April 21, 2015

What the federal budget means for you

Brian LilleyRebel Co-Founder

The Harper government unveiled their 2015 budget with both eyes firmly fixed on the 2015 election.

This is a budget aimed at middle class families across Canada with tax cuts for parents, increased benefits for families with kids, action on student loans, a small business tax cut and all done against the backdrop of disappearing deficits and growing surpluses.

The feds estimate that they will have moved from a deficit of 5 point 2 billion dollars in 2013-2014 fiscal year to a 4 point 8 billion dollar surplus in by 2019-2020 all the while putting more money in your pocket.

“We understand that raising a family can be expensive and we believe that decisions about how that money should be spent are best made at home by mum and dad, not by bureaucrats in Ottawa,” Finance Minister Joe Oliver said before laying out the range of tax cuts and benefits on display in the budget.

The already announced the Family Tax benefits will kick in this year allowing families with children under 18 at home to transfer income from the higher earning spouse to the lower earning spouse.

The Universal Child Care Benefit extends to children up to the age of 18 meaning a $60 a month per child payment, this on top of the $100 per month for each child under the age of six.

The amount a family can claim for child care, paid for at a daycare centre increases by $1,000

In addition the amount parents are expected to contribute to their kids post secondary education is changing. Payment contributions by parents will vary depending on your income and where you live but the income level at which payment expectations kick in is rising.

The Tax Free Savings Account contribution limit rises to $10,000.

And the small business tax rate will lower from 11 percent to 9 percent by 2019.

Proof that this is a political document can be found in the fact that the government arrives at their small surplus of $1.4 billion this year by selling off their shares in General Motors and reducing the $3 billion contingency fund to $1 billion.

You can expect the opposition parties to try and score political points with those facts but that will hardly take the shine off of a bevy of tax breaks and benefits.

According to government examples, published in the budget, a typical two earner family with two kids, one spouse whom they call Henry earns $84,000 while Cathy earns $36,000. The Harper government claims that compared to 2006, before their tax and benefit measures came into effect, this family is better off to the tune of $6,640 in 2015.

That means they will pay $3,293 less in income tax, $1,018 less in GST and will gain $2,329 in child care benefits.

Economist Ian Lee, a professor at Carleton University, says this budget is aimed squarely at the Conservative Party’s base but he says despite popular myth, that is not the well to do in Canada but the middle class.

“Families of modest incomes with children living at home in the burbs,” Lee said. “To put it in the language of demography and statistics and so forth, it’s the lower middle class and the middle-middle.”

Lee pointed out that most high income neighbourhoods in Canada are represented by the NDP or Liberals and that with this budget the Conservatives have targeted that vast swath of middle income earners.

With all those goodies, too many to mention really, it will be hard for progressive parties like the NDP and Liberals to campaign against.

Seniors also get benefits in this budget. The minimum withdrawal for Registered Retirement Income Funds (RRIF) will be reduced. A new home accessibility tax credit will be introduced to help seniors with the costs of adapting their homes to changing needs.

So how will progressives fight against this budget?

Maybe a bit of complaining that the government is raiding the contingency fund or selling GM to get their surplus, but will Canadians really care?

The big complaint will likely be, the government isn’t spending enough.

David Macdonald Chief Economist at The Canadian Centre for Policy Alternatives says the big problem in his eyes, not enough infrastructure spending.

“This is not a budget that is devoted to job creation or economic growth,” Macdonald said. “It is a budget that is devoted to creating a surplus at all costs.”

Macdonald said that the government should be putting money into infrastructure at a time when economic activity in the oil patch is waning. The government’s response is to point to the Building Canada Fund, a multi-billion dollar infrastructure program.

The NDP and Liberals claim it isn’t enough and are demanding more but promises of infrastructure spending is tough sell against jingle in your pocket or more digits showing up in your online bank statement.

What do you think of the budget! Speak your mind in the comments!

