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Low and middle income Canadians hit hardest by high marginal effective tax rates

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From the Fraser Institute

By Philip Bazel

A new study published by the Fraser Institute today finds that Canadian families and individuals with annual incomes between $30,000 and $60,000 face marginal effective tax ratesĀ near or above 50%.

Among the provinces, BC has the lowest tax rates of 38%.

Ontario has a rate of 50% ā€“ and high-income families at $300,000+ are taxedĀ lowerĀ at 44%.

Families with modest income brackets consistently face disproportionately high marginal effect tax rates, raising questions of fairness and efficiency in the tax and transfer system.

Dig into the numbers and see how your province placedĀ here.

Canadian families and individuals with annual incomes between $30,000 and $60,000 face marginal effective tax rates near or above 50 per cent, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

ā€œCanadian families with modest incomes face high marginal effective tax rates, often higher rates than Canadians in top income tax brackets,ā€ said Jake Fuss, director of fiscal studies at the Fraser Institute, which published Marginal Effective Tax Rates for Working Families in Canada by Philip Bazel, an associate at the School of Public Policy at the University of Calgary.

The marginal effective tax rate (METR) measures the personal income taxes paid (federal and provincial) and the reductions in government benefits, resulting from earning an extra dollar. For example, the Canada Child Benefit, a monthly payment, is reduced as family income increases. In other words, the effective tax rate is the combination of taxes you pay and benefits you lose as you make more money.

Crucially, across the provinces, individuals and families with relatively modest incomes face the highest rates. This unfortunately creates a disincentive for earning additional income, as the financial benefits are significantly offset by increased taxes and/or reduced government benefits.

Canadian families with modest incomes, particularly those earning between $30,000 and $60,000, face the highest marginal effective tax rates. For example, families earning a household income of $60,000 are subject to an effective tax rate of 50 per cent or higher in every province. In Quebec, the METR is as high as 67 per cent at this income level.

Among provinces, BC has the lowest rate (38 per cent) averaging across the $30,000 to $60,000 bracket. Ontarioā€™s rate for the $30,000 to $60,000 bracket is 6 percentage points higher (50 per cent) than high-income families at $300,000 or higher (44 per cent).

ā€œFamilies with modest income brackets consistently face disproportionately high METRs, raising questions of fairness and efficiency in the tax and transfer system,ā€ Bazel said.

ā€œThese findings highlight the need to prioritize METR reductions for low-income families.ā€

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Global Affairs goes on March Madness spending spree, buys $9,900 Lego set

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From the Canadian Taxpayers Federation

By Ryan Thorpe

Global Affairs Canada bought $527,000 worth of artwork during year-end spending sprees in 2023 and 2024 ā€“ a practice commonly referred to as ā€œMarch Madness.ā€

Bureaucrats even spent $9,900 on ā€œLego blocks,ā€ according toĀ access-to-information recordsĀ obtained by the Canadian Taxpayers Federation.

ā€œIf you want proof that government bureaucrats have way too many tax dollars on their hands, look no further than Global Affairs Canadaā€™s half-a-million dollar March Madness art spending spree,ā€ said Franco Terrazzano, CTF Federal Director. ā€œItā€™s supremely disrespectful to taxpayers to spend hundreds of thousands of dollars on art theyā€™ll never see in far-flung embassies.ā€

The government of Canadaā€™s fiscal year runs from April 1 to March 31.

On March 31, 2023, GAC bureaucrats purchased 32 pieces of artwork for $160,000, according to the records.

Included in the purchases were a $25,000 ā€œarchival pigment print photograph,ā€ a $20,000 piece of ā€œfabric artā€ made of ā€œpoly-cotton, canvas, steel hanging rodā€ and a $3,500 piece featuring ā€œcowhide, dyed fox fur, Swarovski crystals, caribou hair and 24K gold.ā€

Bureaucrats also expensed a $6,000 oil painting on canvas and a $8,500 piece of ā€œfabric artā€ made of ā€œhome-tanned moose hide, cross fox fur, canvas, trim, seed beads, 24K gold beads [and] nylon thread.ā€

The following year, on Feb. 9, 2024, GAC bureaucrats bought 71 pieces of artwork on the same day, billing taxpayers for $291,000.

