The 2017 federal budget was tabled on Wednesday. Here are 10 ways the Liberal fiscal plan could affect your personal finances.
1. Canada Savings Bonds are toast: Around since 1946, CSBs have been crushed by competing savings products from banks, credit unions and trust companies that offer better rates, comparable safety and easier access to your money. CSB sales will be discontinued this year and all outstanding bonds will be honoured.
2. Capital gains taxes are untouched: There was intense speculation prior to the budget that the inclusion rate on capital gains would rise from the current level of 50 per cent, but the government did not move ahead on this. Neither did the government make any changes to the capital gains exemption for principal residences. The inclusion rate means the portion of a capital gain that is taxable at your usual rate.
3. Tax fairness remains on the government's radar: In a text of his budget speech, Finance Minister Bill Morneau said Canadians expect a fair tax system, and "we will have more to say on this in the near future." The government has used this rhetoric when talking about wealthy Canadians paying higher taxes.
4. The public transit tax credit is toast: You won't be able to claim this credit for transit use after June 30. The government said it wasn't effective in enticing people to ride the bus or cut greenhouse-gas emissions.
5. A new Canada Caregiver Credit has been introduced: This program to help people looking after loved ones replaces three previous, related measures: the caregiver credit, infirm dependent credit and family caregiver credit. Each had different eligibility rules.
6. The first-time donor's super credit is toast: Expires as planned in 2017 due to what the government describes as low uptake and small average donations. The credit offered a larger-than-usual tax credit for people making their first charitable donation.
7. The crackdown on tax evasion continues: Almost $524-million will be invested over five years to prevent tax evasion and improve tax compliance. For the average taxpayer, the message here is to be more diligent than ever about holding on to your tax receipts in case you're asked for verification by the Canada Revenue Agency.
8. Electronic T4 slips are going mainstream: Employers will be able to provide T4 slips to employees electronically without their consent starting in the 2017 tax year. Employers will still have to provide paper slips to people who request them.
9. The government will review the use of private corporations by high earners to minimize taxes: A paper will be released in the months ahead to propose future policies. The government could target situations where, for example, an individual at a high tax rate transfers money to a family member who is at a lower tax rate. Any resulting measures could affect incorporated small business owners.
10. There's help for adults who return to school after years in the workforce: A three-year-pilot program starting in 2018-19 will make it easier for adults to qualify for Canada Student Loans and grants.
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