Canada’s 2015 federal budget, and what will be the impact on Canadian families?
What does Canada’s 2015 federal budget really mean for Canadian families? Can-India contacted noted Cindy Crean MD of Private Client Sun Life Global Investments (Canada) Inc. for her take.
Listed below are four key elements in the budget that directly impacts Canadian families.
1. The government raised the Tax Free Savings Account (TFSA) contribution cap to $10,000 from $5,500 a year
2. The budget proposes to increase the Universal child-care benefit to $160 a month for children under 6, and $60 a month for children between ages 6 and 17. Also, families with children under 18 are eligible for a new, non-refundable tax credit of up to $2,000 (income splitting).
3. The budget proposes to lower small business federal tax to 9% in 2019 from 11% now, by reducing half a percentage point every year for the next four years.
4. The government raised the Tax Free Savings Account (TFSA) contribution cap to $10,000 from $5,500 a year
“As pledged the government has balanced its books and delivered a $1.4 billion surplus this year. But beyond the headlines, the budget also brings good news to Canadian retirees and families.”
“A higher TFSA contribution limit makes a lot of sense for Canadian families, as it gives them more opportunity to save for the future and lower their tax bill. This will be particularly beneficial to young families, who usually have a shorter-term savings horizon and tend to rely more on a bank account for savings.”
“Higher child-care benefit is a welcome relief to young, working families in Canada who are paying more in rent, utilities and daycare today than they were five years ago. Together with the non-refundable tax credit, this not only puts money back in the hands of families, but also gives them a chance to make longer term plans.”
“We encourage families to sit down with a financial advisor and plan for their life’s goals.”
On a side note “the proposed cut in small business federal tax will also help small businesses grow and create more jobs, at a time when there are concerns of overall pace of economic growth in Canada.”
Key points of 2015 Federal budget
• $1.4 billion surplus this year, down from $6.4 billion projected a year ago and $1.9 billion in November.
• Annual contingency fund cut by $6 billion over next three years.
• TFSA annual limit raised to $10,000 from $5,500.
• Small business tax rate cut to 9 per cent from 11 per cent by 2019.
• Accelerated capital cost allowance for industry extended 10 years.
• $360 million this year to pay for Canada’s mission against ISIS.
• $18 million this year to fight terrorism – rising to $91 million in five years.
• $94.4 million over five years for cyber security.
• SIRC, the CSIS watchdog, sees budget doubled to $5 million.
• Seniors at age 71 can leave more money in tax-sheltered Registered Retirement Income Funds.
• EI compassionate care benefits extended to 6 months from current 6 weeks.
• Home Accessibility Tax Credit for home renovations for seniors and people with disabilities.
• $210 million over four years to celebrate Canada’s 150th birthday in 2017.
• Interns will be brought under the Canada Labour Code.