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The Liberal government delivered its second fiscal budget after the market closed on Wednesday. Here is a simplified list of who are the winners and losers from its plan:

Winners

  • Investors: Speculation for the past several weeks suggested that an increase in the capital gains inclusion tax from 50% to 66% or 75% was a possibility. No changes were made. In addition, the government has eliminated Canada Savings Bonds.
  • Cities: $11 billion of previously committed infrastructure for affordable housing was announced.

  • Families: $7 billion over the next decade was committed to child-care spaces. By proposing more flexible parental leave options. Parents will now receive lower EI benefits but over an extended period of up to 18 months from 12 months.
  • Families: A new caregiver leave program got introduced allowing adult family members to take up to 15 weeks of leave to take care of a family member. (No cohabitation with dependents required).
  • Having Children: The Medical Tax Credit is a 15% non-refundable tax credit individuals who require medical intervention in order to conceive a child are eligible to claim the same expenses that would generally be eligible for individuals on account of medical infertility.
  • Disabled Individuals: will now be able to receive a 15% Disability Tax Credit for services for a NURSE PRACTITIONER.
  • Innovation: got a small nod in the form of a few programs worth several hundred million dollars each.
  • Veterans: A new education and training benefit, career transition, and support for ill and injured vets was added this year.
  • Education: Extending the tuition tax credit to fees for occupational skill courses that are not at the post-secondary level.
  • Filing Taxes: Electronic T4’s are now approved albeit with written permission by the employee.
  • Aboriginals: $50 million invested into the Aboriginals Skills and Employment Training Strategy.

Losers

  • Canada’s Debt: Government spending is still set to grow by a large 5% over the next year – materially faster than the underlying rate of economic growth or the pace of revenue growth.
  • Tax Evaders: $523 million over the next five years will be spent on tax enforcement.
  • Tax Evaders: Registered Educational Savings Plans (RESP), Registered Disability Savings Plans (RDSP) and Tax Free Savings Accounts (TFSA) will be monitored more closely to insure anti-avoidance tax rules.
  • “Professional” Tax Payers: Billed-Basis accounting eliminated. Ongoing work gets taxed 100% in each calendar year unlike 50% that can be deferred in the past. (affects professionals such as accountants, lawyers, doctors, etc…)
  • Weekend fun: A tax hike will be forthcoming for alcohol and cigarettes. Tax on alcohol went up 2% across the board, while cigarettes had varies increases depending on the specific product.
  • Employees Moving for Work: Those moving for work with the assistance of employer-provided housing loans will face tax changes.
  • Transit Riders: The previous 15% tax credit offered to transit riders will be eliminated as of July 1, 2017. All purchases prior will still receive the tax credit.
  • Transit Riders: Passengers of Uber will be required to pay HST/GST.
  • Military: Despite speculation that military funding would increase, no new commitments were announced.
  • Families: Eliminating a child care tax credit for workplace daycare creation by 2020.

To learn more, you can click on some of the following links below to read up on any specific topic that you may find interesting.

Miller Thomson – Federal Budget Review

Collins Barrow – Federal Budget Infographic

Invesco – 2017 Federal Budget Analysis

Sun Life – Budget 2017

Fidelity – Federal Budget Video

RBC – Budget Review

 

Kind Regards,

Konrad, Justin and Merriel

More articles and information is available at www.lkwealth.ca 

 

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