441-02557 (Taxation)

Since taking office in 2015, the government's focus has been investing in the middle class, growing the economy, strengthening Canada's social safety net, and making life more affordable for Canadians. Key measures include:

• Maintaining the age of eligibility for Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefits at age 65, by reversing the previous government’s planned increase to age 67.

• Increasing support for families and low-income workers through programs such as the Canada Child Benefit and the Canada Workers Benefit, which have helped lift over 1 million Canadians out of poverty since 2015.
• Building a Canada-wide system of early learning and childcare, which is delivering $10-a-day childcare in eight provinces and territories, significantly ahead of schedule. All other provinces have cut fees by 50 percent and remain on track to deliver $10-a-day childcare by March 2026.
• Increasing the GIS top up benefit for low-income single seniors, enhancing the GIS earnings exemption, and increasing OAS for seniors aged 75 and older.
• Reducing taxes for the middle class from 22 percent to 20.5 percent, while raising taxes on the wealthiest Canadians. 
• Increasing the basic personal amount – i.e., the basic amount of income that Canadians can earn before paying federal income tax – to $15,000, while phasing out the benefits of the increased basic personal amount for wealthy individuals. In 2024, individuals are saving up to $232 due to the increase in the basic personal amount.
• Cutting the federal small business tax rate from 10.5 percent to 9 percent. Since the small business tax rate applies to the first $500,000 of active business income, this can leave up to an additional $7,500 per year for entrepreneurs and innovators to reinvest in their businesses.

As a result of these and other actions taken by the government since 2015:

• The poverty rate was reduced to 9.9% in 2022, compared to 14.5% in 2015.
• The unemployment rate was 6.1% in the first half of 2024 vs. 7.2% in the first half of 2014.
• The Employment Insurance premium rate was brought down to 1.66% in 2024 from 1.88% in 2014.

In addition, the Government of Canada has provided targeted inflation relief to Canadians struggling with the impacts of global inflation, which has made the cost of living a real challenge. This includes direct, tax-free payments of up to $1,300 per child over two years to eligible families to cover dental expenses for their children under 12 years of age. In addition, the Canadian Dental Care Plan has already helped more than 100,000 seniors receive the dental care they need. The plan will be fully implemented by 2025, helping reduce financial barriers to dental health care for all uninsured Canadians with annual family income under $90,000.

Climate action is critical to Canada’s long-term health and economic prosperity. Pollution pricing is widely recognized as effective and the most efficient means of reducing greenhouse gas emissions, which is why the Government of Canada has made sure that it is no longer free to pollute in Canada.

The federal price on pollution is revenue neutral for the government of Canada; the direct proceeds from the federal pollution pricing system remain in the province or territory where they are collected. Put simply, every dollar collected from the pollution price is returned.

In provinces where the federal fuel charge applies, over 90 percent of direct proceeds are returned to residents of those provinces through the Canada Carbon Rebate (CCR). As confirmed by independent experts, the majority of households receive more back in rebates than they pay through the carbon price, with low- and middle-income households benefitting the most. The remaining proceeds are used to support small and medium sized businesses and Indigenous governments. In Budget 2024, the government announced the new Canada Carbon Rebate for Small Businesses, an accelerated and automated return process to provide direct refunds to small and medium-sized businesses. Furthermore, recognizing that many farmers use natural gas and propane in their operations, farming businesses may claim a refundable tax credit to directly receive a portion of fuel charge proceeds.

This year, through quarterly payments, a family of four will receive the following amounts under the base CCR: $1,800 in Alberta, $1,200 in Manitoba, $1,120 in Ontario, and $1,504 in Saskatchewan, $760 in New Brunswick, $824 in Nova Scotia, $880 in Prince Edward Island, and $1,192 in Newfoundland and Labrador. Those living in a rural or small community are eligible for a supplement in addition to the base CCR amount (except in Prince Edward Island, where all residents receive the rural top-up). In recognition of rural Canadians' higher energy needs and more limited access to cleaner transportation options, the government has doubled the rural supplement from 10 percent to 20 percent of the base rebate amount, starting in April 2024.

The government is also working to expand rural supplement eligibility to more Canadians who need this support and, as committed to in Budget 2024, will announce a proposal for better defining rural areas later this year.

The government will continue to take action to support the middle class and make life more affordable for Canadians.