Written By: SAMANTHA EDWARDS AND MATHILDE AUGUSTIN
For the Globe and Mail
A new year brings new rules. As of Jan. 1 and throughout the year, a slew of new laws will come into effect, including changes on who can buy homes in Canada, increases to hourly minimum wages, and new limits on tax-free savings account contributions.
Here is a breakdown of many of the new federal and provincial laws coming in 2023, and how they will affect you.
Federal ban on foreign homebuyers
A two-year federal ban on foreign homebuyers in Canada is in effect as of Jan. 1, an effort the government says will help stabilize the housing market and ensure Canadians have more access to purchasing homes. The new law, which was originally introduced in last April’s budget, establishes a $10,000 fine for people who are neither Canadian citizens nor permanent residents and who buy residential property.
There are some exemptions to the ban, including foreign buyers purchasing recreational properties such as cottages and cabins, residential real estate outside of cities with a population of at least 100,000, international students on a path to permanent residency, refugee claimants, foreigners who are in Canada on a work permit, and the spouses and common-law partners of Canadian citizens.
But real estate experts say it will have a minimal impact on addressing Canada’s housing affordability amid larger factors, including high interest rates.
Minimum wage increases
The minimum hourly wage in some provinces will increase in 2023.
- Nova Scotia will raise the minimum wage by 70 cents to $14.30 on April 1. It will increase the wage another 35 cents to $14.65 on Oct. 1.
- Manitoba will raise the minimum wage by 65 cents to $14.15 on April 1. The province said it will raise itagain to $15 on Oct. 1.
- Saskatchewan will raise the minimum wage to $14 from $13 effective Oct. 1.
- Prince Edward Island raised its minimum wage by 80 cents to $14.50 on Jan. 1. It will be increased another 50 cents to $15 on Oct. 1.
- Newfoundland and Labrador will increase minimum wage by 80 cents to $14.50on April 1. On Oct. 1, it will increase another 50 cents to $15.
New CRA tax rules
Among the key changes affecting Canadians’ pocketbooks in 2023 are some updates to the Canadian Revenue Agency’s tax rules. From tax brackets to payroll deductions, here’s what to look out for this year.
TAX BRACKETS INDEXED FOR INFLATION
All five federal income tax brackets have been adjusted 6.3 per cent for 2023 to keep up with inflation. These new thresholds will provide Canadians whose wages lag inflation with a personal income tax break. The new brackets are:
- 15 per cent below $53,359
- 5 per cent between $53,359 and $106,717
- 26 per cent between $106,717 and $165,430
- 29 per cent between $165,430 and $235,675
- 33 per cent above $235,675
BASIC PERSONAL AMOUNT
The Basic Personal Amount is the amount Canadians can earn before paying any federal income tax, meaning the change will result in increased tax returns for many. The federal government has increased the BPA for 2023 to $15,000 from $14,398 the year prior.
This increase is the last in a series of annual increases announced in 2019 and will be indexed to inflation each year in the future.
TFSA CONTRIBUTION LIMIT
The annual contribution limit for tax-free savings accounts rose to $6,500 on Jan. 1, up from $6,000 in 2022. This means Canadians can save and invest an additional $500 a year with their TFSAs.
The increase is an opportunity for Canadians to put an extra $500 to work, but with the risk of a recession and the increased pressure of inflation and rising rates, there’s more to consider than buying stocks. If you’re not ready to invest in the stock market, a TFSA can be used for savings or buying guaranteed investment certificates.
TFSAs to the rescue: How to use the higher 2023 limit to play both offence and defence in your finances
RRSP CONTRIBUTION LIMIT
The CRA imposes an annual limit on how much Canadians can deposit into their registered retirement savings plan account. The limit in 2023 remains 18 per cent of the previous year’s income, but the maximum contribution is now $30,780 instead of the $29,210 permitted in 2022.
When is it better to use an RRSP, a TFSA – or both?
To decide whether to put money toward a TFSA or RRSP, consider whether you’ll need the money before retirement and whether you could use a tax deduction. Opt for an RRSP if you’re thinking long-term and want a tax deduction. But if you’ll need the money before you retire, then opt for a TFSA, which allows withdrawals without any tax implications.
CPP AND EI PAYROLL DEDUCTIONS
Canadians can expect higher Canada Pension Plan and Employment Insurance deductions on their paycheques in 2023.
CPP contributions are rising as part of a six-year plan to enhance contributions and benefits. The CPP contribution rate for 2023 is rising to 5.95 per cent, and to 11.9 per cent for self-employed Canadians. The estimated maximum contribution is $3,701, up from $3,499 in 2022. In Quebec, the QPP contribution rate is 6.4 per cent up to $4,038 for 2023.
What will CPP expansion mean for my retirement?
Employment Insurance premiums are rising, too, with a federal contribution rate for employees of 1.63 per cent up to a maximum of $1,002.45. In 2022, the maximum contribution for federal EI was $952. In Quebec, the 2023 contribution rate is 1.27 per cent up to $781.
