BC: CTF Releases New Year’s Tax Changes for 2016
- MSP, ICBC, Hydro, property taxes, ferry fares all rising
- Trudeau government’s middle income tax cut means more money for most Canadians
- Income splitting for families cancelled; Universal Child Care Benefit to be replaced with means-tested Canada Child Benefit in mid-2016
VANCOUVER, BC: Another year, another round of hikes for Medical Services Premium (MSP) tax, drivers, Hydro customers and property owners in B.C., says the Canadian Taxpayers Federation (CTF).
“The feds giveth and the province and cities taketh away,” said Jordan Bateman, B.C. Director for the CTF. “Even if you’re lucky enough to get a cut in taxes because of Prime Minister Trudeau’s election promises, you’ll end up handing back a big chunk of that to the province and cities.”
Among the taxes and fees going up in 2016 for B.C. taxpayers:
- The MSP tax increases $72 for families of three or more; $66 for couples; and $36 for individuals on January 1.
- BC Hydro will likely raise electricity rates this year. The final number has not been set yet, but it looks to be 4 per cent. The CTF estimates this will cost the average household $50 more this year.
- ICBC is expected to raise basic auto insurance in 2016 – roughly $44.40 for the average car.
- Cities are still working on their budgets, but the CTF has yet to find a municipality that is freezing or reducing property taxes this year. Vancouver has approved a $100 tax hike on the average homeowner. Assessment jumps could add even more for many taxpayers.
- BC Ferries has permission from the Ferries Commissioner to hike fares as much as 1.9 per cent in 2016.
As part of its annual New Year’s Tax Changes report, the CTF also examined the Trudeau government’s election promises and calculated the 2016 federal tax impact for families for 34 hypothetical Canadian households.
The centrepiece measures are changes to income tax rates, with a reduction on the tax rate for income earned between $45,282 and $90,563, which drops from 22 per cent to 20.5 per cent, while a new tax bracket will apply on income over $200,000, raising the rate from 29 per cent to 33 per cent. The Family Tax Cut, which allowed couples with children under 18 to split their income resulting in a tax credit of up to $2,000, has also been eliminated. Additionally, the Universal Child Care Benefit (UCCB) will be replaced with the Canada Child Benefit (CCB) starting in July 2016. The CCB differs from the UCCB in that it is tax-free, and means-tested with larger payouts going to lower-income households.
“The range varies widely, from a few hundred to about $2,000 in savings, but it’s clear that most Canadian families will have more money in their pockets as a result of these tax changes,” said CTF Federal Director Aaron Wudrick. “Dual-income households with children, where each spouse earns a relatively equal amount, will benefit most.”
Wudrick also noted that for all the good news, high-income earners face substantial tax hikes, while the rollback of Tax-Free Savings Account (TFSA) annual contribution limits from $10,000 to $5,500 will also reduce future savings for millions of Canadians.
CTF calculations for the federal tax changes that will be occurring on January 1st for 34 different income and family scenarios can be found HERE.