Ontario’s financial watchdog is slamming the Ford government’s new low-income tax credit, saying it would provide “fewer benefits” for minimum wage employees than an actual increase in their hourly wages.
The Progressive Conservative government introduced the Low-income Individuals and Families (LIFT) tax credit last fall as a way to counter the cancellation of a minimum wage increase to $15 per hour.
The government claimed LIFT would benefit 1.1-million people across the province, giving low-income and minimum wage employees up to $850 a year in tax relief.
However, in a commentary released today, Financial Accountability Officer (FAO) Peter Weltman says the numbers are much lower than the government’s projections and fewer people would experience positive effects.
The FAO estimated that 1-million people would benefit from the LIFT credit in 2019, receiving just $409 in tax relief for the year and only 38 per cent of those who earn minimum wage would be positively impacted.
On the other hand, Weltman says, if the government increased minimum wage to $15 per hour, 1.3-million workers would have pocketed an extra $810 dollars.
“The LIFT credit will provide fewer benefits to minimum wage workers than increasing the minimum wage from $14 per hour to $15 per hour,” says Weltman.
In response, Finance Minister Vic Fedeli calls the LIFT credit one of the “most generous” tax cuts for low-income workers in a generation.
“Our government took a balanced approach. By pausing the increase in minimum wage our government has given businesses time to adjust, while still providing relief to low-income earners through the LIFT Credit,” Fedeli said in a statement.
