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

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3 minute read

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 rates near or above 50%.

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

Ontario has a rate of 50% – and high-income families at $300,000+ are taxed lower 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 placed 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.

“Canadian families with modest incomes face high marginal effective tax rates, often higher rates than Canadians in top income tax brackets,” 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. Ontario’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).

“Families with modest income brackets consistently face disproportionately high METRs, raising questions of fairness and efficiency in the tax and transfer system,” Bazel said.

“These findings highlight the need to prioritize METR reductions for low-income families.”

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Energy

Carney bets on LNG, Alberta doubles down on oil

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This article supplied by Troy Media.

Troy MediaBy Rashid Husain Syed

Carney is promoting LNG as Canada’s future. Alberta insists the future still runs through oil

Prime Minister Mark Carney is a man in a hurry. He’s fast-tracking energy megaprojects to position Canada as a global LNG powerhouse, but Alberta’s oil ambitions and the private sector’s U.S. focus could throw his plan off course.

It’s all part of a broader federal strategy to reframe Canada’s energy priorities and show that his government is delivering economic results. Some say the motivation is political, with a fragile minority government and the potential for a snap election.
Others say it’s about legacy: Carney wants to be remembered as the prime minister who put Canada back on the global energy map.

That ambition came into sharper focus last week. On Thursday, he announced a second wave of projects being sent to the federal Major Projects Office, a body set up to fast-track infrastructure Ottawa sees as vital to national priorities.

The new list includes the Ksi Lisims liquefied natural gas project and the North Coast Transmission Line in British Columbia, along with a hydroelectric project in Nunavut. It also features nickel, graphite and tungsten mines in Ontario, Quebec and New Brunswick.

Ksi Lisims is the second LNG project Ottawa has submitted to the Major Projects Office.

Carney’s goal is clear, according to Lisa Baiton, president of the Canadian Association of Petroleum Producers. “With Ksi Lisims LNG and the related Prince Rupert Gas Transmission project joining LNG Canada Phase 2 on the major projects list, paired with Cedar and Woodfibre LNG, which are already under construction, Canada is on a path to become one of the top five LNG exporters in the world,” she said in a statement.

But not everyone is on the same page, especially Alberta.

The first batch of fast-tracked projects, announced two months ago, included a Montreal port expansion, a small modular nuclear plant in Ontario, mining projects in Saskatchewan and British Columbia, and LNG Canada Phase 2.

Alberta’s proposed oil export pipeline project was on neither list.

Premier Danielle Smith had said she hoped an agreement with Ottawa would be finalized by early last week to allow a new bitumen pipeline to proceed. That didn’t happen. But in a statement last Wednesday, her office said “sensitive” negotiations are continuing.

“Currently, we are working on a (memorandum of understanding) agreement with the federal government that includes the removal, carveout or overhaul of several damaging laws chasing away private investment in our energy sector, and an agreement to work towards ultimate approval of a bitumen pipeline to Asian markets,” the statement said.

Alberta argues such pipelines are critical if Canada is serious about energy diversification and global exports, particularly to Asia, where demand is rising. So far, those arguments don’t appear to have moved Carney.

With no federal deal in place, the industry is moving ahead with its own export agenda by doubling down on the U.S. market.

Enbridge has approved $1.4 billion in upgrades to its Mainline and Flanagan South pipelines, adding 250,000 barrels per day of capacity to move Canadian crude to the U.S. Midwest and Gulf Coast. The expansion is expected to come online in 2027.

The company also plans to test commercial demand in 2026 for a second phase of Mainline expansion that could add another 250,000 barrels per day.

Colin Gruending, Enbridge’s president of liquids pipelines, said the U.S. remains the most logical export market for Canadian oil, followed by Asia via the West Coast. The federal government’s goal of reducing reliance on U.S. buyers may take time.

Trans Mountain Corp., which moves oil sands crude to the Vancouver area for export, is reportedly also considering ways to increase volumes quickly and affordably.

Keystone XL, the pipeline project killed by former U.S. president Joe Biden in 2021, may also be back in play. The existing Keystone system, now owned by South Bow Corp., moves Canadian oil to U.S. Gulf Coast refineries. The cancelled XL expansion would have added new pipe and a more direct route south.

