I read this column in The Globe and Mail with some amusement. It talks about a new report released today by a “leading economist” that says that the recent federal budget “actually lowered take-home pay for many Canadians”. I have not read the actual report but I don’t think that its contents should be a surprise. Soon after the budget was presented, columnists and bloggers pointed out that the lowest tax rate is going up from the current 15% to 15.5% and weren’t fooled for a minute that it is actually going down from 16% as the budget had claimed (though it may be technically correct).
Let’s do the math: most Canadians work for a paycheck. They get to keep half of the current tax cuts and the new employee tax credit is worth about $155 starting next year. Add the two up and we will pay about $20 more in taxes. And we haven’t even accounted for the 1% cut in the GST or tax credits for transit passes, kids sports, textbooks or apprentice tools, which are worth at least another few hundred dollars in tax savings for an average household. The bottom line is that most Canadians (unless you are a self-employed, non-parent, non-student, non-apprentice, who doesn’t ride the transit, in which case your income taxes are going up but your overall tax burden might well be lower) have more money in their pocket after the budget, however those on different sides spin the issue.