Changes to minimum tax to add $2.6 billion over five years for feds: PBO

OTTAWA – The parliamentary budget officer says the federal government’s proposed changes to the alternative minimum tax will generate an additional $2.6 billion in revenue over five years.

The tax aims to ensure high-income earners and trusts don’t pay disproportionately less in taxes than other taxpayers.

The Liberal government proposed in the 2023 budget changes to the alternative minimum tax so that the highest income earners pay the greatest share of the revenue generated from the tax.

The changes, which come into effect in January 2024, would increase the minimum tax from 15 per cent to 20.5 per cent.

At the same time, it would increase the amount that is excluded from the calculation from $40,000 to $173,000.

While the budget watchdog finds the changes will lead to the highest-income earners paying the largest share, it does not find that to be the case with trusts.

This report by The Canadian Press was first published Sept. 7, 2023.