Federal Tax Policy: A Continuing Challenge for Canadians
A Year of Unrelenting Tax Increases
The federal tax policy in Canada has been a persistent source of concern for citizens, and 2024 was no exception. The Trudeau government’s tax hikes have become an annual tradition, with the combined federal and provincial top tax rate exceeding 50 per cent in every province except Alberta (48.0 per cent) and Saskatchewan (47.5 per cent). This has resulted in a staggering burden on Canadian taxpayers.
The Carbon Tax: A Steady Increase
One of the most notable tax changes in 2024 was the increase in the carbon tax, which rose from $65 to $80 per tonne on April 1st. However, this was not the only change; the government announced a further increase to $95 per tonne in 2025. The carbon tax has been a contentious issue, with many arguing that it disproportionately affects low-income households and does little to reduce emissions.
The Capital Gains Tax: A Threat to Business Investment
The Trudeau government’s decision to hike the capital gains tax will have far-reaching consequences for Canadian businesses. With an estimated 4.74 million Canadians affected by the higher tax rate, either directly or through their ownership of private corporations, this policy change will undoubtedly reduce business investment and exacerbate Canada’s productivity crisis.
A Productivity-Reducing Sales Tax Holiday
The government’s decision to implement a two-month sales tax ‘holiday’ at the end of 2024 was met with widespread criticism. Not only did it impose administrative and logistical nightmares on businesses, but it also failed to address the underlying issues driving economic stagnation in Canada.
A Look Ahead: 2025
Unfortunately, 2025 does not hold much promise for Canadian taxpayers. With the continued implementation of tax hikes and a lack of meaningful policy changes to address the productivity crisis, it is clear that federal tax policy will remain a significant challenge for Canadians in the coming year.
The Need for Change
It is time for the Trudeau government to reassess its tax policies and prioritize economic growth and productivity. By reducing tax rates and implementing policies that incentivize business investment, Canada can begin to address its long-standing productivity crisis and provide a more prosperous future for its citizens.
A Call to Action
Canadian taxpayers deserve better than the continued implementation of tax hikes and ineffective policy changes. It is essential that we demand more from our government and push for meaningful reforms that will drive economic growth and improve living standards. Together, we can create a brighter future for Canada.
The Author
Matthew Lau is a Toronto writer and adjunct scholar with the Fraser Institute. He has written extensively on topics related to economics and public policy.
