Listening to all the hagiographic stuff being written about Muldoon is a little bit nauseating. I totally support the man in terms of his stance on South Africa but not much else. They seem to forget his blatant corruption and patronage. Minister after minister resigned in disgrace. There is reason why his party was reduced to two seats.
He got too arrogant and was so obsessed with patriating Quebec that he took his eyes off the other issues. Like preparing for an oncoming economic recession.
One of the things that Mulroney did that got overlooked was taxation reform. Not mentioned here but one thing it allowed taxpayers to do was obtain tax refunds retroactively. Whereas prior to that if you didn't file by a certain date you lost your tax refund.
Federal Tax Reform, 1987–91
In June 1987, the
federal government introduced Stage One of Tax Reform. It included proposals for reform of the personal and corporate income tax structure. Bill C-139 took effect on 1 January 1988, although some changes were to be phased in over a longer period.
Income tax
In line with tax reform in other countries, Bill C-139 broadened the tax base for both personal and corporate income. It also reduced the rates applicable to taxable income. The bill replaced exemptions with credits and eliminated some deductions for personal income tax. It also replaced the 1987 rate schedule, with its 10 brackets and rates ranging from 6 to 34 per cent, with a schedule containing only three brackets with rates of 17 per cent, 26 per cent, and 29 per cent. (As of 2015, there were four federal brackets with rates of 15 per cent, 22 per cent, 26 per cent and 29 per cent. The 2015 rates in the provinces and territories ranged from 4 per cent to 25.75 per cent, according to income level.)
Capital Gains, Dividends and Business Taxes
Bill C-139 also capped the lifetime capital gains exemption at $100,000. (As of 2013, the lifetime exemption was $750,000. This was available only to owners of businesses, farms or fishing properties). The Bill also reduced capital cost allowances; introduced limitations on deductible business expenses; and lowered the dividend tax credit.
Goods and Services Tax (GST)
In 1991, the
federal government introduced Stage Two of Tax Reform. As part of this reform effort,
Ottawa initially proposed a national value-added tax; it would merge the new federal sales tax and the provincial retail sales taxes. The federal government was unable to get approval from the
provincial governments for this proposal; instead, it continued with Stage Two of Tax Reform and replaced the manufacturers’ sales tax with the Goods and Services Tax (GST).
The manufacturers’ sales tax was difficult to administer; it was also widely criticized for placing an unequal tax burden on different consumer purchases. With a broadly based, multi-stage sales tax such as the GST, tax is collected from all businesses in stages, as goods (or services) move from primary producers and processors to
wholesalers,
retailers and finally to consumers.
The GST has some advantages over the old manufacturers’ sales tax. It eliminates tax on business inputs and treats all businesses in a consistent manner. It ensures uniform and effective tax rates on the final sale price of products. Finally, it treats
imports in the same manner as domestically produced goods. It also completely removes hidden federal taxes from Canadian
exports.