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Are 2020's tax changes 'significant' or 'a wash'? – CBC.ca

Published

5 years ago

December 31, 2019

When Finance Minister Bill Morneau introduced a motion earlier this month to keep the Liberals’ election pledge to cut income taxes for the middle class, he called the measure “significant” and said it would impact 20 million Canadians.

But most Canadians would have to have to study their pay stubs very closely after Jan. 1 to detect that tax cut and other changes to deductions that arrive with the new year. And unless they live in Alberta, they may not notice this year’s tax changes at all (more on that later).

“It’s going to be very subtle. And I’d be surprised, frankly, if anybody noticed, if nobody told them,” said Janet Gray, a personal financial planner from Orleans, Ont.

Finance Minister Bill Morneau tabled a motion in early December to implement a Liberal campaign promise: a phased-in increase to the amount of income Canadians can earn tax-free. (Adrian Wyld/Canadian Press)

The basic personal amount — the amount of annual income Canadians can keep tax-free — is slowly increasing over the next four years, to $15,000 by 2023. In previous years, this amount has been adjusted to the rate of inflation, but Morneau’s most recent enhancement goes beyond that.

For the 2020 tax year, it’s rising by $931, to $13,229.

For low-income Canadians who’d otherwise have to pay 15 per cent income tax on that amount, the annual tax savings could be about $140. Some of the poorest may no longer owe any tax at all.

“There is still about one million Canadians that earn less than that basic personal exemption,” Gray said. “So of course, that’s going to be meaningful for them.”

For Canadians in the middle-income brackets, the annual savings could be up to $240.

But divide that across 26 bi-weekly pay periods and the income bump that starts appearing on Canadian pay stubs doesn’t exactly look life-changing: it’s enough for an extra cup of fancy coffee or, for higher earners, a food truck lunch every two weeks.

For those earning more than $150,473 in annual income, the savings are partially clawed back, or not offered at all for incomes over $214,368.

Keeping up with inflation

Federal tax brackets — the thresholds that trigger higher rates of taxation as incomes rise — have been adjusted for 2020 based on a 1.9 per cent rate of inflation.

Gray points out that in several Canadian cities, particularly those with hot housing markets, the actual rate of inflation may be higher — which means that these tax brackets and sources of government income like the Canada Child Benefit (also indexed and rising slightly as of July 1, 2020) may not be keeping up.

When business or household budgets are sensitive to things like rising food costs or higher taxes on fossil fuels, the government’s calculations fall behind taxpayers’ lived reality.

Janet Gray, a financial planner in Orleans, Ont., said she thinks the Liberal government’s latest tax cut for the middle class will barely be noticeable for some people. (J.F. Benoit/CBC News)

“Some people are going to feel inflation more than others depending on their own lifestyle,” Gray said.

Payroll deductions change

Farther down the pay stub, deductions for Employment Insurance and the Canada Pension Plan are changing, too.

EI premiums are decreasing from 1.62 to 1.58 per cent in 2020, while the maximum insurable earnings will increase to $54,200 from $53,100 in 2019.

That’s a saving, but don’t spend it all at once: it amounts to less than a dollar per bi-weekly paycheque.

CPP premiums, on the other hand, are increasing from 5.1 to 5.25 per cent for employees (double that for the self-employed) and the maximum pensionable earnings — the amount the government uses to calculate an employee’s CPP contributions for the year — is going up to $58,700.

For those earning that much or more, deductions could increase by about $5.73 per bi-weekly paycheque (less for lower-income earners). But remember: today’s CPP contributions become pension income at retirement, so CPP premiums are a modest forced savings program, not a tax.

“It’s kind of painless, a little bit at a time,” Gray said. Young workers may find it difficult to save for retirement and are less likely than previous generations to have employer-sponsored pensions, so “CPP is taking on a little bit more of that job.”

The problem, Gray said, is that many people max out their EI and CPP contributions before the end of the year, and get used to paycheques leading up to New Year’s that have fewer deductions. When January comes around again, their net pay deposits drop and “it’s a little bit of a shock.”

This makes it harder to detect subtle deduction changes at the start of a new year.

