Feds cut GST, slash personal income taxes

Finance Minister Jim Flaherty has announced a reduction of the GST to five per cent, and major cuts to personal income taxes and corporate tax rates, in a fiscal fall update that resembled a full-fledged budget.

The total tax cuts represent about $60 billion in savings over the next five years, taking advantage of a federal surplus expected to reach $11.6 billion this fiscal year.

"Like the North Star, we are a bright light for others to follow," said Flaherty. "Canada has emerged as a shining example in an economic universe of rapid change and uncertainty. We are leading the way with our tax cuts, our debt reduction, our focused and responsible spending."

The Conservatives had promised to lower the consumption tax to five per cent in their 2006 election platform. The GST cut will be effective Jan. 1, 2008.

Other highlights include:

An increase in the basic personal amount exemption to $9,600 from $8,929, retroactive to Jan. 1, 2007;
Two years later, on Jan. 1, 2009, the basic personal amount exemption will be increased to $10,100;
Reducing small business income tax to 11 per cent by 2008;
$10 billion in federal debt relief; and
The lowest personal income tax rate moves to 15 per cent from 15.5 per cent, effective Jan. 1 2007, undoing a change made in the first Conservative budget.

The government will also cut corporate tax rates by one percentage point in 2008. Further cuts will occur each year at a rate of one percentage point per year, bringing corporate tax rates down to 15 per cent by 2012 from 22 per cent today.

Corporate taxes will fall by one third between 2007 and 2012. According to the government, this will make Canada's corporate taxes the lowest among major industrialized nations.

"Taxes haven't been this low since Lester Pearson was prime minister," said Flaherty. "This is an achievement we can all be proud of."

The plan will be put to a confidence vote on Wednesday, putting an election trigger in the hands of the opposition parties.

Reaction

Both the Bloc Quebecois and NDP have said they will not support the government's plan.

NDP Leader Jack Layton said the fiscal update promised little that would help impoverished Canadians.

"It was an opportunity to close the widening prosperity gap. Instead, it widens that gap," said Layton.

He added that the proposals will give "$14 billion to the big banks and oil companies, who frankly don't need our money, instead of making investments in our communities."

Liberal Leader Stephane Dion said Tuesday his party will endorse the fiscal update -- avoiding an election -- but was critical of the GST cut.

"It's a big mistake," he said. "We will choose our time when we will decide to put this government down -- it will not be tomorrow."

On Monday, he had said a GST cut would not be an effective way to give Canadians tax relief.

"Compared with income tax cuts, a GST cut does nothing to improve our competitiveness in the world economy and does little to improve the fairness of our tax system, improve our productivity and move our economy forward," Dion said in a statement.

Liberal Finance Critic John McCallum said that aside from the GST cut, there were two significant measures in the fiscal update that his party agreed with.

"We certainly like the significant corporate tax cuts," he told CTV's Mike Duffy Live. "And the Conservatives had hiked income tax and now they're bringing it back down to where it was under the Liberals, so we can't object to that."

But he said that the fiscal update was too unbalanced, focusing too little on investments in health care, the environment and ending poverty.

Don Drummond, chief economist for TD Bank, said the GST cut will have a direct and immediate impact on Canadians.

"Well, if you think of an average consumer, a family spending about $30,000 a year, it would be $300 into their pocket," said Drummond.

Flaherty delivered the fiscal update in the National Press Theatre, instead of in the House of Commons as he had wanted, because the NDP didn't give the needed unanimous consent.

Past fiscal updates have been presented in front of the finance committee, and the finance minister then answered questions from opposition MPs.

With files from CTV's David Akin in Ottawa and The Canadian Press

Comments are now closed for this story

Michele
said

Happy to Save 1%,
You don't pay GST on a house unless it is new, then you can apply for a GST rebate, unless of course your builder applies for it and keeps it.

Jay Jonah
said

I am thriled with any and all tax relief. My only fear is that corporations will not pass any of the savings along.

John
said

This is weird hearing people complain about tax cuts. Once again Liberals complaining simply because it's a Tory Government that is making the decisions. Also people should actually READ the article, and they'd see that there are income tax cuts, before complaining that there are none. The GST is a hated tax and the Conservatives campaigned on cutting the GST and are keeping their promise. Unlike the famous RED BOOK promise eh?

Jason
said

"Anyone who supports Harper needs to seriously open their eyes and realize that one promise kept does not make up for dozens broken."

Surely you mean one broken and dozens kept right?

RRO
said

Congratulations to the Prime Minister. All of you writing about the PM not slashing personal income tax obviously didn't read the story. He reduced personal income tax, corprate tax and the GST.
Why did he do this? Because the Liberals have been hiking our taxes for so many years so that they could claim massive budget surpluses. Then shuffle the money to their friends in programs like the Sponsorship prgram.
IF Dion had any guts, or any real conviction he would topple the government and face the public. But he won't because all he will do, is lose more seats.

Leslie
said

WOW! 1%! Now I can finally save up for that newspaper I always wanted!

Gary
said

To ET,

If you think the GST cut will seriously affect your level of healthcare or education, maybe you should take closer look at things. Both health and education are under PROVINCIAL control, not FEDERAL control. If Premier Pinochio could give local healthcare centres the millions he gave to cricket clubs and other Liberal-friendly groups, you wouldn't have to wait for 6 hrs on a gurney.
I'm a blue collar worker struggling from paycheque to paycheque in a less-than-extravagant-lifestyle , thanks to nearly half of what I earn being scooped up by tax vultures. Any sort of tax cut is more than welcome, even if it only saves me a measly $50 /yr -- that's MY money that *I* earned. Add in the announced upcoming income tax, and I just might have enough at the end of a month that I can afford to fill up the tank on my little car.
Like it or not, poverty, healthcare and other such issues have been around for thousands of years, and there is yet to be a politician from ANY party on either side of the political spectrum in any country in the world that has worked out a viable solution for any of them.

Danion Brink
said

The rich work extremely hard for what they have. They should be exempt from anything that might make them lose even a bit of it. Most of the human race regrettably refuses to believe this. So regrettable.

Tammy
said

Kudos to this government. Our economy has never been so good. A tax cut by any means is better than none at all. The comments certainly show you can't please them all! But then again, no matter what any government does there will always be criticism. When do we stand up and say Thank You to the Conservatives for pulling our country out of the Liberal mess.

Andrew
said

The cuts make sense at this time. GST and personal income tax cuts are common political tactics for any political party when a possible election could be looming. Stacking the deck. Also cutting corporate income tax makes sense with the soaring loonie to provide some incentive for businesses to expand and hire more staff, who in turn will pay more taxes back to the government. Hopefully good paying jobs. We'll see. Either way this may help reduce the unemployment rate and possibly some underemployment, also good for an election platform.

