Federal Budget Highlights
TMG The Mortgage Group Canada Inc. Thursday, March 24, 2016#
Minister of Finance Bill Morneau has tabled his first budget, which the government hopes will kick start the economy. It does, however, come with a price tag. The deficit is expected to be $29.4 billion this year and $29 billion the next before falling. The debt is expected to grow by $113 billion by 2020-21, but debt-to-GDP ratio is expected to stay flat at around 32%. The budget has a lot of goodies for diverse stakeholders. Here are some highlights:
- New tax free Canada Child Benefit that targets low and middle-income families for the highest benefits. The new monthly tax-free payments starts July 1: Up to $6,400 a year per child under 6, and $5,400 those aged 6 to 18. But this amount begins to claw back for households with an income over $30,000 and is eliminated entirely for incomes over $190,000.
- Tax credits: Children's arts and fitness tax credits phased out by end of 2017.
- Infrastructure: $120 billion over 10 years, focusing first on public transit, water, waste management and housing infrastructure, which should increase employment.
- $20 billion to green infrastructure. Part of that money will no doubt go to transit, but this could also be a boost for companies in B.C. that are focused on green technology.
- Seniors: Guaranteed Income Supplement increased by up to $947 annually. The government will restore the eligibility age of Old Age Security to age 65.
- Veterans: $5.6 billion over six years to increase disability awards for injured veterans and to enhance other financial benefits.
- Entrance to Canada's National Parks will be free.
- Tax rate for small business left unchanged at 10.5%
The impact on the housing market is indirect. Increased employment through infrastructure projects and the new Child Tax Benefit will put more cash into the hands of consumers. The high prices in Vancouver were not addressed, although the budget did include funding to Statistics Canada to study the impact of foreign investment.