We're going to be taxed more: CTF

“Nearly every working Canadian will be paying more in income and payroll taxes in 2011,” said Derek Fildebrandt, CTF national research director.

Virtually all workers in this country will take home less of their paycheque next year, according to the Canadian Taxpayers Federation’s latest calculations.

The CTF’s annual projections found Canadians at a variety of income levels and in various family situations will fork over on average 2% more of their earnings to the government starting Jan. 1.

“Nearly every working Canadian will be paying more in income and payroll taxes in 2011,” said Derek Fildebrandt, CTF national research director.

And in many cases, it’s the low- and middle-income earners who will see the steepest increases, Fildebrandt told QMI Agency Tuesday.

So what gives? The main culprit, according to the CTF, is increases in payroll taxes in the form of higher employment insurance and Canada Pension Plan premiums.

Payroll taxes are capped for workers bringing home more than $44,200 a year. Anyone
earning more will pay an additional $76 in 2011. Employers can tack on an extra $110.

Proportionally, however, it’s the working poor who will suffer most because payroll taxes account for a larger share of their wages. Low-income earners also have to stretch every dollar further.

Several new federal government programs are funded through EI premiums and are responsible for the payroll tax hikes, the CTF said.

Some of these programs are geared towards providing temporary relief for down and out Canadians, such as the $956 million set aside in 2008-2009 for skills training.

Other programs, however, appear less beneficial to the average Canadian, according to Fildebrandt. Two years ago, $246 million in EI funds were set aside for special fishing benefits.

"Rather than reform EI into an actual insurance program, workers are being stuck with the bill for new social programs,” he said.

Aside from payroll tax increases, inflation is also running higher now than it was a year ago and that will force many Canadians into higher income tax brackets.

Workers living in British Columbia, Ontario and Nova Scotia will be hardest hit, according to the report.

That’s because these provinces will see inflation above the national average.

An Ontario family with a single breadwinner with an income of only $45,000 in 2010 will see a hike of a 5.1%, costing that family an additional $389. A dual income family making $80,000 will pay an extra $590 (3.5%), and a single income family making $100,000 will pay $1,035 (3.6%) more.

Nova Scotia will see an average 2.8% hike in income and payroll taxes while residents of British Columbia are expected to hand over 2.9% more.

By Stefania Moretti, QMI Agency