Trudeau’s tax changes socking it to the poor
Justin Trudeau swept into power in 2015 with the promise of making life better for poor and middle-class Canadians. A new study on the effects of the Trudeau government’s changes to the federal income tax system shows the prime minister has broken that promise in a spectacular way.
Indeed, the Liberal government’s income-tax changes are socking it to the poor, the middle class and everyone else. Less money for all. Not a very winning election slogan.
The Fraser Institute report, Effect of Federal Income Tax Changes on Canadian Families Who Are in the Bottom 20 Per cent of Earners, shows that of the bottom 20 per cent of income-earning Canadian families with children, almost two-thirds, 61 per cent, are paying more income tax today than they were before Trudeau came to office.
“We were very surprised with these findings,” said Charles Lammam, one of the report’s three authors.
In fact, during his election victory speech on Oct. 19, 2015, Trudeau vowed to build a government devoted to “growing the economy, creating jobs and strengthening the middle class, one that is devoted to helping less fortunate Canadian families work their way into the middle class.”
His tax changes are doing the exact opposite.
Of the bottom 20 per cent of income-earning families with children, 406,000 of a total 660,000 are paying more federal income tax — about $269 more a year, on average — thanks to Trudeau’s changes to the tax code
Trevor Tombe, an assistant professor of economics at the University of Calgary, confirms the Fraser Institute study is correct, but says lower-income families with children younger than 18 are better off, owing to changes made to the Canada Child Benefit.
The income tax changes however, continue to get worse for middleclass families with children. The report shows 78 per cent of families that earn between $66,449 and $90,743 are paying higher taxes thanks to the tax changes, and in the next tax bracket — families earning $90,744 to $119,736 — 84 per cent are paying more taxes to Ottawa.
“What’s even more surprising,” said Lammam, “is families in the bottom 20 per cent are slightly more likely to be paying higher income taxes than families in the top 20 per cent.”
As the report points out, “relative to other income groups, a smaller percentage of upper-income-earning families (52 per cent) are paying higher personal income taxes due to the tax changes implemented by the federal government.”
Meanwhile, after calling incorporated small Canadian business owners such as doctors and farmers “tax cheats,” earlier revelations that Morneau did not put his considerable assets in a blind trust, continue to haunt the Trudeau government. Exploiting legal tax loopholes has helped keep the uber rich uber rich, while the rest of us tax paying suckers get gouged.
For Trudeau, his motto seems to be, “say one sunny thing and do the exact opposite.” It’s been working so far for Trudeau, whose popularity seems to remain stable regardless of policy mistakes, scandals and broken promises.
Worse yet, however, according to his own government’s projections, Trudeau is expected to increase Canada’s per-person federal debt by five per cent from 2015 to 2019, the largest increase of any prime minister since Confederation whose time in office did not include a world war or economic recession.
Add the job- and confidence-killing measures by moving the regulatory goalposts TransCanada needed to meet to seek approval for the Energy East pipeline, virtually every promise Trudeau made in his “sunny ways” victory speech have been dashed.