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BC: CTF Releases New Year’s Tax Changes for 2014

Author: Jordan Bateman 2013/12/30

VANCOUVER, BC: The Canadian Taxpayers Federation (CTF) has crunched the numbers and despite the federal government’s announcement that it’s freezing Employment Insurance taxes for three years, many Canadians’ paycheques will be getting smaller after January 1st 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. Other forecasts peg the EI tax windfall to the government much higher.

“People have compared the government’s EI game to a casino where the house takes a huge cut of the money,” said CTF Federal Director Gregory Thomas. “It’s completely unfair to compare EI to a casino, because you an occasionally win when you give your money to a casino.”

Thomas noted that for every dollar paid out in EI benefits, the government spends 11 cents on administration.

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.

In B.C., the province is increasing the Medical Services Premium tax for the fifth consecutive year. A family will now pay $138.50 a month in MSP tax, up 28 per cent since 2010. This tax grab wipes out any savings from B.C.’s low rate of inflation.

For a family making $80,000 a year in B.C., the total tax increase is $73 in 2014 – not including approved ICBC, BC Hydro and BC Ferries rate hikes, or municipal property tax increases.

“It’s another year of taxpayers falling further behind in British Columbia,” said CTF B.C. Director Jordan Bateman. “Anyone making more than $25,000 a year in B.C. will lose ground in 2014, thanks mainly to the province’s continued MSP tax grab.”

The federal government has introduced a new tax credit for first time donors to a registered charity. They will receive a credit of 40 per cent of the first $200 they donate, rather than 15 per cent. The credit for donations over $200 goes to 54 per cent for first time donors, rather than previous 29 per cent.

CTF calculations for the tax changes that will be occurring on January 1st for 26 different income and family scenarios can be found here: http://www.taxpayer.com/media/2014_New_Years_Tax_Changes_Backgrounder.pdf


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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