The Government of Canada has balanced the federal budget and is now entering a period of surplus. As a result, the government is going to reduce federal taxes for Canadian families to ensure they continue to prosper.
The government understands the financial challenges that Canadian families face and that is why the government is committed to reducing federal taxes. Since 2006, the government has reduced the GST from seven to five per cent, created the Tax Free Savings Account, reduced the lowest personal income tax rate and increased the basic personal exemption.
Overall, the government has cut taxes for Canadian families over 160 times and as a result, federal taxation is at its lowest level in 50 years. A typical Canadian family of four is now saving $3,400 every year in federal taxes compared to 2006. These tax cuts have taken place despite the global recession of 2009 and despite a challenging fiscal environment.
These measures continue to benefit those who need it most. In last month’s UNICEF report, child poverty rates in Canada decreased since the beginning of the recession.
However, more can always be done. Beginning this January, the government will increase the Universal Child Care Benefit to $160 per month per child under the age of six, or $1,920 per year, and introduce a new benefit of $100 per month per child aged six through 17, or $720 per year. The government has also doubled the Children’s Fitness Tax Credit to $1,000, effective for the 2014 taxation year and will increase the Child Care Expense Deduction by $1,000 per child for the 2015 taxation year. This will allow parents, where both parents work, to claim a bigger deduction for childcare expenses when they file their taxes in April 2016.
Finally, the government is introducing the new Family Tax Cut, effective for the 2014 taxation year. This Family Tax Cut will allow income-splitting to reduce federal taxes payable, for couples with children under 18. Couples will be able to split income between the higher earning and the lower earning spouse, saving up to $2,000 a year in federal taxes. The average benefit for Canadian families will be over $1,100 per year, in direct money. The benefit is being capped at $2,000 to ensure middle-income families disproportionately benefit.
The Family Tax Cut will help approximately four million Canadian families by supporting their childcare choices through direct financial support, 34,820 families in Wellington County alone. Low- and middle-income families will receive about two-thirds of the overall benefits provided by the Family Tax Cut.
The Government of Canada is strongly committed to ensuring that Canadian families prosper.
If you have any questions or comments, contact me at 866-878-5556 or at michael.chong@parl.gc.ca.