MPs to collect higher annual pay, raise taxes on April 1

On April 1, members of Parliament will begin taking home more pay while imposing significant tax hikes on taxpayers already struggling to keep up with inflation.

"Stopping a pay raise is not rocket science, especially when Canadians overwhelmingly oppose it," said Franco Terrazzano, Federal Director of the Canadian Taxpayers Federation (CTF).

According to a new Leger poll, four out of five Canadians oppose the MP pay increase and are calling on Finance Minister Chrystia Freeland to stop the carbon tax and alcohol tax hikes scheduled for April 1. 

According to federal contract data, a backbencher MP currently collects a $189,500 salary, while Ministers take home $279,900. Prime Minister Justin Trudeau gets $379,000 from taxpayers.

As of April 1, MPs will receive an annual salary about $15,700 higher than they did pre-pandemic, while the prime minister will take home an extra $31,400 — marking the fourth MP pay raise since the onset of the COVID pandemic.

CTF identified 51 national governments that cut taxes during the pandemic and as inflation took off, including more than half of G7 and G20 countries and two-thirds of the countries in the Organisation for Economic Co-operation and Development.

"While Ottawa sticks Canadians with higher bills, other countries have provided relief," contends Terrazzano.

"Australia cut its gas tax in half. India cut its gas tax to keep inflation low, thus helping the poor and middle classes. The United Kingdom announced billions in fuel tax relief, and South Korea cut its gas tax by 30%." 

The taxpayers' group cites that Germany, the Netherlands, Italy, Israel, Peru, Poland, 25 Indian states and union territories, as well as Alberta, Ontario, Newfoundland and Labrador, New Jersey, and Florida, cut gas taxes during the COVID pandemic.

"MPs don't deserve another raise, and MPs don't need another raise from their constituents struggling to fill the fridge," said Terrazzano at a press conference Monday on Parliament Hill.

The CTF cited the federal government under former prime minister Stephen Harper as an example to follow because they nipped a scheduled MP raise from 2010 to 2013, citing the economic fallout from the 2009 global recession. 

Terrazzano also cited that BC and Nova Scotia recently froze MLA pay owing to the rising cost of living felt by most Canadians.

Per the Fraser Institute, 74% of Canadians believe the average family of two or more people is over-taxed by federal, provincial, and local governments. Nearly half say they're getting poor value from government services as inflation decimates their standard of living.

Though weekly earnings typically increased 4.2% last year, rent increased 5.9% over the same period. 

"Despite moderate increases in wages and earnings, most workers have seen their purchasing power decline as inflationary pressures ramp up," wrote Statistics Canada.

According to Blacklock's Reporter, the cost of running a family car rose 13.4%, food prices increased 14.8%, and mortgage interest costs jumped 18%.

"Increases in the cost of living are [harming] net saving and wealth, especially for more vulnerable households. Low and middle-income households have seen large reductions in net savings while younger households have become more leveraged," reads the StatsCan report.

"High inflation, especially for food products, has [severely strained] living costs, especially among more vulnerable households as income and saving levels adjust to the withdrawal in pandemic-related supports." 

The CTF states, "MPs don't deserve a raise when they make life unaffordable with tax hikes."

Terrazzano criticized Ottawa on Parliament Hill on Monday for taking home higher pay the same day they intend to raise taxes on Canadians, including the federal carbon tax and alcohol escalator tax.  

"At the very least, Freeland must cancel the MP pay and tax hikes in the budget," he said.

In 2019, the federal government introduced a price on carbon pollution, starting at $20 per tonne and increasing to $50 per tonne in 2022. This April, Ottawa is expanding the tax to $65 per tonne with successive increases until 2030, reaching $170 per tonne.

On April 1, the carbon tax will increase to 14 cents per litre of gasoline and 12 cents per cubic metre of natural gas. 

Meanwhile, the alcohol escalator tax will increase federal excise taxes on beer, wine and spirits every year by the inflation rate. On April 1, the cost of alcohol will go up 6.3% — higher than the current inflation rate of 5.2%. 

First passed in Budget 2017, the federal escalator tax automatically increases excise taxes on alcohol every year without voting on the increase. After April's hike, the CTF calculates the alcohol excise taxes will have increased by about 18% since 2017.

According to the taxpayers' group, Canadians already pay about half of the price of beer, 65% of the price of wine and three-quarters of the cost of spirits in taxes.

Despite Opposition MPs passing a motion calling the "government to cancel its April 1, 2023 tax increase on beer, wine and spirits," it ultimately fell on deaf ears.

"The government shouldn't be making life more expensive with tax hikes when Canadians can't afford gas or groceries," said Terrazzano. "MPs don't deserve pay raises when their tax hikes make life unaffordable."

He argues the Parliamentary Budget Officer (PBO) shows politicians are using "magic math" to sell their carbon tax.

According to the PBO, the federal carbon tax will cost the average household between $402 and $847 in 2023, even after the rebates. By 2030, Alberta and Saskatchewan's top fifth income earners will pay $7,402 and $5,123, respectively.

"The Trudeau government claims 'families are going to be better off' with its carbon tax and rebates. The PBO is clear: the carbon tax costs families hundreds of dollars more than the rebates they get back," said Terrazzano.

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