Liberals move forward on promised tax cut | Power & Politics Liberals move forward on promised tax cut | Power & PoliticsStop doubling down on failed policies, and just change course to make is to invest in Canadian to needs 4th, invest in our communities to invest in brighter future Pharrell and the next episode. That is the very first thing we’re doing today is announcing that we will be lowering taxes, as promised for tens of millions of Canadian campaign promises to cut taxes for the middle class. If they’re motion passes, Canadians will pay no federal taxes on the first $ 15,000. They earn by 2023, that’s up nearly $ 3,000. From the current ceiling of $ 12,000, we’ll say the top 1 % will not benefit. So how much will the measure impact your bottom line? Earlier? I spoke with minister of finance bill Morneau Morneau nice to see you calculation from the government are that it will save the average individual out of full implementation about $ 300 a year. How significant in someone’s life I can honestly think that is. This is significant is hitting a very large number of Canadian, so 20 million Canadians are going to see a reduction in their taxes. That we know is going to help feel as we can see a large number of people to face up to their economic anxiety. People who are struggling to get by and heard a lot from people that are challenged to this in particular raises people all the way up from the lowest level, the income scale right up $ 250,000 or so I’ve finally put lot of money into the economy. So in the first movie about 3 billion dollars, that’s going back to Cadence back in their pockets and is fully fully done. It’Ll be 6 billion dollar. So it’s it’s a very material tax reduction and we think it’s important. We promise we do this. It’S going to give people no more money and, of course, more what’s the metric metric, rather by which you’ll judge its Effectiveness. I ask because when you’re proposing 2015 the Canada child benefit, there were specific markers. It’S going to reduce child poverty by a property from 11 to 9 %, since it was introduced. What metric will you use to judge the effectiveness of this measure by definition this will? This is going to go to a large cross-section of Canadians. I think what we’re also be trying to do is to ensure that we continue to think about other things. We can do to deal with that economic anxiety, so that will be recognizing that we we address issues that we we talked about the campaign how parents are are doing when they’re, when they’re off with their children will be taken with how we can help students will Be looking at moving forward and measures that are going to actually help seniors, Sobe mouth, multiple things that will do that will address that that affordability challenge that people are facing, but first and foremost, we wanted to start with reducing taxes punching in federal revenues and what Kind of impact at the end of the day is it going to have? Was this just to vote-getter during the election, or do you think this will have a material impact on the economy? Two Canadians they’re likely to spend it? That’S money: that’s going to go back into the economy, but I think in the first instance. What we’re responding to is the challenge that people are facing in their lives with the economic challenges that they’re seen we heard loud and clear during the course they like campaign that the people are worried about how they can how they can get ahead. They’Re. Looking at things like they’re with their household debt and having to pay not only the interests but the death, so this will put people in a better position and it’s entirely consistent with what we’ve doing for the last four years, which has worked its putting more money Into people’s pockets, which is allowed them to put it back in the economy, we’ve seen growth, we’re still projecting that are growth this year, and next year will be. You know in the first two in the G7, and it will continue. We hope to help us with our strong employment, which is been positive, lost in that month, the biggest single loss since the Great Recession years ago. I we’ve also seen the number of bankruptcies increase a lot as well. Are you putting the Federal coffers in the best possible position? Are you insulating the go Prince from what could be? Are the onset of troubling Economic Times or even recession, very, very good investment numbers. Just the last two days we seem very good employment numbers in the United States, so so there are different numbers that come out that we watch carefully. But overall, what are we seeing we’re seeing that the economic forecasters are predicting continued growth this year and then we’re seeing that we’re at or near some of the lowest levels of on finally seen in a very very long time and we’re responding by continuing to invest? But invested at the right level, so not investing it at a pace that we don’t think of sustainable lights happening I’d state. What is the pace that makes sense and allows us the the resiliency to deal with economic challenges that we leave. in the cough in the federal coffers? If that recession is down the road? At some point – and I take your – I take your point on all the indicators right now, but those job numbers are traveling to a lot of people. If that recession is down the road is this. The best thing to do right now thing to do is to do exactly this. It’S to invest in future, it’s to put more money in people’s pockets. They can put it back into the economy. It is the approach that worked as we tried to get out of the 7.1 % unemployment that we were left at the end Harper years and got ourselves to a much better position so continuing to make those Investments doing it. No way that that doesn’t put us in a in a vulnerable position because we’re still going to be able to reduce her dad as a