Middle-Class Canadians Taxed More: Report

A new report says middle-class families in Canada are paying higher income taxes than they did a few ...

A new report says middle-class families in Canada are paying higher income taxes than they did a few years ago, this despite claims by the Trudeau government that it has eased the tax burden on this income group.

The Vancouver-based think-tank known as the Fraser Institute said in a report Tuesday that 60% of the nearly four million families included in its study are paying higher income taxes under the current government. Of those included in the middle-income bracket, 81% are paying higher total income taxes after the changes, an average of $840 more per year.

The report comes amid a furor in Ottawa over a recent Liberal proposal to alter tax rules for Canadian private corporations and businesses. Opposition parties have called the tax proposals an attack on the middle class.

The proposed changes would effectively do three things: limit income-splitting within corporations, raise taxes on some portion of internal passive investments and place new restrictions around capital gains exemptions. Farmers, doctors and other groups have been highly critical of the changes, saying they will deter investments and place undue tax burdens on them.

Consultations on the recent proposals will conclude early next month.

Ottawa has ostensibly taken steps in recent years to add to the tax burden on high-wealth individuals while scaling back taxes on the middle class. In 2016, it pared back its second-lowest rate, which applies to Canadians with annual salaries between $45,916 and $91,831, to 20.5% from 22%, and also hiked tax rates on those earning more than $202,800, to 33% from 29%.