Federal tax cut takes effect July 1 but opposition slams Carney for withholding spring fiscal plan
The federal government will proceed with its promised reduction to the lowest personal income tax rate—from 15 percent to 14 percent—on July 1, according to a government document cited by the Financial Post.
The move, which Prime Minister Mark Carney confirmed by signing what he called an “order,” is expected to cost $27bn over five years.
As reported by CTV News, Carney stated that the tax cut “will reduce taxes for the 22 million Canadians who pay federal income taxes.”
He added, “We are acting today on that, so that by July 1, as promised, that middle-class tax cut… will (come) into effect.”
According to Carney, the reduction could result in savings of up to $840 annually for some families.
Finance Minister François-Philippe Champagne said the legislation will be introduced through a ways and means motion on May 26 when Parliament returns, as reported by Global News.
He confirmed that this tax measure is the “first order of business” for the government and emphasized it was part of a sequence: “Step one, you’re going to have a Throne Speech… and there will be a fall economic statement to follow.”
Champagne also said, “This is very significant and it sends a very strong and clear message to Canadians that we care, that we understand that one of the first concerns they have is about affordability.”
The Liberals will need support from opposition parties to pass the legislation due to their minority status in the House of Commons.
As per CTV News, Carney acknowledged that the government must “find two extra votes” to pass the motion.
Champagne added, “We expect other parliamentarians to support, obviously, the government, because this is about Canadians… This is a way for all parliamentarians to show up and say, ‘Yes, we support Canadians at a time where they need a break.’”
However, opposition leaders criticised the government’s decision to delay presenting a federal budget.
Conservative Leader Pierre Poilievre said in a statement reported by Global News, “There is no road map forward, no economic vision and no willingness to lead.”
Poilievre added that Canadians were promised “competence and clarity,” but instead are getting “delays and dysfunction.”
Interim NDP leader Don Davies also raised concerns about transparency and legislative oversight.
As reported by Global News, he said, “It’s Parliament’s most basic function to authorize and scrutinize spending. We need an economic plan tabled in the House of Commons in June.”
According to the Financial Post, the delay stems from procedural disruption after former Prime Minister Justin Trudeau resigned and Carney, upon taking office, called an election.
The House of Commons has not been in session all year, and Carney’s government does not plan to provide a fiscal update until the fall.
The House is scheduled to return on May 26, with King Charles III delivering the Speech from the Throne on May 27.
As reported by Global News, the throne speech will trigger a confidence vote, which, if passed, allows the government to move forward with its legislative agenda.
Budgets and fiscal statements are also typically treated as confidence votes in Parliament.
Meanwhile, Carney’s newly sworn-in cabinet has been tasked with advancing several policy priorities.
According to information published on the prime minister’s website and cited by Global News, the new cabinet committees include one on priorities, planning and strategy chaired by Carney, and others focused on economic development, government efficiency, and Canada-US relations.
As reported by CTV News, several new ministers and secretaries of state expressed optimism about the path ahead.
Wayne Long, appointed secretary of state for the Canada Revenue Agency and financial institutions, said, “I think we’re going to see our government run like a corporation, which I think is long overdue.”
Rookie minister Jill McKnight and International Trade Minister Maninder Sidhu also shared their enthusiasm, saying they are “excited” and “delighted” to begin their new roles.
Tim Hodgson, the new minister of energy and natural resources and a former adviser to Carney, said he looks forward to “building” and “digging in” with provincial and Indigenous partners.