Whether Carney’s push makes Canada an LNG superpower or hits a wall of regional resistance and market reality, the energy and political maps are shifting.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

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Indigenous

Top constitutional lawyer slams Indigenous land ruling as threat to Canadian property rights

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From LifeSiteNews

By Anthony Murdoch

One of Canada’s top constitutional legal experts blasted the push by federal, provincial, and municipal officials for all-encompassing Indigenous “reconciliation,” noting that the reality is all Canadians are and should be equal under the law and no one alive today is responsible for proven historical wrongdoings. 

John Carpay, founder and president of the Justice Centre for Constitutional Freedoms (JCCF), noted in a recent commentary published in The Epoch Times that so-called reverse racism against non-Indigenous Canadians is still “racism.” 

“Well-intentioned racism, to achieve the vague objective of ‘equity,’ is still racism,” Carpay noted.

“The only sure path to reconciliation, social harmony, and equal opportunity in Canada is the principle of equal rights for all, special privileges for none.”

Carpay noted that “the fact that aboriginal ethnic groups arrived in Canada earlier than other ethnic groups should be completely irrelevant when it comes to the application of the law.”

“Nobody disputes that different aboriginal tribes lived in this land before the arrival of Europeans, Africans, and Asians. The question is: Why should this fact matter?” he noted. 

Carpay observed that when officials and courts apply the “law” differently to some “Canadians because of their race, ancestry, ethnicity, or descent,” the predictable and inevitable outcome “is strife, resentment, and fear.”

His comments came in light of a recent court ruling in British Columbia affecting property rights, Cowichan Tribes v. Canada (Attorney General), which saw the provincial Supreme Court rule that decades-long land grants by the government were not valid and violated a land title held by the tribes.

In essence, as noted by Carpay, the court “told the people (of various ethnicities) who live in some parts of Richmond, B.C., that the money they paid for their own properties does not guarantee them the right to own and enjoy their own homes.”

Carpay noted that such a court ruling will only cause more division among Canadians and Indigenous peoples.

“Does anyone seriously believe that this Cowichan court ruling will bring reconciliation between Canadians of aboriginal ancestry and Canadians whose ancestry is Chinese, East Indian, Filipino, Nigerian, German, or English?” he observed.

“Of course not. The only results will be inter-ethnic fear, strife and conflict.”

He then observed what is a fact with land claims, noting, “Is there even one Canadian alive today about whom it could honestly be said that she or he stole land away from aboriginals?”

“Of course not. The court’s legal reasoning is based on inter-generational guilt, whereby people must pay for the sins (real or alleged) of their great-great-great-great-great-great-great-grandfathers. If one were to apply the court’s logic to today’s Germans and Japanese, these two ethnic groups would be forced to pay today for the atrocities that their ancestors committed during World War II,” he stated. 

“Every continent features a long history of military, linguistic, cultural, and economic conquests as between different people groups. Would it be a good idea to apply the principle of inter-generational guilt to all of the world’s ethnic groups and countries? If not, then why try it now in Canada?”

Despite the concerns raised by Carpay, some federal politicians want to make it a crime to “deny” still unproven mass grave residential indigenous schools deaths claims.

Carpay warned that defining legal rights based on a person’s “membership in an oppressor’ group or a ‘victim’ group is Marxist.”

“Marxism repudiates the dignity and value of the individual, replacing it with a fixation on groups that are perpetually at war with each other,” he noted.

As reported by LifeSiteNews, new private members’ Bill C-254, An Act To Amend The Criminal Code introduced by New Democrat MP Leah Gazan, looks to give jail time to people who engage in so-called “Denialism.” The bill would look to jail those question the media and government narrative surrounding Canada’s “Indian Residential School system” that there are mass graves despite no evidence to support this claim.

In 2021 and 2022, the mainstream media ran with inflammatory and dubious claims that hundreds of children were buried and disregarded by Catholic priests and nuns who ran some Canadian residential schools. The reality is, after four years, there have been no mass graves discovered at residential schools.

However, as the claims went unfounded, since the spring of 2021, over 120 churches, most of them Catholic, many of them on indigenous lands that serve the local population, have been burned to the ground, vandalized, or defiled in Canada.

Last year, retired Manitoba judge Brian Giesbrecht said Canadians are being “deliberately deceived by their own government” after blasting the former Trudeau government for “actively pursuing” a policy that blames the Catholic Church for the unfounded “deaths and secret burials” of Indigenous children.

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