Politics

Trudeau promises to raise basic personal deduction to $15K, cut cellphone bills

The Liberal leader says his party would raise the basic personal income tax deduction to $15,000 and cut cellphone bills by a quarter if re-elected in October. 

He says Liberals will reduce cellphone bills by 25 per cent

Liberal leader Justin Trudeau announced affordability promises on Sunday. (CBC)

Liberal Leader Justin Trudeau says his party would raise the basic personal income tax deduction to $15,000 and cut cellphone bills by a quarter if re-elected in October.

The cost of cell service is controlled by the "Big 3" companies — Rogers, Telus and Bell — who share a near-monopoly on Canada's wireless networks. A Canadian Radio-television and Telecommunications Commission report found that the three controlled 91 per cent of all wireless service revenues in 2016.

Canadians pay some of the highest cell bills in the world, with monthly plans ranging from around $40 to over $100.

Trudeau said the Liberal proposal would save the average family almost $1,000 a year. 

To lower the cost, the Liberals say they would open up the market to more competition and work with cell companies to offer plans that more closely mirror global prices. They would also implement an unlimited family plan. More rules could kick in after two years if the prices don't decrease enough.

How much that proposal would cost is unclear.

"We know that Canadians are concerned about affordability," Trudeau said.

Earlier this week the NDP also put out their plan to cap prices of cellphone and internet services — which would save families an estimated $250 a year.  

In a statement on Sunday, Robert Ghiz, president and CEO of the Canadian Wireless Telecommunications Association, which represents most of the country's major carriers,  said wireless prices have already come down around 30 per cent over the past three years — and will continue to decrease.

"As we enter a world of 5G, it is critical that we encourage investment in network technology, the backbone of the Canadian economy," Ghiz said."We need to balance driving affordability with investing long-term so Canadians continue to enjoy world-class networks."

Basic personal income deduction to rise

The Liberals crammed a second, unrelated promise into Trudeau's appearance in Brampton, Ont. Like most others of this campaign, it was also focused on affordability.

Trudeau said a Liberal government would raise the basic personal income tax deduction to $15,000 for people earning under $147,000 — meaning you would only pay taxes on income over that amount. Currently, the basic personal deduction is $12,069. The increase would be phased in, reaching $15,000 by 2023.

The Liberals estimate this will save an individual just under $300 a year, while families would save $585. 

"We have to realize that the cost of living is going up," Trudeau said.

The tax cut would cost $2.9 billion to start, increasing to $5.6 billion by 2023-2024.

The Liberals haven't released costing of several promises through the Parliamentary Budget Officer's new program that allows parties to submit their campaign proposals for costing. They have faced criticism for it. 

Trudeau said the tax cut would lift 40,000 people out of poverty and the party added it would encompass about 700,000 more Canadians. 

"We have a sustainable fiscal plan," Trudeau said. 

The Liberals were running a $15-billion deficit before the campaign and have been cagey about a timeline back to balance. The party has promised a fully costed platform, but it has not been released yet. 

The Conservatives have already announced a tax cut of a different kind. Last week Andrew Scheer said a Conservative government would cut the tax rate on taxable income under $47,630 to 13.75 per cent from 15 per cent.

The party says that would save the average single taxpayer about $444 a year. A two-income couple earning an average salary would save about $850 a year.

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