New year, same affordability crisis: Here's what will cost more in 2024

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With the new year comes new hopes of financial reprieve. Unfortunately, that isn’t in store for some Canadians in 2024, according to the advocacy group Canadian Taxpayers Federation (CTF).

According to the CTF’s annual New Year’s Tax Changes report, the country will see even more rising costs despite affordability struggles already being rife in every province.

The continuation of the dreaded affordability struggle can be noticed not just in the rising costs of products but also in Canadians’ take-home earnings, according to the advocacy group.

Tax hikes on the Canada Pension Plan (CPP) and federal Employment Insurance (EI) mean that Canadians’ total take-home income will decrease as employees will have to pay more into each plan. Canadians will have to pay $113 more for the CPP and $47 more for their EI, with the maximum pensionable and insurable earnings threshold increase.

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The country will also see a carbon tax hike that will see Canadians paying more per litre of gas and per cubic litre of natural gas starting April 1, 2024. The federal carbon tax increase will see the cost of gas increase from 14.3 cents per litre to 17.6 cents per litre across the country.

However, the gas hikes will vary slightly for Canadians depending on their province. Taxpayers in BC will be expected to pay 17 cents per litre of gas, 21 cents per litre of diesel, and 15 cents per cubic metre of natural gas under the new tax hikes, according to the CTF. Comparatively, taxpayers in Quebec are under a special carbon tax deal, which means they will pay slightly less, and taxpayers in Saskatchewan will not have to pay carbon tax for electric heat.

Canadians can also expect to pay more for alcohol, with the alcohol escalator tax increasing for beer, wine, and spirits. Starting April 1, 2024, there will be a 4.7% increase in the federal excise tax on alcohol, which the report estimates will cost taxpayers approximately $100 million over the next year.

Aside from tax hikes making drinks more expensive, Canadians can also expect to pay more for food.

According to Canada’s Food Price Report 2024, food prices are expected to increase by 2.5% to 4.5%, which will cost approximately $700 more than the previous year. However, those increases could even rise to 5% to 7% for meat, vegetables, and bakery items.

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Of course, a list of rising costs wouldn’t be complete without the housing market. According to a report by real estate company Royal LePage, housing prices will see a 5.5% increase from last year, with the average cost of a home forecasted at $843,684 for 2024.

Those are the major price increases Canadians can expect for 2024. Franco Terrazzano, Federal Director of the Canadian Taxpayers Federation, perfectly summarized the situation in a news release about rising costs.

“Tax hikes will give Canadians a hangover in the new year.”