Our newly elected Prime Minister spent heavily in this budget, leading to a projected $29 billion shortfall this year. Its definitely a good news-bad news budget, the bad news they are spending alot of money, the good news some of it MAY benefit you? The problem is for most people reading this blog its going to be mostly negative, other than the OAS eligiblity!:
Good News, Maybe:
•OAS eligibility returns to age 65 – great news for folks born April 1, 1958 or later.
•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. (This could be bad news for higher income families!)
And now for the bad news:
•Switches between corporate-class funds will no longer be tax-free after September 2016. If you are planning to change funds, let’s talk about rebalancing prior to then, this applies to non-registered plans only!
•The promised small business tax cut has been frozen at 10.5%.
•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.
Todd T. Hopper, BA, CFP
Certified Financial Planner