customer economy over time, so that leaves or we can continue to invest, as I said, we’re expecting growth. That is the prognosis, but we always want to be prepared for any eventuality, and we we do think that we have a strong balance sheet to deal with. Any challenges worry. I have to worry about numbers to come out last week. I also have to look at that and contrast numbers that came with the following week or the week before, so we will always look to make sure that we have the ability to respond to challenges, but no, we have to look at what is the? What is the turn that we’re dealing with for dealing with it, an economy that strong with course, always like to be stronger, we’re projecting growth? We continue to have very low unemployment numbers. We have high levels of Workforce participation, so it is an economy that is this large doing we’re going to continue to invest all because we don’t want to be in a position where we don’t continue to ensure that we have these strong employment numbers in and continued Have good wage growth which we’re beginning to see? We also need to recognize there. Are there challenges in the part parts of the country? Sister appreciate your time. I just be clear: the tax reduction that were talking about today will help 20 million Canadians, and that includes Canadians in Alberta and Saskatchewan and other places where people are experiencing challenge. The state of Canada’s economy was under scrutiny today on Parliament Hill, as you saw their the Liberals, moved on their first order of business and middle class tax cut according to the conservative, so it’s too little too late, they say bigger and faster tax cuts are needed. Kickstart and economy: that’s on the brink of recession, so how it risk is Canada’s economy and how much could this tax cut help? Canadians, Rebecca Young is the director of physical and provincial economics with Scotiabank Toronto and next to me here in studio senior Economist with the Canadian Centre for policy Alternatives, hello to both of you nice to see you today. What do you think the in end of the measure that they’ve announced it and do you think it will fulfill that intend? Let me just start by saying that I think the intent really was to Target the issue of household affordability. This was clearly a campaign issue and across all platforms, we heard that this was a Southern raised by Canadians. So I think this was a promise commitment. Everyone was expecting it and what was laid out during the platform is essentially what was delivered, and so it is by and large, a very broad-based tax cut, acting 20 million Canadians, as the minister laid out or in fact about 20s or 97 % of tax filers Fall into that category that will be affected by today’s cuts, and what does it mean David in what way are family and you make in the 9th at A10 deciles your way at the top of the income Spectrum you make between 140 and 200000 group is far More likely to make the maximum $ 600 per family for most Canadians. Actually, it’s going to be much less than that on average of family base going to be about $ 300. What that means for most Canadians individually is a reduction in their taxes of $ 13. A month and that’s going to be a change at sore, so it is extremely Broad and very thin in terms of how much individual Canadians benefit, but it’s incredibly expensive, so 3 billion dollars in the first year. I know you watching Federal politics, 100 or 200 million. Isn’T real money, 6 billion real money a year I mean that’s the foundation for a national, affordable child care plan, for instance, that’s a doubling or tripling of the number of new units that would be constructed International housing. This is money that Canadians probably insisted today that the top 1 %, for example, will not benefit from this. I would agree the talk talk. Tax earners are not eligible for this benefit and it is very broad-based. The majority of Canadian households benefit, but it will be a small amount, whether it’s 300 or 600 a year and, as was pointed out, that could amount to $ 13 a month. Sup, word of you know even half that for biweekly payroll employees, so it is modest and I would point out that is transitory and so you’ll see that increase as it’s phased-in as a one-off, but the next year. We won’t see that boosts, as it translates to spending in the economy, so it’ll be overall, it’s not a game-changer either in the magnitude of what it’ll mean for the household, but also for the economy in the impact, especially in the outer years. They have a metric by which we could judge whether or not it was having an impact with large on the economy. When I asked the minister today, he said by definition, it will have an impact, because, if Canadians get more money or save money in taxes that they’re likely to spend that money is that true Asians have a different propensity to spend that’s what’s interesting. This is actually the reverse of the type of distribution that you’d want to see if your goal was certainly if your production, but even if you want more income, transfer immediately the way it’s structured, as is it higher income households in, are going to get most of That benefit they’re more likely to save the money spending on debt or fenjani Imports, which doesn’t benefit GDP directly household making between 140000 $ 200,600 they’re, the ones that are close to that maximum benefits. I mean, if you’re, in the middle of the income Spectrum. I’D actually argue that $ 13 a month isn’t really all that valuable. But if you have a young child National child care plan to be valuable to you, if you’re trying to find a place to rent lower rental cost would be much more valuable to you. And that’s the trade-off is 6 billion. Dollars is real money. We could be spending it in different way way that we can probably drive more economic growth and