Tax Cuts Slated For 2007 Canadian Budget

by Mike Godfrey, Tax-News.com, Washington

22 February 2007

Jim Flaherty, Canadian Minister of Finance, has announced that he will table the second budget of Canada’s Conservative administration under Prime Minister Stephen Harper on March 19, 2007.

"In this budget, Canada’s New Government intends to take a fair and principled approach to fiscal balance, as proposed in the discussion document 'Restoring Fiscal Balance in Canada', which we released with Budget 2006," revealed Flaherty.

"We will deliver on our commitment to hard-working Canadians and their families to put money back in their pockets by further reducing taxes," he added.

In Budget 2006, the Conservatives claimed to have reduced taxes by almost C$20 billion over two years, more than the previous four budgets combined.

Key tax measures contained in the 2006 budget included the long-promised 1% cut in Goods and Services Tax to 6%, a 2% cut in the general corporate tax rate by 2010, eliminating the corporate surtax on all corporations by 2008, axing the federal capital tax, and increasing the amount of income eligible for the lowest rate of corporate tax for small businesses. In addition, this bottom rate will be reduced by 1% to 11% by 2009. Targeted tax relief aimed at both corporate and personal taxpayers was also announced.

Flaherty indicated that some of the new measures will take effect from midnight, March 18, 2007, the day preceding the budget presentation.

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