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CTF Releases New Year's Tax Changes for 2019

December 27, 2018
CTF Releases New Year's Tax Changes for 2019
  • The increase in Canada Pension Plan tax rate will cost workers an additional $98 per year
  • The new Canada Workers Benefit will help low-income taxpayers
  • Bracket creep remains a problem in several provinces

OTTAWA, ON: Today the Canadian Taxpayers Federation released its annual New Year’s Tax Changes report that highlights the increase to Canadian Pension Plan rates.

“Hiking CPP rates leaves taxpayers with less money to put into other savings options that could be used to help pay for further education or a first home,” said Aaron Wudrick, Federal Director for the CTF. “And this year’s hike is just the start as Ottawa is planning to raise CPP rates every year for five years.”

The CPP hike will cost average Canadians $98 this year and, when the increases are fully implemented in five years, it’ll total $550 every year. While CPP income tax deductions will provide some reductions, an average individual making $60,000 will still face a net loss of $380 per year as a result of the CPP rate increases.

For low-income Canadians, the new Canada Workers Benefit (CWB) will be worth up to $1,355 for single taxpayers with no children or $2,335 for couples or single parents. For a family with an income of $30,000, the benefit will provide savings of $335.

As part of its annual New Year’s Tax Changes report, the CTF has calculated the tax impact in 2019 for 12 hypothetical Canadian households. Some highlights include:

  • A single person in Ontario earning $30,000 per year will save $790 due to the new Low Income and Families Tax Credit, which eliminates provincial income taxes for those earning under $30,000.
  • A two-income family in Newfoundland earning $120,000 will pay an additional $294.
  • A single person in Manitoba earning $60,000 will pay an additional $66.

Bracket creep, which pushes individuals into higher tax brackets simply due to inflation, continues to cost taxpayers across all income groups in Saskatchewan, Nova Scotia and Prince Edward Island, as well as high-income earners in Ontario.

“Bracket creep is a way for governments to take more money even when people’s purchasing power isn’t growing,” said Wudrick. “We call on the provinces that have not yet indexed tax brackets to inflation to do so in 2019 and stop this sneaky tax grab.”

Wudrick noted that while the coming year will not hold many large personal tax changes, the implementation of the federal carbon tax in several provinces in 2019 is likely to have an impact

“The Trudeau government’s carbon tax plan is slated to kick in next year, and even with promises of rebates, the real cost to families remains to be seen,” said Wudrick.

CTF calculations for the tax changes that will be occurring on January 1 for 12 different income and family scenarios can be found HERE.

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