Liberals to ‘go further’ targeting high-income earners with budget’s new minimum income tax – National Post
Breadcrumb Trail Links
The budget contains no details except to say that more is to come this fall, but tax experts say this is a very interesting move by the Liberals to address inequalities in the tax system
Publishing date:
OTTAWA Over one quarter of Canadians who made over $400,000 in 2019 paid less than the 15 per cent in federal tax in 2019, a surprising number that has the Liberal government rethinking how it taxes Canadas highest-income earners.
This advertisement has not loaded yet, but your article continues below.
Some high-income Canadians still pay relatively little in personal income tax (PIT) as a share of their income 28 per cent of filers with gross income above $400,000 pay an average federal PIT rate of 15 per cent or less, which is less than some middle class Canadians pay, reads the 2022 federal budget published Thursday.
In the document, Finance Canada reveals new data based on 2019 tax data that shows that nearly 18 per cent of Canadians who earned $400,000 in gross income that year or the 0.5 per cent paid less than 10 per cent (and sometimes even 0 per cent) in federal tax.
Another 10 per cent of wealthy Canadians paid up to 15 per cent, which is essentially the first income tax bracket for the federal government. The remaining 72 per cent of the countrys top 0.5 per cent earners in 2019 paid over 15 per cent in federal tax.
This advertisement has not loaded yet, but your article continues below.
There are still thousands of wealthy Canadians who pay little to no personal income tax each year. That is unfair, and the federal government is committed to changing it, reads the budget.
Though many within that 28 per cent paid less tax entirely legally, the government is concerned that many more have found ways to make far more deductions to their income than they should be able to.
These Canadians make significant use of deductions and tax credits, and typically find ways to have large amounts of their income taxed at lower rates, the budget reads.
But thats where Canadas little-known Alternative Minimum Tax (AMT) provision should kick in. The Royal Bank of Canada defines the AMT as an secondary means of calculating income tax that should prevent high income earners and trusts from paying little or no tax as a result of certain tax incentives, including claiming certain tax deductions and earning Canadian dividends and capital gains.
This advertisement has not loaded yet, but your article continues below.
But the federal government admits that the AMT, which hasnt been substantively updated since 1986, isnt working.
So now its looking for a new minimum tax regime which it wants to go further in ensuring that wealthy Canadians pay their fair share of tax.
The budget contains no details except to say that more is to come this fall, but tax experts say this is a very interesting move by the Liberals to address inequalities in the tax system.
Jamie Golombek, Managing Director, Tax and Estate Planning at CIBC, said he was very surprised to see that 28 per cent of wealthy Canadians paid so little in federal tax in 2019.
This advertisement has not loaded yet, but your article continues below.
That number seems crazy to me, Golombek said. We have an AMT, it affects very few people, literally, at the end of the day and its obviously not capturing enough people in their opinion.
This is very interesting, he added.
Greg Bell, a tax expert with KPMG, says Finance Canada should dive deeper into how so many wealthy Canadians managed to reduce their gross income so much on their tax filings.
The first question that comes to my mind is, if they have more than$ 400,000 of income, how are they getting their tax rates so low?, he said.
But a review of the AMT is only one of many tax measures in the latest federal budget meant to address what experts call loopholes that have allowed some corporations or wealthy individuals to pay less taxes than they should in the eyes of the government.
This advertisement has not loaded yet, but your article continues below.
The Liberals also promised to invest $1.2 billion over the next five years into the Canada Revenue Agencys fight against tax crime, focusing particularly on increasing audits of wealthy companies and individuals as well as countering foreigners use of Canada as a money laundering haven (also known as snow-washing).
For the most parts, experts agree that most of the measures amount to housekeeping, or simply patching known issues or grey zones in federal laws.
They have this laundry list of things that they dont like, and when (an issue) becomes serious enough, they go after it, Golombek said.
The most impactful change for government coffers announced in this budget is one that would ban private Canadian companies from using foreign corporations, such as shell companies based abroad or moving their headquarters to a tax haven despite still being fully Canadians owned and controlled, to avoid paying Canadas tax rates.
This advertisement has not loaded yet, but your article continues below.
The government estimates the proposal will rake in $4.2 billion over five years starting in 2022-23.
The budget also expects to recoup roughly $135 million per year going forward by closing the double-deduction loophole that allows companies to claim deductions on dividend-paying stocks that they both bet on and against.
