PREPARE TO PAY
Ottawa commits to spend billions of dollars on transit projects and affordable housing but consumers will have to cough up more money
TOBACCO
Excise duty on cigarettes goes up by 53 cents to $21.56 per carton, effective today
ALCOHOL
Excise duty goes up by two per cent, effective today, and will be adjusted annually based on the consumer price index
TRANSIT PASSES
15 per cent tax credit, which allows the cost of public transit passes to be deducted, is being eliminated effective July 1
Vancouver resident Rychard McKeown isn’t too pleased about having to pay more for his whisky and cigarettes.
“They’re nickel-and-diming us to death and feeding off our addictions,” said McKeown, 46, of changes in the federal budget announced Wednesday that will make Canadians who drink, smoke and rely on public transit pay more.
“We need to pay taxes, I get it,” said McKeown, who had just made a purchase at the B.C. liquor store at Harbour Centre. “But if you can’t deal with existing taxes, don’t ask for more. They’re not fiscally responsible.”
Langley resident Carlos Estrada, who was heading into the same liquor store, felt the same way as McKeown about the increased alcohol taxes, but wasn’t concerned about the cigarettes.
“I like whisky,” said Estrada. “And considering the price of living in B.C. with our toll bridges, it’s crazy. It’s not like wages are going up. But cigarettes kill people.”
However, New Westminster resident Jude Gilroy, 71, didn’t have a problem with paying a bit more tax for her occasional bottle of wine.
“You don’t have to drink or smoke. But I wish they’d tax cigarettes more because of the health issues.”
The increased sin taxes are effective Thursday 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 carton of 200 smokes from $21.03, while the rates on alcohol are going up two per cent.
In B.C., a 12-bottle case of Molson Canadian will cost you an extra 42 cents, while the price of a 750-litre bottle of Crown Royal will go up 47 cents.
Both taxes will be adjusted every April 1 starting next year based on the consumer price index.
The federal 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.
Finance Minister Bill Morneau also said he will put tax cheats on notice, budgeting more than half a billion dollars in new money over five years to fund investigations.
The budget did not make any changes to income tax rates.
However, the government did make several changes it said were aimed at ensuring wealthy Canadians pay their fair share.
The spending plan also included $523.9 million over five years for the Canada Revenue Agency to help prevent tax evasion and improve tax compliance. The increased spending is projected to yield $2.5 billion over five years in additional revenue.
The budget also pledged to ensure that ride-hailing services such as Uber are charging GST and HST, just like taxis.
Other measures that will affect Canadian families in the budget included:
Replacement of the caregiver credit, infirm dependant credit and family caregiver tax credit with a new Canada caregiver credit;
Elimination of the labour market impact assessment processing fee for those seeking to hire foreign caregivers for those with medical needs and for families making less than $150,000 seeking to hire a foreign nanny;
$13.2 million over five years to help service providers offer low-cost home Internet packages to low-income families.
The budget projects a deficit of $28.5 billion this coming fiscal year, including a $3-billion contingency reserve. The budget document, for the first time in Canadian history, also includes a section on how many of its measures impact men and women in different ways with a promise to do a deeper gender-based analysis for 2018.