Trudeau: Hike taxes on rich, cut taxes, boost child benefits for middle class

Justin Trudeau has unveiled the Liberal alternative to the Harper government’s economic plan: hike taxes for the wealthiest one per cent to pay for more generous child benefits and an across-the-board income tax cut for the middle class.

OTTAWA — Justin Trudeau has unveiled the Liberal alternative to the Harper government’s economic plan: hike taxes for the wealthiest one per cent to pay for more generous child benefits and an across-the-board income tax cut for the middle class.

Under the Liberal proposal announced Monday:

— The 22-per-cent tax rate for anyone with a taxable annual income between $44,701 and $89,401 would be cut to 20.5 per cent.

— A new tax bracket of 33 per cent would be imposed on those with taxable incomes over $200,000 a year. The current top bracket of 29 per cent would continue to apply to those earning between $138,586 and $200,000.

A Trudeau government would also scrap Prime Minister Stephen Harper’s newly enriched universal child care benefit and roll together two other existing child benefits into a single, more generous, monthly, tax-free “Canada child benefit.”

“We can do more for the people who need it, by doing less for the people who don’t,” Trudeau said at a campaign-style event at a family restaurant in nearby Aylmer, Que. “

According to the Liberals, all families with kids under 18 and an annual income below $150,000, or 90 per cent of families, would receive more under Trudeau’s plan than they do under Harper’s.

Monday’s announcement puts in place a central pillar of the Liberals’ eventual platform for the fall election. And it is a reply to last month’s Conservative pre-election budget, which pivots around twin measures to allow parents with children under 18 to split their income for tax purposes and to expand and enrich the universal child care benefit.

“Canada has always done well when most Canadians are doing well — when we have a strong and successful middle class,” Trudeau told the crowd. “The fact is, over the past 10 years, Mr. Harper’s plan has failed. We are not getting the economic growth, and we’re not getting fairness and success for the middle class.”

Trudeau has previously promised to scrap the $2 billion parental income-splitting scheme, which numerous economists and think tanks have said will benefit less than 15 per cent of Canadian families, primarily the wealthiest.

He is now promising to do away with the Tory-introduced universal child care benefit as well, contending that it makes no sense to dole out equal benefits to rich and poor families alike.

The Conservative government has just boosted that benefit to $160 from $100 a month for each child under the age of six. And it has expanded the program to give families $60 a month for every child between six and 17.

Trudeau proposes to roll together and enrich two other existing benefits that are geared to income — the Canada child tax benefit and the national child benefit supplement — into a single, enriched benefit that would give families up to $6,400 annually for every child under six and up to $5,400 for children aged six to 17.

The benefit level would be tied to family income and would gradually disappear at higher income levels.

The benefit would be “simple, meaningful, monthly and tax-free. But most of all, it will be fair,” Trudeau said.

Trudeau has promised that the eventual Liberal platform will be fully costed and designed within the framework of a balanced federal budget.

His proposed changes to tax brackets would be revenue neutral — a tax cut of $3 billion a year for the middle class counterbalanced by an additional $3 billion in taxes on the wealthy, the Liberals said.

However, Trudeau’s proposed new child benefit would cost the federal treasury an additional $4 billion a year. That would be paid for, in part, by scrapping the Harper government’s $2-billion parental income-splitting scheme.

Trudeau has also promised to reverse the recently announced plan to almost double the amount people can sock away annually in tax-free savings accounts — another measure Trudeau maintains will primarily benefit the wealthy.

That would give him another $1 billion immediately —and potentially billions more over the longer term — to finance his own program.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

Keaton Wildeboer, of Lacombe, participates in the Westerner Championship Dairy Showcase at Westerner Park on Thursday. More than 150 cattle will be on display at the event, which continues until Saturday, carrying on a tradition started in 1954. (Photo by Sean McIntosh/Advocate staff)
Western Canada’s first dairy showcase since last fall begins in Red Deer

Western Canada’s first dairy showcase since last fall is currently being held… Continue reading

Car thief opening stolen car doors. 
(Black Press File Image)
Idling vehicles attracting thieves, RCMP warns

About one-third of stolen vehicles left idling unattended

Police reveal a collection of drugs, cash and guns seized in an April 2016 bust. One of the men charged was sentenced to 27 months in prison on Thursday.
Advocate file photo
Red Deer man sentenced to 27 months for role in “dial-a-dope” operation

