New tax and minimum wage policies introduced across Canada New tax and minimum wage policies introduced across Canada

New tax and minimum wage policies introduced across Canada
19 Jan 2018

At the federal level, tax rates will fall for small businesses, while employment insurance premiums will rise for everyone, but the provinces are implementing their own changes too. 

As of 1 January this year, a number of tax changes have come into force in Canada. 

According to CBC, small businesses are seeing a drop in their tax rate from 10.5% to 10%, a reduction that was brought forward following a backlash against other proposed changes. These include a plan to make it harder for small business owners to ‘sprinkle’ income among family members that also came into force on New Year’s Day.

At the federal level, there will be a slight increase in employment insurance (EI) premiums. But the Canadian Taxpayers Federation estimates it will add only about CAN$6 (US$4.80) more for the average worker and CAN$13 (US$10.40) per employee for the average employer.

The government's new inflation-adjusted escalator to the excise tax on beer, wine and spirits also comes into effect this year, although taxes will not actually rise until 1 April.

Provincial changes

  • Ontario will see the most significant changes, particularly among low-income earners and young people. From 1 January, the province's minimum hourly wage increased from CAN$11.60 (US$9.28) to CAN$14 (US$11.19). This is higher than the current highest rate in Canada CAN$13.60 (US$10.87), which is found in Alberta. Ontario will also introduce another new rate of CAN$15 (US$11.99) at the start of 2019;
  • Alberta will put its minimum hourly wage rate up to CAN$15 ($11.99) on 1 October;
  • New Brunswickers will get a new paid day off, with the third Monday of every February becoming a statutory Family Day;
  • Quebec is Canada's highest-taxed province, but it is to drop its lowest income tax bracket from 16% to 15%, and will also give back $100 this year to families for each child aged between six and 17 to help cover back-to-school costs;
  • British Columbia will increase income taxes for high earners as the province seeks to cover the cost of a 50% cut to its medical services premium that came into effect on New Year's Day.

At the federal level, tax rates will fall for small businesses, while employment insurance premiums will rise for everyone, but the provinces are implementing their own changes too. 

As of 1 January this year, a number of tax changes have come into force in Canada. 

According to CBC, small businesses are seeing a drop in their tax rate from 10.5% to 10%, a reduction that was brought forward following a backlash against other proposed changes. These include a plan to make it harder for small business owners to ‘sprinkle’ income among family members that also came into force on New Year’s Day.

At the federal level, there will be a slight increase in employment insurance (EI) premiums. But the Canadian Taxpayers Federation estimates it will add only about CAN$6 (US$4.80) more for the average worker and CAN$13 (US$10.40) per employee for the average employer.

The government's new inflation-adjusted escalator to the excise tax on beer, wine and spirits also comes into effect this year, although taxes will not actually rise until 1 April.

Provincial changes

  • Ontario will see the most significant changes, particularly among low-income earners and young people. From 1 January, the province's minimum hourly wage increased from CAN$11.60 (US$9.28) to CAN$14 (US$11.19). This is higher than the current highest rate in Canada CAN$13.60 (US$10.87), which is found in Alberta. Ontario will also introduce another new rate of CAN$15 (US$11.99) at the start of 2019;
  • Alberta will put its minimum hourly wage rate up to CAN$15 ($11.99) on 1 October;
  • New Brunswickers will get a new paid day off, with the third Monday of every February becoming a statutory Family Day;
  • Quebec is Canada's highest-taxed province, but it is to drop its lowest income tax bracket from 16% to 15%, and will also give back $100 this year to families for each child aged between six and 17 to help cover back-to-school costs;
  • British Columbia will increase income taxes for high earners as the province seeks to cover the cost of a 50% cut to its medical services premium that came into effect on New Year's Day.

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