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Finance
March 3, 2011

Wide Range of Initiatives Provide Assistance to People Who Need it Most

Numerous measures implemented by the Provincial Government continue to provide much-needed financial relief to the Newfoundlanders and Labradorians who need it most, particularly seniors and others with modest incomes, the Honourable Tom Marshall, Minister of Finance and President of Treasury Board, said today.

Minister Marshall said initiatives aimed at helping with home heating costs are an example.

“When it comes to assisting with the cost of home heating, our government has taken approaches that ensure financial relief goes to the people who really need it the most, as opposed to those at the high end of the income scale,” said Minister Marshall. “The challenge of coping with the rising cost of heating a home is much more real and acute for those with lower incomes. So, government is addressing the issue head-on with targeted support.

“There are several initiatives in place that help relieve some of the financial burden that many residents face. Through the 2010-11 Home Heating Rebate and Low Income Seniors’ Benefit alone, close to $50 million is getting into the hands of people who need that money to cushion the effect of the rising cost of living.”

Minister Marshall also noted that, in addition to these measures, the Provincial Government has provided broader based tax relief to all residents through significant reductions in personal income taxes and other taxes over the past several years.
Measures that the Provincial Government has taken to provide assistance to residents with lower incomes and all taxpayers include the following:

Reduced personal income taxes – Beginning in 2007, the Provincial Government delivered the biggest personal income tax reductions ever in Newfoundland and Labrador. The tax system was indexed to account for inflation, and rates have been lowered from 10.57 per cent to 7.7 per cent (first bracket); from 16.16 per cent to 12.5 per cent (second bracket); and from 18.02 per cent to 13.3 per cent (third bracket). Newfoundland and Labrador has the lowest tax rate on the first income bracket in Atlantic Canada.

Low Income Tax Reduction – This reduction was effective beginning in the 2005 taxation year. Due to enhancements to the program, for the 2010 taxation year, provincial income tax is eliminated for individuals with net income up to $16,022 and for families with net income up to $26,811. Partial tax reductions will be received by individuals with net income up to $19,535 and for families with net income up to $32,086.

Home Heating Rebate – This annual program assists lower income earners with the costs of heating their homes by providing rebates up to $250 (or $500 in coastal Labrador), regardless of what type of energy source is used. Rebates are available to individuals and families with adjusted family incomes of up to $40,000 and who directly incur costs to heat their homes.

Low-Income Seniors’ Benefit – The Low-Income Seniors’ Benefit is available each year to seniors with a family net income under a certain threshold. The maximum benefit increased from $803 in 2009-10 to $900 in 2010-11. Approximately 42,500 seniors in Newfoundland and Labrador received this increase, with an estimated total value of approximately $32.2 million this fiscal year. This compares to 2002, when the maximum benefit was $300 and the value of the program was $6.6 million.

Age Amount tax credit – This is a non-refundable tax credit for individuals aged 65 years or older. The Age Amount credit increased this fiscal year from $3,681 to $5,000, making Newfoundland and Labrador’s the highest among all provinces. The income level at which taxpayers become eligible for the credit rose from $51,940 to $60,733, meaning that more seniors now qualify. Those who claim it will receive a benefit of up to $102 through a reduction in their provincial tax payable. More than 73,000 eligible seniors receive this benefit.

Heating allowance – An additional $1.2 million was committed in Budget 2010 to raise the heating allowance for low-income tenants of the Newfoundland and Labrador Housing Corporation, bringing the total annual heating allowance to $10.2 million.

Provincial Home Repair Program – In 2009-10, $9.3 million was spent to deliver 2,361 grants, of which approximately 70 per cent were approved for low-income seniors.

Residential Energy Efficiency Program (REEP) – This is a two-year initiative designed to assist households with annual incomes of $32,500 or less to make energy efficient retrofits to their homes, to make them more affordable and reduce greenhouse gas emissions.

Other subsidies – Subsidies offered through the Department of Natural Resources assist isolated diesel-powered communities on the island and Labrador coast.

65Plus Plan – This component of the Newfoundland and Labrador Prescription Drug Program provides coverage of eligible prescription drugs to residents 65 years of age and older who receive Old Age Security benefits and the Guaranteed Income Supplement.

Elimination of Tax on Insurance – The 15 per cent retail sales tax paid when purchasing insurance was eliminated effective January 1, 2008.

Minister Marshall also noted other measures include the reduction of vehicle registration renewal fees and other fees.

Since 2007, the Provincial Government has introduced tax reductions totalling approximately $1.6 billion in cumulative savings for taxpayers. In 2011, Newfoundland and Labrador taxpayers will pay approximately $460 million less in taxes as a result of these measures.

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Media contact:

Mark King
Director of Communications
Department of Finance
709-729-6830, 699-3454
MarkKing@gov.nl.ca 

2011 03 03                                                                          2:25 p.m.
 

 
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