Kim Moody: A few of these fees are apparent, however many are buried within the advantageous print of every day life, quietly draining wallets
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Individuals routinely assume you imply income tax if you discuss to them about paying taxes, however have you ever ever considered all the opposite sorts of taxes and authorities charges and levies that erode your earnings and wealth?
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Technically, taxes are obligatory, with no direct profit to such funds. Charges charged by governments are normally in trade for some kind of service or different profit. A levy is commonly imposed on an business or exercise, however can embody a broad class of prices. In actual life, the excellence between charges and levies could be very blurry.
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Right here’s a fast listing of among the extra apparent tax and charges and levies that Canadian households can pay in a 12 months:
1. Federal and provincial earnings taxes: The charges fluctuate by taxable earnings and province of residence for people, however vary from a low of zero to a excessive of roughly 54 per cent. These taxes embody taxes on employment, capital gains, property earnings, enterprise earnings, and many others.
2. Canada Pension Plan, Québec Pension Plan and Employment Insurance coverage: These are a type of a payroll tax since contributions by the taxpayer are obligatory.
3. GST/HST: There are some exceptions to Canada’s value-added consumption tax, however it could actually vary from a low of 5 per cent (in Alberta, Nunavut, Yukon and the Northwest Territories) to a excessive of 15 per cent in most Atlantic provinces.
4. Provincial gross sales tax (PST): British Columbia, Manitoba, Quebec and Saskatchewan additionally cost a separate provincial gross sales tax since they aren’t harmonized with the GST. This provides apparent confusion in these provinces as to what’s taxable for PST functions versus GST functions.
5. Federal and provincial excise taxes on gasoline and different fuels with further carbon taxes.
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6. Federal and provincial excise taxes on alcohol.
7. Federal customs duties and tariffs on sure imported items.
8. Federal luxurious taxes on sure vehicles, airplanes and boats.
9. Air travellers safety cost: That is levied on a per-passenger foundation relying on the kind of flight.
10. Provincial car registration and driver’s licence charges: All provinces cost a price to register automobiles and have a driver’s licence.
11. Municipal property taxes: Every municipality in Canada fees you a beautiful tax for the pleasure of proudly owning actual property in its jurisdiction.
12. Property switch tax: Some provinces, akin to B.C. and Ontario, cost land switch taxes every time a property’s title is transferred.
13. Life insurance coverage premium tax: Should you personal a life insurance coverage coverage in Canada, properly, you’re not directly paying a provincial premium tax that the life insurance coverage carriers pay.
14. Improvement fees: Typically paid by land builders to municipalities to fund varied infrastructure (colleges, roads, and many others.) which might be handed on to the purchasers of the property.
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15. Municipal landfill charges: If you wish to dump your rubbish off, there’s typically a price for that.
16. Municipal parking charges and fines: If you wish to park in a metropolis, there’s a price for that.
17. Toll roads and bridges: some provinces, akin to Ontario, cost charges to entry sure roads and bridges.
18. Brief-term rental charges: Some municipalities cost registration charges for the pleasure of renting out your property. Such prices are handed alongside to renters.
19. Enterprise licensing charges: Many municipalities cost a price for beginning or working a enterprise.
20. Constructing allow charges: There’s normally a municipal allow requirement with a price for constructing or renovating your own home.
21. Emergency providers charges: There’s a worth to be paid in the event you want an ambulance.
22. Emptiness taxes: Some municipalities, akin to Toronto and Vancouver, have emptiness taxes that may apply to residents if their property is sitting vacant too lengthy.
23. Passport charges: There’s a price to acquire a passport.
24. Firearm charges: There’s a price to acquire a gun.
25. Ontario well being premium: The province fees a most of $900 per 12 months, relying in your taxable earnings. Alberta and B.C. beforehand had well being premiums, however abolished them.
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I may go on and on. Hopefully, you see the image that taxes, charges and levies carry an enormous value for households.
The Fraser Institute’s eye-popping annual survey of the tax load for a median Canadian household of 4 (married couple with two younger kids) mentioned the taxation load in 2023 was 43 per cent of the household’s money earnings. This share doesn’t embody among the charges and levies listed above, and it’s additionally considerably larger than the prices for meals, clothes and shelter mixed.
It’s fairly clear our governments discover methods to tax, price and levy Canadians and have an insatiable urge for food to do extra of it. A few of these fees are apparent, however many are buried within the advantageous print of every day life, quietly draining wallets.
That the common household’s tax burden exceeds their mixed primary residing prices ought to be a wake-up name to take a tough take a look at what you’re paying and ask whether or not you’re getting good worth in return.
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The reply is an emphatic no. We ought to be anticipating extra for our hard-earned contributions and that begins with demanding balanced budgets (not enjoying accounting games to get to balanced budgets or diminished deficits akin to Mark Carney is proposing to do) and respect for taxpayer {dollars} from our flesh pressers.
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“One of the best ways to show your youngsters about taxes is by consuming 30 per cent of their ice cream,” the well-known actor Invoice Murray as soon as mentioned. Besides in Canada, the ice cream-eating share is excess of 43 per cent. I’m assured your youngsters gained’t really feel like they obtained good worth in return for you consuming that 43 per cent.
Kim Moody, FCPA, FCA, TEP, is the founding father of Moodys Tax/Moodys Non-public Shopper, a former chair of the Canadian Tax Basis, former chair of the Society of Property Practitioners (Canada) and has held many different management positions within the Canadian tax neighborhood. He could be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.
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