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Taxpayers' Federation Attacks Canadian Tax Changes

by Mike Godfrey,, Washington

02 January 2013

The Canadian Taxpayers Federation (CTF) has slammed what it calls a "raid" on taxpayers, with pension and employment insurance contributions at both federal and provincial levels set to increase in the new year.

The criticisms are included in the CTF's New Year’s Tax Changes report. It focuses on planned hikes to both Canada Pension Plan (CPP) and Employment Insurance (EI) contributions, which Director Gregory Thomas says are "taxes, pure and simple. Wage earners have no choice whether to pay them or not.”

Under federal tax changes, Canadian workers earning at least CAD47,400 will pay CAD891.12 in EI premiums next year. This is an increase of CAD51.50. Further, employers' rates will go up by CAD71.61, to a total CAD1,247.57. Taken together, employees and employers will pay EI premiums to the tune of CAD2,138.69.

Reforms to CPP rates will see those earning CAD51,000 pay an extra CAD49.50 each in 2013, taking contributions to CAD2,356.20. The employer's share will rise by the same amount, taking total CPP rates to CAD4,712.40. Combined CPP and EI payroll taxes will total CAD6,851.09, an overall increase of CAD222.11.

At a provincial level, a greater number of taxpayers in Nova Scotia, Prince Edward Island and Manitoba will enter higher tax brackets, while in Ontario high-income earners will face a higher top tax rate. An extra income tax bracket will be added in Quebec, along with a higher rate of health tax for the wealthiest and greater contribution rates for the province’s pension plan and its parental benefits plan. Jordan Bateman, the CTF's British Columbia Director also anticipates a raft of corporate tax increases, a new carbon tax and health levy rises, and a reduction in personal exemptions.

TAGS: Insurance | tax | insurance | employees | payroll | carbon tax | Canada | Jordan

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