Single-use plastics ban
On Dec. 20, 2022, the initial phase of the government’s single-use plastic ban came into effect, prohibiting the manufacturing and import-for-sale of a range of single-use plastic items including checkout bags, cutlery, takeout containers, stir sticks, can ring carriers, and straws. Some other items like plastic cup lids did not make the list because there aren’t enough alternatives available yet, the government said.
While businesses may start switching to greener packaging alternatives soon, the transition will be gradual. During the initial phase of the ban, these items can continue to be sold in Canada. The second phase, which kicks in at the end of 2023, will ban the sale of these products, except for ring carriers, which will be banned for sale in June, 2024. Not until December, 2025, will manufacturing, import and export for sale be prohibited.
France has also implemented a ban on disposable packaging for customers eating at fast-food restaurants in an attempt to reduce waste. Some McDonald’s locations started rolling out reusable packaging, which quickly went viral on social media.
Federal carbon price increase
On April 1, the federal carbon tax will increase to $65 a tonne of carbon dioxide equivalent, from $50 a tonne in 2022. The price is set to rise by $15 a tonne annually for an eventual target of $170 a tonne in 2030.
The increase means consumers will pay 14.3 cents a litre of gasoline in fuel charges in 2023, about 3.3 cents higher than last year. Heating oil – upon which large swaths of Atlantic Canadians rely to warm their homes – will cost an extra 4 cents a litre in 2023 compared with last year.
Provinces and territories set their own taxes that meet or exceed that standard or use a cap-and-trade system that achieves the same result. Beginning July 1, residents of Newfoundland and Labrador, Nova Scotia and Prince Edward Island will start paying the federal carbon tax after a federal review determined their provincial systems no longer met federal standards.
The federal charge will continue to apply in Alberta, Saskatchewan, Manitoba, Nunavut, Ontario and Yukon, while Quebec, Northwest Territories, British Columbia and New Brunswick will continue to use their own carbon pricing systems.
Copyright law expanded
Canada has extended general copyright protections another 20 years, which means no new books, songs or plays will be added to the public domain until 2043. Prior to this change, copyright protection applied to literary, dramatic, musical or artistic works for the life of their author plus another 50 years. Now that time limit has been extended to 70 years. For example, works by Canadian author Margaret Laurence will now enter the public domain in 2057, rather than 2037.
The law was changed to comply with a commitment made under the new North American free-trade deal to match the protections in the United States. When a work enters the public domain, it can be republished or repurposed without seeking permission or paying the rights holder.
Other province-specific laws
BRITISH COLUMBIA TO DECRIMINALIZE SPECIFIC ILLICIT DRUGS FOR THREE YEARS
Starting Jan. 31, British Columbia will become the first province in Canada to decriminalize possession of small amounts of illicit drugs such as fentanyl, heroin, cocaine, methamphetamine and MDMA. British Columbians 18 and over will be able to carry up to a cumulative total of 2.5 grams without the risk of arrest or criminal charges or having the drugs confiscated.
The province says the three-year experiment is a critical step to addressing B.C.’s worsening drug toxicity crisis and can serve as a template for other jurisdictions. The federal government is reviewing an application by the City of Toronto to decriminalize the possession of drugs for personal use.
ONTARIO AND YUKON PHARMACISTS CAN NOW PRESCRIBE TREATMENTS FOR SOME COMMON AILMENTS
As of Jan. 1, Ontario pharmacists can now assess and offer prescriptions to treat 13 common conditions, including pink eye, hemorrhoids, cold sores, skin irritation, menstrual cramps, urinary tract infections and hay fever. Ontario says the newly expanded powers for pharmacists will free up doctors to treat more complex medical conditions.
What Parliament is looking at this year
When Parliament returns in late January, more than a hundred bills will be awaiting law makers. Some of these bills are Liberal priorities, including updating broadcast laws to encompass big streaming platforms and expanded gun-control legislation. Here are some of the major bills.
The Online Streaming Act would change Canada’s broadcast law to cover streaming platforms, including Netflix, Amazon Prime and YouTube. Under the new rules, those platforms would have to promote and support Canadian work such as songs and films. In December, senators removed wording from the bill that some content creators feared could lead to the regulation of user-generated content on platforms like TikTok. The Senate is expected to send the bill back to the House of Commons when it returns on Jan. 31.
Originally tabled in May, 2022, the Liberals’ gun-control legislation would freeze the importing, buying and selling of handguns. In late November, the Liberals introduced amendments to the bill, which would introduce a legal definition for all assault-style weapons that would automatically be banned. Critics say the proposed definition would target many guns used for hunting. After backlash from Conservatives and the NDP, the Liberals said in December they’re open to “fine-tuning” the bill.
The Online News Act would require tech giants such as Google and Meta to compensate Canadian media for posting links to their work, or republishing their news reports. The House passed the bill just before the holiday break, and the Senate will begin its review once it returns at the end of January.
With reports from Rachelle Younglai, Emma Graney, Wendy Stueck, Erica Alini, Rob Carrick, Marcus Gee, Andrea Woo, Marie Woolf and The Canadian Press