Prime Minister Stephen Harper today announced that a re-elected Conservative Government will allow families with children to share up to $50,000 of their household income for federal tax purposes, providing substantial tax relief for families.

“Since taking office in 2006, our Government has consistently lowered taxes on Canadian families so that they can keep more of their hard-earned money and have the financial security to raise their children and plan for the future,” Harper said. “Thanks to our low-tax plan, the average Canadian family is already paying $3,000 less in taxes each and every year.”

Building on this strong record of lowering taxes on families, a re-elected Conservative Government will, when the budget is balanced within our next full term of office, introduce the Family Tax Cut to allow income sharing for couples with dependent children under 18 years of age.

By allowing these families to share up to $50,000 of their household income, the Family Tax Cut will provide significant tax relief for almost 1.8 million families who will save, on average, $1,300 per year.

Prime Minister Harper noted that the Family Tax Cut will make the income tax system fairer and reduce the tax burden on Canadian families. “We understand that family budgets are stretched and by making the tax system fairer for families, we will make it easier for parents to cover the day-to-day cost of raising their kids,” Harper said.

In contrast, the Ignatieff-led Coalition plans to raise taxes on Canadian families, eliminate the $1,200-per-year, per-child Universal Child Care Benefit, and impose a one-size-fits-all, government-run, national daycare scheme that would cost billions of dollars and ignore the choices of individual families. Their high-tax agenda would raise taxes on families and threaten their financial security.

Prime Minister Harper observed that the Ignatieff-led Coalition has the wrong priorities, with their plan to raise taxes on Canadian families and ignore the choices that families make. “The choice is clear,” Harper said. “Canadians can choose between our low-tax plan for families and a high-tax agenda that will set you and your family back.”

 

 

BACKGROUNDER

THE ISSUE

• Since coming to office in 2006, Stephen Harper’s Government has consistently lowered taxes on Canadian families because we understand that household budgets are tight.

• Our low-tax plan for families has allowed Canadian families to keep more of their hard-earned money and have the financial security to raise their children and plan for retirement.

• To lower taxes on families and deliver real support for the real world, Stephen Harper’s Government has:
  • Reduced the GST twice, from 7 to 6 to 5 per cent.
  • Established the Universal Child Care Benefit, providing $1,200 per year, per child, to support all parents and to respect their right to choose the form of child care that is best for their family.
  • Created the Children’s Fitness Tax Credit, a $500 credit per child, to help cover the costs of putting children in sports or physical activities.
  • Established a new Children’s Arts Tax Credit, a $500 credit per child, to help cover the costs of children participating in arts and cultural activities.
  • Created the Child Tax Credit, a $2,000 tax credit for each child under 18 years of age.
  • Established the Registered Disability Savings Plan, to help Canadians with disabilities and their families to plan for the future.
  • Provided substantial new tax relief measures such as increasing the Basic Personal Exemption and creating the Working Income Tax Benefit, often of special benefit to lower-income families.

 

• Today, thanks to Stephen Harper’s low-tax plan, the average Canadian family is now paying $3,000 less in taxes each and every year.

• The record shows we believe strongly in fairness for Canadian families, and in respecting the choices families make according to their needs and priorities. But there is more to be done, especially under the federal income tax system.

• As it stands, couples with the same number of children and the same household income are not treated equally. A two-income couple, in which one spouse earns more than the other, pays more federal income tax than a two-income couple in which the two spouses earn equal amounts. And a single-income couple pays even more.

• For example, as the table below shows, two parents earning $60,000 and $20,000 pay almost $1,300 more in federal taxes than two parents in an identical household, each earning $40,000, even though their combined household income of $80,000 is the same.

 

	Taxes in Dollars
Two parents earning $60,000 and $20,000	$9,495
Two parents earning $40,000 each	$8,203
Difference	$1,292

 

• Similarly, as the table below illustrates, a two-parent family in which one spouse is earning $70,000 and the other is staying home to raise their children pays almost $2,000 more in federal taxes than two parents earning $35,000 each in an identical household, even though their combined household income of $70,000 is the same.

 

	Taxes in Dollars
One parent earning $70,000	$8,695
Two parents earning $35,000 each	$6,703
Difference	$1,992

 

THE PLAN

• To ensure that the federal income tax system respects and supports the choices that families make, a re-elected Conservative Government will end the unfairness against single-income families with children, and two-income families with children where one spouse earns more than the other. This will also ease the burden on double-income families, by allowing them to keep more of what they earn and to benefit from having a second income.

