431-00157 (Taxation)

This Government has always recognized that a strong economy starts with a strong middle class. When the middle class has more money to save, invest, and grow the economy, everyone benefits.

In December 2015 the Government introduced a tax cut for the middle class. In total, more than nine million Canadians benefit from this tax cut.

To help pay for the middle class tax cut, the Government asked the wealthiest Canadians to pay a little bit more. A new income tax rate of 33 per cent was introduced for individuals who earn more than $200,000 a year in taxable income.

To further help low- and middle-income families make ends meet, in 2016, the Government introduced the Canada Child Benefit. A tax-free monthly benefit designed to help with the high cost of raising children, it’s simpler, more generous and better targeted to give more help to families that need help most. The Canada Child Benefit puts more money in the pockets of nine out of ten Canadian families with children.

Building on the success of the 2015 middle class tax cut that lowered taxes for more than nine million Canadians, the Government moved forward with a proposal that would put more money in the pockets of Canadians. In December 2019, the introduced a proposed amendment to the Income Tax Act to lower taxes for the middle class, and people working hard to join the middle class, by increasing the Basic Personal Amount (BPA) to $15,000 by 2023.

The enhanced BPA will mean that middle class Canadians, and people working hard to join the middle class, will pay no federal taxes on the first $15,000 they earn. This increase was intended to cut taxes for close to 20 million Canadians, and will be phased in over four years, starting in 2020.  And, to ensure that this tax relief goes to the people who need help most, the Government phased out the benefits of the increased BPA for wealthy individuals.

In recent weeks, the Government’s support for all Canadians has been focused on the rapidly evolving health and economic challenge presented by COVID-19. The Government of Canada is working closely with local, provincial, territorial, and international partners to minimize its health, economic, and social impacts in Canada and around the world. We have worked closely with Canada’s trained public health and medical professionals to put in place the plans, infrastructure, and resources needed to protect the health and safety of all Canadians.

In order to support workers through this challenge, the government has established a number of programs, including the Canada Emergency Response Benefit (CERB) to support those impacted by the COVID-19 pandemic. This taxable benefit provides $2,000 every four weeks for up to four months to workers who lose their income as a result of the COVID-19 pandemic. 

In addition, to help businesses keep and return workers to their payroll through the challenges posed by the COVID-19 pandemic, the Government introduced the Canada Emergency Wage Subsidy. This will provide a 75-per-cent wage subsidy to eligible employers for up to 12 weeks.  This wage subsidy aims to prevent further job losses, encourage employers to re-hire workers previously laid off as a result of COVID-19, and help better position Canadian companies and other employers to more easily resume normal operations following the crisis.

The Government has also provided Canadians with up to an extra $300 per child through the Canada Child Benefit for 2019-20, meaning approximately $550 more for the average family as well as providing a one-time special payment starting April 9 through the Goods and Services Tax credit for low- and modest-income families. The average additional benefit will be close to $400 for single individuals and close to $600 for couples.

The Canada Emergency Response Benefit, the Canada Emergency Wage Subsidy and the extra payments through the Canada Child Benefit and Goods and Services Tax credit are key elements of the Government’s Canada COVID-19 Economic Response Plan. The plan also includes many specific measures to help all Canadians, including: seniors, through reduced the required minimum withdrawals from Registered Retirement Income Funds for 2020 and other measures; students and recent graduates, through suspended repayments and interest on student loans; and for our most vulnerable through enhanced support for women’s shelters and improving access to essential food support. Further details of the plan can be found on the Department of Finance website at https://www.canada.ca/en/department-finance/economic-response-plan.html, including these measures and other support the Government is making available to help middle class Canadians.

Going forward, the Government will build on these actions and continue to invest in services that Canadians rely on most. As the Canadian economy recovers from the health and economic challenges presented by COVID-19, the Government will continue to support Canadians through investments for families, communities, our environment and jobs.