THE BRACKET CREEP SQUEEZE

In the mid-1990s Canadians were well aware that harder work and more income was not getting them any further ahead. Although it was not well known, the problem was called “bracket creep.” In 1985, the federal government “de-indexed” the income tax system exposing a greater share of Canadians’ inflation-driven incomes to taxes each year.

The result: After 14 years of this stealth tax, the federal and provincial governments had netted $90 billion in new revenue.

In CTF pre-budget submissions in 1997, 1998 and 1999 the CTF demanded full re-indexation of the income tax system. And while the CTF was successful in convincing the House of Commons Finance Committee and the Alberta government, others proved a tougher nut to crack. So out came the cannons.

First in 1998, and then again in 1999, national campaigns aimed at eliminating bracket creep and lowering overall taxes were launched. The press conference launch in 1999 included 9,418 stacked loonies to show the impact bracket creep had on the average wage earner over the past decade. The campaigns also included comprehensive research, a cross-country speaking tour, billboards and a massive online petition drive called the “Billion-Byte March.”

Our efforts were rewarded with the announced death of bracket creep on February 28, 2000. The campaign has saved taxpayers literally billions. Then Minister of Finance Paul Martin wrote: “The Federation is an important and valued voice in decision making … nowhere is this more evident than in the leading role that the Federation played in educating Canadians about bracket creep and building support for re-indexation of the tax system.”