Now that a federal Liberal minority government has been elected, we can review some of the policies that the Liberals campaigned on to predict tax changes that may be coming in the next few years.
Currently all taxpayers in Canada pay no federal tax on their first $12,069 of income.
The Liberal government has pledged to increase this to $15,000, for those taxpayers with net income of less than $147,000. This would be phased in gradually until the year 2023.
The Liberals have also stated that they will make maternity and parental leave benefits tax free. Along those lines, they have indicated that they will increase the Canada Child Benefit by 15% for children under one year old.
Although making leave benefits tax free is potentially more beneficial to individuals with higher levels of income, the increase to the Canada Child Benefit will provide more of an advantage to low income families.
The Liberals have also pledged to establish a vacant homes tax similar to what is already in place in British Columbia. This will apply to non-residents who do not live in Canada.
They have also promised to introduce a tax of 10% on luxury vehicle purchases of over $100,000. This tax would also apply to boats and personal aircraft.
As it is likely that the Liberals will have to rely on the NDP for support to stay in power, there are certain promises in the NDP platform that the Liberals may have to incorporate into their own changes.
The NDP has indicated that they want to raise the general corporate tax rate by 3%.
When combined with the provincial rate, this would bring the general corporate tax rate in BC to 30%. They have also stated that they would increase taxes
on capital gains. Currently, only one half of a capital gain is included in taxable income. They would increase this inclusion rate to 75%.
They have also promised that they would raise the federal tax rate to 35% on income in the highest personal tax bracket.
When combined with the provincial rate, this would increase the personal tax rate on the highest level of income in BC to 51.8%.