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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 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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2025 Federal Election

ā€˜Iā€™m Cautiously Optimisticā€™: Doug Ford Strongly Recommends Canada ā€˜Not To Retaliateā€™ Against Trumpā€™s Tariffs

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From theĀ Daily Caller News Foundation

By Jason Cohen

Ontario Premier Doug Ford urged Canadian Prime Minister Mark Carney to avoid retaliation against the tariffs President Donald Trump announced on Wednesday.

TrumpĀ announcedĀ in the White House Rose Garden that he would impose ā€œa minimum baseline tariff of 10%ā€ on all goods entering the United States, with Canada not being included on the list of countries with higher rates. When asked about what Canadaā€™s response would be on ā€œBloomberg: Balance of Power,ā€ Ford said he was ā€œcautiously optimisticā€ about Canadaā€™s omission from the higher-tier tariffs and emphasized the importance of a cooperative relationship with the U.S.

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ā€œWell, letā€™s see where these tariffs go. Iā€™m cautiously optimistic that I never saw Canada or Mexico on that list. And it just goes to show you two great countries working together, collaborating together and building relationships,ā€ Ford said. ā€œSo again, Iā€™m cautiously optimistic. I think if thatā€™s the case, itā€™s the right thing for both the U.S and Canada.ā€

Host Kailey Leinz noted that there are currentlyĀ tariffsĀ on Canada in place as well as anĀ exemptionĀ for goods that are in compliance with the U.S.-Mexico-Canada Agreement (USMCA).

ā€œDoes that mean, sir, at least in your mind, that it wouldnā€™t be appropriate for Canada to retaliate for this at this time?ā€ Leinz asked.

ā€œThat is correct. If thatā€™s the case, then I would highly recommend to the prime minister not to retaliate. And letā€™s carry on a strong relationship,ā€ Ford answered. ā€œLetā€™s build the American-Canadian fortress around both countries and be the wealthiest, most prosperous, safest two countries in the world.ā€

TrumpĀ declaredĀ a national emergency to levy a slew of reciprocal tariffs on what he has deemed ā€œLiberation Day.ā€

ā€œMy fellow Americans, this is Liberation Day, April 2, 2025, will forever be remembered as the day American industry was reborn, the day Americaā€™s destiny was reclaimed, and the day that we began to make America wealthy again,ā€ Trump said.

The president also announced that he would proceed with implementing a 25% tariff on ā€œall foreign-made automobilesā€ that will take effect at midnight.

Ford in March hadĀ imposedĀ a 25% surcharge on electricity to New York, Michigan and Minnesota, but promptlyĀ rescindedĀ the policy andĀ apologizedĀ to Americans on WABCā€™s ā€œCats & Cosbyā€ radioĀ showĀ the following day. The tariffs were a retaliatory measure against Trumpā€™s flurry ofĀ tariffsĀ against Canada since starting his second term.

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2025 Federal Election

Liberal MP resigns after promoting Chinese government bounty on Conservative rival

Published on

From LifeSiteNews

By Clare Marie Merkowsky

ā€œI find it incredible that Mark Carney would allow someone to run for his party that called for a Canadian citizen to be handed over to a foreign government on a bounty,ā€ heĀ saidĀ at a recent rally. ā€œWhat does that say about whether Mark Carney would protect Canadians?ā€

Liberal MP candidate Paul Chiang has dropped out of the running after being exposed for suggesting Canadians turn in a Conservative Party candidate to the Chinese consulate to collect a bounty placed on the man by the communist regime.

In an March 31 statement, Chiang, the Liberal candidate for the Markham-Unionville riding,Ā announced his departure from the race after a video of him suggesting a bounty could be claimed for Conservative candidate Joe Tay by handing him over to Chinese authorities circulated on social media. The Royal Canadian Mounted Police have announced they are ā€œprobingā€ the comments.

ā€œI am proud of what we have achieved together and I remain deeply grateful for the trust placed in me,ā€ he said. ā€œThis is a uniquely important election with so much at stake for Canadians. As the Prime Minister and Team Canada work to stand up to President Trump and protect our economy, I do not want any distractions in this critical moment.ā€

 

ā€œThatā€™s why Iā€™m standing aside as our 2025 candidate in our community of Markham-Unionville,ā€ he announced.

Chiangā€™s resignation follows backlash from Conservatives and Canadians alike when aĀ January videoĀ from a news conference with Chinese-language media in Toronto resurfaced.

In the video, Chiang jokingly suggested that Tay, his then-Conservative rival for the Markhamā€“Unionville riding, could be turned over to the Chinese Consulate General in Toronto in return for $1-million Hong Kong dollar bounty, about $183,000 CAD.

 

Conservative Party leader Pierre Poilievre was quick to call out Chiangā€™s suggestion and blasted Prime Minister Mark Carney for keeping him on the ballot.

Chiang has since apologized for his suggestion on both social media and personally to Tay.

ā€œToday, I spoke with Joseph Tay, the Conservative candidate for Don Valley North, to personally apologize for the comments that I made this past January,ā€ heĀ wroteĀ in a March 30 X post.

 

ā€œIt was a terrible lapse of judgement. I recognize the severity of the statement and I am deeply disappointed in myself,ā€ he continued.

Carney has said remarkably little regarding the situation. First, heĀ refusedĀ to fire the Liberal candidate, referring to Chiangā€™s statement as a ā€œterrible lapse of judgment.ā€

ā€œHeā€™s made his apology. Heā€™s made it to the public, heā€™s made it to the individual concerned, heā€™s made it directly to me, and heā€™s going to continue with his candidacy,ā€ Carney said. ā€œHe has my confidence.ā€

Then, following the announcement of Chaingā€™s resignation, CarneyĀ toldĀ reporters that it was time to ā€œmove onā€ and that he would ā€œleave it at that.ā€

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