The Economic Action Plan: What it Means for SDSG Families

January 30, 2009

“The Economic Action Plan presented on January 27th is unprecedented in so many ways,” said local MP Guy Lauzon.  “Not only was the consultation process unlike anything previously embarked upon, but the changes that are going to be put into effect are so substantial that they will benefit Canadians from all walks of life, including individuals right across SDSG.”

Enclosed are some examples of what the Economic Action Plan will mean to average Canadians.

Single Parent Family
Beverly earns $35,000 and is a single parent of two children.  Without the measures taken by this government, she would have paid $1,629 in federal personal income taxes in 2009.

• Tax relief provided prior to Budget 2009 reduced her personal income taxes by $1,150.
• Measures proposed in Budget 2009 will provide a total benefit of $502.
• In total, her federal personal income taxes in 2009 will be reduced by 75%, or $1,216.

Dual-Earner Family
Bob and Emily have two children.  Bob earns $45,000 and Emily earns $85,000.  Without the measures taken by this government, they would have paid $20,097 in personal income taxes in 2009.

• Tax relief provided prior to Budget 2009 reduced their personal income taxes by $1,455.
• Measures proposed in Budget 2009 will further reduce their taxes by about $483.
• In total, their federal personal income taxes in 2009 will be reduced by 10%, or $1,938.

Single-Earner Family
Matthew and Giuliana are a one-earner family with two children, and Matthew’s income is $90,000.  Without the measures taken by this government, the family would have paid $14,516 in federal personal income taxes in 2009.

• Tax relief provided prior to Budget 2009 reduced their personal income taxes by about $1,182.
• Measures proposed in Budget 2009 will provide a total benefit of $426.
• In total, their federal personal income taxes in 2009 will be reduced by 11%, or $1,532.

Working Income Tax Benefit Example
Martin is a single father with a 5-year old daughter living in Nova Scotia.  He receives $15,020 in combined federal and provincial benefits.

• If Martin were to take a full-time job paying $8.50 per hour, he would earn about $15,000 per year.
• After taking into account the loss of provincial social assistance benefits and payroll taxes, Martin would receive about $4,810 in net federal and provincial benefits, and his disposable income would be about $19,810.  In other words, Martin would gain $4,790 from going to work.
• The Working Income Tax Benefit would provide Martin an additional $1,605 and so would raise his net return to work to $6,395, a 34% increase.

Seniors Couple
Winston and Olivia are a senior couple receiving $65,000 and $20,000 respectively in pension income.  In the absence of the measures taken by this government, they would have paid $13,636 in federal personal income taxes in 2009.

• Tax relief specifically targeted to seniors and pensioners, such as the 2006 increase in the Age Credit, the doubling of the pension income credit and pension income splitting, reduced their taxes by $1,769.
• Winston and Olivia also benefit from $393 in other personal tax relief, introduced since 2006, such as the reduction of the lowest personal income tax rate.
• In addition, the increase in the Age Credit amount in Budget 2009 will reduce their taxes by $300, and other personal tax reductions in this budget provide a further $331 in tax relief.
• In total, their federal personal income tax rate in 2009 will be reduced by 20%, or $2,793.