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New tax brackets for Canada in 2023 – CTV News

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In 2022, Canadians experienced high inflation levels as shifts in the global economy began to settle. Canada’s tax brackets are indexed and adjusted to account for inflation.

This means that there are going to be some changes as we move into 2023.

These changes could impact how you’re taxed when you file your 2023 income tax returns next year.

Below, I’ll outline the new tax brackets for this year and discuss some other notable changes that could affect your personal finances.

 

The new federal tax brackets for Canadians in 2023

In 2023, Canada’s federal tax brackets increased by 6.3% to account for inflation.

Here are the tax brackets for 2023, as outlined by the CRA:

Any Canadians earning less than $53,359 in taxable income per year (but above the basic personal amount of $15,000) will be subject to the base 15% tax rate.

Why are Canada’s tax brackets changing?

Every year, Canada incrementally changes the federal income tax brackets to account for inflation. These tax rates, along with other benefits, tax credits, and payments, are indexed to the inflation rate. Since inflation increased dramatically in 2022, the tax brackets saw considerable changes and were increased by 6.3% for 2023.

As inflation rises, the cost of consumer goods typically increases along with wages. Indexing tax brackets to inflation is a good thing, as it reduces the amount of taxes you pay. If tax brackets didn’t change to account for this, then people would be paying a disproportionately high tax rate based on their income.

For example, imagine a scenario where tax brackets aren’t indexed to inflation for 50 years. By then, wages will be much higher, and nearly everyone will be in the highest tax bracket, even if they are low-income earners. By increasing tax brackets, the government ensures that lower-income earners are not unfairly taxed at a high rate due to inflation.

That being said, Canada’s inflation rates are expected to decrease moving into 2024, likely resulting in a smaller adjustment to the federal income tax brackets.

 

Tax rate indexation increases by year

Here’s a quick look at how the federal government’s income tax brackets have increased over the past few years to account for inflation levels, based on CRA data:

2023 saw the largest indexation increase in recent years, which is why the tax brackets have changed significantly.

What is the basic personal amount for 2023?

The basic personal amount is a tax credit that all Canadian taxpayers can claim to help reduce the federal income tax they owe. Federal income tax rates don’t kick in until after the individual has earned more than the basic personal amount.

In 2022, the basic personal amount was $14,398. This year, however, the basic personal amount was increased to $15,000. Moving forward, the federal government announced that it would begin indexing the basic personal amount to inflation (which it previously wasn’t).

For higher-income earners, the basic personal amount tax credit decreases incrementally. If you’re in the 29% tax bracket and earn less than $235,675 per year, then you’ll be entitled to claim the full $15,000 basic personal amount.

However, once you reach the 33% tax bracket and earn over $235,675 per year, your basic personal amount decreases to $13,521.

Other notable tax and benefit changes for 2023

Here are some of the other notable changes that may affect your 2023 taxes.

1. TFSA contribution room increase

This year, the annual contribution room for tax-free savings accounts is $6,500, up from the $6,000 contribution room in 2022. Those who have been eligible for the TFSA program since 2009 (when it began) now have a total contribution room of $88,000.

2. EI premiums increase

In 2023, Employers Insurance (EI) premiums are increasing for both employees and employers. Employees are now subject to a 1.63% EI premium, and employers are now subject to a 2.28% EI premium.

3. Introduction of First Home Savings Account (FHSA) in 2023

This year, the government is introducing an excellent new initiative to help Canadians save for their new homes. The First Home Savings Account (FHSA) allows your contributions to grow tax-free as you prepare to purchase your first home.

As long as the money is withdrawn and put towards your first home, it’s non-taxable, like a TFSA. Additionally, the contributions you make to an FHSA are tax-deductible, similar to an RRSP.

How will the new tax brackets affect Canadians?

Tax brackets are indexed for inflation to help keep the tax rate steady, despite changing economic conditions. It’s good to be aware of the updated tax brackets, so you can plan for the year and maximize your RRSP contributions and tax deductions.

The updated tax brackets will help all of those earning $50,197 or more (that was the first threshold for the 20.5% tax rate in 2022), which is now $53,359 in 2023, a significant increase. While tax brackets aren’t that important during salary negotiations, inflation should definitely be mentioned. For example, if you got less than a 6.3% raise in 2022, your buying power will be less than it was in 2021. That point could be brought up during performance reviews with your boss.

If you’re unsure of how to account for the changes yourself, it may be helpful to speak with a licensed financial advisor or accountant.

Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.

Do you have a question, tip or story idea about personal finance? Please email us at dotcom@bellmedia.ca.

