Trudeau Pledges Major Tax Break in Bid to Revive Campaign

Paula Sambo
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Trudeau Pledges Major Tax Break in Bid to Revive Campaign

(Bloomberg) -- Prime Minister Justin Trudeau pledged a major personal income tax break if re-elected, as the Canadian leader tries to recover from revelations he wore blackface makeup on multiple occasions.

The governing Liberal Party would raise the basic personal income tax deduction -- the threshold under which no taxes are paid -- by slightly more than 20% over the next four years. That’s expected to cost an annual C$5.6 billion ($3.8 billion) by the time it’s fully implemented, and paid for by soon-to-be-announced “measures that make our tax system fairer for Canadians,” the Liberals said in a statement Sunday.

Given the cost, the tax cut is likely to be the Liberal Party’s marquee announcement in this election campaign and competes with a similar-sized tax break being offered by the main opposition Conservatives, as both parties seek to appeal to voters’ pocketbooks in what remains a neck-and-neck race.

“I’ve been talking to Canadians across the country and I keep hearing the same thing: even with our strong economy and record unemployment, it’s still tough to make ends meet,” Trudeau said in the statement.

Trudeau is seeking to return the focus to his left-leaning agenda after his campaign was rocked last week by the release of photos showing the 47-year-old prime minister wearing blackface makeup on at least three occasions when he was younger.

The Liberals also pledged Sunday to reduce the cost of wireless services by 25% within four years. To do that, they will work with telecom companies to offer plans at globally comparable prices, encourage competition and allow regulators to step in if prices don’t fall.

While the photos have dominated the news since they surfaced, the development hasn’t had a dramatic impact on Trudeau’s numbers. Polling by Nanos Research Group for CTV News and the Globe and Mail newspaper have the Conservatives at 34.3%, versus 33.1% for the Liberals -- a statistical tie.

The Liberals were polling at 35% before the blackface controversy emerged. Since then, Trudeau pledged to implement a full ban on military-style assault weapons, a measure that’s popular in voter-heavy urban districts. He followed that with the tax pledge and a new promise Monday to increase funding for health care by C$6 billion over four years.

In a campaign that has been marked by negative attacks by both sides, Trudeau stuck to plan on Monday as he continued to stoke fears the Conservatives will seek to introduce austerity measures if elected. At a morning press conference in Hamilton, Ontario, Trudeau likened Scheer’s team to Ontario Premier Doug Ford’s government, which has seen its approval ratings drop as it implemented spending cuts to reduce the province’s deficit.

The federal Conservatives are also focusing their narrative on affordability, with a message that many Canadians are still not personally getting ahead despite strong jobs numbers. On taxes, Scheer is pledging to reduce the rate paid in the lowest federal income tax bracket by more than a full percentage point.

On Monday, he also pledged to make it easier for young people to purchase a home by reviewing mortgage qualification rules and extending the amortization period for first-time buyers.

Not to be outdone by Trudeau on negative provincial comparisons, Scheer is comparing the federal Liberals to the former Ontario Liberal government of Kathleen Wynne, which he said raised taxes and ran massive deficits.

(Updates with Monday campaign pledges throughout)

To contact the reporter on this story: Paula Sambo in Toronto at psambo@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Chris Fournier, Stephen Wicary

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