The Canadian Taxpayers Federation says bracket creep, which pushes individuals into higher tax brackets simply due to inflation, continues to cost taxpayers across all income groups in P.E.I.
The CTF’s annual New Year’s Tax Changes report highlights bracket creep in Prince Edward Island and the increase to Canadian Pension Plan rates.
“Through bracket creep, the P.E.I. government takes more of people’s money, even when their purchasing power isn’t growing,” said CTF Atlantic Director Paige MacPherson.
“We call on the province to index its tax brackets in 2019 and stop this sneaky tax grab.”
The CTF report shows that a two-income Island family making $90,000 per year will have to pay an additional $99 this year thanks to bracket creep. A single-income Islander making $60,000 per year will pay an extra $49 as a result.
“Most other provinces now index their tax brackets,” said MacPherson.
“The P.E.I. government should treat taxpayers with fairness and get rid of bracket creep too.”
P.E.I. families will also see the cost of gas increase on Apr. 1, when the provincial carbon tax comes into effect, costing 4.42 cents per litre. The carbon tax will be partially offset by a three-cent reduction in the provincial gas tax, but drivers will still pay more in the new year.
“P.E.I. drivers will pay more for gas in 2019,” said MacPherson.
“The carbon tax will make the necessities of life more expensive without making a difference in climate change.”
Federal tax changes will hit Islanders’ wallets too, says the CTF. The increase to Canada Pension Plan rates will cost average Canadians $98 this year and in five years, it’ll total $550 every year.
Even after CPP income tax deductions, an average individual making $60,000 will still face a net loss of $380 per year. On the plus side, low-income Canadians will save money as a result of the new Canada Workers Benefit.