Another $150 million per year is expected to return to government coffers by beefing up anti-avoidance rules to ensure that Canadians pay their fair share of taxes when they use a so-called interest coupon stripping arrangement.
Due to differences between Canadas various tax treaties, the interest received from Canadian residents is often subject to different tax rates depending on where the recipient resides. Interest coupon stripping arrangements exploit these differences and allow some to pay less in taxes, reads the budget.
Finally, the budget promises to review and strengthen federal rules aimed at preventing abusive tax avoidance transactions, though no further details are provided.
This advertisement has not loaded yet, but your article continues below.
This advertisement has not loaded yet, but your article continues below.
Sign up to receive the daily top stories from the National Post, a division of Postmedia Network Inc.
A welcome email is on its way. If you don't see it, please check your junk folder.
The next issue of NP Posted will soon be in your inbox.
We encountered an issue signing you up. Please try again
Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notificationsyou will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.
View original post here:
Liberals to 'go further' targeting high-income earners with budget's new minimum income tax - National Post
- New polls show the Liberals opening large lead over the Conservatives - iPolitics - July 6th, 2025 [July 6th, 2025]
- Another Saturday Night - Liberals Are Patriotic! updated with how to help the central Texas flooding - Daily Kos - July 6th, 2025 [July 6th, 2025]
- Vancouver has a new civic party the Vancouver Liberals - Business in Vancouver - July 6th, 2025 [July 6th, 2025]
- Liberals Lose Trust on Health After 11 Years - Mirage News - July 6th, 2025 [July 6th, 2025]
- Newsom warms to building, but will California liberals allow it? - Washington Examiner - July 4th, 2025 [July 4th, 2025]
- Liberals Are Declaring That The Fourth Of July Is Canceled This Year And Even Threatening To Sue People Who Celebrate For Emotional Damage - Whiskey... - July 4th, 2025 [July 4th, 2025]
- Peter Menzies: Justin Trudeaus legislative legacy is still haunting the Liberals - The Hub | More Signal. Less Noise. - July 4th, 2025 [July 4th, 2025]
- Opinion | Memo to liberals: Diversity can be conservative - The Washington Post - July 2nd, 2025 [July 2nd, 2025]
- Liberals Are Going to Keep Losing at the Supreme Court - The Atlantic - July 2nd, 2025 [July 2nd, 2025]
- Hollywood Liberals Slammed as 'Disgusting' for Bleating They Weren't Invited to Jeff Bezos 'Vulgar' Wedding - RadarOnline - July 2nd, 2025 [July 2nd, 2025]
- Forget female quotas, its mediocrity thats killing the Liberals - The Australian - July 2nd, 2025 [July 2nd, 2025]
- Fatal flaw of liberals is belief that being right is enough | Opinion - The News-Press - June 29th, 2025 [June 29th, 2025]
- Liberals want Americans to depend on government - Washington Times - June 28th, 2025 [June 28th, 2025]
- If old school white-anting Sussan Ley on gender quotas works, the Liberals may pay a heavy political price - The Guardian - June 28th, 2025 [June 28th, 2025]
- HUNTER: Have Liberals had their come-to-Jesus moment on crime? - Toronto Sun - June 28th, 2025 [June 28th, 2025]
- Random Musing: Why some Indian liberals are celebrating Zohran Mamdani and think he is the new Obama - Times of India - June 28th, 2025 [June 28th, 2025]
- Liberals In California Are Banning Books Again - The Daily Wire - June 28th, 2025 [June 28th, 2025]
- 'Liberals need to reconnect with people's deep feelings of being disrespected,' sociologist says - Perspective - France 24 - June 28th, 2025 [June 28th, 2025]
- Threat of Trump should drive liberals from the middle ground | Opinion - The Portland Press Herald - June 28th, 2025 [June 28th, 2025]
- If the Liberals want to appeal again to aspirational Australians, they could start by taxing wealth | Judith Brett - The Guardian - June 28th, 2025 [June 28th, 2025]
