OTTAWA - The Conservative government presented a budget yesterday that promises to ease the tax burden on all Canadians, while doing little to curb the recent increases in federal spending fuelled by a booming economy.
The minority government's first budget reduces the Goods and Services Tax to 6% from 7%, but raises the rate on the lowest tax bracket a half point to 15.5%, rolling back half of last year's cut by the former Liberal government.
The government says all Canadians will still pay less in taxes as a result of a family-oriented budget loaded with nearly $20-billion in other tax relief over two years, including the reduction in the GST.
The budget, as expected, also confirms parents will, as of July 1, start receiving $100 a month for each child under six to help cover the costs of daycare services, but it also ends funding for the former government's child-care plan as of next March.
"The budget is balanced, our spending is focused, and taxes will go down for all Canadians," Jim Flaherty, the Finance Minister, said in his maiden budget speech. "There is more tax relief in this one budget than in the last four federal budgets combined."
The budget also delivers twice as much tax relief as new spending, he added. "For every new tax dollar we spend, this government is returning two tax dollars to hard-working Canadians," he said, saying there are 29 separate tax reductions, including those for individuals and businesses. (source)
