federal personal income tax

Canada’s health-care system fails to account for senior migration

Almost three-quarters of Canada’s total tax burden is paid by the working-age population.

Seniors migration cost British Columbia $7.2 billion in health-care expenses

Average per person spending on health care for Canadians over 70 is $13,797.

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The Impact of Interprovincial Migration of Seniors on Provincial Health Care Spending

Summary

  • The dominant role played by government financing in Canada’s single-payer health care system has led to an oversight related to demographics: senior migration.
  • Health care spending is skewed towards the first year of life and after retirement. The average amount spent on health care by governments in a person’s first year of life is $10,800. For those between the ages of 65 to 69, that amount is $6,424, but it rises to $13,797 for those over 70.
  • Taxes, on the other hand, start out quite low and then climb steadily to one’s prime earning years (56-63), before beginning to decline as one nears and then enters retirement.
  • When a senior migrates from one province to another, they are likely to have paid the bulk of their lifetime taxes in one province but will consume the majority of their health care in another.
  • Six provinces experienced a net inflow of seniors between 1980 and 2016: BC, AB, ON, NB, NS, and PEI. The remaining four provinces (SK, MB, QC, and NL) experienced a net outflow of seniors. British Columbia recorded the greatest inflow (40,512), while Quebec experienced the greatest outflow (37,305).
  • Based on average annual health care costs by age, British Columbia had the largest cost at $7.2 billion (in 2017 dollars) while Quebec had the largest savings at $6.0 billion.
  • A partial analysis of potential tax revenues provided by migrating seniors suggests that BC’s costs could have been mitigated by as much as 36.3 percent while Quebec’s savings could have been reduced by as much as 19.2 percent.

Prime Minister Trudeau thinks Canadians achieve better lives through government dependence

If families who receive CCB transfers begin to earn a higher income, their cash transfers will be reduced—a disincentive to hard work.

In Ontario, obstacles to growth remain

The province’s top earners face a tax rate of 53.5 per cent on any additional earnings.

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Measuring the Impact of Federal Personal Income Tax Changes on Middle Income Canadian Families

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  • During the 2015 federal election campaign, the Liberals pledged to cut income taxes on Canada’s middle class. Since coming into office, the government has repeatedly claimed that it has delivered on this commitment. While the federal government did reduce the second lowest federal personal income tax rate, it also simultaneously introduced several other broader changes to the federal personal income tax system.
  • For instance, it introduced a new, higher top income tax rate and eliminated several tax credits, which had the effect of increasing taxes on Canadian families who previously claimed those credits. In fact, the elimination of many tax credits may partially, or even completely, offset the tax rate reduction targeted at middle class families.
  • This paper measures the net overall effect that the federal government’s changes to the personal income tax system have had on the amount of tax that Canadian families with children pay. It finds the federal government’s income tax changes have resulted in 60 percent of the 3.88 million families with children covered in this paper (representing 13.9 million individuals), paying more in taxes. The average tax increase amounts to $1,151 each year.
  • Among middle income families—the group of families the federal government claims to want to help—81 percent are paying more in taxes as a result of the federal income tax changes. The average income tax increase for this group of middle income families is $840.
  • For the subset of middle income families consisting of couples with children, an even greater share (89 percent) pays higher income taxes ($919 on average).

Extraordinary statement by the finance minister captures government’s approach to the economy

The Liberal government raised the top federal income tax rate to 33 per cent from 29 per cent.

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