- The Weekly Wrap: The Liberals must abandon their internet regulation agenda - The Hub | More Signal. Less Noise. - June 28th, 2025 [June 28th, 2025]
- Data breach may have exposed 200,000 home-care patients' information, say Ontario Liberals - Yahoo - June 28th, 2025 [June 28th, 2025]
- M. imeka criticized the Slovak government after the summit of liberals in Brussels for not diversifying gas supplies - European Newsroom - June 28th, 2025 [June 28th, 2025]
- ANALYSIS: David Petersons Liberals are remembering the good times. Ontarians should, too - TVO Today - June 28th, 2025 [June 28th, 2025]
- Carney Liberals urged to ditch DST as Trump terminates trade talks with Canada - Toronto Sun - June 28th, 2025 [June 28th, 2025]
- Martin Regg Cohn: History reminds Ontarios languishing Liberals that they need to make their own luck - Toronto Star - June 28th, 2025 [June 28th, 2025]
- Arab Journalists and Liberals Praise U.S. Strike On Iran: The Iranian Threat Is Over; Trump Saved Humanity; God Bless America - MEMRI | Middle East... - June 24th, 2025 [June 24th, 2025]
- Conservatives report better mental health than liberals. I think I know why. | Opinion - USA Today - June 24th, 2025 [June 24th, 2025]
- Federal Liberals reintroduce cybersecurity bill meant to protect critical infrastructure - The Globe and Mail - June 24th, 2025 [June 24th, 2025]
- Threat of Trump should drive liberals from the middle ground | Opinion - Lewiston Sun Journal - June 24th, 2025 [June 24th, 2025]
- Opinion: The Tory future may lie with the Liberals - Winnipeg Free Press - June 24th, 2025 [June 24th, 2025]
- FIRST READING: All the hidden extras buried in the Liberals fast-tracked omnibus bills - National Post - June 24th, 2025 [June 24th, 2025]
- Battin wants to reset and to rally Liberals behind taxes, housing and crime - Neos Kosmos - June 24th, 2025 [June 24th, 2025]
- Chaos over withdrawal of EU law against greenwashing. Last trialogue skips, anger of socialists and liberals - Eunews - June 24th, 2025 [June 24th, 2025]
- Libman: Quebec Liberals gamble on Rodriguez. Will voters? - Montreal Gazette - June 22nd, 2025 [June 22nd, 2025]
- Hunger strikes! Tears! Arrest! Its been a week of ridiculous performances as NYC liberals chase folk-hero status - New York Post - June 22nd, 2025 [June 22nd, 2025]
- The Trump Peace Prize? Matt Gaetz suggests renaming honor they only give to liberals - AL.com - June 22nd, 2025 [June 22nd, 2025]
- Victorias Liberals saved John Pesutto from bankruptcy. But can they save themselves from all-out war? - The Guardian - June 22nd, 2025 [June 22nd, 2025]
- Q+A | Outgoing Yukon premier highlights renewed energy in Yukon Liberals with new leader - Yahoo - June 22nd, 2025 [June 22nd, 2025]
- Trump Complains He Should Have Won FIVE Nobel Prizes By Now But They Only Give Them To Liberals - Mediaite - June 22nd, 2025 [June 22nd, 2025]
- Putins biggest threat is not from liberals but the nationalist Right - The Telegraph - June 20th, 2025 [June 20th, 2025]
- Obama swipes at affluent liberals during rare public remarks, says 'all of us are going to be tested' - Fox News - June 20th, 2025 [June 20th, 2025]
- Swedens Liberals bet to revive a sinking party - Euractiv - June 20th, 2025 [June 20th, 2025]
- They Hate Our Country The Right-Wings Accusation Towards Liberals - Daily Kos - June 20th, 2025 [June 20th, 2025]
- BREAKING: Yukon Liberals select Mike Pemberton as their new leader and the territory's next premier - Yukon News - June 20th, 2025 [June 20th, 2025]
- Andr Pratte: Pablo Rodriguez has won over the Quebec Liberals. That was the easy part - National Post - June 20th, 2025 [June 20th, 2025]
- Why liberals ignored the grooming gang scandal - The Spectator - June 20th, 2025 [June 20th, 2025]
- Liberals to pass major projects bill this week with Conservative support - National Post - June 20th, 2025 [June 20th, 2025]
- Liberals Pushing Through Law That Expands Governments Power - The Tyee - June 20th, 2025 [June 20th, 2025]
- Liberals major projects bill on track to pass before House rises for summer - iPolitics - June 20th, 2025 [June 20th, 2025]
