Canadians will be paying more in federal income tax hikes 2024

Nearly every Canadian will pay higher federal income taxes in 2024, according to the Canadian Taxpayers Federation (CTF).
The federally incorporated, not-for-profit citizen’s group released its annual report on Tuesday highlighting the varied tax changes across Canada. This includes federal tax increases like the rising payroll, alcohol and carbon taxes, as well as a second Canada Pension Plan tax and increases in maximum pensionable and insurable earnings. Citing data from the Fraser Institute, the report notes that the average Canadian family pays 46.1 per cent of its budget in taxes after adding up income taxes, sales taxes, property taxes and all other taxes.
Here’s a look at some of the federal changes: Canada Pension Plan: In 2024, the maximum pensionable earnings subject to the Canada Pension Plan (CPP) tax will increase, resulting in higher CPP contributions for both employers and employees. They will each pay $3,867, marking a $113 increase from the previous year for earnings of $68,500 or more. Employment Insurance: In 2024, both the Employment Insurance (EI) tax rate and maximum insurable earnings in Canada will increase. Employees will pay $1,049 and employers $1,469 for EI. This is a rise of $47 for employees and $66 for employers, for those earning $63,200 or more. Carbon Tax (and second carbon tax): Canada’s federal carbon tax will rise from $65 to $80 per tonne on April 1, 2024, increasing the carbon tax rate per litre of gas. This means a higher cost for fueling vehicles, with a family filling a 70-litre minivan expected to pay about $12.32 more per fill-up. Alcohol taxes: Beginning on April 1, 2024, Canadians will pay more for beer, wine and spirits. Digital services tax: Introduced last November, Canada’s new Digital Services Tax (DST) legislation is aimed at large online companies that host and generate marketplaces, social media platforms and online advertising revenue, like Google and Facebook. Home heating oil carbon tax exemption
Canadians who heat their homes using furnace oil received some relief last year when it was announced they would be exempt from the carbon tax for three years. Households using furnace oil for heating will save 17 cents per litre until April 2024 and then 21 cents per litre afterwards.