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Policy Forum: Who Benefits? A Critical Analysis of Canada’s Federal Basic Personal Amount and Personal Tax Credits

Author

Listed:
  • Gillian Petit

    (Department of Economics, University of Calgary)

  • Lindsay M. Tedds

    (Department of Economics, University of Calgary)

  • Selvia Arshad

    (Department of Economics, University of Calgary)

Abstract

The federal basic personal amount (BPA), the spousal or common-law partner credit (SC), and the eligible dependant credit (EDC) have existed, in some form or other, in Canada’s tax system since its inception in 1917. While the original intention of the credits was to exempt persons from paying tax to ensure that they had enough to cover a fair minimum cost of living, changes in the calculations and amounts, as well as changes in the labour market and family formation, have changed the distributional impacts of these credits. Drawing on critical tax analysis, the authors conduct a distributional analysis of the federal BPA and SC. They conclude by discussing what their results mean for the structure of tax credits dependent on policy objectives moving forward.

Suggested Citation

  • Gillian Petit & Lindsay M. Tedds & Selvia Arshad, 2024. "Policy Forum: Who Benefits? A Critical Analysis of Canada’s Federal Basic Personal Amount and Personal Tax Credits," Canadian Tax Journal, Canadian Tax Foundation, vol. 72(4), pages 837-857.
    • Handle: RePEc:ctf:journl:v:72:y:2024:i:4:p:837-857
    DOI: https://doi.org/10.32721/ctj.2024.72.4.pf.petit
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