Deficit reduction levy axed for incomes under $50K
Newfoundland and Labrador Premier Dwight Ball has backed off one of the budget's most contentious items — the deficit reduction levy.
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Ball said Wednesday that 74 per cent of tax filers will no longer have to pay the levy, which was put in place to offset the heavy financial issues facing the province.
The threshold for paying the levy is being raised to $50,000. Originally anyone earning over $20,000 had to pay.
By the numbers
Anyone earning between $50,000 and $100,000 will pay a lower levy than previously announced.
For example, a person earning $55,000 will pay $100 for the annual levy. They would have paid $600 previously.
A person making $100,000 will pay $700 — $50 less than originally stipulated.
Anyone making over that amount will now be more. For example, a person making $625,000 will now pay a $1,800 levy — twice what they would have paid before.
Federal minister and Bonavista-Burin-Trinity MP Judy Foote announced that the Canadian government has allowed the province to suspend monthly payments on what's known as the Equalization Repayable Floor Loan.
A news release from the province said that payments for the $267 million balance will be paid back in monthly interest-free payments over a 10-year period, starting in 2022.
Finance Minister Cathy Bennett told reporters at a news conference that as soon as the province was in a position to change the levy, it did.
Bennett said the new levy is greater for higher income people.
These changes come the same day as an Angus Reid survey that named Ball as the least favourite premier in Canada.
However, Ball said he's not making any decisions based on polling, and is making the changes to the levy because it's best for the province.
He also said the impending changes have nothing to do with the abrupt departure of MHA Paul Lane.
Lane opposed the levy and had planned to vote against the budget.