No, it can raise their effective marginal tax rate. I think in designing an income-tested benefit like this—especially something targeted at low-income workers—the idea is...there are trade-offs and you're trying to achieve the right balance. Research shows that individuals are particularly sensitive to incentives. We think that incentives matter in lots of cases, but certainly when it's a question of a discrete decision—do I work or not work?—it can matter a lot. There, enriching the Canada workers benefit just means work pays a bit more. But there is another decision that's important: given that I'm working do I work a bit more? In designing this, you take into account that it's going to be a lower phase-out rate over a slightly longer range. Those are the trade-offs. We think we're still in the spot where it's a net plus. We're quite confident of that. But it's certainly something to be mindful of when designing such a benefit.
On April 24th, 2018. See this statement in context.