The Honourable Jim Flaherty, Minister of Finance, reminded Canadians of tax changes that will take effect July 1, 2006.
“In Budget 2006, Canadaâ€™s new government introduced more than $26 billion in tax relief over the next two years, of which over 90 per cent will go to individuals,” Minister Flaherty said.
Effective July 1:
* About 655,000 low-income Canadians will be removed from the tax rolls altogether.
* The GST will be reduced to 6 per cent from 7 per cent. This will put almost $9 billion into the pockets of Canadians over the next two years.
* Working Canadians will become eligible for the Canada Employment Credit on up to $500 of annual employment income to help pay the additional costs of employmentâ€”costs for things like uniforms, computers or safety gear. Next year, the amount of employment income eligible for the credit will increase to $1,000.
* The lowest personal income tax rate will be permanently reduced to 15.5 per cent.
* The basic personal amountâ€”the amount that an individual can earn without paying federal income taxâ€”will increase each year and remain above previously legislated levels for 2005, 2006 and 2007.
* Canadians who buy monthly transit passes will get a tax credit. A person who buys passes costing $80 a month will receive about $150 a year in federal tax relief. That will save commuters $370 million over the next two years.
* Excise duty on Canadian wine produced with 100 per cent Canadian agricultural products is eliminated, a reduction of 62 cents a litre.
* Excise duties are reduced on the first 75,000 hectolitres of Canadian-produced beer. All Canadian brewers will enjoy excise duty savings of about $2.30 on a 24-pack of 341 ml bottles on their first 2,000 hectolitres of production per year.
* The minimum tax on financial institutions will be modified as of July 1, 2006, which will reduce government revenues by $15 million in 2006â€“07.