OTTAWA — Even though Santa has come and gone, Canadians can still expect stockings full of coal in 2025.
A year-end report published by the Canadian Taxpayers Federation says Canadians will get hit with a slew of tax increases.
“Canadians need higher taxes like we need a kick in the teeth, but the Trudeau government is reaching deeper into Canadians’ wallets with payroll tax hikes and is making life more expensive with carbon and alcohol tax hikes,” said Franco Terrazzano, the federation’s federal director.
“Canadians are sick and tired of the government hiking our taxes and wasting our money. Canadians can’t afford to keep paying higher taxes to fund Trudeau’s bloated government.”
Here’s a look at some of the federal tax hikes coming in 2025.
Carbon tax
The most obvious increase in store for taxpayers in 2025 are the threatened hikes to Canada’s contentious federal carbon tax, which as of April 1 increases from $80 per tonne to $95 per tonne.
That will put the cost of carbon at 21 cents per litre for gasoline, 25 cents per litre for diesel, and 18 cents per cubic metre of natural gas.
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Despite the federal government’s claims that the carbon tax will be revenue neutral and give families more back in rebates than it paid, Parliamentary Budget Officer (PBO) Yves Giroux issued reports showing that isn’t the case.
“The average household in each of the backstop provinces will see a net cost, paying more in the federal fuel charge and GST, as well as receiving lower incomes (due to the fuel charge), compared to the Canada Carbon Rebate they receive,” Giroux wrote in his report. The CTF maintains the carbon tax cost average families up to $399 more than they got in rebates in 2024.
Payroll taxes
Increases to federal payroll taxes will cost both workers and employers in 2025.
The federal income-based payroll tax will increase for those making over $64,000 — ranging from an additional $355 to $403.
While not a tax, the maximum pensionable earnings covered by the Canada Pension Plan (CPP) will also be increasing, as will maximum insurable earnings for Employment Insurance (EI.)
Alcohol taxes
Those hoping to drink away their tax troubles are in for a harsh hangover in 2025.
Federal excise taxes on alcohol, which already make up roughly half of the cost of beer, wine and spirits, will increase by 2% as of April 1.
That rate was capped to 2% earlier this year by the federal government, and will stay capped at 2% until 2026.
The escalating excise tax for booze is normally tied to inflation, which would have meant a nearly 5% increase on April 1 instead of just 2%.