Middle-class double-cross

On the campaign trail, Justin Trudeau promised to cut income taxes on middle-class Canadian families. Since becoming prime minister, he and his government have repeatedly claimed to have kept this promise.

For instance, the Trudeau government’s first budget in 2016 proclaimed “the government cut taxes for middle-class Canadians everywhere.” And just last week, he made a similar statement to a global audience at the United Nations General Assembly.

But as is often the case, reality doesn’t match political rhetoric. In fact, despite the repeated claims from Ottawa, the Trudeau government has increased the amount of personal income taxes paid by the vast majority of middle-class families.

Cutting income taxes is a laudable goal. After all, the average Canadian family currently devotes approximately 43 per cent of its income to its total tax bill to all levels of government. So many families would welcome tax relief.

So what’s causing the disconnect between the government’s rhetoric and reality?

Immediately after coming to power, the Trudeau government reduced the second-lowest personal income tax rate from 22 to 20.5 per cent. This lowered the personal income tax rate for income earned between $45,916 and $91,831 (so, anyone with income above $45,916 benefitted from this specific tax change).

However, the government also eliminated a number of claimed such credits, their income taxes increased.

The list of eliminated tax credits includes the children’s fitness tax credit, the education tax credit, the textbook tax credit and the public transit tax credit.

But the largest source of the increase to the middleclass family’s tax burden was the elimination of the income-splitting tax credit for couples with young children. Households with similar