After stopping a planned hike to minimum wage little more than a month ago, the provincial government has announced tax cuts for low-income workers as part of an economic update.
The Low-income Individuals and Families Tax (LIFT) credit would benefit more than a million people across the province providing minimum-wage workers up to $850 in Ontario Personal Income Tax relief and couples up to $1,700.
“With this tax relief, a single person who works full time at minimum wage (earning nearly $30,000) would pay no Ontario Personal Income Tax. Tax relief would be gradually reduced for taxpayers with individual incomes greater than $30,000, and family incomes greater than $60,000,” reads a media release.
“One in six Ontario taxpayers would get the LIFT Credit and, on average, would receive about $450 in tax relief. The tax credit would be effective January 1, 2019.”
Finance Minister Vic Fedelli announced the cuts as part of government’s fiscal roadmap, which also included measures to reign-in spending.
The media release states that the Province has saved $3.2 billion, or about two per cent, in program expenses by reducing spending “while not reducing front-line services.”
It also notes that the projected provincial deficit now sits at $14.5 billion — down from $15 billion deficit inherited from the previous government as reported by the Independent Financial Commission of Inquiry roughly three months ago.
“The magnitude of our fiscal challenge is real. It will require difficult decisions as we work to get Ontario’s finances back on track,” Fedeli said.
“This government believes balancing the budget and reducing Ontario’s debt burden is not only a fiscal imperative, it is a moral one. The previous government spent well beyond its means, creating a structural deficit that is unsustainable. Doing nothing is not an option — we need to spend smarter and reinvent government.”
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