October 06, 2016 - 6:18 PM
OTTAWA - Conservative leadership candidate Maxime Bernier wants to eliminate some of the boutique tax credits favoured by former prime minister Stephen Harper to help cover the cost of cutting income taxes for a majority of Canadians.
"I prefer to have a tax system that would be fair for everybody," the Quebec MP said at a news conference Thursday as he unveiled his plan for income tax reform.
"I don't want the government to choose winners and losers," he said.
Bernier is promising a more-straightforward income tax plan that would mean anyone who makes between $15,000 and $100,000 a year would be taxed at a rate of 15 per cent.
Anyone who earns below $15,000 a year would not pay any federal income taxes and anyone who makes more than $100,000 would be taxed at 25 per cent.
That would bring the number of income tax brackets down to two from five.
Right now, the current personal exemption is set at $11,474, the lowest tax rate is 15 per cent for earnings up to $45,282 and the highest is 33 per cent for anyone whose annual income exceeds $200,000.
Bernier said his proposed change, inspired by reforms brought in during the 1980s by former Progressive Conservative prime minister Brian Mulroney, would make the tax system fairer, easier to understand and less expensive to manage and enforce.
He estimated the plan would cost the federal government between $30 billion and $35 billion in lost revenue, which is why he would like to introduce the cuts gradually and only as finances allow.
"There will be no tax cut financed by borrowed money," said Bernier, who has also pledged to balance the budget within two years, should he become prime minister.
Bernier said he would be able to make up some of the revenue difference by getting rid of some so-called boutique tax credits — such as the deduction that can be claimed for moving expenses — should a case-by-case review find they serve no public policy purpose.
He pointed to a Fraser Institute study from last year that identified dozens of tax credits that could offset some $20 billion should they all be eliminated, but noted he did not expect the savings to be that high because there are tax credits that should stay, such as those meant to relieve the financial burden of those caring for their elderly parents.
"These are not things we want to touch," he said.
Bernier did not outright disavow the approach the Harper government took, or divulge whether he had opposed such tax credits around the cabinet table, but acknowledged his plan would take things in the opposite direction.
"I believe that this reform, it's more fair, more responsible, than other kinds of reforms," Bernier said.
Later on Thursday, his Conservative leadership rival Tony Clement took to social media to announce that he would be proposing a single tax rate, also known as a "flat tax," arguing the current progressive tax system penalizes Canadians for working harder.
Clement said he would share more details of his income tax plan later in the campaign.
The other five candidates in the Conservative leadership race are MPs Andrew Scheer, Kellie Leitch, Michael Chong, Deepak Obhrai and Brad Trost, but more are expected to throw their hats into the ring.
The Conservatives will choose their new leader May 27.
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News from © The Canadian Press, 2016