The following News Release or Speech has just been posted on the Finance Canada Site
Ottawa, December 28, 2007
Canadian families, students, workers, seniors, and businesses large and small will continue to keep more of their hard-earned money in 2007 and 2008 thanks to substantial new tax reduction measures introduced in 2007 by the Government of Canada. Since coming to office in 2006, the Government has taken action that will by 2012-13, reduce the overall tax burden for Canadians and businesses by about $200 billion, to its lowest level in nearly 50 years.
“Since coming to office, we have reduced taxes in every way we collect revenues,” said the Honourable Jim Flaherty, Minister of Finance. “The measures introduced just in the last year show how our Government is putting Canadians first by keeping our promise to reduce taxes. Together, we are building a legacy of tax relief we can all be proud of.”
The Economic Statement, introduced on October 30, 2007, reduced taxes for all Canadians by:
* Reducing the goods and services tax (GST) rate to 5 per cent from 6 per cent effective January 1, 2008. Taken together with the initial GST reduction introduced in Budget 2006, total savings from the
2-percentage-point reduction will amount to approximately $12 billion next year for consumers.
* Increasing the amount all Canadians can earn without paying federal income tax to $9,600 in 2007 and 2008, and to $10,100 in 2009.
* Reducing the lowest personal income tax rate to 15 per cent from 15.5 per cent as of January 1, 2007.
Budget 2007 also delivered significant personal tax reductions, including the Working Families Tax Plan, consisting of four components to help families get ahead. They are:
* A new $2,000 child tax credit, which will provide tax relief of up to $300 per child.
* Eliminating the marriage penalty by increasing the spousal and other amounts to provide up to $303 of tax relief for a supporting spouse or single taxpayer who is supporting a child or relative.
* Strengthening the registered education savings plan program by eliminating the annual contribution limit, increasing the lifetime contribution limit to $50,000 from $42,000, and increasing the maximum Canada Education Savings Grant per beneficiary to $500 from $400 to help parents save for their children’s education.
* Helping seniors make decisions about their retirement and better manage their money by increasing the age limit from 69 to 71 for the maturation of a registered retirement savings plan.
The Government also introduced the Working Income Tax Benefit in Budget 2007 to improve incentives to work for low-income Canadians and to lower the welfare wall by providing a refundable tax credit worth up to $500 per year for individuals and $1,000 for families. More than 1.2 million low-income Canadians will benefit.
Budget 2007 also enacted the Tax Fairness Plan, which delivers over $1 billion in tax savings for Canadians by increasing the age credit amount by $1,000 to $5,066, and by allowing pension income splitting.
The Government of Canada also introduced corporate tax measures in Budget 2007 and the Economic Statement to help businesses grow and succeed by encouraging investment and job creation, and supporting Canada’s manufacturers. These include:
* Reducing the general federal corporate income tax rate to 15 per cent from 22.12 per cent by 2012. This will enable Canadian corporations to have the lowest tax rate on new business investment in the Group of Seven (G7) by 2011 and the lowest statutory tax rate in the G7 by 2012.
* Allowing manufacturing and processing businesses to write off their capital investments in machinery and equipment faster, using a two-year, 50-per-cent straight-line capital cost allowance rate on investments made before 2009.
* Reducing the small business income tax rate from 12 per cent to 11 per cent for 2008, one year earlier than scheduled.
A backgrounder detailing federal tax relief in 2007–08 is attached.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
Related Backgrounder Document: Backgrounder – Summary of Federal Tax Relief for 2007 and 2008
SOURCE: Dept of Finance Newsroom