Tax,Tax,Tax, Canadian Favourite Sport in 2024

Taxes play a crucial role in Canada’s economy, funding essential services and programs that benefit citizens across the country. Understanding the Canadian tax system is essential for individuals, businesses, and organizations alike to fulfill their tax obligations and make informed financial decisions. How many taxes Canadian pay each da, every month and annually? Probably too much if you ask average Canadian citizen. But that is not all, Canadian Government will pull out more out of their magic hat in 2024! No it is not a rabbit, but rather few more tax hikes!

Types of Taxes in Canada

Income Tax: Personal income tax is levied on the income earned by individuals, including employment income, investment income, and business income. The tax rates vary based on income levels, with higher earners subject to higher tax rates. Additionally, provinces and territories impose their own income taxes, which are separate from federal taxes.
Goods and Services Tax (GST)/Harmonized Sales Tax (HST): The GST is a federal tax levied on most goods and services sold in Canada, while the HST is a combined federal and provincial sales tax applicable in participating provinces. Certain goods and services are exempt from GST/HST, while others may be zero-rated or subject to a reduced rate.
Corporate Income Tax: Corporations operating in Canada are subject to corporate income tax on their taxable income. The federal corporate tax rate applies to income earned at the federal level, while provincial and territorial corporate tax rates apply to income earned within each jurisdiction.
Property Tax: Property taxes are levied by municipalities to fund local services and infrastructure. The amount of property tax owed is based on the assessed value of the property, as determined by municipal assessors.
Alcohol Tax
Land Transfer Tax
Carbon Tax
Tobacco Tax

Proposed Tax Hikes in 2024

Canadians have felt the economic impact, tax hikes and overall cost of living for months and years now. Food items get more expansive on daily basis, housing and rental market is not getting any better, property taxes get increased every year while employment is unachievable dream for many. Yet, according the Canadian Tax Federation (CTF) report that is still not enough for the Government to call it to much! Canadian Government has proposed few more tax increases to be in effect in 2024! Let’s explore the new normal:

Payroll taxes:

In 2024, the federal government will increase the required payments to the Employment Insurance program and the Canada Pension Plan. 2024 payroll tax hikes may cost an employee as much as $347. Federal payroll taxes (CPP and EI tax) will cost employees making $73,200 or more $5,104 in 2024. Additionally, their employer will be required to pay $5,524.

Carbon tax:

Effective April 1, 2024, the federal carbon tax will rise to more than 17 cents a litre of gas and 15 cents per cubic meter of natural gas. The Parliamentary Budget Officer estimates that, even after rebates, the average household will pay between $377 and $911 in 2024–25 as a result of the carbon price.

Alcohol escalator tax:

Effective April 1, 2024, alcohol taxes will rise by 4.7%. Currently, taxes make up almost 75% of the cost of spirits, 65% of the cost of wine, and roughly half of the cost of beer. Next year, this tax increase will set Canadians back by over $100 million.

See full CTF’s report here

Government Tax Rebates

Carbon Tax

Every three months, Canadians receive a check or direct deposit of their fuel charge revenues through the Canada Carbon Rebate, formerly known as the Climate Action Incentive Payment. This program ensures that most families receive a larger refund, with lower-income households benefiting the most.

$1,800 in Alberta ($450 quarterly);
$1,200 in Manitoba ($300 quarterly);
$1,120 in Ontario ($280 quarterly);
$1,504 in Saskatchewan ($376 quarterly);
$760 in New Brunswick ($190 quarterly);
$824 in Nova Scotia ($206 quarterly);
$880 in Prince Edward Island ($220 quarterly); and,
$1,192 in Newfoundland and Labrador ($298 quarterly).

Even though Canadian Government has implemented Carbon tax Rebates for individuals with lower incomes, Canadian small businesses will cary big burden on their shoulders as there is no tax rebate or benefit for them.

Try to claim Alcohol taxes on your next tax return! Or how about getting back the money from EI insurance? Have you received the notice from benefit deduction increase yet? If not, many Canadians have received letters from their health benefit insurances about deduction increases. How about insurance increase? Car insurance and other insurances have raised the prices as well.