Happy New Year and more taxes for Canadians

As we leave behind 2010 and welcome in 2011 Canadians can look forward to paying more in taxes.

Ontarians are set to experience the highest increases.

Blame higher thresholds to the Employment Insurance and Canadian Pension Plan programs, says the Canadian Taxpayers’ Federation. There’s also the inflation rate in Ontario, which was higher than the national average last year and leads to higher personal income taxes, according to the advocacy group.

An Ontarian earning $45,000 a year will end up paying an extra $390 in income and payroll taxes in 2011, it says. A dual income family with two kids that brings in $100,000 a year will pay an extra $846 in taxes this year. A family with two kids and a single income of $100,000 is hit hardest, paying $1,035 to Ottawa, according to the group.

The increases to EI and the pension plans have been in the works for some time, but the income tax hikes are coming because of  higher inflation rates across the country.

Other changes announced by the federal government include a 1.7 per cent boost in CPP benefits to a maximum $960 a month, and a 0.5 per cent increase in Old Age Security to a maximum $524.23.
Ottawa is also allowing a five-point increase in the deductible portion of meal expenses for long-haul truckers, from 75 to 80 per cent.

But, starting Jan. 1, Canadians will no longer be able to receive a federal credit of up to $1,500 for improving the overall energy efficiency of their homes.

The major change this year is on the corporate side, where the business tax rate falls from 18 per cent to 16.5 per cent. It is due to fall to 15 per cent in 2012.

So while our overall payroll deductions goes up, corporate taxes go down. Something is wrong with this picture. In Ontario our energy costs are expected to increase by 15-20%, but the Provincial Government is giving us a credit of 10% off the bottom line of our hydro bills. Wow, thanks Uncle Dalton for the big break, which by the way we are paying for as the Provincial government had to borrow 1 billion to fund the 10% credit.

To me we have a Conservative government in Ottawa raising our payroll deductions, and a Liberal government in Ontario who are raising our energy costs. To me the guys in Ottawa and at Queens Park both sound like tax and spend Liberals to me.

Until next time!