Canada needs a tax system that improves the standard of living, and encourages investment in Canada .

Here in Ontario and throughout Canada, residents will have more money in their pockets and Businesses will have more money to invest as a result of our Government’s Fall Economic Statement. Our plan will lower the federal tax burden to its lowest level in nearly a half a century.

Actions already taken by the Government will reduce taxes on individuals, families and businesses by almost $130 billion over this and the next five fiscal years. Our recent Fall Economic Statement builds on this legacy by providing an additional $60 billion in broad-based tax relief over this period.

We are giving tax relief to businesses, starting now and continuing over the next five years. We are ushering in a new era of declining business taxation in Canada. It will be a steady, predictable decline that businesses can count on and can plan on.   

To improve productivity, employment and prosperity in an uncertain world, a new tax reduction initiative will reduce the general federal corporate income tax rate to 15 per cent by 2012 from its current rate of 22.1 per cent. We are starting this reduction by immediately cutting the general federal corporate income tax rate by one-percentage-point in 2008. This will be followed by ongoing reductions that will bring the tax rate down to 15 per cent by 2012. To specifically support small business, the reduction in the tax rate to 11%, currently scheduled to be reduced in 2009, will be accelerated to January 1, 2008.  These reductions will give Canada the lowest overall tax rate on new business investment in the Group of Seven (G7) by 2011 and the lowest statutory tax rate in the G7 by 2012. 

In order to make businesses even more competitive, it is essential that Employment Insurance rates be reduced for employers and employees. The Employment Insurance Chief Actuary’s 2008 Report forecasts the break-even rate in 2008 will decline by 10 cents per $100 of insurable earnings for employers and 7 cents for employees.

We are also acting to reduce personal income taxes. In the Fall Economic Statement we are increasing the basic personal amount to $9,600 retroactive to January 1, 2007. In addition the basic personal amount will be further increased to $10,100 on January 1, 2009. This is the total amount all Canadians can earn without paying federal income tax. In addition, we are reducing the lowest personal income tax rate to 15 per cent from 15.5 per cent retroactive to January 1, 2007.

Together, these income tax cuts will deliver relief on spring income tax returns:

•  Families earning between $15,000 and $30,000 will pay on average almost $180 less in tax in 2008. 
•  Families earning between $45,000 and $60,000 will pay on average almost $400 less in tax in 2008.