Tax Pros: Canada’s Tax System Has Taken a Big Hit

Canada’s tax and financial pros weighed in enthusiastically on last month’s two-part Knowledge Bureau Report Opinion Poll in which we asked: "Do you believe Canada’s tax system based on self-assessment, has suffered under recent changes at CRA and by Finance Canada?" 71% said yes. Part 2 was this question: "If so, what is the one wish you have for tax reform?" The responses were very interesting:

Both the CPP and EI contributions – which are mandatory – have risen. This will reduce take-home pay for employees. However, for those who are self-employed and must pay both the employer’s and employee’s portion of the CPP, things are about to get much more expensive and that could start to crowd out critical TFSA and RRSP investments for their futures.  

The 31st Actuarial Report on the Canada Pension Plan (CPP)[1] was released to the Finance Minister on November 14 and tabled in Parliament on December 14, 2022, as required by law, every three years. It is an important and comprehensive overview of Canada’s vital economic statistics from which to project the sustainability of the CPP.  What’s interesting about this report is how the uncertainties ahead may affect our rate structure and what a wealth of economic news it brings.

There’s an argument to be made with high inflation, a shaky economy and possibly lacklustre returns – that this year is the worst year to retire. Retirees NEED to know how long their assets are going to last. High inflation makes that tricky as retirees must draw down more income to pay for basics like groceries and gas. 

According to a report by Toronto- based research firm Strategic Insight, approximately $1Trillion in personal wealth will change hands by 2026, with roughly 70 percent of that in the form of financial assets.  In fact, this is already taking place, as Baby Boomers and Gen X transfer their wealth to Millennials and GenZ. 

Knowledge Bureau’s Advanced T1 Tax Update is more than an incredibly fun and full day of shaking out the cobwebs and learning about the “dark tax horses” with colleagues from coast to coast! This tax update has got you covered for the entire tax season with great online resources: a comprehensive online certificate course featuring over 100 retention questions,  Evergreen Explanatory Notes – a complete tax research library - plus Knowledge Bureau’s Discovery Tools – 16 sophisticated tax planning calculators! 

Old Age Security recipients will receive more on January 27, 2023, due to inflation indexing. But just how much more is more complex these days: it depends on your age – those over age 75 receive 10% more - and whether you have postponed receiving OAS to age 70.  Here are the benefit amounts to watch for: