Here are a few measures from the last federal budget that we believe will have an impact on your finances and/or those of your children or parents.
Creating a national child care system Ottawa is investing $30 billion to create a child care system similar to the one in Quebec. The main objective: that the daily cost of child care for a preschooler should average $10 across Canada. Quebec is ahead of the rest of the country in the area of child care. Unrestricted funds will be transferred to the province to strengthen its network.
Nearly $18 billion for green recovery This investment, over a period of six years, aims first of all to reduce greenhouse gases by 36%. The government will invest in carbon capture technologies and will protect 25% of Canadian land and sea. It also wants to promote companies that manufacture wind turbines, electric vehicles and charging stations.
A luxury tax and another on tobacco In order to finance all these measures and its deficit, the government plans to introduce a tax on certain luxury products as early as 2022: new cars over $100,000, aircraft over $100,000 and boats over $250,000. By the time you read this, the tax on cigarettes will have increased by $4 for a carton of 200. In 2022, a tax on vaping will come into effect.
Assistance for seniors All Old Age Security pensioners who will have reached the age of 75 or older by July 2022 will receive a cheque for $500 in August 2021. Starting in 2022, this age group will see its benefits increased by 10%. Finally, $90 million over three years will go to organizations that aim to "age at home with dignity. "
Aid for housing The government will promote the construction of a minimum of 4,500 housing unites by granting $2.5 billion to the Canada Mortgage and Housing Corporation. 255 of this will be for women's projects. A portion of $315.4 million will also be dedicated to helping low income women fleeing violence to pay their rent. On the other hand, starting January 1, 2022 the government will impose a 1$ annual tax on non-resident and non-Canadian landlords on their vacant and underutilized rental properties.
Health insurance benefits Employment Insurance sickness benefit coverage will increase from 15 to 26 weeks beginning in the summer of 2022.
155 billion deficit The Canadian government is forecasting a $155 billion deficit for this year. To ensure recovery, Ottawa is planning $101.4 billion in new measures over the next three years, including $49.3 billion in investments this year.
Support for business, extension of support measures Canada's emergency wage subsidy will be extended to September 2021. Rates will be phased out beginning in July. The same will be true for the Emergency Rent Subsidy and the Confinement Support Measure.
Worker's Allowance will be enhanced This refundable tax credit provides up to $1400 to single people without children or $2400 to low-income families. The budget proposes to increase the maximum income threshold before losing the allowance from $13,200 to $23,000 for singles and from $17,500 to $26,000 for families.
Ottawa thinks of young people Among other things, Ottawa is suggesting doubling the Canada Student Grant Program over two more years, extending interest relief on federal student loans to March 2023, and making more significant repayment support available to the estimated 450,000 low-income student borrowers.
Interest-free renovation loans These loans, with a limit of $40,000, are for environmentally responsible home renovations such as:
Replacing an oil furnace with a high efficiency furnace or heat pump
Replacing airtight doors and windows
Improving insulation in walls, basements and roof
Installing a high efficiency water heater
Installing solar panels
The good news is that the budget left the capital gains tax rate untouched. At the same time, the government announced a host of other incentives: subsidies for SMEs to make the digital shift, assistance for tourism and cultural businesses, etc.
If you have any questions, please do not hesitate to contact us.