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Liberals move ahead with tax cuts promised during election campaign

Last Updated Dec 9, 2019 at 12:57 pm EDT

Minister of Finance Bill Morneau and Minister of Middle Class Prosperity and Associate Minister of Finance Mona Fortier make an announcement on lowering taxes for the middle class in the Foyer of the House of Commons on Parliament Hill in Ottawa, on Monday, Dec. 9, 2019. THE CANADIAN PRESS/Justin Tang
Summary

The Liberals have introduced a motion in the House of Commons to lower taxes, a campaign promise


The change will be implemented over the next four years and will save the average Canadian family $585 a year


OTTAWA — Finance Minister Bill Morneau says the government will provide an update on federal finances before Christmas, but in the meantime, introduced legislation Monday to provide a tax break for anyone earning under $147,000 a year.

Over the weekend, the Conservatives called on Morneau to provide a fiscal update immediately as economic concerns mount following a poor jobs report late last week.

Instead, the Liberals introduced a motion in the House of Commons to lower taxes. The cut fulfills an election promise to make the first $15,000 of income tax-free for most Canadians.

Morneau says the change will be implemented over the next four years and will save the average Canadian family $585 a year. Single people are expected save up to $300.

He says the tax break will not be provided to high-income earners when it takes effect in January.

“We campaigned on an approach that was going to reduce taxes for 20 million Canadians. It’s a very significant measure that will put, in the first year, $3 billion more money into middle class Canadians’ pockets,” he says.

“So we know this is going to have a very important impact on those 20 million Canadians, but at the same time we’re doing it in a way that’s means-tested so that it doesn’t actually impact the top one per cent. So it will be means-tested in a way so that the impact goes to that 20 million Canadians that were intended to do it for.”

The change will also mean that 1.1 million Canadians won’t pay any federal taxes once fully implemented in 2023, Morneau adds.

The vote on the motion will be a confidence test for the new minority government, one that it is positive will pass.