Taken together with Morneau’s tax cut, “I think it’s going to be mostly a wash,” Gray said.

Stock option change delayed

A few other tax items change with the new calendar year.

The tax-free savings account contribution limit is going up again, by another $6,000. For those eligible to start one who’ve never had a TFSA since its inception in 2009, there’s a possible $69,500 of contribution room.

For those considering upgrading professional skills, a new Canada Training Benefit allows taxpayers to accumulate up to $250 per year toward a future tax credit to offset up to 50 per cent of eligible tuition costs.

And those who spend some of their hard-earned income to support digital journalism will be able to claim up to $500 in eligible subscriptions, for a tax credit worth up to $75, starting with their 2020 returns.

Another expected change was suddenly cancelled by Morneau’s department late in the day on Dec.19: a move to start taxing stock options more like regular income.

In a press release, the department said that, following consultations with stakeholders, “the government will announce details on how it intends to move forward” in the 2020 federal budget.

Revised climate incentive rebates

Perhaps the most significant change for some Canadians is in the rebates they receive for living in provinces where they pay the federal carbon tax on things like gasoline and home heating fuels.

As of April 1, 2020, the federal price on carbon will rise from $20 to $30 per tonne of emissions. In line with that, residents of four provinces will receive revised climate change incentives when they file their taxes this spring.

In Ontario, Manitoba and Saskatchewan, the payments, based on household size, are higher than last year’s.

For example, a single person in Ontario received $154 last year, but is eligible for $224 this year. A family of four in Saskatchewan received $609 last year, but is eligible for $809 this year.

New Brunswick, which recently reached an agreement with the federal government on its carbon pricing plan, will no longer be subject to the federal tax as of April 1 and its residents will not receive rebates when they file their taxes.

Gray said she doesn’t think people make the connection between rising costs for things like gas and the bonus they got at tax time.

“I don’t know that it was a meaningful amount for many people, but it was still nice to have,” she said. “It’s a gift.”

**2020 Climate Incentive Payments**
	Ontario	Manitoba	Saskatchewan	Alberta
Single adult	$224	$243	$405	$444
Second adult in a couple, or first child of a single parent	$112	$121	$202	$222
Other children under 18	$56	$61	$101	$111
Total for a family of four	$448	$486	$809	$888

Which brings us to Albertans, who will receive the federal incentive payments for the first time in 2020.

Their first payments are larger, to reflect three months when Albertans are paying a carbon tax based on $20 per tonne of emissions (January-March 2020) and twelve months when they’re paying the $30/tonne price for 2020-21.

Alberta also generates relatively more carbon emissions that are now subject to the federal tax, and the federal government pledged to return 90 per cent of its carbon tax revenues.

The tax is meant to encourage households to consume less carbon-polluting energy — so the more people conserve, the more they benefit from the rebate.

Unlike the provincial carbon pricing scheme Premier Jason Kenney’s government cancelled earlier this year, every Alberta household, regardless of income, is eligible.

A single adult in Alberta will receive $444. A household of four will receive $888.

New climate incentive payments could add more to Albertans’ bottom lines than the Liberal tax cut.

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Mitchell throws two TD passes as Ticats earn important 37-21 home win over Redblacks

Published

22 mins ago

September 14, 2024

Anne Joseph

HAMILTON – It remains faint but Bo Levi Mitchell and the Hamilton Tiger-Cats still have a playoff pulse.

Mitchell threw two touchdown passes as Hamilton defeated the Ottawa Redblacks 37-21 in the CFL’s annual Hall of Fame game Saturday afternoon. The Ticats (4-9) earned a second straight win to move to within six points of the third-place Toronto Argonauts (7-6) in the East Division.

Hamilton visits Toronto on Friday night.

“Obviously they’re (wins) huge now,” Mitchell said. “We didn’t do ourselves any favours by getting into this position and not being able to really control our own destiny.

“But right now, we need certain people to win at certain times. Our job is to go out there and try to win the next five, then the next three after that.”

Mitchell finished 20-of-27 passing for 299 yards and an interception. He entered weekend action leading the CFL in passing yards (3,383) and TD strikes (21).

