The Standing Senate Committee on National Finance
Senate finance committee strengthens government tax bill
November 22, 2016
Ottawa – A Senate-amended tax bill would leave more money in the pockets of middle-income Canadians than the government’s original bill — and it would save the government billions of dollars, members of the Senate Committee on National Finance said Tuesday.
Committee members applaud the spirit of the federal government’s Bill C-2, An Act to amend the Income Tax Act, which was sold to Canadians as a means of providing relief for the “middle class.”
The committee’s analysis of the government’s bill as passed by the House of Commons — coupled with testimony from numerous expert witnesses — shows that the biggest beneficiaries would in fact be Canadians who earn between $100,000 and $200,000.
Moreover, the Parliamentary Budget Officer, Jean-Denis Fréchette, told the committee that the government’s bill would cost the treasury $1.7 billion each year.
The committee’s amendment would ensure Canadians who earn between $45,000 and $90,000 a year benefit most. It would also be revenue neutral — i.e. it would not cost the government money to implement — by maintaining the income tax rate for Canadians who earn more than $90,000 a year.
The committee respectfully urges the Senate and the House of Commons to adopt the proposed amendment, which would more robustly support middle-income Canadians and spare the treasury a heavy burden that Canada can ill afford.
The amendment passed in committee today on division and the bill will be debated in the Senate Chamber.
- Canadians pay different tax rates depending on how much money they earn. The committee’s amendment adjust the tax brackets differently than the government bill so as to reduce the tax burden on the 7.4 million Canadians who earn mid-level incomes.
- The bill as amended by the committee would be revenue neutral, i.e. it would not cost the treasury any money to implement.
- The bill increases the tax burden on Canadians who earn more than $200,000.
“The objectives of Bill C-2 are noble. The execution is sorely lacking. Our committee is pleased to lend our expertise and experience to this young government so we can help it to reach its worthwhile goal. Fixing poorly-drafted bills is one of the Senate’s most important functions. Our committee’s amendment is fiscally responsible and more generous to middle-income Canadians.”
- Senator Larry Smith, Chair of the committee
“The process we have followed here shows the good that can come from co-operation between the Senate and the House and between partisans and non-partisans. Through our careful study of this bill and its implications, we have proposed an amendment that respects the intent of the bill and strengthens it. All Canadians benefit when both Houses of Parliament work together.”
- Senator Anne C. Cools, Deputy Chair of the committee
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