The Federal government has released their budget for 2019 which they’ve tilted: Budget 2019 – Investing in the Middle Class. Housing was the focus of the budget this year, with the main features helping to reduce barriers to home-ownership. I outlined the 10 most impactful components of the budget below:
- The Home Buyer’s Plan (HPB) withdrawal from an RRSP has been increased immediately from $25,000 to $35,000.
- The Liberals have introduced a new CMHC First-Time Home Buyer Incentive. This provides funding of 5-10% of a home purchase price for eligible and qualified first-time home buyers who are taking out an insured mortgage (5% for existing homes and 10% for new builds). The program is available to first-time home buyers with household incomes under $120,000/year. This is expected to cost $1.25 billion over 3 years.
- A $300 million Housing Supply Challenge has been created to incent municipalities to create more new housing. More details are expected to come in the summer.
- They have introduced a new Canada Training Benefit. Due to launch in 2020, the new incentive would provide a non-taxable training credit to cover related training fees. Eligible workers would see their available credit accumulate over time, increasing by $250 to a lifetime maximum of $5,000. This is expected to cost $710 million over 5 years.
- An Employment Insurance training benefit will also be available. Workers will be eligible to receive up to four weeks of income support while they’re in training and not receiving their regular pay. This benefit would be 55% of average weekly earnings & they need to accumulate 600 hours of insurable employment to qualify.
- The Liberals are creating a new Canadian Drug Agency that will negotiate prescription drug costs nationally. There projecting the savings will be $3 billion/year.
- Increasing support for low-income seniors. Ottawa is enhancing the Guaranteed Income Supplement (GIS), providing $1.76 billion of support over four years. With the new rules, GIS benefits are fully rolled back at just under $30,000/year, up from $20,000/year for seniors with employment income, and less than $20,000/year for seniors with self-employment income. These changes will tax take effect in July 2020.
- A new federal purchase incentive of $5,000 for electric cars and hydrogen fuel cell vehicles has been announced. The incentive is available on vehicles as long as the retail price is less than $45,000. The incentive is expected to cost $300 million.
- A $200,000 annual cap is being introduced on employee stock options for employees of large firms. Currently, employee stock option benefits are taxed at half the income tax rate. The change only applies to options granted in the future and will not impact those granted before the announcement. The new rules align with the tax treatment of large firms in the United States.
- Funding has been extended to provide high speed internet access to rural and remote communities across the country. The goal is to have 100% access to internet speeds of 50/10 Mbps by 2030 anywhere in Canada.
If you’re interested, you can read the budget in its full 464 pages of glory here. Give me a call or send me a message to find out how the budget impacts you. I’d like to help you navigate through this difficult financial landscape and help you live life confidently.
Cattelan Private Wealth Team