2019 federal budget
Federal Minister of Finance Bill Morneau delivered the 2019 federal budget in the House of Commons Tuesday.
Here’s a quick look at the winners and losers:
Winners
First-time home buyers — who will be able to finance a portion of a home purchase through a shared equity mortgage with Canada Mortgage and Housing Corporation, helping lower monthly mortgage payments. Homebuyers will also be able to tap up to $35,000 of their RRSP — up from $25,000 — for a home purchase.
Workers looking to upgrade their skills — workers between 25 and 64 will be able to accumulate $250 a year, to a lifetime limit of $5,000, through a new Canada Training Credit that can be applied to training costs. It accompanies a new employment insurance measure for workers who take leave for training. The new benefit will cover up to 55 per cent of earnings for those who take time off from a job to attend a training program, which will cost $1.04 billion over five years.
Seniors who want to keep working while collecting the Guaranteed Income Supplement — the budget proposes to enhance the guaranteed income supplement’s earnings exemption so seniors can work part-time and still see financial benefits.
Municipalities looking to kick-start infrastructure projects — the budget allocates a one-time $2.2 billion transfer from the federal gas tax fund for local infrastructure, meant in part to compensate for delays in rolling out spending from the infrastructure program.
Buyers of electric or hydrogen fuel-cell vehicles — Transport Canada introduce a subsidy of up to $5,000 for electric-battery or hydrogen-fuel-cell vehicles that cost less than $45,000. Natural Resources Canada will also get $130 million over five years to deploy new recharging and refuelling stations. Immediate expensing will be provided to a full-range of zero-emission vehicles so that businesses that want to switch over their fleets can recoup their costs faster.
Losers
Executives taking advantage of stock options at “large, long-established, mature firms” — The budget moves to limit the use of a controversial tax break on executive stock options. The deduction was conceived, in part, to help capital-starved startups attract top talent, but is widely used by executives at established companies as a way to pay less taxes. The tax break costs the government more than $700 million annually. According to Morneau’s prepared remarks, the government will “limit the benefit of the stock option deduction for executives of large, long-established corporations.”
People hoping for quick relief on high drug prices — the budget promises to lay the groundwork for a national drug plan by creating a new agency to bulk-buy pharmaceuticals — a move that could, according to the government, eventually save $3 billion per year. However, the document provides no details on which jurisdictions and drug plans would participate and describes the move as “foundational.” Next steps will be determined after the National Advisory Council tables its final report in the spring. So Canadians will likely continue to pay among the highest prices in the world for drugs for some time yet.
Anyone worried about deficits — the deficit is projected to grow to $16.8 billion in the next fiscal year before dropping to $9.8 billion in 2023-24. Morneau spoke about bringing the books “back to balance” but was unrepentant about the lack of a clear timeline to return to surplus. His government had previously campaigned on a promise to eliminate the deficit by 2019.
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The Canadian Press 3/19/2019 |
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