The Federal Government delivered its “New Balance” budget today offering lots of goodies for everyone. Here are the most important announcements affecting your financial planning:
- No new tax cuts.
- TFSA limit is being increased from $5500 to $10,000 per year effective immediately. This happens as soon as the budget is passed and approved. We will let you know as soon as we hear.
- The RRIF (Registered Retirement Income Fund) MAP (Minimum Annual Payment) is being lowered. Under the current rules, a 71-year-old would have to withdraw 7.38 per cent of his or her RRIF in the first year, escalating all the way to 20 per cent by age 94. Under the new rules outlined in the budget, those limits have been ratcheted down to 5.28 per cent to start, and down to 18.79 per cent by 94. This truly is excellent news for retirees.
- EI premiums to be reduced by 21% in 2017
- EI compassion benefit (to take care of a sick family member) increased from 6 weeks to 6 months.
- Small business tax reduced from 11% to 9% by 2019.
- New government initiative to help Women owned businesses.
- More financial help for Young entrepreneurs.
- New retirement income benefit for veterans.
- New home accessibility for seniors and people with disabilities. Starting this tax year, homeowners who spend up to $10,000 on renovations such as wheelchair ramps, walk-in bathtubs, non-slip flooring and grab bars can get a tax deduction for up to $1,500.
- There is something for students too. Canada Student Grants eligibility will drop from 64 to 34 weeks.
- The government is also changing the student loan program. Under current rules, any dollar over $100 a week that a student earns from a part-time job while studying reduces the loan amount they’re eligible for. The budget proposes eliminating that “penalty” from now on, which the government says would help 87,000 students a year.
- 4 Billion surplus this year
- Total overall debt $617Billion
More in tomorrow’s newspaper. Make sure to check our blog often. We will be commenting on these new government initiatives in the weeks ahead.
Sources: CBC news, CTV News, National Post, Globe & Mail