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New year heralds changes to tax rates, minimum wage

By Sara Bedal |

Depending on where you live in Canada, you may or may not be toasting recent changes to tax rates and the minimum wage. On January 1, 2011, changes came into effect in three provinces and one territory.

Businesses in British Columbia will now pay less in provincial corporate income tax, with the rate dropping to 10 per cent from 10.5 per cent. B.C. and Alberta now have the lowest corporate income tax rates in the country.

Farther east, Manitoba has done away with the general corporation capital tax. The change is expected to save Manitoba businesses more than $119 million and follows the elimination of the small business income tax rate in that province on December 1, 2010.

The new year brings more sobering news to Quebecers. On January 1, Quebec Sales Tax (QST) jumped to 8.5 per cent from 7.5 per cent. And because QST is calculated on top of the Goods and Services Tax, the effective new QST rate is actually 8.925 per cent.

This is just one of two provincial sales tax hikes Quebec consumers must weather. Another 1 per cent increase to the QST is scheduled for January 1, 2012.

Meanwhile, low-income earners in Nunavut are celebrating the increase in the minimum wage there from $10 per hour to $11 per hour. Nunavut has the highest cost of living in Canada but now has the highest minimum wage in the country. Ontario has the second highest at $10.25 per hour.

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