Government hiking taxes on smokes, booze

Canadians who drink, smoke and rely on public transit will be paying more thanks to changes in the federal budget.

Finance Minister Bill Morneau also said Ottawa will scrutinize the private corporations wealthy professionals like doctors and lawyers use to reduce their taxes.

And he put tax cheats on notice, budgeting more than half a billion dollars in new money over five years to fund investigations.

“We will close loopholes that result in unfair tax advantages for some at the expense of others,” Morneau said in his speech.

“We will eliminate inefficient tax measures, especially those that disproportionately benefit the wealthy. And we will work with the provinces and territories to crack down on those who hide their identity to avoid paying taxes.”

The increased sin taxes are effective today and will put an additional $55 million from tobacco and $30 million from alcohol in government coffers in the 2017-18 fiscal year.

The excise duty rate on cigarettes is increasing to $21.56 per 200 cigarettes from $21.03. For alcohol, the excise duty rates are going up two per cent and starting next year will be adjusted every April 1, based on the consumer price index.

The Liberals are also eliminating the 15 per cent tax credit for commuters who buy a transit pass, a move that will save the government $150 million.

In justifying the decision that will take effect July 1, the government said the credit was ineffective in encouraging the use of public transit and reducing greenhouse gas emissions.

“Our approach to making a real difference for Canadians in public transit is to invest significantly over the long term,” Morneau said.