Some tax changes have officially come into effect in Canada, and they will have an impact on personal and business finances going forward.
While everyone knew this was coming, residents should note that the start of 2019 marked the implementation of a carbon tax and Canada Pension Plan (CPP) increase.
Both of these increases came into effect on Jan. 1.
CPP premiums will increase for all Canadian workers.
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The federal government says the CPP increases will ensure Canadians have more money when they retire. The Trudeau government also says middle class earners will see more money on their paycheques compared with 2015.
“Taken together, changes to the Employment Insurance (EI), enhancements to the CPP and the middle class tax cut, mean that a single person earning $48,000 will save almost $60 in paycheque deductions 2019 compared with 2015,” the government says.
“For a single person earning $75,000, this would represent a saving of almost $210.”
The CPP enhancements have drawn some criticism. The Ontario government has said that this will reduce an employee’s take-home pay by up to $1,050 per year when fully phased in 2025.
The much-discussed carbon tax is also in effect.
The federal government’s output-based pricing system came into force yesterday (Jan. 1) as well. Beginning April 1, 2019, the federal government will be implementing a fuel charge to fossil fuels in the province of Ontario. This new tax means that residents could see increased fuel and heating costs.
Some tax breaks are also on the horizon.
On Jan 1, the federal government announced that it cut the small business tax rate to 9.0 per cent – the lowest in the G7.
What do you think of these tax increases?