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OTTAWA — The Liberal government is poised to make good on its promise to cut federal income taxes for middle earners by raising the rate on the richest Canadians — cuts that the government admits won’t be revenue-neutral.

Finance Minister Bill Morneau is conceding for the first time that the changes are going to cost the federal treasury $1.2 billion annually, starting in the 2016-17 fiscal year.

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The government has introduced a motion in Parliament lowering the income-tax rate on Canadians earning between $45,282 and $90,563 per year from 20.5 per cent from 22 per cent, to take effect starting Jan. 1.

To offset most of that tax-rate change, the Liberals are also imposing a higher tax rate of 33 per cent on earners in the top one per cent — those who make more than $200,000 per year.

Morneau says the government is being forthright with Canadians about the total cost of the tax changes.

Those changes also include cancelling a Conservative plan to increase limits on tax-free savings accounts from $5,500 to $10,000.