Ottawa, January 30, 2007
Archived - Minister of Finance Stands Firm on Tax Fairness for All Canadians
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- Remarks by the Honourable Jim Flaherty, Minister of Finance, to the House of Commons Standing Committee on Finance
- Backgrounder - Estimated Federal Revenue Impact from Flow-Through Entities
- Charts and Tables
- Letters of Support From Provincial Finance Ministers
Before a special hearing of the House of Commons Standing Committee on Finance, the Honourable Jim Flaherty, Minister of Finance, today stated that Canada's New Government intends to proceed with the Tax Fairness Plan that was announced October 31, 2006.
"Make no mistake, the decision that was taken on October 31st is all about fairness-fairness in our tax system, fairness for hard-working Canadian taxpayers and their families, fairness for seniors, for business and other levels of government," said Minister Flaherty. "I am not prepared to sacrifice the interests of millions of hard-working Canadians who pay their taxes and play by the rules so that a select group of special interests can enjoy a tax holiday."
Minister Flaherty provided the committee with a detailed accounting of the estimated federal revenue loss of $500 million for 2006 due to the special tax advantage for income trusts-a burden that was unfairly being shifted to ordinary taxpayers and other tax-paying corporations.
The Minister pointed out that extending the 4-year transition period for existing trusts to 10 years would cost the federal treasury approximately $3 billion. It would also cost provincial treasuries. Alberta would lose over $2 billion and Quebec would lose hundreds of millions.
Minister Flaherty noted provincial and territorial governments unanimously supported the Tax Fairness Plan at the December 2006 meeting of federal-provincial-territorial finance ministers in Vancouver given the negative impact of income trusts on provincial revenues and their economies.
"It is regrettable that some investors suffered financial losses," said Minister Flaherty. "Although it was a very difficult decision, it was an absolutely necessary decision for the country and for future generations of Canadians, our children and grandchildren. At the same time, we have proposed to further reduce the general corporate income tax rate, increase the age credit amount by $1,000 and, for the first time ever, allow Canadians to split their pension income beginning this year."
Minister Flaherty's presentation to the Standing Committee on Finance and other documents related to the Tax Fairness Plan and income trusts can be accessed at http://www.collectionscanada.gc.ca/webarchives/20071115073724/http://www.fin.gc.ca/access/truste.html.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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