Allan
said

I got a great chuckle out of the poster who said: "It is a promise that was made and a promise that must be kept."

I live in Nova Scotia and would just like to remind you of two words: Atlantic Accord. Stephen Harper promised when he was campaigning to honour it and he didn't. I don't trust a word that man says or any of his ilk.

And don't forget, the Tories may form the government, but they by no means won the hearts of voters nor did they earn a majority.

Jim in the West
said

While I approve of the personal and small business tax reductions, I'd have been happy to see the corporate taxes fall by only 0.5 or 0.25 % per year. They are posting record profits, so its a bit difficult for me to support reduced taxes for them - Particularily since I doubt that all of the corp tax relief put together will reduce what I pay to those corps by even 1%.

Instead of cutting the GST, I'd have liked to see targeted cuts, such as eliminating the tax altogether on printed materials.

All in all, a decent budget, and worthwhile for the Libs to support.

As for Layton, he should remeber that it was his party that put Harper in power.

Alex Sz
said

I can't believe people are mad about any type of TAX cut. Thank god my taxes are going down. Whether it be GST or Income taxes, bring it on.

As for the NDP saying there isn't anything for the lower income. Please... More money in the hands of PEOPLE mean more jobs which will help the needy. It will also allow others to give of their time in volunteering or in donations. It is a fact that the more prosperous people are, the more they help. I am one that doesn't believe that the government needs to do every little thing for you. We do need to take care of the most vulnerable.... that's what government is for but as for the rest of it, leave me with enough money so I can hire people to do things that I need to get done. I'd rather give my extra money to people for work, than have the government take it from me and give it to others 'free of charge' in programs that can be corrupted or mismananaged. Which brings me to the liberals.... oh wait a minute, that's old news.

Bob
said

This may not be a popular idea, but why not use the surplus to further pay down the national debt. Leave the "tax relief" for 1 more year, and wait to see how the economy shapes up ofer the next 12 months. That debt has to be paid sometime.....why not make a big dent now.

Rob
said

If anybod's wondering where the SURPLUS came from, the answer is CONSERVATIVE ALBERTA

Steven
said

GST cut is simply optics and would rather have seen deeper income tax cuts that would have rewarded those that have the incentive to work more and do more simply to have a better life.

Take issue with Laytons "prosperity gap" complaint. This man can always be counted on to fight for some to have a free ride on the backs of those that pay the bills. Why he thinks those that have should carry those that don't is simply beyond me and my non- socialist mind set.

All in all, the Conservatives are doing what so many parties before have not done and that is keep their promise. Top marks for that

Jason
said

"I notice no one is mentioning the added cost to business to implement a change to the GST on purchases. This is also even more of an impact when you do it mid year. I don't pretend to have all the answers but I know asking small business to change GST rates with a months notice is not a smart decision."

I'm a business owner. It will take me about 10 minutes to enter in a new tax code and about 20 extra minutes when doing the quarterly GST payment.

Jamie in Kitchener
said

If the government were able to elimate the GST all at once, people would be happy to no longer pay GST. Remember the original opposition to the GST in the first place?

This government seems to be doing the prudent thing, and cutting it back until it is eventually gone. Let's see how many people are STILL complaining once the GST is gone for good.

1% works out to about $300 per family on average. With two 1% GST cuts so far, I'll gladly keep my $600, thank you!

Deb in Sask
said

I think the gov't is right on. To all those who are complaining that they should have done this or should have done that, why don't you wait and see whether the other parties will pass this bill on Wednesday before complaining. For myself, while I don't spend $30,000 a year myself (as I don't make that much!) between myself, my husband, son and daughter who are still at home, I'm sure we must. You have to calculate GST on your power, telephone, internet, clothing, fuel, meals out, nights out, sports events (GO RIDERS!), etc. 1% will soon add up. So will the personal exemption, which means I will get back more on my income tax refund this year (and in case you're wondering, I get one most years, it's called tithing). All this in addition to paying $10 billion on the federal debt. That sounds good to me.

Richard
said

It's such a breath of fresh air to have a government that cuts taxes instead of the Liberal way of increasing the government's financial stranglehold on the Canadian middle class. Harper has my vote!

Inhaling a breath of fresh air
said

I have to say that in some ways, god bless this minority government where the Liberals are too weak to trigger an election. It allows the Conservatives to do what so few governments do when they are in power: KEEP THEIR PROMISES! I remember hearing everybody complain when the GST was introduced. NDP and Liberal alike all said they were against the tax and that it should be gone. The Conservative government made a promise and kept it. What a refreshing change. I think it's dumb that the other parties oppose it simply to be partisan. Party poltics is what is making our government ineffective, not this budget.

Ivan Reel
said

This is very misleading from a corporate tax perspective. The only break provided is on the first 400K of profits your company earns. After that corporate taxes are a staggering 47%! Making Canada one of the most difficult countries in the world to run a successful small business.

noel
said

Tax cuts all around,thanks much needed.But now what are the Liberal and ndp whiners going to complain about?:)

JM
said

Hey all these tax cuts since the PC's came into power add up. 2% on, an increase in personal exemption, reduction in rates, what I save from my provincial portion in relation to my federal portion, and presto, I'm saving about $1500+ per year. I dunno about most of you, but I welcome that extra change in my pockets.

Brian
said

Hey Paul,

It's a step in the right direction, isn't it? I guess there will always be people looking at this as the glass half-empty.

I think these cuts are reasonable and they should be applauded for reducing the debt.

Tim
said

They Made a Promise....
Are there other ways to cut taxes, yes - were they voted in based on those promises, no...
If you disagree, vote different next time. I find it hard to believe any of the others wouldn't have found a way to just pocket the extra cash given the history.

WJ
said

Well stated Donna. I like how you think. It seems some people want their cake and to eat it too! The PC's got the better of all naysayers. All early posters whined about GST cuts and extolled the virtues of income tax cuts. Well you got a GST cut, you got an income tax cut, and you got an increase in personal exemption. I think the PCs one-upped all critics.

Paul
said

Holy cow I better line my pockets for those extra toonies from the penny pinching so called personal tax reduction.

What a joke. So they've raised the exemption by about $600.00 which only means that's $600.00 you won't get taxed on... it doesn't mean you will get $600.00

Set that in par with inflation and interests costs on your home etc, middle and lower class are STILL BEHIND.

Wake up people... your $1.00/vote buys are adding up.

