Finance Minister Bill Morneau says tax changes to take 12 billion more

OTTAWA — The Liberal government is poised to make good on its promise to cut federal income taxes for middle earners by raising the rate on the richest Canadians — cuts that the government admits won’t be revenue-neutral.Finance Minister Bill Morneau is conceding for the first time that the changes are going to cost the federal treasury $1.2 billion annually, starting in the 2016-17 fiscal year.The government has introduced a motion in Parliament lowering the income-tax rate on Canadians earning between $45,282 and $90,563 per year from 20.5 per cent from 22 per cent, to take effect starting Jan. 1.To offset most of that tax-rate change, the Liberals are also imposing a higher tax rate of 33 per cent on earners in the top one per cent — those who make more than $200,000 per year.Morneau says the government is being forthright with Canadians about the total cost of the tax changes.Those changes also include cancelling a Conservative plan to increase limits on tax-free savings accounts from $5,500 to $10,000.“We are starting today with middle-class tax breaks, a key part of our initiative,” Finance Morneau told the House of Commons on Monday.“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. This is an important first part in our tax program.”How most Canadians will be left out in the cold by Trudeau’s proposed tax cutWhy it makes sense to use your TFSA to get out of debt this ChristmasWhy it’s time for Canadians to forget about the $10,000 TFSABut some say the tax changes, a central pledge in the campaign platform that helped propel the Liberals to victory in October, are likely to cost public coffers more than the government expected and could provide more benefit to richer Canadians.For example, a study released Monday by the Canadian Centre for Policy Alternatives found that higher-income earners — those who make more than $124,000 — would benefit most from the middle-class rate cut as long as they did not earn enough to land in the new upper bracket above $200,000.Those making more than $90,563 are taxed at three different rates: one rate on the first segment of income up to $45,282, the second, newly reduced rate on the next segment of income, up to $90,563; and a third rate beyond that, up to $200,000.As a result, they will realize a greater total benefit from the middle-bracket cut than will an income earner whose annual salary lands within that bracket, the study says.Another recent study by the C.D. Howe Institute think tank said the changes would encourage big earners to make more of an effort to avoid taxes, while the rate reduction itself could cost government finances more than expected.In its platform, the Liberals estimated the tax increase on the top earners would fall a little short of covering the full costs of the tax cut. It projected the reduction to cost close to $3 billion annually over its four-year mandate.Combined with the sting of the struggling economy, the new Liberal government is facing increasing pressure to meet its election vows to cap annual deficits at $10 billion over the next two years and to balance the federal books in the fourth year of its mandate.Morneau has said the Liberals are facing a slower economy and a worse-than-expected fiscal environment handed over from the former Conservative government.“We have inherited a situation that is more challenging than what was foreseen in the budget,” he said.Last month, Morneau announced a $3-billion deficit forecast for the current fiscal year. In April, the Tories projected a $2.4-billion surplus for 2015-16 — including the $1 billion set aside for contingencies.The proposed changes to the tax brackets will help boost the economy, the Liberals say. Last week, however, Morneau backed away from the Liberal vow to keep annual shortfalls under $10 billion in 2016-17 and 2017-18.He said the government would focus on its pledges to invest in infrastructure, lower the federal debt-to-GDP ratio and balance the books before the next election, but dodged when asked directly about the party’s promise to keep annual shortfalls under the $10-billion ceiling. read more

Princess Diana to be remembered at Aids hospital as friends and fans

first_imgFlowers and tributes to mark the 20th anniversary of the death of DianaCredit:John Stillwell/PA Wire Diana was a woman whose warmth, compassion and empathy for those she met earned her the description the “people’s princess”.Twenty years may have passed since her death shocked the world but her appeal remains undiminished. The 20th anniversary of the death of Diana, Princess of Wales will be marked at an Aids hospital she regularly visited today.Diana’s sons the Duke of Cambridge and Prince Harry have already paid tribute to their mother, visiting the floral tributes and pictures of the Princess left at the gates of her former home Kensington Palace.The brothers toured the site on Wednesday and laid flowers on behalf of well-wishers who had gathered to see the royals. The institution will hold a remembrance service and past members of staff will share their memories of Diana as will the hospital’s patron, actress Linda Robson, and dancer Wayne Sleep who famously performed with the Princess. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily  Front Page newsletter and new  audio briefings. William and Harry also met representatives of charities their mother supported and the Prince told them how her death was a tragedy for them – as they were preparing to work with the royal – as well as his family.He said: “I can imagine for a lot of you it was like ‘right here we go, now we’ve got her, we’ve got the thirst, we’ve got the attention, now let’s do something’ then suddenly she’s snapped away – if I can put it (this way) all of us lost somebody.” “And we wonder what kind of a mother she would be now, and what kind of a public role she would have, and what a difference she would be making.”Former prime minister Tony Blair called Diana the “people’s princess” on the day she died and in a magazine interview with his former spin doctor Alastair Campbell, William echoed the words of his brother.He said: “I think she would have carried on, really getting stuck into various causes and making change. Diana’s sons the Duke of Cambridge and Prince Harry have already paid tribute to their motherCredit:John Stillwell/PA Wire People look at flowers and tributes outside Kensington Palace Thinking of the wonderful times we spent with Diana and the great joy she brought into our lives and all those who knew her.— Elizabeth Emanuel (@ElizabethEmanue) August 31, 2017center_img Diana's sons the Duke of Cambridge and Prince Harry have already paid tribute to their mother “If you look at some of the issues she focused on, leprosy, Aids, landmines, she went for some tough areas. She would have carried on with that.” Royal well-wishers light a candle outside of Kensington Palace in London Fans of Diana, who was killed in a Paris car crash on August 31 1997, are likely to gather at Kensington Palace to mark the anniversary.William and Harry have spoken candidly about their mother in the run-up to the 20th anniversary of her death, describing the personal anguish they experienced and the grief they still feel.Harry, interviewed for an ITV documentary about his mother, said: “There’s not a day that William and I don’t wish that she was … still around. Flowers and tributes to mark the 20th anniversary of the death of Diana People look at flowers and tributes outside Kensington PalaceCredit:John Stillwell/PA Wire The Princess will also be remembered at East London’s Mildmay Mission Aids hospital, visited regularly by Diana when it was a hospice caring for HIV patients. Royal well-wishers light a candle outside of Kensington Palace in LondonCredit:AP Photo/Kirsty Wigglesworthlast_img read more