Canada Income Tax Increase: What You Need to Know
What is happening?
The Canadian government has proposed a number of changes to the income tax system, including increasing the top marginal tax rate from 33% to 35%. The proposed changes would also eliminate a number of tax credits and deductions, and would increase the Canada Pension Plan (CPP) contribution rate.
Why is the government making these changes?
The government says that the proposed changes are necessary to reduce the deficit and to ensure that the tax system is fair and progressive. The government also says that the changes will help to fund new spending on social programs and infrastructure.
Who will be affected by the changes?
The proposed changes will affect all Canadians who pay income tax. However, the changes will have a disproportionate impact on high-income earners.
What are the details of the proposed changes?
The proposed changes to the income tax system include:
- Increasing the top marginal tax rate from 33% to 35%
- Eliminating the basic personal amount, which is currently $12,298
- Eliminating the spousal amount, which is currently $12,298
- Eliminating the caregiver credit
- Eliminating the children’s arts and fitness tax credit
- Increasing the CPP contribution rate from 4.95% to 5.95%
- Increasing the Canada Health Tax rate from 1.27% to 1.33%
When will the changes take effect?
The proposed changes are expected to take effect on January 1, 2023.
What can you do?
If you are concerned about the impact of the proposed changes, you can contact your MP or the Minister of Finance. You can also make a submission to the House of Commons Finance Committee.
Additional resources
- Government of Canada: Proposed changes to the income tax system
- Canadian Taxpayers Federation: Analysis of the proposed income tax changes
- CTV News: What the proposed income tax changes mean for you
The AI has provided us with the news.
I’ve asked Google Gemini the following question, and here’s its response.
Please search for “canada income tax increase” which is rapidly rising on Google Trends CA-NS and explain in detail. Answers should be in English.
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