The Canadian Taxpayers Federation released its annual New Year’s Tax Changes report today to highlight major tax changes in 2025.

“Islanders will continue to face higher taxes in 2025,” said Devin Drover, CTF Atlantic Director. “Prince Edward Island remains only one of two provinces to not automatically adjust for bracket creep, leaving Islanders forced into higher income tax brackets due to inflation.”

Bracket Creep: The P.E.I. government announced changes to its income tax brackets and tax rates in the 2024 provincial budget. These changes amount to a small tax cut for all Islanders making less than $105,000. However, the P.E.I. government does not automatically index its income tax brackets to inflation. This means that every year, as incomes go up with inflation, Islanders pay more in income taxes as they are pushed into higher tax brackets.

Islanders are also facing higher taxes due to planned hikes from the Trudeau government. Planned federal tax hikes in 2024 include increases to payroll taxes, capital gains taxes, alcohol taxes and the federal carbon tax.

“The Trudeau government continues to make life more expensive for Islanders by raising taxes,” said Drover. “Prime Minister Justin Trudeau should drop his plans to take more money out of Canadians’ pockets and deliver serious tax relief.”

You can find the CTF’s New Year’s Tax Changes report here.