Trudeau’s legacy includes larger tax burden for middle-class Canadians

On Monday outside Rideau Cottage in Ottawa, after Prime Minister Justin Trudeau told Canadians he plans to resign, a reporter asked Trudeau to name his greatest accomplishments. In response, among other things, Trudeau said his government “reduced” taxes for the “middle class.” But this claim doesn’t withstand scrutiny.

After taking office in 2015, the Trudeau government reduced the second-lowest personal income tax rate from 22.0 per cent to 20.5 per cent—a change that was explicitly sold by Trudeau as a tax cut for the middle class. However, this change ultimately didn’t lower the amount of taxes paid by middle-class Canadians. Why?

Because the government simultaneously eliminated several tax credits—which are intended to reduce the amount of income taxes owed—including income splitting, the children’s fitness credit, children’s arts tax credit, and public transit tax credits. By eliminating these tax credits, the government helped simplify the tax system, which is a good thing, but it also raised the amount families pay in income taxes.

Consequently, most middle-income families now pay higher taxes. Specifically, a 2022 study published by the Fraser Institute found that nearly nine in 10 (86 per cent) middle-income families (earning household incomes between $84,625 and $118,007) experienced an increase in their federal personal income taxes as a result of the Trudeau government’s tax changes.

The study also found that other income groups experienced tax increases. Nearly three-quarters (73 per cent) of families with a household income between $54,495 and $84,624 paid higher taxes as a result of the tax changes. And across all income groups, 61 per cent of Canadian families faced higher personal income taxes than they did in 2015.

The Trudeau government also introduced a new top tax bracket on income over $200,000—which raised the top federal personal income tax rate from 29 per cent to 33 per cent—and other tax changes that increased the tax burden on Canadians including the recent capital gains tax hike. Prior to this hike, investors who sold capital assets (stocks, second homes, cottages, etc.) paid taxes on 50 per cent of the gain. Last year, the Trudeau government increased that share to 66.7 per cent for individual capital gains above $250,000 and all capital gains for corporations and trusts.

According to the Trudeau government, this change will only impact the “wealthiest” Canadians, but in fact it will impact many middle-class Canadians. For example, in 2018, half of all taxpayers who claimed more than $250,000 of capital gains in a year earned less than $117,592 in normal income. These include Canadians with modest annual incomes who own businesses, second homes or stocks, and who may choose to sell those assets once or infrequently in their lifetimes (when they retire, for example). These Canadians will feel the real-world effects of Trudeau’s capital gains tax hike.

While reflecting on his tenure, Prime Minister Trudeau said he was proud that his government reduced taxes for middle-class Canadians. In reality, taxes for middle-class families have increased since he took office. That’s a major part of his legacy as prime minister.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute

Related Topics:#FraserInstitute #GradyMunro #JakeFuss CanadaTaxes feature PersonalIncomeTaxRate TrudeauLegacy

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Canadians continue to experience long waits for MRIs and CT scans

Published on February 10, 2025

Todayville

From the Fraser Institute

By Mackenzie Moir

Canada reported 10.6 MRI machines per million population, ranking us 27th out of 31 universal health-care countries and far behind fifth-ranked Germany (32.5 machines per million population). We see a similar story with CT scanners where second-ranked Australia (78.5 units per million) far outpaces Canada (14.6 units per million population)

Canada’s health-care system is in dire straits. We face an access crisis in primary care, regular rural emergency room closures, and some of the longest waits for non-emergency surgery in more than 30 years. Indeed, the median wait between referral to a specialist by a general practitioner and receipt of treatment was 30 weeks in 2024, the longest on record.

But beyond medical and surgical treatments, Canadians also face significant waits for key diagnostic services.

In 2024, the latest year of available data, patients could expect a 16.2-week wait for an MRI (more than three weeks longer than what they waited in 2023) and an 8.1-week wait for a CT scan (a week and half longer than in 2023).

Of course, these machines are crucial in the diagnosis and monitoring of many different illnesses. As a result, long waits for these machines can result in delays in diagnosis and the advancing of illness that can impact decisions around treatment and potential outcomes.

But why are there delays for this type of basic diagnostic care?

One explanation is that Canada has lower availability of these machines compared to other high-income universal health-care systems.

