Each New Year brings its share of legislated tax changes taking effect and 2022 is no different, with some of the announced changes already implemented with others set to begin in the coming months.
This year has already brought a more competitive business climate to Prince Edward Island, which put in place a cut to its small business tax rate.
PEI lowered its rate to 1 percent on Jan. 1, a move that’s projected to save PEI’s local business owners $2.8 million in 2022.
Minimum Wage Announcements Come Into Effect
PEI will also increase its minimum wage, effective April 1, to $13.70 per hour. The announcement of the 70-cent increase will give PEI the inside track to the highest minimum wage in Atlantic Canada — though only until the end of this summer.
Not to be outdone, New Brunswick announced in December that it would move on the largest jump in its minimum wage in over 40 years, increasing the minimum wage by $2 per hour to $13.75 per hour in 2022, making it the new top rate in Atlantic Canada by a nickel.
The increase will come in two separate increases of $1 per hour, the first would coming on April 1, followed by an additional $1 per hour increase later in October.
The Nova Scotia hourly minimum remains at $12.95 per hour, but will also see a new annual adjustment April 1. Changes to Nova Scotia’s minimum wage are relative to the Consumer Price Index.
Win Some, Lose Some
Each year, the Canadian Taxpayers Federation releases its annual New Year’s Tax Changes report, outlining some of the major tax changes from the federal and provincial governments in 2022.
“If you’re making more than $40,000, you’ll see your federal income tax bill go up thanks to rising payroll taxes,” said Franco Terrazzano, Federal Director with the CTF. “From higher carbon taxes to rising alcohol, payroll and property taxes, there’s a raft of tax hikes coming in the New Year.”
Some Jan 1 adjustments coming to payrolls are uniform nationwide through Canada Pension Plan, (CPP) and Employment Insurance, (EI) programs.
Contributions to the CPP have increased for the fourth year in a row in 2022, with both the tax rate and maximum pensionable earnings covered by the tax rate increasing.
According to CTF, Employers and employees will each be required to pay $3,500 in 2022, representing a $333 tax increase this year for both employees and employers (earning above the maximum pensionable earnings).
CPP payroll contributions have been increasing steadily since 2018, with employee and employer taxes for CPP increasing $906 on both employees and employers since then.
While the EI tax rate remains the same this year, the maximum insurable earnings for EI have increased, translating to a $63 EI tax increase for employees and an $89 EI tax increase for employers (earning above the max insurable earnings).
EI payroll deductions are also on a multi-year rise, increasing on employee and employer tax bills of $858 and $1,202 in 2018, respectively, to $953 and $1,334 in 2022 in what CTF notes was an overall tax increase of $95 for employees EI and $132 for employers EI since 2018.
The Cost Of Going Green
The federal carbon tax will increase to 11 cents per litre of gasoline on April 1. If this date reads familiar, an increase to the current 8.8 cents per litre also happened last year on April 1. It covered the $40 per tonne carbon tax which expands to reach $50 per tonne this year.
Next year, Ottawa will begin rising it by $15 per tonne each year until 2030, (or $170 per tonne of carbon pollution) according to the federal proposal.
Meanwhile In Halifax, the city is proposing a 5.9 percent increase to its property tax bills, including a new 3% Climate Action Tax that would amount to roughly $120 for the average residential property and come in at more than $2,000 for the average commercial property.
Halifax Mayor Mike Savage thought the increase was, “too high coming out of Covid” even asking city staff to come back with a report on a budget with a 3.7 percent increase.
Tyler McLean is a reporter with Huddle, an Acadia Broadcasting content partner.
