Justin Trudeau defends proposed tax hike on wealthy in Bay Street speech

Liberal Leader Justin Trudeau directly addressed the so-called one-percenters today, saying that it makes more economic sense to hike taxes on the wealthiest Canadians than raise corporate tax rates.

Speaking to the Canadian Club of Toronto, Trudeau stressed the importance of fairness.

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"I know people in your position get asked for a lot, and as evidenced by the thriving and generous philanthropic culture in Canada, you step up," Trudeau said. "Your contributions to Canadian society have been appreciated — and I'm asking for one more."

The speech comes a week after he unveiled details of a proposal that would include:

• Lowering the 22-per-cent tax rate for anyone with a taxable annual income between $44,701 and $89,401 down to 20.5 per cent.
• Creating a new tax bracket of 33 per cent for those with taxable incomes over $200,000 a year.
• Increasing monthly child benefits but clawing them back for higher income earners.

Trudeau said he would also cancel the Tories' income-splitting tax credit and their plan to nearly double the contribution limits of tax-free savings accounts.

Trudeau has said he would have to increase taxes on the wealthiest to pay for the middle-class tax cut. In his speech, the Liberal leader seemed to nix the idea that raising corporate tax rates could also pay for those tax cuts.

Competitive corporate tax rates encourage and reward investment and growth, he said. Raising those rates would "have the undesired effect of stifling innovation, investment and growth," he said.

"So I'm asking those with the most to do a little bit more to help those in Canada with less, so raising corporate income taxes is not going to do much in that regard."

Trudeau also dismissed those who claim the Liberals are trying to "create a sense of envy" as "rank political nonsense."

He said it's the government's role to keep the middle-class growing and to allow all Canadians to have a fair shot at participating in the economy. But he also suggested there could be consequences unless changes are made.

"If we don't deliver fairness, Canadians will eventually entertain more radical options," he said. "All of the time I've spent with Canadians tells me that the status quo is not sustainable."

The Tories have slammed Trudeau's plan, saying that by cancelling the TFSA contribution limit, it will actually raise taxes on Canadians earning less than $60,000.