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With grief lingering, Blue Jackets GM Waddell places focus on hockey in wake of Gaudreau’s death

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BUFFALO, N.Y. (AP) — Hearing the familiar sounds of clacking sticks and pucks banging off the boards and glass while watching Columbus Blue Jackets prospects from the stands of a cold rink on a warm late-summer afternoon was not enough to wash away the lingering residuals of grief for Don Waddell on Saturday.

That, the Blue Jackets’ general manager acknowledged, will take more time than anyone can guess — weeks, months, perhaps an entire season and beyond.

What mattered is how spending the weekend attending the Sabres Prospects Challenge represented a start to what Waddell called among the first steps in refocusing on hockey and the future in the aftermath of the deaths of Columbus star Johnny Gaudreau and his brother, Matthew, who were struck by a suspected drunken driver while riding bicycles on Aug 29.

“We got to play hockey,” Waddell said. “We’re not going to forget about Johnny and his family, the Gaudreau family.”

He then reflected on the speech Johnny Gaudreau’s wife, Meredith, made during the brothers’ funeral on Monday, by urging those in mourning to move forward as she will while focusing on raising their children.

“Everybody knows that Johnny wants them to play hockey,” Waddell said. “And everybody’s rallying around that.”

The resumption of hockey in Columbus began last week, when most Blue Jackets players returned to their facility to be together and lean on each other at the urging of Waddell and team captain Boone Jenner. And it will continue on Thursday, when the team opens training camp, exactly three weeks since the Gaudreaus were killed.

“Tragic. Senseless. But now we got to focus on trying to get our team ready to play hockey this year,” Waddell said. “We all mourn and heal differently, but I think as a team being together like that is going to be critical for them to get moving forward.”

Tragedy is no stranger to Waddell or the Blue Jackets.

Waddell was general manager of the then-Atlanta Thrashers in 2003 when Dany Heatley lost control of his car and struck a wall, with the crash killing passenger and teammate Dan Snyder. In 2021, Blue Jackets goalie Matiss Kivlenieks died during a July Fourth fireworks accident.

Waddell placed the emphasis on himself and coach Dean Evason — both newcomers to Columbus this offseason — to guide the team through what will be an emotional season.

“Now, do I think there’s going to be some dark days? I won’t be surprised,” Waddell said.

Reminders of the Gaudreaus’ deaths remain apparent, and reflected in Buffalo on Friday night. A moment of silence was held in tribute to the brothers before the opening faceoff of a game between the Blue Jackets and Sabres.

Afterward, Columbus prospect Gavin Brindley recalled the times he spent with Johnny Gaudreau in Columbus and as teammates representing the United States at the world hockey championships in the Czech Republic in May.

“He was one of the biggest mentors for me at the world championships,” Brindley said. “I couldn’t tell you how many times we hung out with Meredith, pictures on my phone. It’s just so hard to look back and see that kind of stuff.”

The NHL and NHL Players’ Association are providing the Blue Jackets help in the form of grief counseling, crowd security at vigils and addressing hockey issues, such as potentially altering the league’s salary cap rules to provide Columbus relief from having to reach the NHL minimum payroll because of the void left by Gaudreau’s contract.

“The Blue Jackets, I don’t think anybody’s focused from an organizational standpoint, from a hockey standpoint as to what comes next, because I think everybody’s still in shock,” NHL Commissioner Gary Bettman told The Associated Press last week. “I don’t think anybody’s focused right now other than on the grieving part, which is understandable.”

Much of the burden has fallen to Waddell, who has been in discussions with the NHL and the NHLPA and dealing with outreach programs with the Blue Jackets’ partner OhioHealth, while also overseeing preparations for training camp and gauging his prospects in Buffalo.

There’s also his roster to attend to, which he said has two openings at forward, one involving Justin Danforth, who may miss the start of the season because of a wrist injury. Waddell didn’t have to mention the second opening.

Tiring and emotional as it’s been, Waddell found comfort being in his element, a rink, and looking ahead to the start of training camp.

“The guys are in really good shape. We’ve done a lot of testing already and they’re eager to get going,” Waddell said. “We have a reason to play for. And we’ll make the best of it.”

The Blue Jackets later Sunday signed veteran winger James van Riemsdyk to a one-year contract worth $900,000.

“James van Riemsdyk has been a very consistent, productive player throughout his career,” Waddell said. “Bringing him to Columbus will not only provide depth to our group up front, but also valuable leadership and another veteran presence in our dressing room.”

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AP Hockey Writer Stephen Whyno in New York contributed to this report.

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PSG says defender Nuno Mendes target of racial abuse after a French league game

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PARIS (AP) — Paris Saint-Germain defender Nuno Mendes was the target of abusive and racist comments on social media after a French league game.