Grant Johnson
said

My household income is in the range of 60-80k. The following are my major monthly expenses:

Rent - exempt from GST
Food - 80-90% is zero-rated
Loans - exempt from GST
Vehicle insurance - exempt from GST

This 1% cut to GST doesn't benefit me at all. Why? Because I don't have the disposable income to buy a new vehicle, a new house, a family vacation package, etc. The personal income tax will help but for how long?

Buster B.Brown
said

A promise kept is worth a 1% tax break. Everyone hates the GST, the sooner it is gone the better. This Conservative govt would slaughter the red book liberals, there will be no election call.

True blue
said

hehehe.... can't beat all you Liberal-lovers out there..... "don't cut the GST, all major economists say its not the right time...." what a crock.... Where were these economists in the 90's when the Libs "promised" to eliminate the GST? Does 8 years all of sudden make it the wrong thing to do? Just because its the Conservatives doing it?

Oh.... by the way.... everyone just made a few dollars on the retroactive increase in the personal exemption

Oh.... by the way.... the personal exemption is going to increase every other year

Oh.... by the way.... they eliminated .5% of low income tax, reversing their own decision of a year ago. At least they had the courage to reverse themselves, not hide behind "economists"...

Liberals.... don't forget where the engine driving Canada's economy is right now. Alberta and oil, not Ontario and a flagging auto industry....

Donna Wood
said

Is it time once again to provide the short sighted this little story?
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20. "Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so: The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Tim, and don, you aren't overtaxed
said

DO none of the pro-gst-cut respondents understand that this GST cut would have been much better spent on something worthwhile, like Health Care, or help fund Education? Most of our students do not know what Vimy Ridge was, hospitals are overworked and understaffed, and that is only the teensiest tip of the iceberg. And besides, we may have saved thousands of dollars throughout the year, but will we feel it? No, as our money worries for the lower-middle class and under are for surviving today. Give me my money in April, when I file my taxes, thank you.

kr
said

The GST should be dropped altogether.....look at the cost of fuel, they charge a transportation tax, and such, then on top of all that they charge the gst. I thought that they were not allowed to tax a tax????

Anti-big-government
said

A cut in GST and an increase in personal allowances (call it an income taxt cut): a good start.

What we really need is a cut in the amount of government we have, so that we can cut even further the amount of income tax we have to pay. We do not need tier after tier of government employees ceating paper to justify their jobs. A good systems analyst could probably cut anywhere from twenty five to fifty percent of unnecessary tax-payer funded jobs in the Federal cicl service.

How about trying that one on, Mr Flaherty? That goes double for the Liberals and NDP who believe bigger government - hence higher taxes - is better.

PrinceC
said

It's funny of how all the leftists leave out the other highlights of the mini budget update in this news article, and here are the highlights posted in the article for those who forget:

# Two years later, on Jan. 1, 2009, the basic personal amount exemption will be increased to $10,100; and,
# The lowest personal income tax rate moves to 15 per cent from 15.5 per cent, effective Jan. 1 2007, undoing a change made in the first Conservative budget.

Now lets see I've highlighted the Leftist Agenda's comments in this article into a nice summary:

1) Complain about income tax rate and ignore the income tax cut by raising personal exemptions? Checkmark (done)

2) Complain again about income tax rates and ignore the percentage point drop in rate? Checkmark

3) Complain about how the poor recieve no benefit, yet the middle class pays for the ppors free services? Checkmark

4)Complain that the Conservatives are keeping
their promises, and that it's all politics, and yes it is politics, but at least they keep their promises, what do Chretien/martin Liberals have to show for it? Checkmark

5)Complain about GST and ignore the other budget highlights such as income tax cuts and person exemption rate increased? Checkmark

6) Complain that Conservatives should pay down debt instead of a GST Cut, wait wasn't that 14 billion to pay down debt which saved us 700 million plus in interest charges? Checkmark

Did I forget anything?

Robert
said

People who don't like these tax cuts are a bunch of whiners... you're complaining that 1% is not worth anything? So, what would happen if they said they were RAISING the GST by 1%... oh, then you'd hear everyone screaming and crying fowl - a cut in taxes is ALWAYS a good thing...

Besides, they ARE cutting the personal income tax - they're doing both. And next year personal income tax goes down ever further!! How can that be bad?? So the people who complain that we have to "spend to save" are also saving...

In my opinion, a very good move as we get the best of both worlds...

Dixie from Alberta
said

For those who are against the GST cut ... your utility rates just went down by 1% - what's not to like????

Len
said

Any tax cut is good. Let's not worry about which type of tax cut is better; at least we finally have a government committed to reducing taxes and leaving more money in our pockets.

Alex
said

This is the best pre-Christmas present Canadians can ever get! Finally, someone out there is listening to what many taxpayers want. I am especially pleased for what is in the announcement for lower income Canadians: lower GST, basic personal exemption up, personal tax rate down, EI reductions- wow! On top of that, we still have continued debt reduction. I am only concerned that the high dollar will severely damage the forestry, manufacturing and other sensitive industries. More attention needs to be paid to this problem. Bring on the election!

Kirk
said

What a pile of hypocrites. All of you were complaining bitterly when the Liberals did not cut the GST. You complained when the GST was put in. Now a government is actually dealing with it you still complain.

If you want money go earn it. This government is just giving a bit back.

marty d
said

Has anyone ever thought that the gst going down, means also for whomever is getting a gst check every 3 months means they're getting lower amounts, which isn't right

eric
said

I am a believer in the GST. I think it is the most representative form of taxation as most of us, wealthy and poor, spend the money we have. The wealthier spend more than the poorer. So they pay a higher tax. Increase the GST and cut personal income taxes is the way to go. And, if memory serves, when the Conservatives originally conceptualized the GST, it was to be tied to personal income tax reductions. But, that concept, was altered from the get go.

Concerned Canadian
said

For the amount of people complaining on the recently proposed tax cuts, it's a wonder how the Conservatives got the job in the first place, I think they could leave the GST where it's at and put some of that money into education, or low income housing, let the rich pay for being rich, and let the poor catch up.

Kent C
said

When the GST was first introduced, the left screamed that it was an unfair tax on low income earners. They just could not afford the increased tax on basic necessities. Now that it is being partially repealed back, I hear the left screaming that it amounts to nothing more than a tax reduction for the wealthy. Which is it folks??

A Practical Person
said

I can't believe how many people are actually complaining about the gst cut. Anybody who wants more money in their pocket would agree that the GST cut is a welcomed promise kept. Whether it is $300, or 50 cents that is more money in your pocket that you worked hard to earn.