RCMP Priority Crimes Task Force broke up drug operation in April 2016 after four-month investigation

Red Deer RCMP say a 30-year-old man faces sexual charges against a teen. (File photo by Advocate staff)
RCMP’s downtown traffic stops lead to charges

Two traffic stops conducted by Red Deer RCMP officers on bike patrol… Continue reading

Alberta Premier Jason Kenney arrives for an announcement at a news conference in Calgary, Alta., Tuesday, Sept. 15, 2020.	Kenney is isolating at home after one of his ministers tested positive for COVID-19. THE CANADIAN PRESS/Todd Korol
Alberta premier isolating after minister tests positive for COVID-19

Alberta Premier Jason Kenney is isolating at home

New York Giants' Evan Engram (88) tumbles after trying to leap over Philadelphia Eagles' Cre'Von LeBlanc (34) as Josh Sweat (94) defends during the second half of an NFL football game, Thursday, Oct. 22, 2020, in Philadelphia. (AP Photo/Derik Hamilton)
Carson Wentz rallies Eagles to 22-21 win over Giants

Carson Wentz rallies Eagles to 22-21 win over Giants

North Carolina State safety Jakeen Harris (6) tackles Virginia wide receiver Terrell Jana (13) during an NCAA college football game, Saturday, Oct. 10, 2020, at Scott Stadium in Charlottesville, Va. Jana's last name doesn't appear on the back of his Virginia Cavaliers football jersey as a tribute to enslaved labourers. THE CANADIAN PRESS/AP, The Daily Progress, Erin Edgerton
Canadian receiver Jana’s name missing from jersey to honour enslaved labourers

Canadian receiver Jana’s name missing from jersey to honour enslaved labourers

Tiger Woods hits from the 11th tee during the first round of the Zozo Championship golf tournament Thursday, Oct. 22, 2020, in Thousand Oaks, Calif. (AP Photo/Marcio Jose Sanchez)
Munoz in the lead and Woods with his worst score at Sherwood

Munoz in the lead and Woods with his worst score at Sherwood

The national anthem is performed ahead of the inaugural soccer match of the Canadian Premier League between Forge FC of Hamilton and York 9 in Hamilton, Ont. Saturday, April 27, 2019. Canadian Premier League champion Forge FC takes on El Salvador's CD Municipal Limeno in a CONCACAF League preliminary-round match Thursday. THE CANADIAN PRESS/Aaron Lynett
Forge FC scores late to win CONCACAF League preliminary-round game in El Salvador

Forge FC scores late to win CONCACAF League preliminary-round game in El Salvador

NHL cancels 2021 Minnesota Winter Classic, All-Star Weekend

NHL cancels 2021 Minnesota Winter Classic, All-Star Weekend

FILE - In this Jan. 24, 2020, file photo, Mariah Bell performs her senior women's free skate program at the U.S. Figure Skating Championships, Friday, Jan. 24, 2020, in Greensboro, N.C. When U.S. skaters and a few foreigners training in this country kick off the season at Skate America this weekend, it could be a rare opportunity to display their wares. So they will relish the chance to get on the ice for competition, knowing that two Grand Prix series events and the Grand Prix Final have been canceled due to the coronavirus pandemic, and prospects of national and word championships being held are uncertain.(AP Photo/Lynn Hey, File)
Skate America opens shortened, coronavirus-impacted season

Skate America opens shortened, coronavirus-impacted season

Kang, Song share lead in LPGA Drive On Championship

Kang, Song share lead in LPGA Drive On Championship

Vegas Golden Knights' Alec Martinez (23) is checked by Vancouver Canucks' Jake Virtanen (18) during first period NHL Western Conference Stanley Cup playoff action in Edmonton on August 23, 2020. The Canucks have signed Virtanen to a two-year contract with an average annual value of US$2.55 million. Virtanen had 36 points and 41 penalty minutes in 69 games in the 2019-20 season. THE CANADIAN PRESS/Jason Franson
Forward Jake Virtanen signs new two-year deal with hometown Vancouver Canucks

Forward Jake Virtanen signs new two-year deal with hometown Vancouver Canucks

Most Read