2017 Federal Budget

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.

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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

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