Ian B
said

Kudos to the past Liberal Governments for setting the table for these tax cuts - too bad neither the Liberals or the current government see fit to use OUR tax surplus to fix the problem of hospital wait times, fix broken education systems, provide better programs for disabled persons, invest in green technology, reinvest in womens programs - you know all the stuff that was robbed to make the surplus.

Brad
said

They kept their promise and people are mad? Whaaaa?

GST cuts are good. Personal income tax cuts are good. The economy is good. We should be cutting taxes when we have the means.

Canadians are very highly taxed for all of our "free" services. So a reduction is most excellent. Beyond that the other parties are mad because all they can do is critize when the little minority government is making great changes! Oh maybe they are mad because they actually do what they say they will. Wow what a concept... :)

Erick
said

Well, I don't totally disagree with some of the comments about the GST cut but at least I will give this to the Conservatives! They kept their promise on most of their platform from the last election. Try to get that out of the Liberals would be impossible!

David
said

I think one thing to keep in mind with the GST cut to 5% is the goal of getting those Provinces who are not yet harmonized with the GST into the fold. That includes Ontario, so if the Conservatives can motivate the rest of the Provinces to harmonize their sales tax with the GST, that would be a considerable tax saving. And alone, a 2% cut off the GST does make a difference if you are buying a house or a car. That is hundreds to thousands of dollars in savings.

Frederick S
said

The price we pay for goods in Canada are too high, The GST cut does not help this. What is 1% 0f 100 = 1. If the price was cut by 20 dollars, you would save much more. Go after the price GOUGING by retailers and make Canadians Save money. Our government collects TAXES GST on the Inflated price of retailers making it better to let the rip-off continue!
WE DESERVE BETTER!!

Gis Bun
said

Another Conservative government was of wanting to have a majority government.

1% doesn't sound like much. Buy a $20,000 car and save $200. I'm sure they'll get you to fork over that $200 in another way.

Skip the 1%. Reduce our income taxes at the end of they year, add additional necessities that should be tax free and additional tax relief for those living in and near poverty.

Lance
said

For all of you who are complaining that a GST cut means people have to spend money to get the savings....that's the point. GST cut = stimulated spending = more jobs created and a stronger economy.
Basic economics

Andy In Cambridge
said

"How about taking the GST off of books?? Since the bookstores won't price the books at par with US prices...that move would have been great"

I agree Kelly, it would be nice to see the GST eliminated someday, but remember, they promised to cut it to 5% over their mandate, and this is what they've done. The reality is, even though they've reduced it, it's still a source of revenue for the government

Aaron
said

I know Ron from NS is concerned about inflation; however, considering most of the consumer goods we purchase are imported items, the 1% cut in GST should pale in comparison to our dramatic increase in the value of our dollar vs. the USD. There is no way a 1% reduction on the GST will trigger the central bank to raise interest rates by 1% either. The GST doesn't bring in very much revenue if you think about it... Consider how much you spend on taxable goods every year, and multiply it by 1%. For me it equates to max $280 if I didn't buy food etc. A 1% increase in my mortgage interest would be about $2,000. It's not gonna happen...

Roger T
said

Reducing the GST means cutting public services. The Gov't will come up with another way to tax people because the next announcement will be "We need more funding because will since the GST was cut, we are falling short on our budget." However you see it - in the end we pay for it in other ways.

K
said

If you're on welfare already, you won't be making enough money to pay any income tax, and you can write most stuff off to make your income even lower when all said and done, so that you're not taxed at all. GST is the best way to go. What about saving a hundred bucks on the $10 000 dollars a year for tuition, or saving thousands of dollars on a new $400 000 house. A GST cut is way better than an income tax cut. Oh and what about the thousands of dollars in gas you spend a year. You are saving money there too. Saving a dollar a fill-up starts to add up.

Phil
said

I notice a number of comments about a family spending $30,000. per year saving $300. on the lower GST. Since a large portion of annual spending is on accommodation (rent or mortgage) and groceries which are not subject to GST it follows that the savings for said family would likely be less than $150. per year. I am sure most Canadians would be far better served by a reduction in income tax. Also a reduction in business tax might help in retaining jobs in Canada.

big_biso
said

To those who are complaining that he should do this or should do that. Please read the news carefully. They cut the GST by 1% they reduced the personal income tax and the corporate tax. So they distributed the tax cuts in many area to please anybody who will complain and to fulfill a campaign promise.

Charles
said

This finance minister is so incompetent: income trust farce, slagging our market regulators, ignorance about US/Can prices and now GST effects. Can he do anything right?

John
said

As a pensioner on a fixed income a GST reduction does nothing for me because I have very little disposible income to spend. The last time the GST was cut 1% and the liberal .5% personal income tax reduction was clawed back I ended up losing between $20 to $25 a month. What low/fixed income people need is a personal income tax reduction ONLY. Don't make us pay for a GST reduction for the people who can really afford to pay it.

Michael
said

Overall a very responsible statement and actions to both reduce the tax burden as well as keeping our rate of economic growth at the highs we are enjoying.

Kelly
said

How about taking the GST off of books?? Since the bookstores won't price the books at par with US prices...that move would have been great

Ari Ukkonen
said

What most of us rich internet connected members of the upper middle class are missing here is that an income tax cut would do absolutely nothing to help the poorest of the poor and the working poor which do not have to pay income tax anyway. Poor people tend to spend what little money they have on beer, cigs, nights out at the movies and junk food. All of those items are GST taxable.

Terry in the Free West!
said

Unbelievable, up comes the 'hidden agenda' criticism again!
Thank God for these Liberal 'defenders of the Faith'.
Can't wait for Dion to force an election so we can shut these 'Chicken Little' Liberals up once and for all.

As far as the GST rebate for travellers, I just returned from a week in Texas, paid tax on everything nickle I spent. Why should Canada provide GST rebates to Americans? It's not like they don't pay taxes at home?

Come on people, try and see the glass as half full!!

DG
said

Keeping promises is important.

Getting our tax rates (sales tax or income tax) down to levels that are reasonably comparable to other first world nations is important.

To cut taxes of any description so low that there is no surplus whatsoever, would leave no room for a rainy day fund for large natural disasters, which can happen.

As well, not sure if anyone has noticed the 500 billion dollar gorilla in the room. Hey folks, we (all of us as citizens) still have a huge mortgage called the national debt to pay off....no matter who created it or added to it in the past. No surplus, means no extra funds to pay against the national debt, aka, mortgage.

Harper was able to put about $14 billion against the national debt for last year. Would be cool to see the same thing happen again this year. If we stay the course, or close to it, hold a bit of discipline, this country can be completely debt free by 2021.

Debt free nations have money for healthcare. Debt free nations have money for transportation. Debt free nations have money for all kinds of things.

