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Liberals' income tax cut to cost more in lost revenues than planned, PBO says

Last Updated Jan 28, 2020 at 3:10 pm PDT

FILE - Freezing rain turns the Peace Tower white, Thursday January 24, 2019 in Ottawa. The parliamentary budget watchdog estimates the Liberal government's newly enacted income tax cut will cost $2.5 billion more than the government projects. THE CANADIAN PRESS/Adrian Wyld
Summary

The Liberal government's newly enacted income tax cut will cost $2.5 billion more than projected

The income tax cut came into effect on Jan. 1, and will be phased in over four years

OTTAWA — The parliamentary budget watchdog estimates the Liberal government’s newly enacted income tax cut will cost $2.5 billion more than projected.

A report from the budget office this morning says the tax break will result in just under $21.5 billion in lost tax revenues through to March 2024, compared to the $18.9 billion the Finance Department reported in December.

The income tax cut came into effect on Jan. 1, and will be phased in over four years.

It increases the amount someone can earn before they are taxed on it, ultimately to $15,000 from $12,300.

The report says Canadians will, on average, have $218 in annual tax savings and $364 for families when the cut is fully implemented in 2023.

The report also suggests the biggest beneficiaries of the tax cut will be those earning between $103,000 and nearly $160,000 a year.

This report by The Canadian Press was first published Jan. 28, 2020.

The Canadian Press