Harper promises new aid to seniors, defends boutique tax credits

A re-elected Conservative government would offer a new tax credit to seniors who are single or widowed, the Conservative leader said.

Thestar.com
Sept. 15, 2015
By Tonda MacCharles

Conservative leader Stephen Harper rejected critics who object to his approach to boutique tax credits and announced a new targeted tax measure to win support of Canada’s aging population as he campaigns for re-election.

Harper said Tuesday a re-elected Conservative government would offer a new tax credit to seniors who are single or widowed that could shave an extra $300-a-year off their tax bill at an annual cost to the federal treasury of $397 million.

Harper unveiled the new promise at a campaign event in North Vancouver, saying the proposed Single Seniors Tax Credit could be combined with an existing tax credit and together would add up to about a $600-a-year savings for “our most vulnerable seniors.”

Seniors may already claim the Pension Income Credit, a federal non-refundable tax credit on up to $2,000 of eligible pension income. The credit applies to different forms of private pension income, but does not apply to CPP or OAS payments. On a federal tax bill, it means the actual saving is 15 per cent on up to $2,000 of pension income, or $300. Depending on where a person lives, there are provincial tax savings on top of that, which can add up to a total savings on a tax bill of between $350 and $700.

The newly promised Single Seniors Tax Credit would be an additional measure to allow a senior to shield even more pension income from taxation. It is a non-refundable 15-per-cent tax credit on eligible income up to $2,000. The Conservative Party says it would help about 1.6 million seniors.

It would be phased in gradually over four years, beginning in January 2017, the party says. In its first year, it is estimated to cost the federal government about $23 million, and reach $397 million per year when fully implemented.

Harper used the new campaign promise to draw a distinction between his approach and that of his rivals.

He pointed to other measures his government has introduced such as pension income-splitting and registered tax-free savings accounts (TFSAs) that allow people to gain savings on up to $5,500 a year. As a savings vehicle, the accounts allow those aged 18 and over to accumulate investment income within the savings account without paying federal or provincial tax on the income gains.

Harper’s last budget promised to nearly double the contribution limit to $10,000, but the NDP and the Liberals have said they would repeal that hike, calling it a measure that only benefits the wealthy.

“The Liberals and the NPD want tax hikes to fund your retirement; we want tax breaks to fund your retirement,” Harper told a small crowd of supporters assembled in a curtained-off space at an ice sports facility in the newly established riding of Burnaby North-Seymour.

He slammed the NDP and Liberals for backing enhanced pension benefit plans that would require greater employer and employee contributions, such as that proposed by Ontario. Harper calls such savings vehicles “payroll tax hikes” that individuals and employers cannot afford.

NDP leader Thomas Mulcair has said he will not increase personal income tax rates, would lower small business tax rates, but would increase the taxes paid by large corporations. Liberal leader Justin Trudeau has promised to raise income tax rates only on the wealthiest, defined by the Liberal platform as those earning more than $200,000 a year.

Later, answering questions from reporters, Harper rejected the suggestion his approach to taxation has not been broad-based enough, saying his GST cut from seven per cent to five per cent was the “broadest-based tax reduction anyone has brought in the history of this country.” He pointed to lower corporate tax rates and defended his record on targeted tax savings measures.

“In terms of all the other credits ... look, I don’t think most Canadians are finding their tax forms harder to fill out. I think, on the contrary, they are glad to take advantage of these things. These are real help not just to seniors, but to students, to families, to people who use public transit, these are good things for Canadians. I know the other guys don’t like them. We’re not going to let them take them away.”

Harper said measures to speed up the intake of Syrian and Iraqi refugees would be announced “in the not too distant future.”

He said he would not increase the number of admissions beyond what has already been promised, saying the government’s policy “is a clear reflection of the views of most Canadians.

“We have announced an increased number that we think is certainly reasonable and in line, and keeps us in front of the pack in refugee resettlement.”