Greg Bell’s 15-yard TD run at 11:30 of the fourth and two-point convert put Hamilton up 36-21 after backup Jeremiah Masoli led Ottawa on two scoring drives. Following a 13-yard TD strike to Andre Miller at 2:53, Masoli found Dominique Rhymes on a 10-yard touchdown pass at 7:43 before Khalan Laborn’s two-point convert cut Hamilton’s lead to 29-21.

“When you’re scoring from (15) yards out on a run play, that makes offence easy,” Mitchell said. “It’s one of those things when you get down there as a quarterback, it takes you sometimes five, eight, 10 plays and now it’s ‘OK, now we have to create some stuff and find something.’

“When you hand the ball off and you’re scoring from (15) yards, it makes the offence really easy.”

Ottawa (8-4-1) would have clinched a playoff spot with a victory.

Ottawa committed six turnovers (three interceptions, two fumbles, once on downs) before an announced Tim Hortons Field gathering of 22,119. Lawrence Woods III also returned a punt 83 yards for a touchdown at 11:51 of the first quarter that put Hamilton ahead 10-3.

“You’ve got to bring your best every single week and this wasn’t our best, all of us, from coaches to the players,” said Ottawa head coach Bob Dyce. “If you don’t play great for four quarters, I don’t care who you’re playing you’re not going to have a successful day.

“We should’ve made the tackle (on Woods), we had him wrapped up it’s that simple. Even though we didn’t make the play on that, there should’ve been extra bodies there to clean it up when he did break the tackle.”

Hamilton also tied the season series with Ottawa 1-1. The teams meet again at TD Place on Oct. 25.

“If we didn’t turn it over today I would’ve said we played really well offensively and that to me is what the biggest difference is,” said Hamilton head coach Scott Milanovich. “Even the turnovers today (interception, fumble), at least they were in their end and we weren’t giving them a short field.

“The biggest play of the game was Woodsie’s return. It got us jump-started, gave us the lead and we were kind of off after that.”

Ottawa starter Dru Brown was 17-of-27 passing for 164 yards and an interception. Masoli entered late in the third and finished 13-of-19 passing for 183 yards with two TDs and two interceptions, but Dyce said Brown will start next weekend against Montreal (10-2-1), which earned a 19-19 tie Saturday night with Calgary (4-8-1).

The Canadian Football Hall of Fame’s ’24 class of S.J. Green, Chad Owens, Weston Dressler, Vince Goldsmith and Vince Coleman, along with builders Ray Jauch and Ed Laverty (posthumously), was honoured at halftime. All were enshrined Friday night.

Steven Dunbar Jr. and Ante Litre had Hamilton’s other touchdowns. Marc Liegghio kicked two field goals, three converts and two singles.

Ottawa’s Lewis Ward booted two field goals and a convert.

Mitchell culminated a five-play, 96-yard march with a 20-yard TD pass to Litre at 13:34 of the third. It followed Jonathan Moxey’s interception.

Liegghio’s single at 7:05 of the third put Hamilton up 22-6.

Mitchell’s 54-yard TD strike to Dunbar at 14:18 of the second staked Hamilton to its 21-6 halftime lead. The advantage was well-deserved as the Ticats had more first downs (12-six), net offensive yards (260-144) and scored on both offence and special teams.

Mitchell was 14-of-20 passing for 210 yards and a TD, but his interception cost Hamilton at least a field-goal attempt. Dunbar had five receptions for 113 yards and the touchdown.

Brown completed 13-of-21 passes for 127 yards.

Liegghio’s missed 47-yard attempt went for the single at 12:45 to put Hamilton ahead 14-6. It followed a Kiondre Smith catch that was ruled incomplete and at the very least cost the Ticats a first down that would’ve kept the drive alive.

Ward’s 30-yard kick at 9:15 had pulled Ottawa to within 13-6.

Liegghio’s 19-yard field goal at 5:13 pushed Hamilton’s lead to 13-3. It followed the defence stopping Ottawa’s Dustin Crum on third-and-one, giving the Ticats possession at the Redblacks 40.