The club condemned the abuse and expressed its “full support” Sunday for the Portugal left back, who was targeted following PSG’s 3-1 win against Brest on Saturday.

Mendes, who is Black, shared on his Instagram account a racist message he received.

During the match, Mendes brought down Ludovic Ajorque in the box for a penalty that Romain Del Castillo converted to give Brest the lead.

“Paris Saint-Germain doesn’t tolerate racism, antisemitism or any other form of discrimination,” the club said. “The racial insults directed at Nuno Mendes are totally unacceptable … we are working with the relevant authorities and associations to ensure those responsible are held accountable for their actions.”

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Slovenia’s Tadej Pogacar wins Grand Prix Cycliste de Montreal

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MONTREAL – Tadej Pogacar was so dominant on Sunday, Canada’s Michael Woods called it a race for second.

Pogacar, a three-time Tour de France champion from Slovenia, pedalled to a resounding victory at the Grand Prix Cycliste de Montreal.

The UAE Team Emirates leader crossed the finish line 24 seconds ahead of Spain’s Pello Bilbao of Bahrain — Victorious to win the demanding 209.1-kilometre race on a sunny, 28 C day in Montreal. France’s Julian Alaphilippe of Soudal Quick-Step was third.

“He’s the greatest rider of all time, he’s a formidable opponent,” said Woods, who finished 45 seconds behind the leader in eighth. “If you’re not at your very, very best, then you can forget racing with him, and today was kind of representative of that.

“He’s at such a different level that if you follow him, it can be lights out.”

Pogacar slowed down before the last turn to celebrate with the crowd, high-five fans on Avenue du Parc and cruise past the finish line with his arms in the air after more than five hours on the bike.

The 25-year-old joined Belgium’s Greg Van Avermaet as the only multi-time winners in Montreal after claiming the race in 2022. He also redeemed a seventh-place finish at the Quebec City Grand Prix on Friday.

“I was disappointed, because I had such good legs that I didn’t do better than seventh,” Pogacar said. “To bounce back after seventh to victory here, it’s just an incredible feeling.”

It’s Pogacar’s latest win in a dominant year that includes victories at the Tour de France and Giro d’Italia.

Ottawa’s Woods (Israel Premier-Tech) tied a career-best in front of the home crowd in Montreal, but hoped for more after claiming a stage at the Spanish Vuelta two weeks ago.

“I wanted a better result,” the 37-year-old rider said. “My goal was a podium, but at the same time I’m happy with the performance. In bike racing, you can’t always get the result you want and I felt like I raced really well, I animated the race, I felt like I was up there.”

Pogacar completed the 17 climbs up and down Mount Royal near downtown in five hours 28 minutes 15 seconds.

He made his move with 23.3 kilometres to go, leaving the peloton in his dust as he pedalled into the lead — one he never relinquished.

Bilbao, Alaphilippe, Alex Aranburu (Movistar Team) and Bart Lemmen (Visma–Lease) chased in a group behind him, with Bilbao ultimately separating himself from the pack. But he never came close to catching Pogacar, who built a 35-second lead with one lap left to go.

“It was still a really hard race today, but the team was on point,” Pogacar said. “We did really how we planned, and the race situation was good for us. We make it hard in the last final laps, and they set me up for a (takeover) two laps to go, and it was all perfect.”

Ottawa’s Derek Gee, who placed ninth in this year’s Tour de France, finished 48th in Montreal, and called it a “hard day” in the heat.

“I think everyone knows when you see Tadej on the start line that it’s just going to be full gas,” Gee said.

Israel Premier-Tech teammate Hugo Houle of Sainte-Perpétue, Que., was 51st.

Houle said he heard Pogacar inform his teammates on the radio that he was ready to attack with two laps left in the race.

“I said then, well, clearly it’s over for me,” Houle said. “You see, cycling isn’t that complicated.”

Australia’s Michael Matthews won the Quebec City GP for a record third time on Friday, but did not finish in Montreal. The two races are the only North American events on the UCI World Tour.

Michael Leonard of Oakville, Ont., and Gil Gelders and Dries De Bondt of Belgium broke away from the peloton during the second lap. Leonard led the majority of the race before losing pace with 45 kilometres to go.

Only 89 of 169 riders from 24 teams — including the Canadian national team — completed the gruelling race that features 4,573 metres in total altitude.

Next up, the riders will head to the world championships in Zurich, Switzerland from Sept. 21 to 29.

Pogacar will try to join Eddy Merckx (1974) and Stephen Roche (1987) as the only men to win three major titles in a season — known as the Triple Crown.

“Today gave me a lot of confidence, motivation,” Pogacar said. “I think we are ready for world championships.”

This report by The Canadian Press was first published Sept. 15, 2024.



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