Jim Flaherty, Minister of Finance, on Friday reminded Canadians of tax changes that took effect July 1.

“In Budget 2006, Canada’s new government introduced more than $26 billion in tax relief over the next two years, of which over 90% will go to individuals,” Flaherty said.

Among the changes effective July 1:

  • About 655,000 low-income Canadians will be removed from the tax rolls altogether.
  • The GST will be reduced to 6% from 7%.
  • Working Canadians will become eligible for the Canada Employment Credit on up to $500 of annual employment income to help pay the additional costs of employment. Next year, the amount of employment income eligible for the credit will increase to $1,000.
  • The lowest personal income tax rate will be permanently reduced to 15.5%.
  • The basic personal exemption will increase each year and remain above previously legislated levels for 2005, 2006 and 2007.
  • Canadians who buy monthly transit passes will get a tax credit. A person who buys passes costing $80 a month will receive about $150 a year in federal tax relief.
  • The minimum tax on financial institutions will be modified, which will reduce government revenues by $15 million in 2006–07.