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b800-26r-6620 1-800-267-6640 1-800-267- - ""2f;~""-'~':""" Y~TTT -Ne_'.'.- -H.ree.F._. -- "."' A,new6titsaGdterviatiktemwiiirepucettteexisaing'rederstusTUit anapfifmnfidflpercanonthevastmjofityofmods "itrvraicomsutiied in Candi. Ttid existing magnum: is generally t3Ftthemattutietrtrer'aievel. _ _ V cattttoioe-inthedetdspbtxdetit.Thetsttutmrissesses oftt-t-hamtirmoodteotepttmtimtrthet-t1tttitrttrredumtitemttouttt l oftaxttter-fdattemiietitorit-tisittt75,000t-rhtgaxpom- tioets,ttte-000apeciaiamm-ttaandadtniniairrtiveirtt-titrts tequiredtipthemtemittopemtiort. _ - The preterit federal ales a: system is an increasingly ungediaable and un- relialjle source a reveaue fer the. federal government. It mutt replaced. thir cannons debt has put pressure on the government's ability to meet other' ptiorities/Canadians know the risks of not acting to bring the debt under control. The size of the debt has left us exposed to increases in interest rates. and vumentble to international economic shocks. Thereliability and stability of our sourerot revenue are all the more important in such an environment. The new federal sales tax will sewn-e year by year reductions in the deficit, while ensuring we can continue to provide Canadians with a standard of services that is among the best in the world. Once the GST is in place, families earning less than $30,000 a year will be better off. This will be achieved through a combination of income tax changes. First, low income Canadians will receive the new GST Credit. Second, the middle personal income tax rate will be reduced from 26 per cent to 25 per cent. 'l‘hcamount of the Credit will depend on family size and income. The basic adult credit will be 8275. Most single adults will be able to get an additional credit of up to $140, for a total of $415. The child credit will be $100. Single parents will receive an adult Credit of $275 for one of their children. Cmadian households with incomes up to about $25,000 annually will be entitled to the full Credit. - "s The CST Credit Will be paid every three months and in advance of expenses. Eligible Canadian households will receive their first credit cheque in December 1990, before the January 1, 1991 GST start-up date. About 9 million Canadians will receive Credit cheques. The GST Credit will be calculated on the basis of income tax returns. Every income tax return will contain a one-page form showing Canadians how to apply for the GST Credit. A family of two adults and two children, eligible for the full Credit, will for example receive cheques of $187.50, four times over the course of the year, for . total of $750. fiWlLHEIPlOWINOOIECANADIANS. Our current federal sales tax favours imports over Canadian made goods. We are the only country in the industrialized world that is putting itself at such a dis- advantage. The existing system also makes Canada's exporters less competitive in the world economy. Our present Herzl sales tax makes our annual economic output about 89pit1io's9otethe itwould be with the new GST in place. A BEIEEijiaiDat2jEiEi22i2d2L' tit _'. 3 3x “CREATED” , Under the GST, we Jitt be able to completely remove tax from our exports and make Canadian product more competitive abroad. And in Canada, Canadian-made prod- ucts will be able to compete more effectively 'datr.N'.T1td'""'" with imports. 1 “a“... 7 7_\ The benefits to the Canadian economy from sales tax reform will extend across all regions and sectors of the economy. The Atlantic and Prairie regiong for eymple, will benem The GST will lower the cost of the mtdtines, supplies and equipment companies have to buy to produce their products. This will lead to higher levels of investment and expand our output. Higher output will lead to more jobs. and Prairie regiong for eymple, will be'nem ' mum y been»? Mamie: are ' resource-based an export-oriented - two sec- re_sourée-Eased and (export-oriented - two sec- tors that will benefit the moat from sales tax reform. . Rtrmoe0ftrmatioetal-tthe4ltSr,pleaseealr. mu.” c-u uni-mm v.. 6570»! mm mm.- Rid! now. everywhere in this mum every time Canadians buy a good or service made in Canada, they are paying federal sales tan For example. a substantial amount of sales tax is presently buried in house prices. Under the existing system, it is dandy impossible for Canadians to know how much federal sales tax they are paying. There are four different rates on a variety of different products and the taxis buried throughout the production process . 'r%u.Ell,ttqtqENlllMtENTRltEk gtwariedeirGcsnalsiaiGtteittheratepayiagthe9peranttisroetxmd hue d theGST means it will apply (calms! everything The few exception: will bewiddyknown. . Some mailers in Canada will have cash registers that are capable of showing the GST separately at the Mm counter, while other retailers will not. The federrtlipvemmeutwiieideanimmttivetoretailerstoasaisttheminaatuirim the cash registers to show the GST separately. In all am. the federal governme'm will brovide retailers with signs for their stores that clearly indicate that the 9 per cent GST is being applied. AThe GST will apply to virtually all goods and services sold m Canada: however, Canadians will not be charged tax when they buy the following GOODS: basic groceries; prescription drugs; medical appl: - ances such as eye-glasses and wheel chairs: resndenual rents and existing houses. s. Because the present federal sales tax will he removed, prices wtll not automatically rise by 9 per cent when the GST IS introduced The prices of some things will be lower. and others higher. The prices of many big-ticket items for example, that are taxed at 13.5 per cent under the present system, will be lower once the 9 per cent GST is in place. The price of other Items that are not taxed under the present system will increase. 3. Canadians will not be charged tax when they buy the foliowmg SERVICES: loans, mortgages. securities and msurance pollues; health and dental care; most education services; daycare services,' legal aid: Ind municipal transit and passenger ferry serVtces 4. Newly constructed houses will be taxed. however, most ncu humr buyers will not see a significant Increase in the price of a new house resulting from the GST, because there will be a $900 million GST housing rebate. In many parts of the country price Increases will be less than half a per cent. Indeed. many communities should set. lower prices as a result of the GST rebate. The mam ”septum u I” be Toronto, where extraordinarily high land prices may came prices of new housing to increase by about M010. For consumers, the GST will be similar to a retail sales tax, at the rate of 9 per cent on the retail price of goods and services. The GST will replace the existing federal sales tax, which IS hidden at the manufacturer's level. Finally. well before the GST is up and running. the government will be telling Canadians about the GST and miormmg them about the kinds of price changes they an expect for key goods and whims when the GST replaces the existing federal sales tax. ITEM P Air Conditioner Car Snow Tires Hotel Accommodation For instance, here are a few examples of what consumers might PRE -TAX REFORMG) 780.00 15,000.00 200.00 (Telecommunications device for the hearing impaired) "' -t'-tAvatAautrrptt,tqri'AaE_A.2_t POST-TAX REFORM“) 770.00 14700.00 203.00 9500 B-r-rot-trr. I'm-hm