Alex Montgomery
said

The 1% reduction is a farce. I agree with the person who says pay down the debt and give us some real money back. Money that governments have been stealing from Canadians for years.
Remember the Scholarship Scandal, how about welfare fraud, payments to contractors who are friends of the government. Not to mention excessive pensions. We have short memories.
I think the Conservatives are honest and will do what they promise and my vote will always go to Stephen Harper, however give us a decent break on income taxes. Most of us as has been mentioned will not benefit one dime from the GST cut.

Craig
said

Do the whiners here even pay attention to the news?

They mention that it is really hard to spend $30,000 in one year. Did you read the article, it was talking about buying a car. You've never bought a car before?

They keep saying that it is better to cut income taxes. The Conservative party has had income tax cuts as part of their election platform for the past 15 years. Flaherty has even mentioned that income tax cuts should be expected in the next budget. The media and the left seem to treat this as one or the other. The Conservatives will be cutting both the GST and income taxes in the near future.

They say that the debt needs to be paid down. It is the government's policy to use all excess surplus money to pay off the debt. In effect, it is already being done. The government has also promised to use all interest saved on the debt to pay for INCOME TAX cuts.

So before you start to criticize the government, take the time to learn about what the issues are. Don't just knock the government because you don't understand what's going on.

Owhenthelowly
said

Dear Mr Flaherty,
If you are reading this, could you please remember those who live on disability pensions-who could only dream of the 30,000.00 tax bracket everyone is talking about here?

I contribute 13,000.00 to my family of 4. GST doesn't help me much because most of that goes to food- which isn't gst'd. I wish I could pay taxes. I wish I didn't feel like such a drag on our economy. I wish I could spend more on GST even though we all are supposed to pay it. I think that would feel good. But mostly, I just wish my wife could quit working one of the 3 jobs she does to try to make ends meet.

Thank you for helping our country do so well, and for your careful fiscal management. I know you are trying your best.

Owen

Linda
said

Let me see if I understand this.The NDP and the Liberals,who once fought long and hard against the GST,are now poised to fight against lowering the tax.I wonder what the Liberals would do if there ever came an opportunity to abolish it all together.It was a Liberal promise at one time.
And the NDP,the people who want to fight poverty.Since very poor people pay almost no income tax,I expect they would see some benefit from a GST cut.How is it that a higher value dollar,more employment and lower taxes not a good step in reducing povery???
Check here for whining and complaining no matter what happens.

ance
said

A reduction back to 15 percent for the lowest marginal tax rate is the fairest way to disseminate a broad based tax decrease to all Canadians.

With a potential 15 billion dollar surplus the Conservatives should take this opportunity to restore the .5 percent decrease that they took back during their first year in power.

Because the GST is a tax on consumption, it is inherently of less benefit to low income individuals than a marginal tax rate reduction.

If your income dictates that you purchase only necessities, it is unlikely that the additional 2 cents you might save on toilet paper is going to be a huge benefit.

Calgary geek
said

Doesn't GST also apply to apartment rental, gasoline, natural gas electricity, phone and cable?

What are your monthly expenses?

Mario
said

And when our economy slows down (and it will, Alberta!!!) Let's see how much we scream when they have to raise the GST back up. Oh wait, No... they'll raise Income Tax....

Red or Blue - you just can't win.

William
said

Kathy,

They cut from other areas to create a surplus of money. Good fiscal management can only create so much surplus. Cutting funding might not be the popular choice but it had to be done somewhere. The liberal governement also admitted it cut to much and would start giving some back. Lets not forget with the extra surplus created by the liberals, more of our debt will be paid off which means less interest paid and more long term funding can be added else where. All these cuts by the conservatives have to be funded some way and I can only see our surplus leaving and our country crawling back into debt.

Enrique
said

I have to SPEND to SAVE 1%. Wow what a concept!

Rob K
said

You know, I have to feel for people in the government, we are never happy with any of them. We complain about the Liberals when they are the government, we complain about the Conservatives now that they are the government.

Here's the problem, we ALL agree we need more money in health care, infrastructure etc. etc. So, let's get all 30 million of us together in one place to decide the spending priorities of our country. We can discuss tax cuts at the same time and what form these should take. We can also discuss how much to put toward paying down the debt while we are all there.

Wait a minute...there is no where that 30 million of us can meet. Trying to get a good time for everyone to do a conference call for 30 million people would be a logistical nightmare.

It seems to me we elected a few people to represent us and help decided these issues for us and all we can do is complain, complain, complain. Look, no party is perfect (there's shocking news for you), but, we live in a great country that is enjoying the greatest prosperity of any country in the western world. If you think you can do better than the representatives you and I have elected and you think the priorities should be different, get off your butt and run for office where you can actually do something.

In my opinion, any tax cut in any form is a step forward for ALL 30 million plus of us, continuance of paying down the debt at the same time is also important and is being done. The more taxes the government cuts the more money I am willing to put back into the economy by buying items I could not afford previously. This is all good and ALL of us, no matter what our political stripe are going to enjoy the benefits. Aren't we lucky, lucky people??!!
Stop your political bickering and complaining all of you, instead reflect on how lucky we are as a people to even have the opportunity to consider tax cuts at all.

Ray
said

David: Just to be clear, Harper most certainly DID NOT PROMISE to leave income trust structures alone. It was not one of his five election priorities, in fact, it received little attention at all during the campaign.

Dave in Surrey
said

Cut Income Tax as an incentive to work harder and make more... GST cut only encourages spending, not savings and as Canadians are deep in personal debt, we need to focus on savings and in order to increase or productivity we need incentives to work harder!!!

Happy to Save 1%
said

To all of the people who think that this 1% reduction does not help out working families because you have to spend to save, answer this question.

Will you in the future purchase a:

House
Vehicle
Clothing for your self or family
Pay Utilities
Buy Fuel for you vehicle
Food
Entertainment
Christmas Gifts
School Supplies
Computer
Furniture......

the list is endless and guess what, most of the things on this list are essential to every family in Canada and are not "luxery items"

A promise kept and money saved. Next lets reduce income tax.

ED
said

So if this is a fair tax why do women have to pay it for sanitary products??? Last time I checked I couldn't go without it. All other "necessities" are not included in the tax, why not these? A small matter but when you have no money every little bit of the "wealthy man's tax" (to quote) that I don't have to pay is important.

Steve
said

How many times will left leaning people like David bring up the income trust subject. Harper said they would not change the income trust setup but when other companies wanted to start changing over to that set up and avoid taxes Harper had to do something to stop them.

If the system had not been changed where would the lost tax dollars have come from? You guessed it, personal income tax.

