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.
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.
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.
TAMPA, Fla. (AP) — The Tampa Bay Lightning selected Victor Hedman as the team captain on Wednesday as training camp opened, making the big defenseman the successor to Steven Stamkos.
Hedman, who is going into his 16th season with Tampa Bay, was considered the obvious choice to get the “C” after the Lightning did not re-sign Stamkos and their longtime captain left to join Nashville.
“Victor is a cornerstone player that is extremely well respected by his teammates, coaches and peers across the NHL,” general manager Julien BriseBois said. “Over the past 15 seasons, he has been a world-class representative for our organization both on and off the ice. Victor embodies what it means to be a member of the Tampa Bay Lightning and is more than ready for this exciting opportunity. We are looking forward to watching him flourish in his new role as we continue to work towards our goal of winning the Stanley Cup.”
The 33-year-old from Sweden was a key contributor in the Lightning hoisting the Cup back to back in 2020 and ’21, including playoff MVP honors on the first of those championship runs. Hedman also took home the Norris Trophy as the NHL’s top defenseman in 2018 and finished in the top three in voting five other seasons.
Ryan McDonagh, who was reacquired early in the offseason in a trade with the Predators, and MVP finalist Nikita Kucherov will serve as alternate captains with the Lightning moving on to the post-Stamkos era.
TORONTO – While Toronto FC is looking to improve its position on the pitch, general manager Jason Hernandez is trying to do the same off it.
That has been easier said than done this season.
Sending winger Jahkeele Marshall-Rutty to CF Montreal for up to $1.3 million (all dollar figures in U.S. funds) in general allocation money before the secondary transfer window closed in early August helped set the stage for future moves.
But there have been plenty of obstacles, which Hernandez has been working to clear.
“We feel a lot more confident going into this upcoming off-season that we did the one prior,” said Hernandez. “There’s a level of what I would say booby-traps that were uncovered when I first got the (GM) role at the end of last summer.”
The club is paying off departed forwards Adam Diomande and Ayo Akinola as well as a $500,000 payment due in 2024 to Belgium’s Anderlecht for Jamaican international defender Kemar Lawrence. That payment was part of the transfer fee for Lawrence, who joined TFC from Anderlecht in May 2021 and was traded to Minnesota United in March 2022.
Diomande was waived while Akinola’s contract was terminated by mutual agreement.
“That comes to an end in ’25, which is nice,” said Hernandez. “We had to suffer from a salary cap perspective this season. But those things coming off, the Jahkeele Marshall-Rutty money coming in, we’re going to be in a position to make some good additions, which is positive.”
While MLS clubs are allowed one contract buyout per year, Toronto had already used its on former captain Michel Bradley, who retired after last season. Bradley had previously restructured his contract, deferring money.
TFC’s only other move during the summer transfer window was the signing of free-agent defender Henry Wingo. Hernandez said the club knew going into the window that it was likely limited to the one acquisition “unless other business happened”
“We knew we had this bucket of money and we knew we were going to go get Henry,” said Hernandez.
While the sale of the highly touted Marshall-Rutty opened up other possibilities, it came on the eve of the transfer window closing. And the team did not like what it saw in the free-agent market.
“A lot of the opportunities we were presented in the free agency space felt more like a short-term, Band-Aid decision versus what actually the club probably needs.”
Hernandez was not willing to take in players who came with a “club-friendly” salary cap charge in 2024 and a much bigger number in 2025.
Instead, Toronto promoted forward Charlie Sharp and wingback Nate Edwards to the first team from TFC 2 ahead of last Friday’s roster freeze.
MLS teams are operating on a salary budget of $5.47 million this season, which covers up to 20 players on the senior roster (clubs can elect to spread that number across 18 players). But the league has several mechanisms that allow those funds to go further, including using allocation money (both general and targeted) to buy down salaries.