For example, using the latest available data from 2022 and after adjusting for population age, Canada reported 10.6 MRI machines per million population, ranking us 27th out of 31 universal health-care countries and far behind fifth-ranked Germany (32.5 machines per million population). We see a similar story with CT scanners where second-ranked Australia (78.5 units per million) far outpaces Canada (14.6 units per million population), which ranked 28th of 31.

These data also underscore the wider dissatisfaction among Canadians about how our governments steward our health-care systems. According to a recent Navigator poll, 73 per cent of Canadians want major health-care reform.

In the end, poor access to diagnostic imaging technology can prevent the appropriate triaging of patients and create further delays for scheduled care. Improving access to diagnostic imaging should help reduce delays for care overall and improve the lives of patients and their families.

Business

Pay increase for Governor General since 2019 is more than average Canadian annual salary

Published on February 7, 2025

Todayville

From the Canadian Taxpayers Federation

By Ryan Thorpe

The salary for Canada’s Governor General has skyrocketed by just over $75,000 since 2019. Meanwhile the average annual salary among all full-time workers in Canada was roughly $70,000 in 2024

Governor General Mary Simon pocketed a $15,200 pay raise this year, bumping her annual salary for 2025 up to $378,000.

This marks Simon’s fourth pay raise since she was appointed governor general in 2021, meaning she now makes $49,300 more than when she took on the role.

“Can anyone in government explain how Canadians are getting more value from the governor general, because her taxpayer-funded salary just increased by more than $1,200 a month,” said Franco Terrazzano, CTF Federal Director. “The automatic-pay-raise culture in Ottawa is ridiculous and politicians and bureaucrats shouldn’t expect more money every year just because they’re on the taxpayer payroll.”

The Canadian Taxpayers Federation confirmed Simon’s current salary and the details of her latest pay raise with the Privy Council Office.

“For 2025, the Governor General’s salary, which is determined in accordance with the provisions of the Governor General’s Act … is $378,000,” a PCO spokesperson told the CTF.

The federal government hiked the governor general’s annual salary by $75,200 (or 25 per cent) since 2019.

Meanwhile, the average annual salary among all full-time workers in Canada was roughly $70,000 in 2024, according to Statistics Canada data.

“Canadians can’t afford to keep paying more for a largely symbolic role,” Terrazzano said. “The governor general already takes a huge taxpayer-funded salary and she should show leadership by refusing this year’s pay hike.”

On top of the $378,000 annual salary, the governor general receives a range of lucrative perks, including a taxpayer-funded mansion, a platinum pension, a clothing budget, paid dry cleaning services and lavish travel expenses.

Former governors general are eligible for a full pension, of about $150,000 a year, regardless of how long they serve in office.

Even though Simon’s predecessor, Julie Payette, served in the role for a little more than three years, she will receive an estimated $4.8 million if she collects her pension till the age of 90.

The CTF estimates that Canada’s five former governors general will receive more than $18 million if they collect their pensions until the age of 90.

Even after leaving office, former governors general can also expense taxpayers for up to $206,000 annually for the rest of their lives, continuing up to six months after their deaths.

In May 2023, the National Post reported the governor general can expense up to $130,000 in clothing during their five-year mandates, with a $60,000 cap during the first year.

Simon and Payette combined to expense $88,000 in clothing since 2017, including a velvet dress with silk lining, designer gloves, suits, shoes and scarves, among other items.

Rideau Hall expensed $117,000 in dry-cleaning services since 2018, despite having in-house staff responsible for laundry – an average dry cleaning tab of more than $1,800 per month.

In 2022, Simon’s first full year on the job, she spent $2.7 million on travel, according to government records obtained by the CTF.

Simon’s travel has sparked multiple controversies, including a $100,000 bill for in-flight catering during a weeklong trip to the Middle East, and her $71,000 bill at IceLimo Luxury Travel during a four-day trip to Iceland.

“Platinum pay and perks for the governor general should have been reined in a long time ago,” Terrazzano said. “The government should stop rubberstamping pay raises for the governor general every year, end the expense account for former governors general, reform the platinum pension, scrap the clothing allowance and cut all international travel except for meetings with the monarchy.”

Table: Annual Governor General Salary, per PCO data