This should have a positive effect...Feds cuts biz taxes more than expected...
This will give a boost to the markets, they've also cut the GST and Personal Income taxes.
Finance minister announces GST cut to 5 per cent
Updated Tue. Oct. 30 2007 4:45 PM ET
CTV.ca News Staff
Finance Minister Jim Flaherty has announced a reduction of the GST to five per cent, and major cuts to personal income taxes and corporate tax rates, in a fiscal fall update that resembled a full-fledged budget.
The total tax cuts represent about $60 billion over the next five years.
"As a result of the steps I am announcing today, the purchasing power of consumers will go out, the take-home pay for all Canadians will go up, and Canadian businesses from neighbourhood coffee shops to large corporations will have more freedom to create jobs and make further investments," said Flaherty.
The Conservatives had promised to lower the consumption tax to five per cent in their 2006 election platform. The GST cut will be effective Jan. 1, 2008.
Other highlights include:
An increase in the basic personal amount exemption to $9,600 from $8,929, retroactive to Jan. 1, 2007;
Two years later, on Jan. 1, 2009, the basic personal amount exemption will be increased to $10,100; and,
The lowest personal income tax rate moves to 15 per cent from 15.5 per cent, effective Jan. 1 2007, undoing a change made in the first Conservative budget.
The government will also cut corporate tax rates by one percentage point in 2008. Further cuts will occur each year at a rate of one percentage point per year, bringing corporate tax rates down to 15 per cent by 2012 from 22 per cent today.
Corporate taxes will fall by one third between 2007 and 2012. According to the government, this will make Canada's corporate taxes the lowest among major industrialized nations.
Liberal Leader Stephane Dion had said he would prefer income tax reductions rather than a GST cut, although it doesn't appear likely he would topple the government on the issue.
"Compared with income tax cuts, a GST cut does nothing to improve our competitiveness in the world economy and does little to improve the fairness of our tax system, improve our productivity and move our economy forward," Dion said in a statement Monday.
"The experts are united against a GST cut and we Liberals agree with them. It seems there is only one person who studied economics that wants to cut the GST -- and his name is Stephen Harper."
However, one economist said the tax cut will have a direct and immediate impact on Canadians.
"Well, if you think of an average consumer, a family spending about $30,000 a year, it would be $300 into their pocket," Don Drummond, chief economist for TD Bank, told Canada AM on Tuesday.
Flaherty delivered the fiscal update in the National Press Theatre, instead of in the House of Commons as he had wanted, because the NDP didn't give the needed unanimous consent.
Past fiscal update have been presented in front of the finance committee, and the finance minister is then asked questions from opposition MPs.
With files from CTV's David Akin in Ottawa and The Canadian Press