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federal budget 2016

Graduates standing after receiving their diplomas.Meredith Blache/Getty Images/iStockphoto

Here's what the federal budget means to your personal finances if you're …

A parent (Part One): The government claims the new Canada Child Benefit will pay nine of 10 families more than they receive under existing programs. The new child benefit starts in July and applies to people with kids under 18. Benefits are tax free, which means no surprises when filing your taxes.

A parent (Part Two): The budget gives, and it takes away. Both the children's fitness and arts tax credits are headed to extinction. Eligible expenses will be cut in half for 2016 and eliminated for 2017. The fitness credit is now worth up to $150 on expenses of as much as $1,000, while the arts credit is worth up to $75 on expenses of up to $500.

A college or university student: The Canada Student Grant, for young people from low-income families, will grow to $3,000 a year from $2,000 for the 2016-17 academic year; students from middle class families will see the grant rise to $1,200 from $800.

A student or parent helping to pay college or university: The education tax credit and textbook tax credit are being eliminated as of Jan. 1, 2017. The education credit is worth 15 per cent of $400 for each month a student is enrolled in school full-time, while the textbook credit is set at 15 per cent of $65 per month.

A recent graduate: No student will have to repay money borrowed under the Canada Student Loan program until he or she is earning at least $25,000 per year.

An investor: The government is cracking down on corporate class mutual funds, which allow people to switch money between funds in the same corporate structure without incurring a taxable gain. This switching will no longer be tax-free after September of this year. Also, labour-sponsored venture capital funds have been revitalized through the return of a 15-per-cent federal tax credit on purchases of these investments. These funds provide a way for small companies to get financing, but they have produced weak results for investors in many cases.

A low-income single senior: Payments under the Guaranteed Income Supplement top-up benefit will rise by as much as $947 per year. This measure will affect 900,000 single seniors, a group that is at particular risk of living in poverty.

Someone who is looking ahead to retirement: The age of eligibility of for Old Age Security will remain at 65 and not gradually increase to 67 by 2029.

Part of a senior couple that is living apart: If the couple is living apart for reasons beyond its control, say because one partner requires long-term care, then additional GIS benefits may be available, depending on income.

A teacher: A new tax credit will, starting this year, help cover out-of-pocket costs for school supplies at a rate of 15 per cent on expenses of up to $1,000. Early childhood educators are also covered.

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