Federal Budget Highlights
The Trudeau Liberal federal government tabled its first budget. Here are the highlights of the so called middle-class focused budget:
- Canada Child Benefit: New monthly tax-free payments starts July 1 to replace UCCB and other tax measures. The new benefit will pay up to $6,400 a year per child under 6, and $5,400 those aged 6 to 18. But this amount begins to claw back for households with an income over $30,000 and is eliminated entirely for incomes over $190,000. You can use this calculator to see how it will affect your child benefit. http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html
- Elimination of tax credits –tax splitting for couples with children, as well as children’s fitness and arts credits are being phased out by 2017.
- Seniors: Guaranteed Income Supplement increased by up to $947 annually.
- OAS: the benefit eligibility has been restored to age 65 from age 67.
- Student grants: Increased 50%, to $3,000 for low-income and $1,200 for middle-income students.
- Teachers get a $150 credit for teaching materials.
- EI: Changes make it easier to qualify for benefits, and extends benefits for workers in 12 hard-hit regions. Plus: a bigger-than-expected cut in EI premiums next January.
- Infrastructure: $120 billion over 10 years, focusing first on public transit, water, waste management and housing infrastructure.
- Indigenous Peoples: $8.4 billion over five years, with $2.6 of that to improve primary and secondary education on reserves. Other funding for drinking water and housing, as well as family and child services.
- Arts: $1.9 billion over five years for arts and culture organizations, including the Canada Council, Telefilm Canada and the National Arts Centre. $675 million to “modernize and revitalize CBC/Radio-Canada in the digital era.”
- Veterans: Reopens nine service offices, increases amounts payable to injured veterans and indexes some benefits to inflation.
How much will it cost?
- Deficit: $29.4 billion this year, $29 billion the next before falling – but no surplus forecast before the next election.
- Debt: Expected to grow by $113 billion by 2020-21, but debt-to-GDP ratio to stay mostly flat at around 32 per cent.
- Growth: Deficit based on 0.4% annual growth – much lower than economists predict.
Where does the money go?
- $11.9 billion over five years to modernize and upgrade infrastructure systems, including transit and water
- $23 billion in 2016-17 to administer the new Canada Child Benefit
- $8.4 billion over 5 years for Canada’s indigenous people and their communities
- $40 million over two years for the inquiry into missing and murdered indigenous women
- $2 billion over three years for a new post-secondary strategic investment fund
What is not in the budget?
- No changes to the capital gains rates
- No changes to corporate tax rates
Source: CBC, CTV, BNN, Yahoo finance.