Justin Trudeau, leader of the Liberal Party of Canada, outlined his plan on Monday to change the income tax rate system and create a new child benefit if his party forms the government following October’s federal election.
Should Trudeau become prime minister, his party plans to create a new tax bracket, where taxpayers with an annual income of more than $200,000 would be taxed at a rate of 33%. This would be a change from the current system where a taxpayer with a taxable income of more than $138,586 per year is taxed at a rate of 29%.
The Liberal plan would also reduce the amount of tax paid by taxpayers with taxable incomes between $44,700 and $89,401 per year. Canadians who fall in this bracket would pay a rate of 20.5%, instead of the current rate of 22%.
The Liberal Party announcement states that this would provide up to $670 in savings per person per year.
Trudeau also announced a promise to create a new tax-free and automatic monthly child benefit called the Canada Child Benefit.
“As an income-tested benefit, the Canada Child Benefit gradually phases out to ensure that it is targeted to the middle class and those working hard to join it,” states the Liberal Party plan.