Islanders facing major tax hikes in 2023
The Canadian Taxpayers Federation released its annual New Year’s Tax Changes report today to highlight the major tax changes in 2023. The report shows that Premier Dennis King is set to increase taxes on Islanders of every income level.
“Islanders are getting hammered with income tax hikes because King is refusing to end his tax hikes by stealth,” said CTF Interim Atlantic Director Jay Goldberg. “A Prince Edward Island taxpayer earning $40,000 is effectively facing a $107 tax hike because King refuses to index tax rates to the rate of inflation.”
Bracket creep occurs when governments don’t move tax brackets with inflation and inflation sends taxpayers into higher tax brackets even if they can’t afford to buy more.
The report also outlines five tax hikes that Islanders will be facing at the federal level.
- Canada Pension Plan tax: Workers earning $66,600 or more will pay an extra $255 through the Canada Pension Plan tax in 2023. Their employers will also pay an extra $255.
- Employment Insurance tax: Workers earning $61,500 or more will pay an extra $50 through the Employment Insurance tax in 2023. Their employers will also pay an extra $70.
- Carbon tax: The federal carbon tax will be imposed on Prince Edward Island on July 1, 2023. It will begin at 14 cents per litre of gas. The carbon tax will cost the average Canadian household between $402 and $847 in 2023, even after the rebates, according to the Parliamentary Budget Officer.
- Second carbon tax: The federal government is imposing a second carbon tax through fuel regulations on July 1, 2023. The second carbon tax will increase the price of gas by up to 13 cents per litre by 2030. There are no rebates for the second carbon tax.
- Liquor escalator tax: The federal liquor escalator tax will increase liquor taxes by 6.3 per cent on April 1, 2023. Taxes already account for about half of the price of beer, 65 per cent of the price of wine and more than three quarters of the price of spirits.
“Other countries are cutting taxes, but Ottawa is sticking Canadians with higher bills,” said CTF federal Director Franco Terrazzano. “Prime Minister Justin Trudeau needs to stop wasting so much money and cut taxes.”
You can read the CTF’s New Year’s Tax Changes report here.