Federal Taxes

Federal taxes affects all Canadians and is only a portion of the taxes each individual and each business must pay. Everyone has them, and it helps our government pay for much of our modern living.

Prior to WWI, Canadians did not have to pay taxes on their income, and the government had money coming in from the customs tax and the import and export tariffs at the time. At the insistence of the Liberal Party and due to the expense of the war, the government had little choice but to instill an income tax in 1917. Funny fact is that the income tax was supposed to be temporary, only until the debt incurred by the war was fully paid off. However, the income tax persists to this very day, and while it can be quite frustrating at times, handing a part of our earnings over is a result of living in today’s world.

There are over 130 different government agencies and departments in the Canadian Government, and together they’re all quite costly to run. In an estimated breakdown, about $0.59 of each tax dollar being used by the provinces and territories; another $0.30 goes towards infrastructure, public safety, the CRA, and the National Defense; this leaves around $0.11 to go towards the debt the country has accrued over the years.

In the end, taxes are a must in order for us to continue to have the lifestyles we enjoy, and in a sense, taxation humbles us because it follows a fair and impartial set of guidelines that all citizens are subject to, regardless of individual financial status. In addition, we’re all given equal access to benefits derived from allowable deductions, and here at Ottawa Bookkeeping, we strive to get the most deductions for you and your business.