Canadian Personal Finance Blog

Yes, it’s time after all my commentary to actually comment on the Federal Budget that was brought down yesterday, by Jim Flaherty, minister of finance.

A safe budget, but not a cynical one either. I thought for sure it was going to have so many perks that the Tories would then be able to use this as their election platform, but no, I think they came out with a very “center-ish” kind of budget with a little bit for everyone, but not a lot for all. The NDP and Liberals have both stated they will be voting against it, but the Bloc evidently will vote to support it, so I guess most of this is going to become law, which is good. The government will fall for some other reason, but evidently not on this budget.

My highlights (I am hitting the things that are good for me, other points you can read about here in a Brief Overview of the Budget put out by the government).

• A $2000 rebate for fuel efficient cars, while adding a $4000 tax for gas guzzlers, interesting idea, I need to see the list of what cars they view as fuel efficient before I comment much more.
• A lot of talk of a national water strategy, and I think this is going to be a VERY hot issue in the next few years (water as a resource and Canada’s ability to protect our fresh water).
• A work incentive tax credit for the working poor. OK, I guess, but making sure there are well paying jobs might help too? Not sure how that would work, just a comment. A start.
• RDSP for parents saving for kids with disabilities is important. This is a subject near and dear to my heart, I will read more about this one and report back on it, because parents with a disabled child need our help.
• No capital gains tax on securities donated to charities, ok, that’s cool. Do I get the full value of the donation?
• Funding for Canadian Football and Lacrosse? Cool! I like that, after all Lacrosse is Canada’s national game.
• Keep up the debt reduction, that is a good thing, by lowering the debt by $22B over last and this year, good.
• Lots of money to the provinces, which should help Jean Charest’s election chances in Quebec.
• Good changes to the RESP program, lifting the $4000/year cap for inputs to each program, lifting the lifetime contribution limit to $50K, and the annual grant from $400 to $500, all good things.
• A $2000 tax credit for each child in a family (under age of 18 I think) which could mean about $310/child tax reduction per family. HOORAY!!!! I like this one a lot
• Income splitting but only for Pension incomes, oh well, maybe next time.
• RRSP age limits are raised to 71 now, so at 71 you must turn your RRSPs into RIFs.
• Phased retirement? Interesting sounding.

Lots of other stuff about defense, international funding, etc., but not stuff I care about that much. For me the major goodie is the child tax credit, which is nice for someone like me with 4 kids (CHA CHING! $$$ :-).

I am impressed that this was not the kind of budget I expected, whether it is a good budget as usual, only time will tell on that one, now won’t it?

Check out other Canadian Financial Blogs to get their opinions on yesterday’s budget as well. Always good to hear lots of opinions, but read the budget over too, to see how it affects (effects?) you.