The Liberal government is going through on its promise to cut taxes for the middle class.
Finance Minister Bill Morneau outlined the motion on Monday, slashing the income-tax rate for Canadians who earn between $44, 700 and $89, 401 dollars per year, beginning January 1st.
The feds are also creating a new 33% tax bracket for those who earn over $200,000 a year.
“Today is the day where we have said we are going to reduce middle-class taxes by asking those Canadians who are doing very well to pay a little bit more.” Morneau said from the House of Commons, “This is an important first part in our tax program.”
Mourneau says the changes will cost the federal treasury $1.2 billion annually, starting in the 2016-17 fiscal year.
The Liberals will also be cancelling the Conservative plan to increase limits on tax-free savings accounts from $5,500 to $10,000.