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Finance Minister Jim Flaherty shakes hands with Prime Minister Stephen Harper in the House of Commons on Parliament Hill in Ottawa March 22, 2011. (CHRIS WATTIE/REUTERS/CHRIS WATTIE/REUTERS)
Finance Minister Jim Flaherty shakes hands with Prime Minister Stephen Harper in the House of Commons on Parliament Hill in Ottawa March 22, 2011. (CHRIS WATTIE/REUTERS/CHRIS WATTIE/REUTERS)

Highlights

Federal budget 2012: What you should know Add to ...

Cross-border shopping

Starting June 1, the amount of goods Canadians can bring home tax and duty free after travelling to other countries will increase. There remains no tax exemption for trips shorter than 24 hours, but for trips between 24 and 48 hours long, the tax exemption rises to $200 from $50. For trips between two and seven days long the exemption doubles to $800 from $400 and for excursions lasting longer than seven days it increases by $50 to $800. Alcohol and tobacco rules remain the same.

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Ending the penny

In a move that will save the government $11-million annually, the Royal Canadian Mint will cease producing one-cent coins in April. Pennies will still be accepted, but Ottawa recommends commercial cash transactions be rounded off to the nearest five-cent interval.

Streamlined environmental approvals

Ottawa will introduce legislation to speed approvals of major resource projects, including the controversial Northern Gateway oil sands pipeline to the B.C. coast.

Tax rules for charities

To improve transparency and accountability, Canada Revenue Agency will require charities to provide more information on their political activities, including the extent to which they are funded by foreign sources. New sanctions will be introduced for those that do not comply.

Vice-regal salary

For the first time, the Governor-General’s salary will be subject to income tax in the same manner as other Canadians, starting in 2013. But it is an entirely symbolic move: His salary – currently $137,939 – will be raised so that taxes don’t affect his take-home pay.

Employment Insurance

Ottawa is launching a pilot project designed to ensure claimants are not discouraged from taking work while collecting EI benefits. The project will cut the current clawback rate in half and apply it to all earnings made while on claim.

Ending red ink

The government plans to return to a balanced budget ahead of schedule in fiscal 2015-2016, the next federal election year.

Small business

Small business owners will be happy with the one-year extension of a hiring credit to encourage growth and job creation worth $205-million. A limit on increases to Employment Insurance premiums will also help small- and medium-sized businesses keep payroll costs down.

Innovation

The budget proposes to reform innovation incentives by granting fewer tax credits and providing more direct grants to businesses to spend on research and development. The government plans to use around $500-million in savings from cancelled tax credits for direct grants and venture capital for businesses.

Old Age Security

As expected, the government is moving forward with a plan to delay the age at which Canadians can start receiving Old Age Security and Guaranteed Income Supplement payments from 65 to 67. The change will be phased in so that anyone over 54 years old today will not be affected, and Canadians under 50 will not see OAS payments until they turn 67. Those between 50 and 54 can start collection between age 65 and 67. One surprise proposes that Canadians who choose to delay receiving OAS receive a higher benefit.

Disabilities

The budget provides some goodies for people with disabilities and their families. Small changes to the Registered Disability Savings Plan will make the program more flexible and easier to use and set up. New incentives are also proposed to make finding jobs easier for people with disabilities.

Trade

The government says it will intensify Canada’s pursuit of new and deeper trading relationships, especially with countries with large and growing economies like India.

Women on corporate boards

An advisory council made up of leaders from the private and public sectors will promote the participation of women on corporate boards by linking corporations to a network of women with professional skills and experience. No targets are included in the initiative.

Rouge Valley Park

The government is moving to create Canada’s first national near-urban park in Ontario’s Rouge Valley, a 40-minute drive from downtown Toronto.

Port Hope-area initiative

Ottawa has slated $8-million over two years to help compensate property owners and municipalities for potential losses related to clean up of low-level radioactive waste in Port Hope and Clarington, Ont.

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