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The Trudeau Government's Budget Makes Drinking, Smoking, And Public Transit More Expensive


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The Liberal government's budget will make life a bit more expensive for you if you drink, smoke, or take public transit.

Chris Wattie / Reuters

Finance Minister Bill Morneau unveiled the changes when he introduced the Liberal government's second budget in Parliament on Wednesday.

Here are the details:

* There will be a 2% increase in tax on alcohol, to be adjusted every year to keep up with inflation.

* The budget raises taxes on a bunch of different tobacco products. An increased tax on cigarettes, for example, will make a carton of smokes about half a dollar more expensive.

* It eliminates a public transit tax credit, which currently provides a 15% rebate to people using monthly or yearly transit passes. The change comes into effect on July 1.

* The budget also forces Uber and similar ride sharing services to charge sales tax, just like taxi cabs currently do.

While there is other investment in public transit included in the budget, the loss of the tax credit is going to sting.

Public transit tax credit will be eliminated on July 1, 2017. Happy Canada Day.

According to the budget figures, cutting the tax credit will save the federal government $150 million in the first year alone. The government considers it an "inefficient tax measure."

Some people wondered how this was helping the middle class, as the government always claims to be doing.

So I'm really not seeing where this @JustinTrudeau budget to "help the middle class" is helping out me by getting rid of transit tax credit.

The group Canadians for Tax Fairness, which advocates for progressive tax policies, accused the government of squeezing average Canadians and ignoring perks for the rich.

@Bill_Morneau @PnPCBC Why cut transit tax credit before axing stock option loophole that gives rich CEOs $800M a year? #priorities

In 2015, the Liberals promised to close loopholes in the tax code that primarily benefit Canada's top earners. However, this year's budget did not include a change to the stock option deduction, which costs the government about $840 million a year to maintain.


Others said cutting the transit credit clashed with the government's aim to fight climate change to make public transit more expensive for people.

Why would a government supposedly committed to fighting climate change cut the transit pass tax credit #budget2017

A govt pushing for lower GHG emissions eliminates public transit credit? #cdnpoli

For what it's worth, the budget says the public transit tax credit "has been ineffective in encouraging the use of public transit and reducing greenhouse gas emissions."

The government is also putting up about $20 billion over 11 years to provinces and territories for better public transit.

Ishmael N. Daro is a reporter for BuzzFeed News and is based in Toronto. PGP fingerprint: 5A1D 9099 3497 DA4B

Contact Ishmael N. Daro at

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