Carbon emitters would pay more, the rest of us would pay less

How Stéphane Dion's Green Shift tax plan would work


Stéphane Dion's Green Shift taxation plan, announced June 19, is based on a simple idea.

Those who contribute to climate change by burning fossil fuels would pay more tax, while everyone else would pay less tax.

That's why it's called a "shift." Ottawa would rake in less tax money from you and rake in more from polluters. The total amount shifted would equal about $15 billion.

The plan's goal is to tax things the government wants people to do less of – such as burning fossil fuels – and reward things they want people to do more of – such as working, saving and investing.

It would also give northern residents something that numerous northern groups, including the Nunavut legislative assembly, have requested for years: a beefed up northern residency deduction that's tied to the cost of living.

An added benefit for northerners would be a $150 Green tax credit for all northern and rural residents.

Here's a brief summary of how the Liberal plan would work:

Where the money would come from

  • No additional tax on gasoline;
  • Tax on diesel would increase 7 cents a litre after four years;
  • Tax on home heating oil would increase 11.3 cents a litre after four years;
  • Tax on heavy fuel would increase 12.4 cents a litre after four years;
  • Tax on jet fuel would increase 6.2 cents a litre after four years;
  • Tax on propane would increase 6.3 cents a litre after four years;
  • Taxes on coal, natural gas, kerosene and other fossil fuels would all increase by varying percentages after four years.

Total revenue to be taken in through new fuel taxes: about $15 billion.

Where the money would go

  • An increase in the northern residency deduction to $7,000 a year from $6,000, after which it would rise with the cost of living;
  • A $150 tax credit, payable to every northern and rural Canadian who files and income tax return;
  • A new universal child tax benefit worth $350 per child, available to everyone, to be applied on top of existing child tax benefits;
  • A new guaranteed family supplement worth $1,225 a year for low income families with children under 18
  • Lowest income tax bracket cut from 13.5 to 15 per cent;
  • Middle tax brackets cut from 21 to 22 per cent and from 25 to 26 per cent;
  • A $1,850 tax credit for every employed person who earns less than $50,000 a year;
  • Cuts to corporate and small business taxes.

Total revenue to be handed back to taxpayers: about $15 billion.

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