might be more useful and in a longer-term productivity perspective. The employment employment numbers rather from statistics November saw the biggest drop in jobs: 21,000 lots of 21,000 jobs, Benz 2009. How big of a warning sign is that, from your perspective, first of all, we don’t see your recession coming. I think that we do see slowing of growth. We see a structural and cyclical slow down. We’Ve benefited, though, from tremendous Krav job growth and wage growth, some over the last couple years, and particularly the first half of the year. So it is definitely a surprise. Is monsivais data but, on the other hand, we’ve also seen a positive uptake on business investment, but over the the cloud over. All of this is really that trade uncertainty in what’s going to happen South of the Border, that’s really the biggest drag. Arguably, on the Canadian autonomy as it flows through to our trade and Export channels, so I think that we need to put this into perspective. We really need to see how the economy is going to play out and how the politics are going to play with the second half of the year that we don’t see a recession and if we do series session quite honestly, the amounts were talking about today aren’t Going to be what makes the difference them, we’re really going to need for a bigger leavers, both in terms of monetary policy and much greater fiscal policy and what were saying today. It’S really just a drop in the bucket. If, if that were the case, but that’s not what we see is as the case, I think that we do see. You know what structural slow down, but not in an alarming rate in. We certainly need to see more data to be convinced that we are heading heading in a in a difficult Direction. I’M not sure of the changes in short-term unemployment rate tickets are getting us any indication of. What’S going to happen three six months down the road, I’m certainly the real challenges for the next recession, whether it comes six months from now or a year from now, we will have another recession in Canada. I think they will all agree on that. We just have a lot less play when it comes to monetary policy to decreasing interest rates. The bank of Canada’s decrease in interest rates just had a lot less power than it used to, and government at the same time often seem far less willing than they have been in the past in major stimulus program. To offset that lock of a power from the from the central bank, and so that’s the real challenge, the thing that we would need to not have a prolonged recession and I’m unsure as to whether there’s an interest in doing that that you have the room. Should you need help, I mean the ratio has been fairly low, it’s been fairly continue. Could you could run twice the deficit and still not really see a big change in the debt-to-gdp ratio? A government deficit by definition means more money in the pockets of household or providing higher services, and sometimes the opposite of the way we should. I think that we need to really think about fiscal policy into different, sometimes, and so, when we talk about a recessionary time, we’re really wants spending that is targeted And Timely and transitory, and what we see today is not that we do see a structural chain does Lowering your taxes, so it doesn’t reduce the Firepower later on in a downturn for government revenues, but in the big scheme of things it is very small. I think whether we’re looking at Federal deficits running below 1 % of GDP at a time when many provinces are consolidating, and so in fact the the stimulatory effect of federal government measures is not necessarily that strong. But the longer-term challenge for Canadians really is about how to weboost longer-term growth and just not having that conversation right now and we need to focus on future policies and future spending on unlocking that grows. So I have to have to have that conversation of it later are the Canadian Centre for policy Alternatives. The Liberals are moving forward with their campaign pledge to lower taxes in January they’ll begin boosting the amount you can earn before you have to pay tax, eventually, phasing-out, the benefits of the richest Canadians, how significant is cut for the average taxpayer and what will it mean For the federal government’s budget will any party vote against such a measure time for the power panel in Calgary, Jason, Marcus off of Maclean’s Brad Levine of counsel public affairs is in rcbc studios over in Toronto. This evening, Montreal Yul on James former Quebec, Liberal cabinet, minister and former director of policy to Stephen Harper, Rachel korine, that with Harper and Associates and the CBC Zone, John Paul Tasker, how everybody to see the super size Monday power. The politics behind this is was a key campaign place for the Liberals. Is it a smart move for them to be introducing stop playing, so I think they felt they had to present something similar to the voters and they’re delivering. I mean it’s built on what they propose in the last Parliament when they cut the middle income bracket. This is dealing with the lowest bracket if you will buy kind of eliminating taxes all together. There is a risk, though, that this is just too modest of a tax cut, that people won’t actually notice that, because it’s facing over 4 years and really did maximum benefit is $ 300 for a single person or $ 11 a month. So there’s a risk that they don’t get any political payoff from introducing something that really does have a hit to the federal budget. I mean it’s a sizable in terms of the cost of the treasury, but in terms of what people will actually gain from. This is pretty small. It’S kind of small potatoes has other pressing issues to deal with jobs report last week. I think that they’re hoping this might be, they can sell it as some sort of fiscal stimulus. I just don’t see how it really makes