LILLEY: Taxes are only rising under Trudeau in new year

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You don’t need to be a fortune teller to know that tax hikes are in the future for Canadians. At least five main taxes will increase in 2023 by hundreds of dollars per year for workers, employers and consumers.

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Of course, there could more if the Trudeau government decides they need more revenue tools to keep up with their ever-increasing spending.

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“Tax hikes will give Canadians a hangover in the new year,” said Franco Terrazzano, Federal Director of the Canadian Taxpayers Federation.

On Jan. 1, workers and employers will start paying more in payroll taxes through Employment Insurance premiums and Canada Pension Plan premiums. The Trudeau government has recently tried to claim these aren’t taxes but just fees we all collectively pay for services we get down the road.

To most people, that means a tax, but even if you accept their definition, employers will still be paying those payroll taxes without getting any services.

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In the new year, someone earning $66,600, the maximum for CPP cutoff, will pay an added $255 in premiums. Employers will pay the same $255 in additional CPP premiums for each employee.

When it comes to EI, that same worker will pay an extra $50 per year in EI premiums, whether they ever collect EI or not, while their employer will pay an extra $70.

The CTF estimates that payroll taxes will cost a middle-class worker $4,756 in 2023 while still costing their employer an additional $5,157. That doesn’t include income taxes.

The federal government is increasing the basic personal exemption on income tax but for anyone earning over $40,000 per year, the payroll tax hikes will mean they pay more in overall taxes.

The CTF and the Canadian Federation of Independent Business are both critical of these significant tax hikes at a time when Canadians are also dealing with inflation.

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“The maximum additional amount that an employee will pay in EI and CPP contributions is $304.71. It may not seem like a lot, but $300 can cost one family a trip to the grocery store or pay for their transportation or utility bills,” said Dan Kelly, president at CFIB.

Kelly said the increases combined with inflation and labour shortages are putting employers in a very bad spot.

“At minimum, government should be pressing pause until inflation is under control,” Kelly said.

That’s unlikely to happen given the Trudeau government’s spending patterns. Between April’s budget and the November fall economic statement, finance minister Chrystia Freeland increased spending by $20 billion while claiming fiscal prudence.

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Just shy of $8 billion of that increase is the extra cost to service Canada’s debt which went from $26.9 billion to $34.7 billion. Next year, the cost to service our national debt will increase to $43.3 billion.

With debt and spending like that, there’s no wonder that the Trudeau Liberals need to keep increasing taxes.

In the CTF’s report on tax changes for 2023, they note that carbon tax and alcohol escalator taxes will increase on April 1 while the federal clean fuel regulations, dubbed a second carbon tax, will take effect on July 1. That tax is expected to drive up the cost of gasoline by as much as 13 cents per litre by 2030.

The carbon tax increase on April 1 will boost the cost to the average family increase even after the much-hyped carbon tax rebates according to the Parliamentary Budget Office. The average family in Manitoba $402 more than they receive in rebates next year, the average Ontario family will pay $490 more, it will be $500 in Saskatchewan and $847 in Alberta.

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All of that is on top of an increase in the price of alcohol of 6.3% on the federal excise tax.

“Other countries are cutting taxes, but Ottawa is sticking Canadians with higher bills,” said CTF executive director Franco Terrazzano. “Prime Minister Justin Trudeau needs to stop wasting so much money and cut taxes.”

While I agree with the sentiment, I won’t hold my breath. Trudeau has shown an appetite for taking more tax money, not less, from Canadians. In 2023 this won’t change but life will be more expensive.