Governments take more in 2024

I want to start this week’s report by wishing you a happy and prosperous New Year in 2024. I know that times are currently very challenging for many people, and I often hear that citizens are hopeful that the Bank of Canada’s interest rate will move in the opposite direction in 2024 compared to 2023.

Unfortunately, starting on January 1st, 2024, there will be another round of increases to payroll deductions for E.I. (Employment Insurance) and CPP (Canada Pension Plan) premiums by the federal government. If you work, your net take-home pay will be lower, which is a significant concern given the high cost of living.

Higher payroll taxes also impact small and medium-sized business owners, who face increased costs imposed by various levels of government across the board.

There is also a new payroll deduction called “CPP2” that many people are unaware of. Previously, the maximum CPP contribution rate for a specific year was 6% for incomes up to $68,500. However, under “CPP2,” a new threshold has been introduced. This threshold adds 4% more to the contribution rate on income up to $73,200. In 2025, this income level, subject to the added 4% contribution rate, is estimated to increase to $79,400.

Furthermore, on April 1st of this year, the Trudeau Liberal Government plans to raise the federal excise tax on wine, beer, and spirits. It will increase by 4.7% unless there is a political intervention by the Trudeau government.

The carbon tax will also increase at the federal and provincial levels in British Columbia. It will rise to $80 per tonne as scheduled unilaterally by the Trudeau Government. This increase in costs in energy and transportation that touches almost every part of our personal and commercial daily lives is part of what I often refer to as “made-in-Canada inflation.”

Last year, the governor of the Bank of Canada confirmed in writing to the Finance Committee that the carbon tax was causing an increase in inflation, and these increases will only exacerbate the situation.

For some individuals, the federal and provincial tax increases that will reduce their net take-home pay may have little impact on their household. However, I am aware of a concerning report released by licensed insolvency trustee MNP Ltd in October of last year.

According to the report, “51 percent of Canadians said they are $200 away or less from being unable to pay all of their bills at the end of the month.” This is an increase from the 46 percent reported in April 2023. Additionally, 35 percent of those surveyed stated they do not earn enough to cover their bills and debt payments.

The number of households who may be unable to pay their bills at the end of the month will only increase further with these recent increases coming in 2024. This is deeply concerning.

My question to you this week is: will your household be able to afford the increasing prices of domestically produced goods due to inflation?

I can be reached at or call toll-free at 1-800-665-8711.