Purchases included 31 paintings costing a combined $153,000.

One bureaucrat ordered a $9,900 set of ā€œLego blocks,ā€ described in government records as ā€œmixed media.ā€

Then, on March 26, 2024, GAC bureaucrats expensed 12 more pieces of artwork to taxpayers, costing more than $50,000.

Included in the purchases was a $9,000 piece of ā€œfabric artā€ described as ā€œwool, cotton, embroidery floss,ā€ and a $7,500 piece of ā€œmixed mediaā€ described as ā€œhandmade khadi paper woven on block printed industrially.ā€

All told, GACā€™s year-end spending spree on art the past two years cost taxpayers $527,000. For the sake of comparison, thatā€™s enough money to cover an entire yearā€™sĀ grocery billsĀ for 31 Canadian families of four.

ā€œMarch Madness is a long-observed phenomenon in Ottawa which sees federal departments quickly spend all of their remaining annual budgets in the last month of the fiscal year,ā€ according to aĀ reportĀ from CBC.

ā€œEvery March, taxpayers are forced to watch a bad episode of bureaucrats gone wild,ā€ Terrazzano said. ā€œTaxpayers need the government to fully open up the books, go line by line through each departmentā€™s spending and take a chainsaw to all this waste.ā€

This isnā€™t the first time spending by GAC bureaucrats has triggered alarms bells.

GAC bureaucrats spent more thanĀ $3.3 millionĀ on alcohol between January 2019 and May 2024, according to separate access-to-information records obtained by the CTF. That means the department is spending an average of $51,000 a month on beer, wine and spirits.

The CTF has longĀ criticizedĀ GAC spending, including a $8,800 sex toy show in Germany, $1,700 for a ā€œLesbian Pirates!ā€ musical, $12,500 for senior citizens in other countries to talk about their sex lives and aĀ $51,000Ā red-carpet photo exhibit for rockstar Bryan Adams.

ā€œFrom sex toy shows to lesbian pirate musicals to a $9,900 Lego set, Global Affairs Canada may be the worst waste offender in the entire federal government,ā€ Terrazzano said. ā€œAnd thatā€™s saying a lot.ā€

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Bruce Dowbiggin

Collision Course: Boomers Love Canada. Millennials Want A Better Offer

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Canada is a nation of fissures. East versus West. French versus English. White versus indigenous. For much of its 157-year history its has overridden those divides to stand as an independent nation. Its ability to do so has, however, made it a very complacent partner in security.

Donald Trump has now exposed a new fissure, and this one just might be the kill shot to Confederation. In his brazen attempts to exploit the many vulnerabilities imposed on Canada by the Justin Trudeau governmentĀ  Trump has asked a question that petrifies the Canadian establishment.

Would Canadians rather join the powerful U.S. and abandon a rickety Canadian union? Which future holds the greater attraction, being a state/ partner of America or continuing to go it alone in a world of ambitious nations like China, Russia and India? Uncle Sam or Sir John A.? (Wait, Canada has tossed aside the founder of Confederation. Who else is there? Weā€™ll have to get back to you on that.)

The polling results are bracing. Companies setting out to answer Trumpā€™s existential question have discovered that while Boomers and their sunset media still see Canada as a land of Terry Fox, Anne Murray and the 1972 Summit Series, under 50s see something different and dangerous. And they are willing to listen to offers. A stunning 43 percent from the 18-35 Millennial demographic say they are willing to join the U.S. if offered citizenship and asset conversion to USD. In the +55 bracket just 17 percent of Canadians would trade their citizenship.

In 18-35 polling, 65 percent say Trumpā€™s demand that Canada shape up to keep doing business with America has made them doubt the future of the nation. (35 percent +55) When asked if itā€™s just a matter of time till the U.S. consumes Canada 31 percent say yes (11 percent +55). And 35 percent say Quebec or Alberta will leave Confederation within the decade (22 percent +55).

These polls hew closely to current voter preferences in the (maybe) upcoming federal election. In the Super Boomer category (65+) 48 percent will vote for for the Mark Carnivores. In the 50-64 demo that number is 41 percent. But flip the age demographic and itā€™s the opposite. Conservatives lead the 18-35 bracket with 45 percent support versus 21 percent for Liberals and NDP 20 percent. Young people are pissed.