- Yukon Liberals to choose new leader tonight - 96.1 The Rush - June 20th, 2025 [June 20th, 2025]
- MAGA World and liberals have turned on Musk as Trump divorce turns friends to foe - The Independent - June 7th, 2025 [June 7th, 2025]
- The Occupation Is Destroying Israel From Within, and Liberals Can't Ignore It Anymore - Haaretz - June 7th, 2025 [June 7th, 2025]
- 15 Liberals And Conservatives Are Sharing The Political Opinions They Hold That Align With The Opposite Party - Yahoo - June 7th, 2025 [June 7th, 2025]
- How are the Liberals of Bradfield coping with their loss? | Fiona Katauskas - The Guardian - June 7th, 2025 [June 7th, 2025]
- 15 Liberals And Conservatives Are Sharing The Political Opinions They Hold That Align With The Opposite Party - BuzzFeed - June 7th, 2025 [June 7th, 2025]
- Liberals and Conservatives in Canada split on Mark Carney and the country's direction after the election - YouGov - June 7th, 2025 [June 7th, 2025]
- Moderate Liberals say the party has a choice be a far-right rump run by octogenarians or move to the centre - The Guardian - June 7th, 2025 [June 7th, 2025]
- Chris Selley: Liberals wrap much-needed refugee reform in a terrible privacy-invading package - National Post - June 7th, 2025 [June 7th, 2025]
- 7 Things: Trump and Musk are going at it; Tuberville taunts liberals; angry mob demands MTG stay out of HSV; and more... - Yellowhammer News - June 7th, 2025 [June 7th, 2025]
- How a little-known procedure helped the Liberals dodge their first confidence vote - National Post - June 7th, 2025 [June 7th, 2025]
- Supporters of John Pesutto question Victorian Liberals priorities over reluctance to bail out former leader - The Guardian - June 7th, 2025 [June 7th, 2025]
- Globe editorial: The Liberals get around to fixing the thing they broke - The Globe and Mail - June 7th, 2025 [June 7th, 2025]
- As John Pesutto faces bankruptcy, the Victorian Liberals struggle to unite - Australian Broadcasting Corporation - June 7th, 2025 [June 7th, 2025]
- Liberals survive confidence vote, as throne speech motion passes through House - iPolitics - June 7th, 2025 [June 7th, 2025]
- Liberals introduce bill to cut trade barriers, speed up 'nation-building' infrastructure - Yahoo - June 7th, 2025 [June 7th, 2025]
- Wave of anger could sweep liberals to victory in South Korea election - Reuters - June 4th, 2025 [June 4th, 2025]
- Liberals lead debate on the future of European security in Helsinki - ALDE Party - June 4th, 2025 [June 4th, 2025]
- Milk Act to Bike Month: How Liberals are trying to slow Bill 5 with 4,000 amendments - Global News - June 4th, 2025 [June 4th, 2025]
- What are Canadas governing Liberals going to do about AI? - The Conversation - June 4th, 2025 [June 4th, 2025]
- Opinion | The one thing liberals need to address before the June parade - The Washington Post - June 4th, 2025 [June 4th, 2025]
- Gina Rinehart helped Liberals raise nearly $400,000 at exclusive dinner that led to wrongful dismissal claim - The Guardian - June 4th, 2025 [June 4th, 2025]
- Just before the election, Liberals handed out 411 cheques worth $3.86B - Global News - June 4th, 2025 [June 4th, 2025]
- Prominent conservative legal scholars join liberals to condemn Trump in biting court brief - Alternet - June 4th, 2025 [June 4th, 2025]
- Theres A New Law Firm In Washington. It Wants To Take All The Cases Liberals Hate - dailycaller.com - May 19th, 2025 [May 19th, 2025]
- The Liberals aren't tabling a budget. How does that affect the economy and your wallet? - CBC - May 19th, 2025 [May 19th, 2025]
- Liberals will table a budget this fall, Prime Minister Mark Carney says - CBC - May 19th, 2025 [May 19th, 2025]
- Ted OBrien says Liberals need to reflect modern Australia with more women in party - The Guardian - May 19th, 2025 [May 19th, 2025]
- Sussan Ley needs bold thinking to modernise the Liberals. She should look to David Camerons Tories | Tom McIlroy - The Guardian - May 19th, 2025 [May 19th, 2025]
- Political parties can recover after a devastating election loss. But the Liberals will need to think differently - The Conversation - May 14th, 2025 [May 14th, 2025]