OTTAWA––The Liberals on Thursday urged the federal government to halt billions in corporate tax cuts, saying it’s irresponsible to help companies when the country is drowning in debt.

“I want to decry the choice of the Conservative government, which ignores Canadian families who are struggling,” said MP Geoff Regan.

“It’s absolutely outrageous that Canadians are having to pay more on EI and CPP while big corporations are getting tax breaks from this Tory government,” he added.

Canadians earning more than $44,200 annually will pay an additional $76 in EI and CPP premiums in 2011, while employers will pay up to an additional $110 in payroll taxes per employee, according to the Canadian Taxpayers Federation.

Regan chastised the Conservatives for forging ahead with a tax break “we can’t afford” when Canada’s corporate tax rates are already amongst the lowest in the G7.

The federal corporate income tax rate will be reduced from 18 per cent to 16.5 per cent effective Jan, 1. It will then be reduced to 15 per cent in 2012.

The corporate tax cut amounts to $1.65 billion next year, and jumps to nearly $4 billion in 2012.

Finance Minister Jim Flaherty has insisted that corporations must remain financially healthy if jobs are to be created.

“If we want more jobs, higher wages and an improved standard of living, Canada needs to be the most attractive place for job creators to do business and invest,” Flaherty said earlier this week.

Flaherty said the rate reductions will decrease the cost of capital and increase the rate of return on investment, encouraging firms to invest more in all sectors of the Canadian economy.

Flaherty said since 2007, Canadian businesses have been investing with the knowledge that Ottawa is delivering substantial tax relief.

“As a result of federal and provincial tax changes, Canada now has an overall tax rate on new business investment that is substantially lower than that in any other Group of Seven country. That’s good news for jobs and economic growth,” he said.

Regan said that’s all well and good when the books are balanced — not when there is a federal deficit of more than $40 billion.

The New Democrats have consistently opposed the corporate tax relief and voted against the Conservative budget earlier this year for that reason among others.

NDP MP Thomas Mulcair said instead of an across-the-board decrease — which the party argues benefits large profitable companies and banks — the government should be concentrating on lending a hand to certain sectors of the economy that are struggling to keep their heads above water.

“The Conservatives’ biggest mistake . . . with regards to the economy has been across-the-board tax cuts for the richest corporations,” Mulcair said.

Meanwhile, increases in CPP and EI premiums mean many Canadians will be taking home less pay as of Jan. 1.

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Based on a variety of income and family scenarios for each province, the average hike in personal income and payroll taxes is two per cent nationally, the Canadian Taxpayers Federation said in its annual New Year tax change calculations.

The CTF estimates Ontario residents will see the biggest tax hit in 2011 — an average increase of 4.3 per cent based on various family and income scenarios.

The biggest tax bite would come for a single-income family — one parent and two children — making $45,000. They would see a difference in taxes of 5.1 per cent, or $389.

Taking CPP early will prove costly

OTTAWA––Thinking of tapping into the Canada Pension Plan when you turn 60? You might want to think again.

Changes to the CPP that take effect Jan. 1 will penalize those who take retirement benefits before age 65 even more than now and reward those who wait until 65 or beyond.

The changes, being phased in over five years, won’t affect those already receiving a pension.

Under current rules, a person wanting to receive CPP retirement benefits after turning 60 must show he or she stopped working or their income dropped to below the maximum CPP benefit level. After meeting those requirements for two months, that person could return to work or earn more and still keep their early retirement benefits.

As of Jan. 1, anyone over 60 can apply for a CPP retirement benefit without an earnings test being applied. However, starting in 2012,

CPP benefits will be reduced by 0.6 per cent a month for each month before age 65 to a maximum of 36 per cent. This change will be phased in over five years.

Those who wait until 65 to start collecting CPP get an increase of 0.7 per cent a month for each month after age 65 and before age 70 to a maximum of 42 per cent. This change will be phased in over three years, starting in 2011.

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