Liegghio’s 47-yard field goal opened the scoring at 2:42 before Ward tied in with a 24-yard boot at 8:44.

UP NEXT

Redblacks: Host the Montreal Alouettes (10-2-1) next Saturday, Sept. 21.

Tiger-Cats: Visit the Toronto Argonauts (7-6) on Friday.

This report by The Canadian Press was first published Sept. 14, 2024.

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Toronto FC downs Austin FC to pick up three much-needed points in MLS playoff push

Published

41 mins ago

September 14, 2024

Anne Joseph

TORONTO – Needing three points to keep their playoff push alive, Toronto FC’s Jonathan Osorio and Deandre Kerr stepped up with first-half goals against Austin FC on Saturday with goalkeeper Sean Johnson doing his bit at the other end.

A 76th-minute goal by Austin’s Owen Wolff made for a nervy ending but TFC hung on for a 2-1 win.

While Toronto (11-15-3) remains on the Major League Soccer playoff bubble in eighth place in the Eastern Conference (the eighth- and ninth-place teams in each conference square off in a wild-card playoff with the winner facing the top seed in the conference), other results went their way.

Seventh-place Charlotte, 10th-place Atlanta and 11th-place Philadelphia all lost while ninth-place D.C. United tied.

Toronto midfielder Alonso Coello called it “a game we had to win.”

“It’s a big win … To see that fight tonight was important,” added coach John Herdman.

Austin (9-12-7) came into the game in 11th place in the West, two points below ninth-place Minnesota. The Texas side has won just one of its last six league games (1-4-1).

Austin outshot Toronto 7-6 (6-2 edge in shots on target) in the first half but found itself trailing 2-0 at the break as Toronto took advantage of its chances and the visitors didn’t in their first-ever visit to BMO Field, before an announced crowd of 25,538.

Toronto had a dream start, catching Austin on the counterattack in the seventh minute. A sliding Austin player dispossessed an onrushing Kerr, who had been set free by a long ball from Coello, but the ball bounced to Osorio, who beat goalkeeper Brad Stuver with a rising shot.

It was the Toronto captain’s second goal of the season in league play and his 65th for TFC in all competitions. Only Sebastian Giovinco (83) and Jozy Altidore (79) scored more in Toronto colours.

TFC went ahead on another counterattack in the 30th minute after an Austin giveaway. Osorio found Richie Laryea outpacing his marker and the wingback unselfishly sent a perfect low cross across goal for Kerr to knock home for his third of the season.

Wolff, the son of Austin head coach Josh Wolff, made it interesting with his late strike. The 19-year-old U.S. youth international, controlling a long ball, beat defender Raoul Petretta and then waited out Johnson before slotting it home for his first of the season.

Toronto survived a nervy six minutes of stoppage time as Austin pressed for the equalizer. Austin outshot Toronto 14-9 (8-3 in shots on target) and had 52.5 per cent possession.

The win evened Toronto’s home record at 7-7-0, while Austin slipped to 3-8-3 on the road.

It was a costly evening for Austin with defender Brendan Hines-Ike, midfielder Jhojan Valencia and star attacker Sebastian Driussi allpicking up cautions to miss Wednesday’s game with Los Angeles FC due to yellow-card accumulation.

Toronto defender Shane O’Neill will miss Wednesday’s game against visiting Columbus for the same reason. Toronto could be short mid-week, too. The hope is veteran centre back Kevin Long, who missed Saturday’s game after tweaking his hamstring in training, will be good to go.

Toronto has five games remaining, including three more at home as it looks to return to the post-season for the first time since 2020 when it lost to Nashville after extra time at the first hurdle.

It is a challenging road.

TFC hosts Columbus, the New York Red Bulls and Inter Miami while playing away at the Colorado Rapids and Chicago Fire. All but Chicago are in playoff positions.

The only previous meeting between Toronto and Austin was in May 2023, when Zardes scored a 91st-minute winner to give Austin a 1-0 win over visiting Toronto, which was then mired at the bottom of the Eastern Conference. That loss prompted a post-game outburst from Italian star Federico Bernardeschi about TFC’s drab play.

