Yesterday, March 22nd 2017, Finance Minister Bill Morneau presented the 2017 Federal Budget which had a key focus on ‘Innovation.’ The budget also drew attention towards the development of skills and training, early learning and childcare, the national housing strategy, and how infrastructure spending will be directed.
Larger deficits are expected as higher spending will offset stronger economic growth in fiscal year 2017-2018. The government now estimates that fiscal measures announced in the previous Budget will add 0.4% to growth in 2017, a reduction in what the Bank of Canada had forecasted. Debt-to-GDP will rise from 31.0% to 31.4% this year and remain at this level through FY19. The Liberals have not committed to a specific debt-to-GDP target nor do they seek to achieve a balanced budget within their mandate.
Here are some points worth noting with regards to how the budget could affect your personal finances:
- Capital Gains Tax Unchanged: There was speculation that the inclusion rate on capital gains would rise and the capital gains exemption for principal residences would change. The government did not include such changes in this budget.
- Public Transit Tax Credit Eliminated: June 30th will be the last day to claim this credit as the Government said it wasn’t effective in enticing people to ride the bus or cut greenhouse-gas emissions.
- First-Time Donor’s Super Credit Eliminated: The credit will expire in 2017 as planned. The Liberals stated that the credit had a low uptake and small average donations.
- New Canada Caregiver Credit: This program will replace the Caregiver Credit, Infirm Dependent Credit and Family Caregiver Credit which all had different eligibility requirements.
If you have any questions on how these measures may affect you or any additional ones not covered in this letter, please feel free to consult us by phone at 416-246-0888 or email email@example.com.
Valerio Cattelan, BSc, MBA, CIM®
Director, Private Client Group
Cattelan Private Wealth Counsel