The new Liberal government delivered its first federal budget on March 22 in Ottawa.
While you've probably seen plenty of media coverage, I thought you would appreciate an overview of how some of the budget items relate to investments and taxes.
The Liberals will spend heavily in this budget, leading to a projected $29.4-billion shortfall this year. The good news? Part of that spending may benefit you:
OAS eligibility returns to age 65 - great news for folks born April 1, 1958 or later who were projected to receive a delay in OAS payment by up to two years or age 67.
The Canada Child Benefit replaces the Canada Child Tax Benefit and the Universal Child Care Benefit. The CCB is tax-free, unlike before, and government says nine out of 10 families will receive more in child benefits than under the current system. It will be a graduated benefit based on combined Income starting at those below $30,000 and will be phased out as family income rises. The maximum eligible amount will be $6,400 for children under 6 and then $5,400 for those aged 6 to 17. Remember those amounts are for those whose combined earnings are $30,000 or below. The benefits reduce to ZERO when your combined incomes reach $189,000.
The bad news is, the government also took things away:
Select Mutual Funds for Non Registered money had an unfair tax benefit which the government has now closed. Switches between special 'corporate-class' investment mutual funds will no longer be tax-free after September 2016.
The promised small business tax cut has been frozen at 10.5%. If you're a business owner, let's talk about other ways to save tax.
Special tax treatment for insurance policy transfers to corporations. If you own a business and were planning on doing such a transfer, we should revisit that strategy, as it's no longer tax-advantaged.
The Children's Fitness and Arts Tax Credits will be phased out by 2017.
There will no longer be education and textbook tax credits as of January 1, 2017, but the impact should be relatively minor.
I hope you find these highlights useful. If you'd like to discuss these and other federal budget initiatives and how they affect your financial plan, please don't hesitate to contact me.