Well, it appears that 2023 will be a time to tighten our belts even more thanks to more tax increases and rising prices.
There is little that won’t see an increase in ‘taxes’. Canadian workers making $40,000 or more will see their federal income-based taxes increase in 2023 due to rising payroll taxes, EI contributions and CPP contributions. It will not only affect workers but also small business owners. CPP went up again this year and will do so for the next three years. What does all this mean? Less money in the pockets of the ordinary person.
The Canadian Tax Federation lays things out in succinct manner. “Employers and employees will each be required to pay $3,754 in 2023. This represents a $255 tax increase in 2023 for both employees and employers (for workers earning $66,600 or more). The CPP tax has been increasing steadily over the past several years. Since 2018, the employee and employer rates of CPP have increased from $2,594 in 2018 to $3,754 in 2023. This represents a CPP tax increase of $1,160 on both employees and employers since 2018.” The end result overall? Less take-home pay for workers and less expendable income to go back into the economy. [Entire Canadian Tax Federation Report]
Even though there is no doubt that if employees are sick they should stay home and be paid, based on average weekly earnings in Canada, if the paid sick days become permanent, they will cost the average business owner up to an additional $2,229 per employee! So, there are two sides to the story.
There will also be a carbon increase of 14.31 cents per litre of gas over the current 11.05 cents per litre. The result? Even after government so-called rebates, it will still cost the average household between $402 and $847 at the pumps.
The table lays out the cost for households in Ontario in 2023-30
While food prices are on the rise, utilities are increasing, property taxes are increasing, rents are out of reach, along with everything else, the Federal government feels it’s also time to implement a second carbon tax through fuel regulations and grab yet another tax hike on alcohol sales.
The second carbon tax through fuel regulations takes affect July 1st and will increase the price of gas by up to 13 cents per litre, at least, by 2030. However, there are no rebates for the second carbon tax.
Although gasoline prices appeared to decline by 3.6 per cent, did they really? When compared to a year ago, they are still up 13.7 per cent. What a joke. The prices are so high that when they come down by a mere few cents, we tend to rush to the pumps to take advantage of the drop!
The Alcohol Escalator Tax will also increase by 6.3 per cent on April 1st despite the fact that taxes already account for about 50 per cent of the price of beer, 65 per cent of the price of wine and more than 75 per cent of the price of spirits.
Now, when it comes to the staple that everyone needs, food, according to Statistics Canada, the annual food inflation rate hit 11.4 per cent last month, up from 11 per cent in October.
When it comes to groceries, families, minimum-wage earmers and seniors are having a difficult time to make ends meet, to say the least. No matter how hard they try, they continue to fall behind, particularly, when some of the increases are craftily hidden — such as edible fats and oils (up 26 per cent), coffee and tea (up 16.8 per cent), eggs (up 16.7 per cent) cereal products (up 15.7 per cent) and baked products (up 15.5 per cent). This is in addition to fresh produce, meat and poultry that are all skyrocketing. Remember when a box of KDs (Kraft Dinner) was 39cents? Now it’s a bargain if it drops just below $1! It’s no wonder that there has been a dramatic rise in food bank usage.
One of the major players in the grocery world is, of course, Loblaws, owned by the Weston family and spearheaded by Galen Weston Jr. As of October, 2022, the company earned a total revenue of $17.52 billion, with an operating income of $1.47 billion. Net earnings of shareholders reported an increase of 273.5 per cent citing “… the favourable year-over-year net impact of adjusting items totalling $563 million.” Oh to be a shareholder!
While the Weston family has a net worth of $8.7 billionUS and is the third-wealthiest in Canada, Galen Weston Jr. has been touting in the media that the company has put a “price freeze” on all its ‘No Name’ products to, as he says, “… help make a meaningful difference to your grocery budget at a time when you may need it most.” Surely, he was joking but ‘methinks not’ especially when the ‘No name’ brand products are the lowest priced in any event.
And the list of the wealthy goes on.
According to the Canadian Centre for Policy Alternatives (CCPA), “Canada’s 100 highest-paid CEOs made an average of $14.3 million in 2021, smashing the previous record of $11.8 million set in 2018 … or 243 times the average Canadian worker in 2021, again beating 2018’s record of 227 times.” It would be interesting to know how much each paid in income tax and/or where they bank. Is it here in Canada or … offshore somewhere? Hmmm.
But I digress.
There will also be changes to the federal tax brackets: $zero to $53,359 (15 per cent); more than $53,359 to $106,717 (20.5 per cent); more than $106,717 to $165,430 (26 per cent); more than $165,430 to $235,675 (29 per cent); and anything above that is taxed at 33 per cent. One can only hope that, for some reason, you are not pushed by fate up into the next bracket where it could mean the difference of thousands of dollars in tax owed.
Just when we begin to come out of the depths of a pandemic, and it looks as though it is far from over, when small businesses in particular struggled to simply stay afloat, when workers have suffered what is tantamount to PTSD for some, the government decides it’s time to hike things up once again in the new year, 2023.
How much more can people take? How many more small businesses will fail under the weight of taxation? How tight can we pull that belt?
