Dear John,

Since being elected in 2015, Justin Trudeau and his government have insisted that they’ve lowered taxes on middle-class families.

They repeated the line endlessly during last years’ election.

As an economist heading up a research-based think tank, my only question is: is that actually true?

Unfortunately, the answer is no.

After the 2015 election, the Trudeau government reduced the second-lowest personal income tax rate from 22% to 20.5%.

But what they have failed to mention in election cycles since is that they simultaneously eliminated several tax credits – including the children’s fitness tax credit, children’s arts tax credit, public transit tax credits, education and textbook tax credits, and the income-splitting tax credit for couples with young children. This has the effect of raising the income tax on families.

Put more simply: the government cut income taxes in one way, but raised income taxes in several other ways.

So in order to determine if the government has in fact lowered taxes on middle-class families, you need to compare the savings versus the increase. 

A recent Fraser Institute study did exactly that, comparing the savings from the lower personal income tax rate against the loss of these tax credits based on a model provided by Statistics Canada.

Its findings were crystal clear: when you compare the value of the government’s tax rate reduction with the loss of tax credits between 2015 and 2019, 86% of middle-class families experienced an increase in their federal personal income tax burden.

So not only has the government not lowered taxes, they’ve done the opposite: they’ve raised taxes on an overwhelming majority of middle-class families!

At the risk of sounding trite, this is not surprising. We expect politicians of all stripes to engage in doublespeak in order to protect their images and legacies.

But this also demonstrates why the work the Institute does is so important.

We cut through the talking points and give Canadians the raw information they need to hold governments accountable.

I’m happy to report that the above-mentioned study was featured in the Epoch Times, the Toronto Sun, Business Examiner, and the Financial Post. It reached millions more people on social media.

Like so many of the studies we produce, it moved the dial on discourse by educating the public.

If you support the work we do, please consider making a donation today. Because we hold governments to account, we don’t accept government funding. We rely entirely on people like you.

Thank you for your support!

Sincerely,

Niels Veldhuis
President
The Fraser Institute