2019 tax changes concerning to taxpayers federation

A number of tax changes coming in 2019 are worrying to the Canadian Taxpayers Federation.

Several changes were identified in the CTF’s annual New Year’s Tax Changes report as areas of concern, including rate increases coming to the Canada Pension Plan, tax brackets that aren’t indexed to inflation, and the uncertainty surrounding the federal government’s carbon tax.

According to the CTF, the Canada Pension Plan rate increase of 0.15 per cent may look small at first glance, but it will cost workers about $98 in 2019. The federal government intends to continue increasing the rate, the CTF said in its report, meaning Canadian workers will end up paying $550 more per year after five consecutive years of hikes. Income tax deductions will make up for some of the difference, but according to the CTF’s calculations, the average person making $60,000 will still be paying $380 more annually.

“The politicians like to spin it that you’re getting the money back as a sort of a savings plan, but you could have saved that money yourself,” CTF Prairie Director Todd MacKay told 650 CKOM. “There’s a lot of options that are more flexible and probably more beneficial for Canadians.”

In Saskatchewan, one of the CTF’s biggest concerns for 2019 was “bracket creep,” which occurs when inflation pushes individuals into higher tax brackets. According to the CTF, Saskatchewan’s tax brackets have not been indexed to inflation since the 2017-18 budget, and they’ll remain unindexed next year.

“It’s really frustrating to see bracket creep back in Saskatchewan,” MacKay said. “It’s a bad policy, the government knows it’s a bad policy, you’ve got to get rid of bad policies, and the Saskatchewan government needs to get rid of bracket creep.”

When it comes to the carbon tax, the federal government has assured Canadians that most families will benefit from the rebates offered through the carbon pricing scheme. MacKay disagreed, saying he expects the policy to have a negative overall effect.

“I don’t think there can be any real doubt – the carbon tax is going to cost Saskatchewanians money,” MacKay said. “I think it’s a pretty tough pitch to say you’re going to send hundreds of millions of dollars to Ottawa, run it through the bureaucracy, and have it come back unscathed.”

While those with a lower carbon footprint may see some net gains through the rebate program, MacKay said those in crucial industries such as agriculture and construction will “almost certainly” end up losing money on the carbon tax, which will hurt the local economy.

Saskatchewan residents can expect to pay an additional $0.0442/L on fuel starting April 1, 2019, barring the ongoing legal challenge against the carbon tax led by Premier Scott Moe.

While the report painted a negative picture for taxpayers in 2019, some positive changes are also coming next year. The CTF’s report highlighted a $500 increase in the annual limit on tax-free savings accounts, bringing the new limit to $6,000, as well as a single-point reduction in the small business tax rate, which will drop to nine per cent in 2019.