OP-ED: Work Hard, Keep More, What Canada Can Learn from America’s Overtime Tax Break

While Ottawa punishes productivity with taxes and red tape, Washington is finally rewarding the working class. It’s time Canada followed suit.

Something striking has happened south of the border. The United States — yes, the same country that just raised its debt ceiling again to fund more bloated programs and foreign escapades has actually managed to include a good idea in its latest megabill. Say what you will about the One Big Beautiful Bill Act, and to be clear, we do not approve of mortgaging the future with more reckless federal spending. But credit where it is due this bill includes one of the smartest, most grounded policies we’ve seen from Washington in years.

It rewards people who want to work.

Specifically, it eliminates federal income taxes on overtime pay for qualified workers. That means up to $12,500 per year for individuals, or $25,000 for married couples filing jointly, is completely shielded from federal tax if it comes from overtime. In other words, the more you work, the more you get to keep.

To qualify workers must be non-exempt under the Fair Labour Standards Act. That means they are paid hourly or earn below government fixed thresholds. The overtime pay must exceed the normal wage rate and it must be properly reported on tax documents.

The deduction phases out for those with modified adjusted gross income above $150,000 for single filers or $300,000 for joint filers It covers only federal income tax. Payroll taxes such as Social Security and Medicare still apply and states may tax this income .

This is what real economic policy looks like. And it exposes just how out-of-touch our own leadership in Canada has become.

Let’s be honest. In this country, we punish productivity. Ottawa’s approach under Mark Carney Trudeau’s former economic advisor and an unelected disciple of the global financial elite has been to tax, regulate, and redistribute. The result? Middle-class Canadians are squeezed, businesses are shuttered, and tradesmen are treated like second-class citizens while bureaucrats and foreign consultants cash in.

The Americans just sent a different message. They said if you’re an hourly worker, you matter. If you put in extra time, you should not be penalized for it. Their law targets real working people, not civil servants, not Bay Street executives, not World Economic Forum alumni, but the people who fix the roads, install the power lines, keep the hospitals clean, and actually build the country.

And here’s something Ottawa doesn’t want to talk about Canada is falling behind in productivity. Badly. While the political class is busy virtue-signaling about climate targets and crafting ever-expanding welfare programs, the economic fundamentals are rotting beneath them.

As of 2023, Canadian workers generated only 74.70 US dollars of output per hour (adjusted for purchasing power). Compare that to the United States at 97.00 and France at 89.30. Yes, that’s right France, a country known for three-hour lunches and 35-hour workweeks, is outproducing us.

Let that sink in.

From 2000 to 2023, Canada’s productivity grew at just 0.8 percent annually. That’s a snail’s pace. It’s well below the United States and most of our OECD peers. And the trend is getting worse, not better.

Canada’s productivity index relative to the U.S. was only 78.5 in 2022 significantly below our historical average of about 82 to 85. We used to be in the same league. Now we’re falling into the second tier.

Why? Because we punish work and reward stagnation. We tax our businesses more, burden them with regulation, and spend our national energy debating pronouns instead of pipelines. Meanwhile, the Americans just passed a law saying, “Work harder, keep more of what you earn.” That’s the difference.

Final Thoughts

So let’s take a step back.

The United States, despite its flaws and despite its bloated spending habits, just did something that Canada refuses to even consider. It told its working class the men and women who build, lift, move, and repair that their time has value. It told them that staying an extra hour, picking up an extra shift, providing for their family, matters. That the state won’t punish them for it.

Now, contrast that with Canada.

We punish those people. We tax their earnings into oblivion. We drown their employers in red tape. We talk endlessly about social justice and “equity” while our productivity collapses and our middle class shrinks. We have a Prime Minister who spent a decade pushing ideology instead of growth and an newly elected banker whose praising his accolades from 2008 at the helm today who answers more to global finance than to the Canadian people.

Here’s the truth. We don’t need more slogans. We don’t need more bureaucrats. We need policies that reward work. Real work. We need a government that values plumbers over policy analysts, linemen over lobbyists, roofers over revenue agents.

And if we’re serious actually serious about restoring this country’s economic future, we should start by asking a simple question: Why don’t we reward hard work the way America just did?

It’s not complicated. It just takes political courage. But don’t hold your breath waiting for Mark Carney and his Liberal cronies to figure that out.