CTF Releases New Year’s Tax Changes for 2020
- Increase in basic personal amount will give most income earners a $138 tax reduction
- The increase in Canada Pension Plan premiums will cost up to an additional $97 per year
- 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 impact of income-related tax changes.
“The good news is that the Trudeau government’s decision to increase the basic personal amount will mean most Canadians see a reduction in income-related taxes,” said Aaron Wudrick, Federal Director for the CTF.
Rising Canada Pension Plan (CPP) premiums will cost average Canadians $97 this year, the second of five planned annual increases, while Employment Insurance premiums will drop slightly for an annual reduction of $20.
As part of its annual New Year’s Tax Changes report, the CTF has calculated the tax impact in 2020 for 8 different income brackets. Some highlights include:
- Individuals in Ontario or Quebec earning under $100,000 per year will see an overall annual reduction of between $55 and $116.
- Outside British Columbia and Newfoundland and Labrador, those earning over $200,000 per year will see tax hikes of up to $194.
- The elimination of a provincial health tax in British Columbia will save residents up to $461 annually (although the new Employer Health Tax will offset much of that progress).
- The elimination of a deficit reduction levy in Newfoundland and Labrador will save residents there up to $1,012 annually.
Bracket creep, which pushes individuals into higher tax brackets simply due to inflation, continues to cost taxpayers across all income groups in Alberta, 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 2020 and put an end to this sneaky tax grab.”
Wudrick noted that while the coming year will not hold many large income tax changes for most Canadians, consumption taxes will have significant impacts in several provinces, including those provinces which face a rising carbon tax.
“The Trudeau government’s decision to put endless carbon tax hikes on the table after dodging the issue during the election will place a rising tax burden on Canadian families,” said Wudrick.
CTF calculations for the tax changes that will be occurring on January 1 for 8 different income levels can be found HERE.