Liberals ask P.E.I. government to forego collecting provincial income tax on CERB payments

The P.E.I. Liberals are asking government not to collect provincial income tax from Islanders receiving Canada emergency response benefit (CERB) payments.

According to Statistics Canada, there are more than eight million Canadians collecting CERB, which provides $2,000 per month to eligible Canadians who've lost their jobs or had hours reduced.

The CERB was originally planned to run for 16 weeks, but in mid-Junethe federal government extended the program for another eight weeks.

Eliminating tax would help 'most vulnerable'

In the P.E.I. Legislature Tuesday, Liberal MLA Heath MacDonald asked why government would be collecting tax payments from Islanders for that money and if it would consider eliminatingthe provincial income tax portion of CERBaltogether.

"Why do you expect Islanders to pay more and bail out your government?" he asked.

Later to reporters, MacDonald said eliminating those tax payments would just be "one small way that our province can alleviate some of the pressures for these people that are feeling the effects right now of the financial crisis that maybe some of them are in."

"These are people that may have lost their jobs, may not have jobs to go back to. They're deferring their property taxes, deferring their mortgages."

'It is taxable income'

In response, Finance Minister Darlene Compton would not make such a commitment.

"If you look across all of Canada, you'll see that all provinces are charging it. It is taxable income and the federal government is also charging federal tax on thisbecause it is income," she said.

"That's what we will do as well."

She said the taxes are necessary to help pay for services like education and health care.

When asked how much the provincial portion of income taxes from CERBwould be worth to the province, Compton didn't give specifics, and said it depends on whether people receiving the benefit are able to returnto work.

Compton also said the province is helping Islanders by increasing the basic personal exemption and decreasingthe small business corporate tax.

"We will do what we can for all Islanders. We've said that from the very beginning."

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