Canadians Can Expect More Federal Tax Hikes in 2024: Report

The Canada Revenue Agency (CRA) headquarters Connaught Building in Ottawa on Aug. 17, 2020. (Sean Kilpatrick/The Canadian Press)

Canadians can expect an increase in taxes in 2024, thanks to the country’s high inflation rate, the Canadian Taxpayers Federation (CTF) said in a newly released report.

The Canada Revenue Agency announced the changes in November, saying an inflation rate of 4.7 percent will be used to set the 2024 tax brackets. Among those changes will be an increase in the mandatory Canada Pension Plan (CPP) and Employment Insurance (EI) contributions in 2024 for both workers and their employers, the CTF’s annual tax report notes.

That means both workers earning at least $68,500 and their employers will be required to pay $3,867 in CPP tax in 2024, a $113 increase.

The federal government has also announced a second CPP tax beginning in 2024. Known as CPP2, it will be applied to any income between $68,500 and $73,200. The maximum tax amount will be $188 in 2024.

“That means the CPP2 is a tax increase levied on income over and above the original CPP taxable income, up to a new ceiling of $73,200,” the report explained.

CPP and EI will cost workers making $73,200 or more $5,104 in 2024, the report found, adding that these payroll tax increases could cost employees up to $347 each next year. Their employers, meanwhile, will have to pay $5,524.

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Each year, income tax is indexed according to the inflation rate. This practice can cause what the report describes as “bracket creep.” Bracket creep occurs when governments don’t move tax brackets with inflation. Inflation can then bump taxpayers into a higher tax bracket.

“Canadians pay too much tax because the government wastes too much money,” CTF federal director Franco Terrazzano said in a Dec. 19 press release. “Canadians need relief now, and that means Prime Minister Justin Trudeau must drop his plans to raise taxes in 2024.”

Carbon and Alcohol Taxes

The report also noted the impact that carbon pricing will have on Canadians next year.

The federal carbon tax will increase to more than 17 cents per litre of gas and 15 cents per cubic metre of natural gas on April 1, 2024.

“At that higher rate, the carbon tax will cost a family about $12.32 every time they fuel up a 70-litre minivan,” the report says. “Taxpayers in every province and territory, except Quebec, are forced to pay this federal carbon tax rate.”

The average household will shell out between $377 and $911 in carbon tax in 2024–25, despite the Climate Action Incentive Payment rebate, according to the Parliamentary Budget Officer.

Alcohol taxes will also rise as of April 1. The 4.7 percent tax increase will cost Canadians roughly $100 million next year, the report says.

Taxes already account for approximately 50 percent of the price of beer, 65 percent of the price of wine, and more than 75 percent of the price of hard liquor.

“Tax hikes will give Canadians a hangover in the new year,” Mr. Terrazzano said. “Canadians need help with the rising cost of living, but the feds will be reaching deeper into our pockets with major tax hikes in 2024.”

The Epoch Times reached out to the Canadian Revenue Agency for comment, but didn’t hear back by press time.