Personal income taxes drop $1,000 per person in past decade

By Special to MoneySense on May 27, 2014
Estimated reading time: 1 minute

The PBO says taxes have been cut by about $17.1 billion through a variety of changes since 2005.

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OTTAWA – Canada’s budget watchdog says Canadians are paying Ottawa about $30 billion less this year — or a little less than $1,000 per person — due to tax changes introduced in the past decade. The Parliamentary Budget Officer calculates in a new report that personal income taxes have been cut by about $17.1 billion through a variety of changes introduced since 2005. And the two-percentage point cut in the GST has resulted in a $13.3-billion saving this year. Another way of representing the numbers is that Ottawa would have a healthy surplus today if not for the tax cuts. The PBO did not calculate savings or lost revenue due to corporate tax reductions due to what the office said was data limitations. Most, but not all of the tax reduction measures, have occurred under the Conservative government of Stephen Harper, which took office in February 2006. By comparison, the many spending reductions and job cuts introduced by the Harper Conservatives will result in about $12.5 billion in savings for the government in the current 2014-15 fiscal year. Despite some criticism in this area, the PBO says the lion’s share of the tax savings have gone to low middle income earners — households with incomes between $12,200 and $23,000. The lowest and highest 10 per cent of income earners have benefited the least from the changes.