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commented 2015-04-23 17:53:05 -0400
The Liberals don’t like this budget, because they did not come up with the idea first, therefore, they will fight against it.
commented 2015-04-23 17:53:05 -0400
The Liberals don’t like this budget, because they did not come up with the idea first, therefore, they will fight against it.
commented 2015-04-22 14:05:11 -0400
I find the contention that the GDP growth of 5% will translate into 5% increase in personal income tax somewhat naive. We see in the US growing GDP that is not being passed onto income earners.
commented 2015-04-22 11:59:55 -0400
Our household is on a limited budget, yet still make use of the TFSA. I do not understand why some are reporting this is only for the rich. You only contribute what you can during the year. For those of us who have a limited income, it is a great way to save money and not pay tax on the savings.
commented 2015-04-22 10:32:20 -0400
This is a good news budget for the average Canadian! Thank you to Joe Oliver and his team!
commented 2015-04-22 10:21:11 -0400
Just listened to CTV’s Robert Fife comment on the Budget. One of his main comments was nothing for Climate Change. REALLY. That is highlight. Why doesn’t Fife just “come out” and announce he is the Liberal front man. Terry Milewski has nothing compared to Fife’s biased reporting. The Budget may not be perfect but I am comfortable having the Conservatives fight the Election on it.
commented 2015-04-22 10:05:44 -0400
Exactly, Peter. The Alberta PCs are CINO (Conservatives In Name Only) – they are like the Ontario Liberals, less the corruption and criminality.
commented 2015-04-22 08:56:39 -0400
Well Kenneth, lets hope Alberta does not go by way of Ontario and vote in the PCs again, Liberals wearing a blue suit, because then the Western Canada economic engine will be down and out for the count. Then that would leave Saskatchewan to support the country. At least the federal Conservatives have their fiscal house in order.
commented 2015-04-22 02:24:50 -0400
this will piss off the lefties since they kept saying our economy was in free fall and that harper was horrible well think again lefties
commented 2015-04-22 02:20:16 -0400
Despite all the good work the federal Conservative government has done, Canada will continue to suffer the effects of the mismanagement of the economy by the Liberal governments of Ontario and other provinces. Those who voted for such governments will get the results they deserve. Unfortunately, the rest of the country will also suffer from their stupidity.
commented 2015-04-22 01:51:30 -0400
I rather like this budget …..
commented 2015-04-21 22:37:39 -0400
Sounds like this will be a good budget. All about the middle class.
commented 2015-04-21 22:36:37 -0400
Keith Barnes, that is a good link to post. I hope everybody watches it.
commented 2015-04-21 22:18:08 -0400
Pretty telling. Conservatives lower taxes. NDP/liberals raise taxes.

Vote with your wallet folks – take a look at Pig Wynne in Ontario – what a disaster anything close like this Pig in Ontario would be for all of Canada.
commented 2015-04-21 22:11:56 -0400
Thanks for the fantastic fiscal policy Harper et al

Well done once again.
commented 2015-04-21 22:07:16 -0400
Christopher Bishop, I agree.
commented 2015-04-21 21:54:20 -0400
I’m an Albertan and I find it rich that the spokesman from the center for policy alternatives used the declining investment in the oil sands as why the feds should be spending more. I doubt he meant only in Alberta where the job losses are. Just an excuse to spend even though unemployment is not too high nor the economy totally stagnate. Save the spending for a real emergency.
commented 2015-04-21 21:48:12 -0400
But I thought it was Trudope who was going to help the middle class? Now what are his ads going to lie about?
commented 2015-04-21 20:40:53 -0400
But but but I heard on the radio station Chez 106 in Ottawa, that the new balanced budget is just smoke and mirrors yet it seems pretty straight forward to me. Could it be there is a bias in Ottawa? Anyways, excellent budget I couldn’t be any happier. Thank goodness.
commented 2015-04-21 19:54:53 -0400
Looks like all the right peoples got better, rather than things like climate change, etc…