MPs have unanimously endorsed a $5.8 billion income tax cut, passing Bill C-4 in a 335-0 vote at second reading, though some MPs say changes are needed before it becomes law.The bill, introduced by Prime Minister Mark Carney as a “middle class tax cut,” would reduce the federal tax rate on the first $57,375 of income from 15% to 14% by 2026. Finance Minister François-Philippe Champagne called it a way to “put more money in the pockets of Canadians” and lower costs.Blacklock's Reporter says New Democrat leader Don Davies warned the bill may disproportionately benefit wealthier Canadians and reduce the value of key tax credits relied on by vulnerable groups. “This bill, while helpful, can and should be improved,” Davies said, pledging to propose amendments during upcoming finance committee hearings..“The average benefit for someone living in poverty would be just $11 a year,” Davies said. “The middle 30% of Canadians would see an average of $151 a year, while the richest would gain an average of $310 a year.” Davies argued that only 1% of tax filers would receive the $412-per-person benefit promoted by the Liberals during the last election.Davies also raised concerns about unintended consequences of lowering the lowest tax rate, which is used to calculate non-refundable tax credits like the Canada caregiver credit, disability tax credit and the age amount. “When that rate is reduced the dollar value of these credits also decreases,” he said. “This is not just a technical oversight. It would hurt the financial security of some of the most vulnerable people in our country.”.Champagne has not commented on whether the government would accept amendments. The bill also includes a repeal of GST charges for first-time homebuyers purchasing new homes under $1 million, a measure expected to cost $383 million next year.“We expect other parliamentarians to support obviously the government because this is about Canadians,” Champagne told MPs on May 27. “They want us to do bold things. They want us to do them quickly.”The Commons is scheduled to adjourn June 20 for its summer recess.
