A press release from the Canadian Taxpayers Federation warns that, despite the federal government’s announcement that it’s freezing Employment Insurance taxes for three years, many Canadians’ paycheques will be getting smaller after Jan. 1, as EI and Canada Pension Plan taxes go up.
In its annual “New Year’s Tax Changes” report, the CTF has calculated that maximum employee EI taxes will go up $23 in 2014 to $914, while the employer’s share of EI payroll tax goes up $31 to $1,279.
That means a working couple who each earn at least $48,600 in 2014, will have $4,386 in EI payroll taxes sent to Ottawa on their behalf.
The federal government expects to collect $4.2 billion more in EI taxes in 2014 than they pay out in benefits.
According to the CTF, other forecasts peg the EI tax windfall to the government much higher.
Meanwhile, the maximum employee Canada Pension Plan payroll tax rises $70 to $2,426, for employees earning at least $52,500 a year. Employers match employees’ CPP payroll taxes dollar for dollar, pushing the total CPP payroll tax haul to $4,856.
The CTF says that the pain will be worse in Manitoba.
“Manitobans are going to see small income tax increases because the Selinger government doesn’t do what almost every other province does with the income tax system,” said CTF Prairie Director Colin Craig.
“Someone earning $35,000 will get stung by a $34 tax increase while someone in the $80,000 category will get bit by a $98 increase.”
However, that’s based on calculations that assume Manitoba workers get a cost-of-living wage increase, which could bump portions of their paycheques into a higher tax bracket.
“The secret income tax increases in Manitoba are known as ‘bracket creep’ and they occur because the Selinger government refuses to index tax brackets and credits for inflation like most provinces do,” Craig said.
Manitoba, P.E.I. and Nova Scotia do not index their provincial tax brackets to inflation.
» Brandon Sun
Republished from the Brandon Sun print edition December 31, 2013