Then-coach Bob Bradley benched Bernardeschi for the next game.

Current coach John Herdman made four changes to his starting 11 with Bernardeschi and Osorio returning from suspension and Coello and Kerr also slotting in. Coello, who had missed the last eight league games with a hamstring injury, was impressive in his 59-minute return.

Both Toronto and Austin suffered home losses last time out going into the international break. Toronto was beaten 3-1 by D.C. United while Austin lost 1-0 to Vancouver.

—

Follow @NeilMDavidson on X platform.

This report by The Canadian Press was first published Sept. 14, 2024.

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CF Montreal finds its groove with 2-1 win over Charlotte

Published

43 mins ago

September 14, 2024

Anne Joseph

MONTREAL – CF Montreal is back in the win column after securing a 2-1 Major League Soccer win over Charlotte FC on Saturday night at Stade Saputo.

Montreal’s form had suffered of late, with just one win in MLS since July, but Laurent Courtois’ squad showed a level of poise and control over the tempo of the game that had not been seen since the beginning of the season.

“What we’ve changed in the last few weeks or months in terms of our methodology or coaching, is nothing. We did the exact thing, We had the exact same words, and we expressed them the exact same way,” said Courtois. “Today, everything just clicked.”

Caden Clark scored for the first time as a Montreal (7-12-9) player in the 23rd minute, in addition to Bryce Duke’s goal three minutes later that ended up being the winner, while Tim Ream found the back of the net for Charlotte (10-10-8).

Montreal had the first major scoring chance of the match after 15 minutes of play. With a free kick roughly 25 metres away from goal, Gabriele Corbo sent a near-perfect shot smashing off the crossbar.

Montreal would continue to dictate the tempo in the opening phase, finding first blood just seven minutes later.

Following a phenomenal triple-save from Charlotte goalkeeper Kristijan Kahlina, the ball fell to Clark who volleyed the ball into the wide-open net, picking up his first goal for the club.

“I think you don’t lose the feeling (of scoring), everything happens for a reason, you just can’t lose yourself in the chaos,” said Clark, who had missed a full season due to injury and was briefly without a club, but was grateful for Courtois’ confidence in him.

“(To have a coach’s confidence) is huge and is something I’ve had both ends of so you just can’t take advantage of that in the wrong way. I’m going to keep my discipline with the game plan and keep my head right.”

With momentum completely on their side, the home side doubled the lead just three minutes later. Montreal continued to build up play on the left flank and found a streaking Raheem Edwards in behind the defence who cut the ball back to Duke, sending the Stade Saputo crowd into a frenzy.

Just after the half-hour mark, Charlotte pulled one back through a set piece — something Montreal has struggled defending all season — as Ream rose above everyone at the back post to score his first with his new club.

The second half began in a similar fashion to the end of the first, with Charlotte pressing high up the pitch and forcing several turnovers in dangerous areas. After surviving the pressure, Montreal began to regain control of the game near the hour mark, enjoying the lion’s share of the possession while Charlotte looked to hit back on the counterattack.

“I think when we conceded that goal we were like ‘here we go again.’ 2-1 is a tough lead before halftime … and at the beginning of the half we kind of shot ourselves in the foot and they pressed a bit more, they moved a bit more forward and that opened some gaps,” said captain Samuel Piette.

“I was happy with that, it shows character. At the end of the day, we just wanted the three points and that’s what we got.”

As the game progressed, Charlotte pushed harder to find an equalizer but to no avail. With only one shot on target conceded, the second-worst defence in the league put up an impressive front and confidently rebuffed every single Charlotte attack.

“I’m a big fan of the back five’s performance in their discipline, competitiveness, and synchronization with balls in behind,” said Courtois.

“We can’t explain sometimes in a game it’s not there, they’re capable and today they showed it. Let’s see tomorrow.”

UP NEXT

Both teams are back in action on Sept. 18 away from home as Montreal will look to avenge a 5-0 rout against the New England Revolution while Charlotte visits Orlando City SC.

This report by The Canadian Press was first published Sept. 14, 2024.

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