Middle class Canadians will have more money in their pockets in 2019
The Government of Canada is making life more affordable for middle class Canadians. In 2019, as a result of the Government’s changes, middle class Canadians will see more money on their paycheques, compared with 2015, while changes to the Canada Pension Plan (CPP) means they will have more money for their retirement.
Taken together, changes to the Employment Insurance (EI), enhancements to the CPP and the middle class tax cut, mean that a single person earning $48,000 will save almost $60 in paycheque deductions 2019 compared with 2015. For a single person earning $75,000, this would represent a saving of almost $210.
In addition to these savings, starting in 2019, the Government of Canada will implement the Canada Pension Plan enhancement, increasing benefits and contributions to strengthen the retirement income security of today’s workers to help them maintain their standard of living when they leave the workforce, with increases of up to 50 percent for the youngest Canadians.
The government is also making investments that will continue to improve the lives of Canadians and families. For example, a typical middle class family of four will receive, on average, about $2,000 more each year, as a result of the middle class tax cut and the Canada Child Benefit.
“Every Canadian deserves a real and fair chance to succeed, no matter where they live or where they come from. That’s why we are making sure that middle class Canadians have more money in their pockets while providing access to better pensions and enhanced supports when they need them the most.” – The Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development
Initiatives like these support the Government of Canada’s overall commitment to improve the well-being of all Canadians and strengthen the middle class and help people working hard to join it.
“Canadians deserve fair and dignified retirements that recognize their hard work. That is why the Government of Canada took the initiative to strengthen and improve the Canada Pension Plan. These changes will help today’s workers plan for their retirement while building strong systems that support Canadians in their older years.” – The Honourable Filomena Tassi, Minister of Seniors
- The strength of the Canadian economy in 2018 contributes to the Employment Insurance (EI) premium rate decrease, with 219,000 more people working and fewer claiming EI benefits.
- The 2019 premium rate of $1.62 per $100 of insurable earnings, down from $1.66 in 2018, represents a reduction of 26 cents from the 2016 rate of $1.88 since the Government announced new enhancements to EI benefits and programs.
- To support Canada’s hard-working entrepreneurs, the Government cut the small business tax rate from 10.5 per cent to 10 per cent effective January 1, 2018, with a further reduction to 9 per cent coming into effect on January 1, 2019.
- In December 2015, the Government introduced a tax cut for middle-class Canadians. To help pay for the middle-class tax cut, the Government asked the wealthiest Canadians to pay a little bit more. A new income tax rate of 33 percent was introduced for individuals who earn more than $200,000 a year in taxable income.
- Additional changes to the CPP will also provide greater benefits to parents whose income drops after the birth or adoption of their child, to persons with disabilities, to spouses who are widowed at a young age and to the estates of lower-income contributors. These changes are considered the largest reform of the CPP in 50 years.