The Liberals passed a major government milestone, delivering the throne speech for the 42nd parliament. Delivered by Governor General David Johnston, the throne speech outlines the priorities of the Liberal government, promising “real change.”
The Liberals are inheriting a $2.3-billion deficit from the Conservatives. This is in stark contrast to the $1.4-billion surplus projected by former Conservative Finance Minister Joe Oliver. This has led to the Liberals backing away from their promise to keep the annual deficit under $10 billion. Key election promises for the pocketbooks of Canadians include a tax cut for the middle class, lowering the retirement age for Old Age Security and the expansion of CPP.
Helping the Middle Class
A key election promise of the Liberals was to tax cuts for the middle class. In the throne speech, helping the middle class was referred to as an “immediate priority.”
“This is the fair thing to do, and the smart thing to do for Canada’s economy,” read Johnston from the speech.
The Liberals have pledged to make taxes more fair for the middle class, and are hoping Canadians leverage the extra cash to save, invest and grow the economy. They’ve promised to cut the middle income tax bracket from 22 per cent to 20.5 per cent; if your taxable income is between $44,700 and $89,401, you will see your income tax rate fall. This adds up to tax savings of up to $670 per person, per year or $1,340 for a two-income household.
To help pay for this tax cut, the Liberals are asking the “one per cent” to pony up their fair share. To do that, the Liberals are introducing a new tax bracket of 33 percent for Canadians with taxable income over $200,000 per year.
Other Election Promises
The Liberals also touched on their promise of expanding CPP – their solution to ensuring Canadians are saving enough for their golden years, and offsetting the looming retirement crisis.
They also mentioned the new Canada child benefit they plan to introduce; the party is famously scrapping income splitting for families and the Universal Child Care Benefit. The Canada child benefit promises to give more money to nine out of 10 Canadian families compared to what they would have received under a Conservative government. A family of four can expect to receive an extra $2,500 tax-free each year.
Opposition Leaders on the Throne Speech
As this was one of the shortest throne speeches in modern history, some felt left out in the cold; interim Conservative Leader Rona Ambrose was disappointed with the lack of mention for agriculture, energy or the private sector.
“What we’ve seen from this speech from the throne is nothing less than big government and big spending, which we know will result in higher taxes for Canadians,” said Ambrose.
The Liberals have a lengthy list of election promises that don’t come cheap. The Canadian Taxpayers Federation is concerned this could lead to higher taxes for Canadians.
“They’ve made a lot of big promises and the government will be hard pressed to find a way to pay for them all,” said Canadian Taxpayers Federation director Aaron Wudrick.
Although NDP Leader Tom Mulcair had some nice things to say about the throne speech, he was disappointed for the lack of mention about the promise to lower the Old Age Security age from 67 to 65.