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Canadian legislation to reduce the middle income tax rate to 20.5 percent received Royal Assent on December 15.
Bill C-2 reduces the tax rate on incomes between CAD44,701 (USD33,449) and CAD89,401 from 22 percent to 20.5 percent. The Finance Department estimates that single individuals will see an average tax reduction of CAD330 a year, while couples will benefit to the tune of CAD540 a year.
The tax cut took effect as of January 1, 2016. According to the Finance Department, "it supports the Government's effort to foster long-term economic growth, create jobs, and help Canada's middle class prosper."
Also given Royal Assent were Bill C-29, which indexes the Canada Child Benefit, and Bill C-26, which facilitates the implementation of an agreement between Canada's federal, provincial, and territorial governments on enhancing the Canada Pension Plan.
Finance Minister Bill Morneau said: "A strong economy starts with a strong middle class. Canadians understand this, and so does the Government. Our first step to strengthen the middle class is now passed into law by parliamentarians. We are also helping Canadian families across the country with increasing child care costs through the Canada Child Benefit, and ensuring its viability in the long term through indexation."
"These measures give middle class Canadians more money to save, invest, and grow the economy."
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