any meaningful impact on the economy when we’re waiting till 2023. For this to be fully effaced – and I think it’s pretty pretty Limited – is that if you get, you know, 15th have more money in their pocket. Thanks to attack Scott, they will effectively spend that money in the economy politically. Was this a smart move to introduce it so quickly? Given I mean JP point that the conservatives had introduced something very similar. This was from Minot. The Liberals had been planning this as a sort of key campaign pledge for a longtime. Affordability was a big issue in the campaign. Is this a smart move? That’S also how they started off their first name date, of course, in 2015, and I think they need some deliver quickly and Incredibly expensive a policy. If I was going to quibble with anything, I don’t love the idea in principle of taking more people off the tax rolls more than a million Canadians. I do think everyone should have a little bit of is fake, an attack system. So so, if I was going to yes, but is that simply referring pain down the road when we’ve got to account for all of his spending that we’re doing logically in favour of of of cutting taxes? If you were to ask the average mention this and then all the sudden, this becomes their first priority. If you, if you were to ask if you had $ 1000000 by the time, this is all completely phased in, it was that. Would this be your first next thing? I don’t believe that you can hope that people will spend their at 12 $ 13 a month or at depending, if they’re, to income families. I can’t really see a lot of stimulus within the economy of the top of the show simulate a lot of economy on $ 26 a month or $ 30 a month, depending on how much back I’m going to be getting at the same time. It’S that they spend it, but there’s nothing, there’s no direct connection to spending paying down $ 26 a month in debt and we’re not going to be seeing that on Main Street that might might help affordability. That was the theme of the election campaign, but $ 13. A month is not going to make that bridge that a lot of people, I think, would would say that six billion dollars in go for response to that was today. Your lawn was that I mean they seem to be really honing in on the affordability idea and that this will make a difference $ 300 a year up to 604. I think of that argument. Do you think it will resonate? Allow me to disagree respectfully, of course, with driving that I remember quite clearly during the campaign that the liberal party did put at the Forefront of their commitment and have they not been moving forward with this as one of their top commitments, they would have been criticized For it, because the issue of affordability in the cross living with such an important issue to a lot of Canadians during the campaign on whether they’re making the right choice at the right time, I made, I think, back to whether it’s provincially or federally. Whenever any government announces, that’s there’s always crystal balls, not enough. That’S not going to make a big difference, but I think that it is when you look at the number of $ 12,000 and I’m moving to 50000, I get that it’s not exempt from taxes Progressive. I think that that does make a difference in the lives of people who are are trying to squeeze and NN make ends meet, coupled with the fact that it’s not just an isolation. I think the minister, and into play with you a few minutes ago, was very clear on the fact that this is something that’s in lined with what they’ve done since 2015, with announcing the initial tax cut now and as well as the child benefit. So we need to take when you add all of those options together. I think it says, make a significant difference in Canadians live, and I think they were right to go forward with it quickly as we head into the holiday season. You know the burden is always on the government in a minority they can make Parliament work, but people are going to be asking questions as it’s. Okay, so all right government with elections October 21st, has anything happened. In already with this they’re able to say, we’ve already moved forward on this on this political, Thomas and Jason. Given that what kind of support do you expect from the party, or lack thereof, either side, the the conservatives said that they still should be faster? Do it all in one Fell Swoop, the NDP said they should have got cut off the effect of this at a much lower income bracket level. I mean it is interesting, unlike a lot of tax cuts out where they just simply cut the cut one of the rate levels, the Federal liberals I decided to off this, I wear people who earn over $ 150,000 won’t get as much of the benefit from it And the people in the Unicorn $ 100,000 – roughly none of that has been done first tattoo like this, since the 90s. Martens by Jets. That’S one interesting thing to take. When 20 liberals see one side saying you’re, you’re, not saying you’re, not cutting fast enough and the other side saying you’re, not cutting your cut much for the higher-end, that’s a nice place for liberals want to be in the middle. It’S you know, the middle class isn’t going to feel this much of the lower class, but it just doesn’t work for the federal liberal Brandon to call class tax cut. They don’t have a minister of lower-class pro Verdi, but I got to say the biggest benefit will be at those lower income levels, the ones who won’t be getting tax rebates at the end of this now, driving to the CBC news channels or click the link for Another video The Liberals are taking steps to deliver on their campaign promise to lower taxes for Canadians. The government will boost the Basic Personal Amount exemption — the amount you can earn before you start paying taxes — by almost $2,000, which means the first $15,000 earned will be tax free.
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