Designated players only count $683,750 — the maximum salary charge — against the cap no matter their actual pay. Toronto’s Lorenzo Insigne is actually earning $15.4 million with fellow Italian Federico Bernardeschi collecting $6.295 million and Canadian Richie Laryea $1.208 million.
Hernandez says Laryea’s contract can — and “very likely” will — be restructured so as to remove the designated player status.
There are benefits in going with just two designated players rather than three.
Teams that elect to go with two DPs can sign up to four players as part of the league’s “U22 Initiative.” The pluses of that structure include a reduced salary cap charge for the young players and up to an extra $2 million in general allocation money.
Hernandez says the club is currently pondering whether that is the way to go.
Captain Jonathan Osorio who is earning $836,370 this season, restructured his deal to allow the team to sign Laryea as a DP. In doing so, Osorio had his option year guaranteed so his contact runs through 2026.
Hernandez and coach John Herdman will have decisions to make come the end of the year.
The contracts of goalkeeper Greg Ranjitsingh ($94,200), defenders Kevin Long ($277,500), Shane O’Neill ($413,000) and Kobe Franklin ($100,520), midfielder Alonso Coello ($94,050) and Brandon Servania ($602,710), and forward Prince Owusu ($807,500) — all on the club’s senior roster — expire at the end of 2024 with club options to follow.
While there is more work to do, Hernandez believes TFC is on the right road.
Toronto, which finished last in the league at 4-20-10 in 2023, went into Wednesday’s game against visiting Columbus in a playoff position at eighth in the East at 11-15-3.
“By every metric, we are miles ahead of where we were at this point last year,” said Hernandez.
“That’s a low bar, so that’s not saying much,” he added.
But he believes TFC is “quite competitive” when it has all its players at its disposal.
“To get results in this final stretch, we’re going to need our prominent players to really show up and have big performances, and be supported by the rest of the cast.”
After Columbus, TFC plays at Colorado and Chicago and hosts the New York Red Bulls and Inter Miami. The club also travels to Vancouver for the Canadian Championship final.
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This report by The Canadian Press was first published Sept. 18, 2024
Mackenzie Hughes might just be what the International team needs as this year’s Presidents Cup.
Hughes, from Dundas, Ont., is one of three Canadians on the squad competing in the match-play event at Royal Montreal Golf Club next week.
His putting skills, cool demeanour under pressure, pre-existing connections with teammates and clubhouse leadership could help the team — made up of non-American players outside Europe — end a nine-tournament losing skid to the United States at the biennial event.
“I’ve had this one circled on the calendar for a few years now,” said Hughes on joining fellow Canadians Taylor Pendrith and Corey Conners as captain’s picks on the 12-player International team. “I pretty much knew that when it was announced the tournament would be in Canada and that Mike Weir was going to be the captain, you pretty much knew where that was going to go.
“To get that call from (Weir) is really special because he’s the guy that I looked up to, we all looked up to, as Canadian golfers.”
Pendrith and Conners are returning to the team after a disappointing 17 1/2 to 12 1/2 loss to the United States at Quail Hollow Club in Charlotte, N.C. in 2022.
Hughes was ranked 14th on the International team standings in 2022 and could have easily been included on that squad after Australia’s Cameron Smith and Chile’s Joaquin Niemann were ruled ineligible after jumping ship to the rival LIV Golf circuit.
However, captain Trevor Immelman of South Africa instead chose the lower ranked Christiaan Bezuidenhout (16th) of South Africa, Pendrith (18th), South Korea’s Kim Si-woo (20th) and Australia’s Cameron Davis (25th).
“I certainly wanted to be on that team but also I understood the picks,” said Hughes, who lives in Charlotte and plays at Quail Hollow regularly. “I think that like a lot of guys that don’t get picked you more so look back on your own play and I wish I had made that selection easier for them.
“I didn’t do myself any favours in the six weeks leading up to it and that’s a hard pill to swallow.”