I can agree that it didn't look good on the government for what happened but the companies that caused the change also bear the responsibilty.

All I can say is that this "broken promise" which benefits all Canadians is minute compared to the Liberal promise of "Read my lips, NO GST" which they had 13 years to take care of but did nothing.

If this is the worst of the broken promises that we will see from the Harper government I can live with it, it is still way better then we ever got from the Libs.

Matt
said

This is getting annoying.

Most tax cuts benefit those who make more.
Why? Because they pay most of the taxes.

Those who have low incomes or are on social assistance shouldn't complain that they aren't getting a break, they should be thankful the rest of us are spending a disproportionate portion of OUR income paying for the services they recieve.

Low income people get a lot of services from the government that they quite simply didn't pay for. I don't mind helping, I don't mind even paying for a bit more than I actually use myself. However when half my paycheck goes to taxes it's a bit too much.

Richard
said

As per many of the early comments and some of the later comments:

Maintain the tax level in order to pay the debt. The log term savings will be much greater than with a debt.
If we don't pay the debt when times are good, when will we?

Hatrock
said

Nevermind a recent study showed that Canadians were in more personal debt than ever before. While the gov't rakes in huge "surpluses" (read: overtaxation), any money in our pockets to put toward paying that debt down is good news.

Brian
said

I applaud the Conservatives for following through on their promise to cutting the GST. However, a GST reduction does nothing for those who need it most. Fulfilling a pointless promise does not make it any less pointless.

Mlab
said

Instead of cutting GST across the board, why not cut it entirely for certain classes of products, like Ontario does with EnergyStar qualified products, and leave it unchanged for the "luxury" items like big cars and big new houses? Just because we're not sinking (further into debt) anymore does not mean we've got our heads above water.
Taxes should be managed to encourage the economy (household) to prosper, and eliminated only when we're completely debt-free.

Greg
said

We should only be reducing the income tax. This one per cent will only trigger when we SPEND money, whereas income tax is ongoing.

David
said

I completely understand why Conservative supporters are touting this as a good move. After all, Harper kept his promise cutting the GST to 5%. It's too bad that he broke a promise on income trusts in order to fund it. But that's ok, isn't it? I mean, it's just a whole bunch of broken promises vs. the ONE promise that he did keep. Anyone who supports Harper needs to seriously open their eyes and realize that one promise kept does not make up for dozens broken.

Kathy
said

A GST tax cut will benefit all who spend money. The Personal Income Tax will benefit only those who pay Income Tax. Both tax cuts would be welcome.

James. The Liberals accumulated a surplus by cutting funding to the Military, by cutting funding to the RCMP,by freezing the wages of Federal Gov't employees, cutting transfer payments to the Provinces (ie Health Care), etc., etc. The Liberals' surplus was not a result of Liberal fiscal good management. It was accomplished by taking away from others to benefit themselves.

Wendy Stevens
said

The GST cut will benefit expedentially those with money to spend so it doesn't help the "working poor" much! I would like to see small business get some financial credit for being tax collectors for the government!

Sagar V.
said

Cutting the GST will only increase spending. This in turn will increase retail sales, causing the BOC to raise rates.

Not a good move to raise rates given the value of our currency.

larry
said

All tax reductions are good news, as far as I'm concerned.
Rich and poor all buy goods affected by the GST.
While a 2% reduction may not look like much, I look at it as if I buy a hundred dollar item and now the tax is at 5% rather than the old 7% and that equates to almost 30% 'less' tax.

Elliott SASK
said

I am a single father with one child at home and one child I have on weekends. I work on average 180 to 190 hours a month. To bring in a grand income of 26,600.00 last year. I cannot afford to pay for a sitter so I can't have my other child two weeks on and two weeks off. But hey cut the GST bang on when I make it big I will be able to spend with out worry because that 30,000 I spend will save me a few hundred bucks. Stupid move cutting the personal taxes would have been a better move.So in short keep up the lousy work managing our country.
But when I go buy food this month and spend my money I will remember that the GST cut does not affect me much.

SaskDave
said

I'm just a working guy, not an economist or expert of some kind. Every time I make a purchase, a purchase I have to make anyway, I'll see the savings from a GST cut. Makes sense to me, but I also expect to see further personal income tax cuts if the Conservatives remain in power and fulfill their promises. From my perspective, well done Mr. Harper!

Doug
said

The government announced that they will reduce the GST, they will reduce personal income tax, and business tax. What is wrong with a broad based tax cut? Everyone is whining about the GST dropping 1% again... All the Liberal hacks that read this board cry about Harper's "hidden agenda" yet in under 2 years in office, he has done much more than the Liberal government did in nearly 13 years of corrupt government. Please, Grits, quit taking credit for the current resource boom... it wasn't you, and its not the Tories... its Canada, her resources, and her hard working people (who deserve broad based tax relief).

Rob Z
said

Seriously, the Conservatives would have been better off to use the surplus to reinvest in the social programs that were left underfunded by the Chr�tien government's cuts in the mid-1990's (meaning health care, post-secondary education, research and development, municipalities, etc). Such reinvestment would be far more beneficial to the Canadian economy than any tax reduction, consumption or income.

But then again, I do understand that the Conservatives are mainly doing this (the GST reduction) in order to fulfill one of their 2006 election promises, something which I can respect.

ET
said

What happened to spending SOME of the GST monies on paying down the debt, investing in health care and education, or a real daycare program? The next time we are stuck in an ER gurney waiting for 6 hours to see a doc, while our little ones are running around the room, remember just how much you enjoyed your 1% GST cut.

Over Taxed Don
said

I am sick of people complaining about the "RICH" benefiting from these tax cuts. I pay over $20,000/year in income tax alone which is more than my fair share. When the "poor" are paying $5000 or less per year on income tax who do you think deserves more of a tax break? I pay way more taxes into the system yet receive the same benefits as the next person who pays next to nothing into the system.

Maybe I make more than the "average" Canadian but I also pay way above average taxes.

The only reason that we have a system in which the "poor" pay very little or nothing in income tax is because our country over taxes the middle class working family to death to compensate.

I will take any tax cut I can get, also bring income splitting too.

Dan
said

Yes I agree it was a campaign promise but if they took the time to seel a comprehensive income tax cut the way they are selling this GST cut they would be golden.

The one person said it best. I would have to spend $30000 this year to realise a $300 savings. I make $38000 and on that I pay 17% of that in income tax. Those folks are REAL dollars. If they would have cut my personal income tax by 2% to 15% then I would realise a tax savings of $760. That folks again is real dollars not these hypothetical it sounds too good to be true dollars the Tories are trying to sell us.

