Booze, cigs to cost more

But Liberals’ spending plan doesn’t touch corporate tax rates and capital gains

Smokers, drinkers and transit users took a hit but there were no changes to personal or corporate tax rates or capital gains in the new budget.

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 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 but will be a significant hit for lower-income Canadians, said Myron Knodel, director of tax and estate planning at Investors Group.

Overall on the taxation front, the 2017 federal budget is considered more notable for what it didn’t contain than what it did.

“Perhaps it’s a wait-and-see” scenario amid uncertainty about the future of tax rates in the U.S. under Donald Trump, said Lynne Zulian, partner, tax services at accounting firm Grant Thornton LLP Canada.

She’s especially pleased to see no increase to corporate tax rates this time around.

The budget also pledged to ensure that ride-sharing services like Uber are charging GST and HST, just like regular taxis.

The government will scrutinize the private corporations wealthy professionals like doctors and lawyers use to reduce their taxes.