A report released by the CTF or Canadian Taxpayers Federation presents the results of the newly implemented changes on the federal and provincial tax. According to the CTF, the two changes in the two levels of taxation are for the Employment Insurance (EI) premiums as well as for the first Canada Child Benefit (CCB) which will be undergoing means test for the full year. The EI rate for the past four years remained at 1.88% for employees and it will drop to 1.63% from January, while employers on insurable wages with 2.63% will decrease to 2.28%.
Meanwhile when it comes to the impact of CCB, the CTF explained that the measures will push more and higher benefits for many low income families and with children because it will be free form tax. The said group of families then were paying income tax on the Universal Child Care Benefit (UCCB) before this new changes is implemented.
Moreover for the provincial tax, Labrador and Newfoundland shall anticipate tax rate increases for all the 5 tax brackets which will set increase for almost all taxpayers. On the first day of January a carbon tax was presented in Alberta and on the same day the cap-and trade system started in Ontario. Alberta and Manitoba are going to index their income tax brackets for this year. Nowadays the only provinces that are not doing the same are Prince Edward Island and Nova Scotia. Meanwhile, Ontario and New Brunswick don’t index top tax brackets.
People in Quebec may experience a number of largest reductions in taxes after abolishing the provincial health tax and changes. Families with income of CAD250, 000 will have CAD1,409 less in tax. Meanwhile in Ontario, single-income family with two children with annual income of CAD60,000 will have CAD122 less in taxes. In addition the families will receive an additional CAD1,824 in CCB payments.
In many provinces, families with higher incomes will be paying more but CTF Federal Director Aaron Wudrick believe that a huge number of Canadians will get less taxes to pay and more money left in their pocket.