As for the arguement that it is unfair to those that don't pay income tax well then I'm sorry. With the ecomomy and the employment rates that we have right now in Canada maybe it's time for them to upgrade their employment situation to something that pays income tax. Besides as the illustration says they would have to spend $10000 just to save $100 and someone not paying income tax is likely not going to be spending that kind of money.

Give the coporations a tax cut and the income earners. This will be a win win.

Kevin J
said

This government caters towards the middle class family. And hey wait, most of Canadians are part of middle class families. Nothing wrong with that. Realize that these are the people the GST reduction is geared toward. Those budding families looking to make a large purchase such as a car or a house.

Glenn
said

Any way you look at it keeping over 10 billion dollars in the pockets of consumer's is a good thing. A big part of it end up back in government coffers in the long run.

Pat S.
said

The rich get richer and rhe poor get poorer.
$30 000 in spending per year? Wow, must have a lot of disposable income to spend $30K per year. a 1% cut to stop me from spending in the US? HA, with the prices difference, good luck on that one!
I much prefer an income tax cut, as that has a greater effect on me and puts more $$$ in my pocket than a stupid GST cut.

Rick
said

To Anna - what about the people with low incomes who pay no income tax. Are you saying that they don't deserve a tax break. Lowering the GST is the only way to give all Canadians a tax break.

Davey Legasse
said

Perfect timing for a GST cut, economy is slowing slightly although still set to outperform the US. The last GST reduction from 7% to 6% had no effect on inflation, why are these guys whining that this cut will boost inflation? Last GST cut happened as the economy was in one of its strongest economic growth periods ever and yet no effect.

Program spending is greater than ever, the rate of spending increases is much higher than GDP growth yet here we have the lefties whining again about how so much more must be spent.

Right now we've got the money to increase program funding while reducing our onerous taxes and yet the complaining continues...what a nation of whiners we are.

Shawn
said

I would be interested to see how many people, who claim their savings will be minimal, would be willing to post all of their receipts on-line to prove their claim. You might be surprised how much you will really save.

The Conservatives said they would cut GST and they did. I would guarantee that if they didn't cut it, the majority of the people who have posted comments would be complaining that they didn't fulfill their election promises.

A 1% reduction may not mean much to most of us, and while I feel that a personal tax cut would have been better, we got a tax cut that does allow us to keep more of our money. Stop complaining and be thankful for a change.

Mike
said

IF GST does effect economic growth why not RAISE the GST by a few points and cut corporate and person income taxes???

Just look at whats happened to Ireland, they were borderline third world country a few decades ago now their GDP per-capita is in the top 5 in the world. Higher than USA. All because they slashed corperate taxes down to 12% vs our nearly 40%.

Im all for helping the poor but you can help them a lot more when GDP per capita is 50,000+ vs our current 36,000

Darren
said

The 1% cut will benefit those that shop retail most often and buy taxable items. Imagine the savings for real estate traders!

Most middle to lower class Canadians cannot afford to buy many of these high priced retail taxable items anyway (enough to see any difference over time) When the price of anything like coffee or milk goes up again that would be enough to offset this wonderful break.

A lot of people most in need of real breaks and cuts shop where places do not charge sales tax or where goods cost substantially less.

I see it as another negative impact to higher inflation and to make the economy sizzle a little more which isn't needed right now.

Those who consume (mostly) newer products and have the money to do so are the ones that are being rewarded here.

Prices of goods only need increase 1% or 1 cent for ever dollar to eliminate this lovely 'tax break' while at the same time taking billions of potential funding out of schools and/or health care.

What good is a 1% retail sales tax break if we need to pay $50-$100 per week to have our children supervised during the full school day. In addition to this most of us pay for school supplies and fund-raising to give milk or provide adequate school supplies simply to teach properly and have healthy schools.

ET
said

YEAH! I get to save:
$300 on a $30,000 car, and 50 cents on a $50 Christmas tree.

Oh yeah, I'm a single parent of two on welfare...and not planning on buying a tree this year. But thanks for cutting the GST! That's going to make a HUGE difference to me. And YES, I'm being very sarcastic, in case you couldn't tell.

DistinguishedFlyer
said

If fairness is the only issue, then the GST is the best tax to cut - people on higher incomes tend to invest a greater proportion of their income (not subject to tax), as well as pay a larger share of what they make in income tax. If you make less money, then the GST takes up a larger proportion of your income. The opposition parties, as well as other left-wing papers and lobby groups, had always taken this point of view from when the GST was brought in until the Tories proposed cutting it -- they suddenly changed their minds and said that the GST was a very fair tax, which it is not (although the GST credit offsets its impact on low-income people).
If, however, economic efficiency is the focus, then the GST is not a great tax to cut. Inflation is already at about 2.5%, and cutting a consumption tax will just drive it higher. The rate of saving is also very low, and making it even cheaper to spend your money rather than save it or invest it will increase this problem as well.
The best plan would be to increase the GST, (but at the same time increase the GST credit so the poor don't get hit too badly by it), and then use the money to finance large reductions in income & business taxes. Cutting those taxes would be better for the economy, while the extra sales tax would slow down inflation and increase the rate of saving. The increased GST credit would keep the system fair.

Exiled Canadian
said

The GST cut benefits everyone since both rich and poor have to spend money to survive. While a personal income tax cut would be beneficial to the majority of Canadians, those who don't pay income tax for lack of income would see no benefit whatsoever. In other words, the poorest of the poor would see no benefit in an income tax cut.

On thus subject of tourism, how many folks do you think actually fill out the GST rebate form? I know many folks in the U.S. who visit Canada regularly (including myself) and they never fill out the forms because they have enough paperwork to deal with as it is on a monthly basis. Cutting the GST saves tourists a penny on every dollar they spend. That's good for tourism.

Finally, this is just the conservatives keeping their promises. If they didn't get the GST down to 5%, they would be accused by the opposition during the next election of reneging on their promises to cut it. They said they would do it so now they are following up on their pledge when they can afford it.

Don't be surprised if you do see the income tax come down also at some point in the near future. The governement is getting the job done and keeping their promises. Whether you agree with their policies or not, you have to give them credit for following up on the promises they made to Canadians during the last election.

Michel
said

Considering the lower income earners in this country probably pay NO income tax, they would surely benefit more from a GST reduction. Given the huge surplus, I hope the government can do both, reduce the GST and provide income tax relief to those of us middle income earners that are paying the largest portion of our salary in taxes.

Greg
said

I have heard nothing about the possible capital gains taxes being changed? There was some talk about reinvesting your gains to postpone the Tax on gains that would be great for unemployment and business I like it, as long as it leaves your personal home as a tax free gain I'm all for it.