Itā€™s hard to look at these numbers and not believe that the romantic notion of Canada being proposed by PMJT is running out of runway. And, irony of ironies, the young fresh face from 2015 is a main culprit for the disillusionment now gripping younger Canadians. But ten hard years of watching Happy Ways become Hippy Ways have convinced many among Gen-X and Millenials that, barring an inheritance, there is little to attract them to staying in Canada.

While Boomers desperate to embrace Carney plaintively ask, ā€œwhat was so bad about Trudeau?ā€ the current children or grandchildren of Boomers have a long list of grievances from his chaotic time in the PMO. Inaccessible housing, escalating taxes, refusing to retire, self-absorbed culture appropriation (blackface), DEI/ ESG effect on white people, over-reliance on outdated government and hoarding healthcare facilities and doctorsā€¦ the list is long.

American psychologist Lawrence R. Summers has heard Millennials in his practice. ā€œBoomers hogged the economy and the worldā€™s resources for their own financial gain and/or consumptive habitsā€¦ They are often seen as greedy and wasteful, with no regard for what future generations will inherit.

ā€œTo put it another way, theyā€™re frequently viewed as dinner guests whoā€™ve eaten and drank pretty much everything set out on the table, leaving only scraps for those who came later to the party, even their own children.ā€ A cursory look at inflated real estate pricesā€” houses serving as cash boxes for Boomersā€” serves to illustrate this deep frustration.

Before you say, well, this disaffection with Boomers is the same everywhere, remember that 78-year-oldĀ  Donald Trump swung the youth vote last November, moving it 20 percentage points in his direction. Going on alternative podcasts and social media that young people identify with blunted what had always been a Democratic party asset, exposing its fossilized leadership.

Boomers are cranky about Elon Musk employing teenaged whiz kids to ferret out corrupt USAID spending. Democrat geezers driven crazy by the Musk DOGE youngsters then are reminded of the ages of some of the Founding Fathers in 1776.

James Monroe, 18

Henry Lee III, 20

Aaron Burr, 20

John Marshall, 20

Nathan Hale, 21

Banastre Tarleton, 21

Alexander Hamilton, 21

Benjamin Tallmadge, 22

Robert Townsend, 22

Gouveneur Morris, 24

Betsy Ross, 24

James Madison, 25

Henry Knox, 25

Oops. The Canadians generation gap is hopelessly self inflicted. While America still retains a core culture, Trudeau has made sure Canada is seen more as a hotel than a nation. Bragging that Canada is a postmodern entity with no core culture (outside of hockey and equalization) he has demonized Canadaā€™s founders as racist and genocidal by flying the Canadian flag at half mast for six months to assuage ā€œsettler guiltā€. He has diluted the culture, importing millions who see Canada as a way stop to America or a place to launder money/ deal drugs.

He has glorified globalism through climate and gender agendas. He has continued his fatherā€™s alienation of the West and its energy industry. He has allowed the nation to be the worldā€™s choice destination for laundering dirty money so that, now, few in the world trust the Canadian government on security and defence.

Thatā€™s seemingly okay with his aging core. Bu the question now is can 45-year-old CPC leader Pierre Poilievre ride the culture wave? Can he be bold and make its his own as Trump made 18-35 year olds his shock troops in 2024?Ā Poilievre has done a sober, predictable rollout of policy.Ā  What he needs, however, is to emulate Trump, showing the Liberals as geezers, the NDP as enablers and the decrepit media as propagandists. Itā€™ll take courage. He wonā€™t get CBC/ CTV/ G&M to help him quit so what?

Donald Trump is going to crucify the Libs/ NDP.Ā  He wants to hear from a different partner in negotiations. Poilievre has to ignore the noise and negotiate a future that young Canadians can buy into.

Bruce Dowbiggin @dowbboy is the editor of Not The Public BroadcasterĀ  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster. His new book Deal With It: The Trades That Stunned The NHL And Changed Hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org. You can see all his books at brucedowbigginbooks.ca.

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