Canada's Tax Dinosaurs

January 11th, 2012  -  D. Stone

The Canadian Taxpayer's Federation has recently released a report that singles out three Canadian provinces as "taxation dinosaurs" for their taxation policies and because these provinces do not index their rates according to inflation. According to the report, provinces with higher inflation levels will see employees paying more than provinces with lower inflation rates and more than ones who make adjustments accordingly.  

On the contrary, provinces with lower inflation rates, like Alberta and Saskatchewan, will pay less in payroll deductions this year. As of January 1st, all Canadians have started paying an average of 300 dollars more per year due to increases in EI and CPP deductions.

The three provinces refered to as "the taxation dinosaurs of confederation" by the report are PEI, Manitoba, and Nova Scotia. They are the only three provinces that do not index their tax rates to their inflation rates. Coincidentally, two of the provinces are under majority NDP mandates.

Since 2006, EI premiums have been steadily increasing. Some analysts have agreed that Canada's current system may be unsustainable. Included in this ever growing lot of EI critics is the Canadian Taxpayer's Federation. Their recent report, as well as previous reports, have criticized Canada's current employment insurance system.

For employees, EI contributions are now .5 % more for every person, up from 1.78% in 2011. For employers, EI deductions have risen double that of employees; up .10% from last year.