Cyndi
said

Given that I would have to spend lots of money to say any substantial savings with this GST cut, I would have much rather the government take this 1% and put it into repairing the roads and infrastructure of our great country. I'm not going to notice the 1% and I would rather it be put to good use.

Denis
said

The Conservative are choosing politics over good governance. All economists say not the time for GST cut.

Sean
said

I notice no one is mentioning the added cost to business to implement a change to the GST on purchases. This is also even more of an impact when you do it mid year. I don't pretend to have all the answers but I know asking small business to change GST rates with a months notice is not a smart decision.

Andr�
said

A government can not raise the GST without our knowledge...reducing the GST to 5% makes it an easier calculatable rate, it prevents the sneaky Liberals from raising taxes on it in the future and it forces the governement to live within its means...income tax cuts will and should still come in the future.

Michael (Ottawa)
said

Less tax is ALWAYS a good thing... how people derive it to be a bad deal is befuddling to most rational intelligent people.

Anna
said

Another ridiculous move by the conservatives! This cut only helps consumers and the rich get a break again.

Rob
said

To all those who say the GST cut is a bad thing, get over it!. It is a promise that was made and a promise that must be kept. I am a middle class earner. We don't live in luxury and work very hard. Our monthly savings are about 20 dollars or 240 per year.I will take any savings I can get.

Julian
said

Doesn't anybody remember the "Red book" of the liberals and their promise to remove the GST? and now everybody loves the Gouge and Screw Tax???
At least the Conservatives kept their promise and have reduced it from 7 to 6 to 5%. Reducing a tax that affects everything you buy can only be a good thing.

Raymond
said

You whiners. I welcome a GST cut, and yes, 2% does make a difference. If Harper suddenly reversed course, kept the GST at 6% and implemented a cut in personal income taxes, you'd be howling like banshees that he broke his promise. A tax cut is a tax cut.

shannon
said

The comments posted so far amaze me. The Conservatives promised to lower the GST to 5% in their election campaign and that's what they are doing. If they decided not to go ahead with it, all of these people would be screaming that they are liars. Some people are never happy.

Michele
said

continued:

"Well, if you think of an average consumer, a family spending about $30,000 a year, it would be $300 into their pocket,"
There are alot of Canadians who do not make 30,000 a year let alone spend that much on 'things' that charge GST. With most low income Canadians their biggest expanse is groceries (most not GST applicable). They could have used a income tax break.

James
said

What I dont think a lot of people understand is that they are doing this to prevent some people from going to the US for their holiday shopping. Of course it's a stupid idea. I mean if I wanted to save 1% I would just cut my personal spending, maybe a coffee or something. This has got to be one of the most useless moves done by the government.

Michele
said

At first glance it would be nice to pay less tax when buying something.
In fact a GST cut just rewards consumer spending. At a time when consumer debt is at an all time high, is this really the right way to go?
It does however make perfect political sense.
Unfortunately politicains/political parties, of all stripes,
are more concerned with getting/staying in power
then what is best for Canada/Canadians in the long term.
Seeing what is happening in the U.S. with consumer debt problems we should be encouraging personal fiancial responsibilty not more consumption.
Canadians should have a break on income tax, and they can decide if they want to spend that savings or save it. You should not have to spend to save money.
"Well, if you think of an average consumer, a family spending about $30,000 a year, it would be $300 into their pocket,"

gregt
said

I would put the GST rebate program for non-residents in perspective if claiming that it hurt the tourism industry... Whether the GST is 7% or 5%, it certainly much lower tax than the 17.5% VAT in Great Britain or the 19% Mehrwertsteuer in Germany. Again, whether the GST is 5% or 7% - it is hardly worth the effort to fill out the forms to get the refund.

James
said

Why should there be a tax rebate for tourists? Do we get our taxes back when we purchase things across the boarder?

Personally, I would like to see the government run like a household. Pay off the debt the best you can before making any more big purchases. IE: we are surviving now let's bite the bullet a bit longer and get us out of debt. Then we can reap the benefits of a strong dollar without paying a crazy amount of interest.

Overall though, I am happy with the Conservatives. However, I am not under any illusion that the Liberals didn't start this surplus. The Conservatives are just keeping it going.

Ron from NS
said

Does the Finance Minister not understand that you don't cut taxes when the economy is hot? A 1% GST cut savings will pale in comparison to the increase in interest costs that will come when the Bank of Canada raises the prime rate to keep a lid on inflation.

Everyone take their spending during the last year and deduct 1%, then take all your loans and add 1% interest. You will be shocked how much you will actually lose with a 1% GST cut during a hot economy.

All the surpluses should be used to pay down the debt (which is also your debt) so there will be room for tax cuts during bad times.

What is happening now is fiscal mismanagement from a Conservative government who says they are fiscally responsible.

Matt
said

The GST cut isn't a good economic move.

They should cut income and business taxes and raise the GST.

But the GST is unpopular, and people don't think about income tax cuts.

However the first step for a politician is to get elected, the GST cut is good politics.

More promises kept
said

As a Canadian who, because of low income, pays no Income Tax (other than the illegal Ontario health tax) a cut in the GST rate is very welcome.
Along with broad-based Income Tax cuts, these measures should go a long ways to help ALL Canadians.

Francis S
said

The GST tax break sounds great, but what is really behind Harper's agenda? He is trying to win support for a majority government, once that occurs, we are on our way to a US (type) of gov't and rule, protect the rich and their possession, and disregard the poor and unfortunate, this is not to mention the conservative type of policies that could comprimise many Canadian values and freedoms. So is this tax break comming as goodwill, or is it a ploy (politics)? because in the end, who is going to take the blunt end of this GST break, what's a few hundred dollars a year saved? when one considers the types of service cuts that will occur because of this. I give it to Harper, his gov't is smart, but we have not seen them in full action yet, and I for one am not looking forward to it. Their confidence is growing. Truly we Canadians did need a change, but this type of change is comming too quick and is unpredictable, but we Canadians will take this tax break, and forget that this is part of a greater agenda.

Peter
said

Reducing the GST by 1% � WOW.
This does not make sense � I will have to spend money in order to realize this saving.

The tax break should have been on personal income tax.

stephen
said

Reducing the GSt is one of the silliest things this government could have done, it was the fairest of all the taxes we have.. basically it just amounts to a greater tax reduction for the wealthy.. and offsets the burden of paying back the debt to further future generations of Canadians.

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Perhaps they should look at reducing duties resellers must pay for products coming from the US to Canada in order to level the field? Then it would be prudent for the resellers to offer competitive pricing and good service to maintain a loyal customer base.

padev

New cross-border shopping rules take effect Friday

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