The Fraser Institute is the top think-tank in Canada for the tenth straight year and ranks in the top 25 among all think-tanks worldwide, according to the University of Pennsylvania’s Global Go-To Think Tanks Index.

As we near end of summer 2018, here are some interesting and important tax facts Canadians should understand and consider:

  • The total tax bill for the average Canadian family will exceed $35,000 in 2018, or 42.5 per cent of their income—more than what the average family spends on housing, food and clothing combined.
  • While the federal government has claimed it “cut taxes for middle-class Canadians everywhere,” the reality is that 81 per cent of middle-class families in Canada are paying higher federal income taxes under the government’s personal income tax changes—on average, $840 more a year.


TAX TIP      If you rent your home via Airbnb or privately, please remember that such income from home sharing or other means is considered rental income by Canada Revenue Agency and thus fully taxable. However, you may be able to deduct various home expenses to reduce your tax liability. Please contact us now for tax planning advice concerning your rental income.

  • More than 60 per cent of lower-income families (those in the bottom 20 per cent of earners) in Canada now pay higher federal income taxes because of the federal government’s tax changes.
  • Canada’s high and increasing personal income tax rates on its best and brightest workers have made the country uncompetitive compared to other developed countries. Seven of our 10 provinces now have a top combined federal-provincial rate above 50 per cent.
  • The top 20 per cent of income-earners in Canada—families with an annual income greater than $186,875— will pay 64 percent of all personal income taxes and 56 percent of all taxes (i.e. income, payroll taxes, sales taxes and property taxes, etc.).
  • Prime Minister Trudeau is on track to increase per-person federal debt more than any other prime minister in Canadian history who didn’t face a world war or economic recession.

As we look forward to 2019, let’s hope we see a refocus on policies that will actually improve the economy and lives of Canadians.

TAX TIP      Unfortunately, you may be considered a U.S. resident for USA tax purposes, and hence must report your worldwide income and complete all relevant USA tax filings, if you meet both of the following physical presence tests: (1) present in the USA for at least 31 days during the current year, and (2) the following formula totals at least 183 days: (a) all days in the USA e.g. 2017, plus (b) 1/3 of days in the USA in prior year e.g. 2016, plus (c) 1/6 of days in the USA in second preceding year e.g. 2015. Please contact us now for advice on whether you must file USA tax disclosure documents with the U.S. Internal Revenue Service.

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