• A Stephen Harper Government will, as soon as the budget is balanced, establish the Family Tax Cut — income sharing for couples with dependent children under 18 years of age. This will give spouses the choice to share up to $50,000 of their household income for federal income-tax purposes.

• By extending the principle of income sharing to families with children — a benefit our Government granted pensioners in 2007 — we will lower taxes on Canadian families.

• The result will be significant tax relief for nearly 1.8 million Canadian families — each of them saving, on average, $1,300 per year.

• This measure is projected to cost $ 2.5 billion per year.

• The Family Tax Cut is consistent with the tax treatment of families in other countries. Currently France, the United States, Germany, Belgium, Greece, Luxembourg, Portugal, Switzerland, Ireland, Norway, Poland and Spain allow families some form of income splitting.

 

THE CHOICE

• Stephen Harper’s Government has a strong record of supporting Canadian families and the choices that they make to raise their children and plan for the future.

• But we need to continue to help families whose budgets are stretched. We need to lower taxes for families. We need to ensure that our country remains a place where anyone — no matter who they are or where they’re from — can achieve their dreams and retire with security.

• We are proud of our record and intend to build on our low-tax plan that protects the financial security of families.

• The Family Tax Cut – which ends the current tax unfairness for many families – will lower taxes on these families and ensure that they can keep more of their hard-earned money.

• Canadians have a real choice between the Conservative low-tax plan for families and the Ignatieff-led Coalition’s agenda to raise taxes on families.

• In contrast to Stephen Harper’s low-tax plan for families, the Ignatieff-NDP-Bloc Québécois Coalition’s high-tax agenda will set families back.

• The Ignatieff-led Coalition has said they would:
  • Raise the GST.
  • Replace the Universal Child Care Benefit with a one-size-fits-all, government-run, national daycare scheme that would cost billions of dollars and ignore the choices of individual families.
  • Higher taxes and higher prices. Michael Ignatieff’s high-tax agenda will stall our recovery, kill jobs and set families back.

 

As the Michael Ignatieff-led Coalition with the NDP and Bloc Quebecois united once again, Prime Minister Stephen Harper vowed to provide the stable national government that Canada needs to complete the economic recovery and keep taxes low.

“By forcing an unnecessary election in this time of fragile economic recovery, Michael Ignatieff and his coalition partners are irresponsibly and recklessly putting at risk Canadians’ jobs, our economy and stable government.” said Harper.

The Prime Minister emphasized that he remains focused on strengthening the financial security of hardworking Canadians and their families.

“The budget tabled this week – the next phase of Canada’s Economic Action Plan – is critically important. It is a low-tax plan for jobs and growth,” said the Prime Minister. “A plan to strengthen the financial security of Canadian families.  A plan to protect and create jobs.

“Implementing our low-tax plan is my priority, to complete our economic recovery and ensure stability and certainty for Canadians in what  remain extremely challenging global circumstances.”

“In contrast, the Ignatieff-led coalition is focused on pursuing their political ambitions instead of Canadians’ financial security. Their actions make clear they simply do not care about any of the practical initiatives that were in the Budget. In forcing Canada’s 4^th election in 7 years, the Ignatieff and his Coalition partners are clearly focused on their own self interest instead of the interests of Canadians’.”

 

 

On Tuesday, Jim Flaherty, Minister of Finance, introduced the Next Phase of Canada’s Economic Action Plan to complete Canada’s economic recovery.

Stephen Harper’s Conservative Government is focused on the economy, supporting hard-working Canadians and their families, and completing and securing the economic recovery.

Today, we introduced the Next Phase of Canada’s Economic Action Plan: a low-tax plan for jobs and growth.

As part of that plan, we will:

• work to keep taxes low
• undertake additional targeted investments to support jobs and growth
• control government spending to stay on track to eliminate the deficit
• not cut transfer payments for crucial services like healthcare and education
• not give in to the Ignatieff/NDP/Bloc Québécois Coalition’s demands to impose massive tax hikes

Our Government is focused on securing our economic recovery, while improving the financial security of workers, seniors and families.

We have a responsible plan to achieve these goals — a plan that’s working and that needs to stay on track.

The Coalition is now faced with a choice: opportunism, or the principle of working together to secure our economic recovery.

The Harper Government is taking the right action for families in Canada and our economic recovery.