In the upcoming year, the Canadian and Alberta governments are expected to implement a series of modifications to your taxes.
A limited summary of the most significant forthcoming tax adjustments has been compiled by the Canadian Taxpayers Federation (CTF).
There is only one significant change for 2025 on the provincial level, according to them: a reduction in the lowest income tax bracket.
The province has suggested that the tax be reduced from 10% to 8%. This would result in residents paying the lesser amount for the first $60,000 of income.
According to Kris Sims, the Director of CTF Alberta, the announcement is anticipated to be made during the government’s budget announcement in February.
“The United Conservatives claimed that this provincial income tax reduction would provide families with an estimated $1,500 in savings each. At present, Alberta families require this type of tax relief,” Sims asserts.
However, Canadians will ultimately incur additional expenses when it pertains to federal modifications.
Payroll taxes:
- The federal government is raising the mandatory Canada Pension Plan and Employment Insurance contributions in 2025. These payroll tax increases will cost a worker up to an additional $403 next year.
- Federal payroll taxes (CPP and EI tax) will cost a worker making $81,200 or more $5,507 in 2025. Their employer will also be forced to pay $5,938.
Carbon tax:
- The federal carbon tax is increasing to about 21 cents per litre of gasoline, 25 cents per litre of diesel and 18 cents per cubic metre of natural gas on April 1. The carbon tax will cost the average household between $133 and $477 in 2025-26, even after the rebates, according to the Parliamentary Budget Officer.
Alcohol taxes:
- Federal alcohol taxes will increase by two per cent on April 1. This alcohol tax hike will cost taxpayers $40.9 million in 2025-26, according to Beer Canada.
- Following Budget 2024, the federal government also increased capital gains taxes and imposed a digital services tax and an online streaming tax.
Temporary Sales Tax Holiday:
- The federal government announced a two month sales tax holiday on certain items like pre-made groceries, children’s clothing, drinks and snacks. The holiday will last until Feb. 15, 2025, and could save taxpayers $2.7 billion.
Also See: Canadians Set To Receive Double Pension Payments This December
