Photo credit: Pexels/Mikhail Nilov
The Canadian Taxpayers Federation (CTF) released its annual New Year’s Tax Changes report on Monday. The report highlights the major tax changes set to come into force in 2022.
“If you’re making more than $40,000, you’ll see your federal income tax bill go up thanks to rising payroll taxes,” said Franco Terrazzano, federal director at the CTF. “From higher carbon taxes to rising alcohol, payroll and property taxes, there’s a raft of tax hikes coming in the New Year.”
The report outlines the major tax changes from Canada’s federal and provincial governments in 2022. As highlighted in a news release from the CTF, key takeaways from the report include:
- Taxpayers making $40,000 or more in 2022 will see the federal government deduct more money.
- The Canada Pension Plan tax increase will cost workers and businesses an extra $333 each in 2022 (for maximum pensionable earnings).
- The Employment Insurance tax increase will cost each worker an extra $63 in 2022 and businesses an extra $89 (for maximum insurable earnings).
- The increase in the federal personal basic amount will save taxpayers $89.
- The federal carbon tax will increase for the third time during the pandemic to 11 cents per litre of gasoline on April 1, 2022.
- Alcohol taxes will increase for the third time during the pandemic on April 1, 2022. Taxes already account for about half of the price of beer, 65 per cent of the price of wine and more than three quarters of the price of spirits.
Per the CTF, the governments of Alberta, Ontario, Nova Scotia and Prince Edward Island will all impose an underhanded form of income taxation known as bracket creep. Bracket creep happens when governments don’t move tax brackets with inflation and inflation automatically bumps taxpayers into a higher tax bracket, even though they can’t actually afford to buy more.
“A pandemic is the worst possible time to be raising taxes,” said Terrazzano. “Many Canadians lost their job, closed down their business or took a pay cut during the pandemic, and that’s why all politicians should be reversing their tax hikes.”
Read the entire CTF 2022 New Year’s Tax Changes report here.
