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Finance Minister Paul Martin yesterday promised middle-class Canadians will see deeper tax cuts in his next budget even as the government accelerates its plan for corporate tax reductions.

In an appearance before the House of Commons finance committee, Mr. Martin said he is now convinced that a growing economy will give him the opportunity to build on the five-year, $58-billion tax cut package he introduced in his February budget.

"I can now tell you that we will accelerate these measures in the 2001 budget, and futhermore, we will look at new options for cutting taxes," he told MPs.

"On the personal income tax side, taxes are still too high, particularly for middle-income earners."

He described middle-income as those earning between $25,000 and $55,000 a year. He added that while the focus would be on that group, the tax cuts would extend "across the income scale."

Mr. Martin noted Canadians will see the benefit of his tax plan on July 1, when the 26-per-cent tax rate drops to 24 per cent and the Child Tax Benefit increases by about $250 a child on an annual basis. The 26-per-cent rate applies on all income between $30,000 and $60,000.

On the corporate side, the Liberal government cut the general rate, which applies to service companies such as banks and high-tech firms, to 21 per cent from 28 per cent over five years.

"On the corporate tax side, we must accelerate our rate reductions," he said.

Mr. Martin said the Liberal government will be able to reduce both personal and corporate taxes even as it allocates more money than planned to reducing its $577-billion debt and hikes spending in areas such as health, education, research and infrastructure.

"Canada has been doing well because of low interest rates, because governments have been getting rid of deficits and because of the strong performance of the world economy," he said.

"But this is only the beginning. What should give us even more confidence is this government's investments in education and research as well as its tax cuts, which are only now beginning to pay off."

However, opposition MPs criticized the Liberal Finance Minister, saying his approach to tax cuts is simply too timid.

Canadian Alliance MP Dick Harris said Mr. Martin was taking credit for cutting taxes only after the Liberal government raised taxes for years during the fight to eliminate the deficit.

"The fact is you have ripped this money out of the pockets of Canadians since 1993 and now you are going to give some of that money back," Mr. Harris said. He said the Liberal government should follow the lead of Conservative governments in Ontario and Alberta and slash taxes dramatically to spur economic growth and boost disposable incomes.

Mr. Martin took the opportunity to condemn the Alliance's single-rate tax plan, which would increase personal and spousal exemptions and reintroduce child deductions, and then tax everyone, regardless of income, at a single 17-per-cent rate.

Mr. Martin said the flat-tax proposal would impose an unfair portion of the tax burden on middle-class Canadians.

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