Federal Budget 2017: How will it affect you?

The Federal Budget was released by the Liberal government today. Here are the biggest changes that may affect you.

Effective immediately:

Alcohol and cigarettes will now cost a little bit more:

- a bottle of wine (1L) will cost 1 cent more

- a 24 pack of beer will cost 5 cents more

- a bottle of spirits will cost 7 cents more

- a carton of 200 cigarettes will cost 53 cents more

The T2201 Disability Tax Credit certificate required to qualify for the disability tax credit may now also be completed by a nurse practitioner in addition to the other medical professionals already listed.

Expenses paid for reproductive technologies in excess of insurance coverage may now qualify for the medical expense tax credit. This credit is for Canadians trying to have a baby who rely on medical technology such as artificial insemination, IVF, etc. to help them conceive. This expands the coverage from those with medical infertility to include others, such as same-sex couples and single Canadians who, while they do not have a medical issue per se, need medical intervention in order to have a child.

A new Canada Caregiver Credit will provide up to 15 weeks to give workers time off to care for an injured or ill adult family member; however, the three different tax credits that are currently available (infirm dependent credit, caregiver credit and family caregiver credit) are eliminated, effective for the 2017 taxation year. Up to $6,883 for expenses linked to the care of dependent relatives with infirmities like brothers, sisters, parents and adult children will be provided. For people caring for minor children or their spouse/common-law partner, the amount tops out at $2,150.

Previously, EI assistance for families caring for ill or injured adults only applies when there is a “significant risk of death" and benefits can be paid for up to 26 weeks. Under the new budget, families can continue to apply to access 26 weeks of additional EI assistance under the current benefit if the injured party does not make a partial or full recovery at the end of the 15 weeks.

Finally, the Canada Savings Bonds program is being discontinued. The bonds will no longer be sold and holders of a CSB will have to transfer their value into another vehicle, such as an RRSP or other account. There are no penalties or fees to cash in any outstanding bonds at any financial institution in Canada.

Effective July 1st, 2017:

The Public Transit Tax Credit will be eliminated. This non-refundable credit was worth 15% off your tax bill for amounts paid for monthly or annual fare cards.

Ride-sharing services such as UBER and Lyft must charge GST/HST, similar to other taxi services.

Others:

18-Month Parental Leave is now an option. Parents can choose to take a longer leave (up from 12 months) and will receive a lower parental employment insurance payment of 33% of eligible average weekly earnings, compared with 55% over 12 months. This is proposed to be effective for the 2017/2018 taxation years. Pregnant women may now also access maternity benefits up to 12 weeks before their due date - currently, the earliest to obtain maternity EI is eight weeks.

EI premiums will increase in fiscal 2018-2019 by five percent.

Part-time employed students may have an easier time to obtain Canada Student Grants - a higher income threshold to qualify has been introduced, and the grants do not need to be repaid. This is effective for the 2018-2019 academic year.

The $1,000 processing fee to obtain a work permit is waived for families to hire a foreign caregiver (such as a nanny) to care for children if their annual income is $150,000 or less, or for families to hire a foreign caregiver to care for relatives with high medical needs. This is proposed to be effective for the 2017/2018 taxation years.

Get in Touch with OMNI to find out how these changes will affect your planning for 2017 and subsequent years!