New Laws & Who They Affect
In January, Canada introduced new laws that will impact newcomers like you. These laws cover different areas, such as employment, taxes, and student fees, and they will be implemented at both the federal and provincial/territorial levels. These changes will have a significant impact on temporary foreign workers, international students, and permanent residents across the country. Let’s delve into what these new laws entail and how they may affect you.
New Tax Rules Across Canada
The Canada Revenue Agency (CRA) is adjusting its tax rules this year. All changes are going to impact Canadian permanent residents.
Increased Taxes For Remote Workers
Remote Workers Will See an Increase in Taxes Withheld from their Paychecks:
Globe and Mail reported that remote workers might face changes in payroll taxes if they live in a different province than their company. This affects where they file their taxes, EI, and pension contributions.
New Financial Requirements for International Students
From January 1st, international students applying for study permits in Canada face a substantial increase in the financial requirement. Previously set at $10,000, applicants must now demonstrate savings of at least $20,635. This higher amount must cover living expenses for the first year in addition to funds for tuition and travel.
Find Out If You're Affected
Tax-Free Savings Account (TFSA)
On January 1st, 2024, the CRA changed the annual contribution limit for TFSAs from $6500 to $7000 annually. This savings account is crucial for Canadian citizens and permanent residents, as it enables account holders who put money in the account to avoid paying capital gains and withdrawal taxes on the money.
Registered Retirement Savings Plan (RRSP)
Similar to the TFSA, the RRSP has changed, with the annual maximum account contribution increasing from $30,780 to $31,560. Despite this adjustment, the yearly income percentage that Canadians can contribute to their RRSP remains at 18% for 2024. This change benefits Canadian permanent residents by providing them with greater long-term security as they invest in their future.
Canadian Pension Plan (CPP) & Employment Insurance (EI)
Starting in 2024, Canadian workers will see a rise in their CPP deductions from their paychecks. Employees earning over $68,500 annually will now contribute $3,867 a year, $113 more than before. This means they’ll take home less money for now.
A second CPP tax will also be introduced. While it is set to affect PRs and Canadian Citizens, it is more specifically created for workers whose earnings are above the first earnings ceiling, which is over $68,500. To learn more about the second CPP tax, click here.
In 2024, changes to EI (Employment Insurance) will lead to a higher maximum contribution. Like with CPP, employed Canadian residents will pay more in premiums, with the maximum federal contribution for EI increasing from $1,002.35 to $1,049.12 for the year.
Increasing the Federal Carbon Tax
In 2024, Canadians who rely on their vehicles will face higher costs at the gas pumps, paying 17.6 cents per litre in fuel charges, up by 3.3 cents from 2023. This increase in the federal carbon tax will have a notable impact on household expenses. According to the Globe and Mail, the new federal carbon tax is projected to cost the average household between $377 and $911, even after accounting for government rebates.
If you are planning to come to Canada or you already live in Canada, hopefully, this article provides you with an idea of what to expect with the 2024 changes. If you have any questions or need assistance with your immigration plans, our experienced managers at Jane Katkova & Associates, with over 20 years of expertise, would be happy to help you with all your immigration needs.
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