It may have been a costly oversight on Immelman’s part, as finishing holes was an issue for the International team in 2022 and Hughes is one of the best putters on the PGA Tour. This season he’s third in shots gained around the green and fifth in shots gained from putting.
“It doesn’t mean that just because I was there it would have turned the tide, but I’d like to think maybe I could have helped,” said Hughes. “That’s why you play the matches. You have to get out there and do it.”
This year Hughes made it easier for Weir, the Canadian golf legend from Brights Grove, Ont., to choose him. Hughes is 51st in the FedEx Cup Fall standings and has made the cut seven tournaments in a row, including a tie for fourth at last week’s Procore Championship.
“Mac played very solidly all year. Really like his short game, an all-around short game,” said Weir on Sept. 3 after announcing his captain’s picks. “He’s one of the elite and best short game guys on the PGA Tour
“I also love Mac’s grit. So that was the reason I picked him.”
Hughes’s intangible qualities go beyond grit.
He, Pendrith and Conners will arrive at Royal Montreal as a unit within the International squad, having become close friends while playing on Kent State University’s men’s golf team before turning pro. They’re also part of a group of Canadians, including Nick Taylor and Adam Hadwin of Abbotsford, B.C., that regularly practice together before PGA Tour events.
“To have those guys with me is really icing on the cake, it’s very special,” said Hughes. “Opportunities like this don’t come around very often: to play this kind of team competition, which is already hard to do, but to play with some of your best friends, it almost seems scripted.”
An 11-year professional, Hughes has also been a member of the PGA Tour’s player advisory council the past two years and has been an outspoken advocate for making professional golf more accessible to fans.
Although Weir relied heavily on analytics to make his captain’s selections, Hughes’s character came up again and again when asked why he was named to the team.
“I just have a gut feeling with Mac that he has what it takes in these big moments,” said Weir. “They’re big pressure moments, and I have a feeling he’s going to do great in those moments.”
DP WORLD TOUR — Aaron Cockerill of Stony Mountain, Man., continues his chase for a spot in the Europe-based DP World Tour’s playoffs. The top 50 players on the Race to Dubai standings make the DP World Tour Championship and Cockerill moved eight spots up to 39th in the rankings after tying for ninth at last week’s Irish Open. He’ll be back at it on Thursday at the BMW PGA Championship at the Wentworth Club in Surrey, England.
KORN FERRY TOUR — Myles Creighton of Digby, N.S., is ranked 38th on the second-tier Korn Ferry Tour’s points list. He leads the Canadian contingent into this week’s Nationwide Children’s Hospital Championship. He’ll be joined at Ohio State University Golf Club — Scarlet Course in Columbus, Ohio by Edmonton’s Wil Bateman (53rd), Etienne Papineau (65th) of St-Jean-Sur-Richelieu, Que., and Sudarshan Yellamaraju (99th) of Mississauga, Ont.
CHAMPIONS TOUR — Calgary’s Stephen Ames is the lone Canadian at this week’s Pure Insurance Championship. He’s No. 2 on the senior circuit’s points list. The event will start Friday and be played at Pebble Beach Golf Links and Spyglass Hill Golf Course in Monterey, Calif.
LPGA TOUR — There are four Canadians in this week’s Kroger City Championship. Savannah Grewal (97th in the Race to CME Globe Rankings) of Mississauga, Ont., Hamilton’s Alena Sharp (115th), and Maude-Aimee Leblanc (142nd) of Sherbrooke, Que., will all tee it up at TPC River’s Bend in Maineville, Ohio.
EPSON TOUR — Vancouver’s Leah John is the low Canadian heading into the Murphy USA El Dorado Shootout. She’s 54th in the second-tier tour’s points list. She’ll be joined by Maddie Szeryk (118th) of London, Ont., and Brigitte Thibault (119th) of Rosemere, Que., at Mystic Creek Golf Club in El Dorado, Ark.
This report by The Canadian Press was first published Sept. 18, 2024.
