2017 Federal Budget

Federal Budget –What’s in it for me?

April 2017

On March 22, the Liberal government delivered their second budget. Leading up to the budget there was speculation that significant changes were coming. Speculation the capital gains tax rate would be increased,airports could be privatized, there were also rumours that additional measures would be taken to cool Canada’s housing market. None of those items were in the federal budget. In the end the budget was largely an extension of the 2016federal budget. There were only a handful of new items in the budget, the federal government effectively hit the pause button. In my opinion the uncertainty surrounding the U.S. administration, specifically the direction of their tax and trade policy, is the reason the federal government is being cautious.

There are, however, a few changes that might impact your personal tax situation:

  • The public transit tax credit is being scrapped.
  • The infirm dependent credit, the caregiver credit and the family caregiver tax credit will be replaced by the new Canada caregiver tax credit.
  • The range of courses that qualify for the tuition tax credit has been expanded.
  • The tax on alcohol is being increased 2%.
  • The definition of taxi service is being changed so that ride sharing services, such as Uber, will be taxed in the same way as traditional taxi services.
  • The Canada Savings Bond program is being scrapped.
  • There are more generous and flexible EI payments for caregivers and parents, including an option to allow parents to extend parental benefits over 18 months at a reduced rate.
  • Last year the federal government announced measures to crack down on tax loopholes and tax evasion, those efforts were increased in the recent budget.

The federal budget included a five year projection and deficit spending is expected in every year. The deficit in the upcoming fiscal year is expected to be $28.5 Billion. Over the five year planning horizon the federal government is expected to add over $120 Billion to our total debt.

Overall the changes were minor, in my view they amount to tweaking of the current system. If you were wondering, what’s in this budget for me? Not much.

To get a full understanding of how your personal situation may be impacted I suggest a meeting with your tax and financial professionals.

 

Clinton Orr B.Comm(hons.), CIM, CFP, DMS, FMA  lives in Beausejour and is a portfolio manager with National Bank Financial.

 

This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity.  As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group.