Finance Minister Wes Sheridan
Islanders looking for an income tax break will have to wait after Finance Minister Wes Sheridan said he won’t increase the basic personal income tax exemption.
He made the remarks in response to questions from Stratford-Kinlock MLA James Aylward in the legislature Thursday where Aylward asked him to commit to raising the exemption.
Sheridan said he doesn’t think raising the personal income tax exemption is the best place to use tax dollars because people like himself would benefit when they don’t need it and there are better places to give Islanders tax relief.
“There’s a much better way to better focus those savings,” he said.
The basic personal amount is the level of income exempt from taxes and varies from province to province.
In P.E.I., the basic personal amount is $7,708, which is the lowest in the country and it’s not indexed to increase with inflation.
That pushes incomes that increase with inflation into a higher tax bracket and is known as bracket creep.
Alberta has the highest basic personal amount at $17,593.
Aylward said the government tied all of its fee increases to the consumer price index, which left Islanders poorer, while Sheridan refused to increase the tax exemption.
“It would be the simple way out. It would be the good thing to do,” Aylward said.
But Sheridan disagreed, saying it’s an issue he won’t look at until the province’s budget is balanced and that tax relief won’t come in the form of changes to the basic personal exemption.
He argued that people with higher incomes don’t the need the benefit that would come from increasing the basic personal amount and the focus should instead be on providing tax relief in other ways.
“I think we can better focus that on those who truly need and must have relief,” he said.