What Budget 2016 means for you
OTTAWA -- The new Liberal government’s first budget includes a wide range of spending aimed at revitalizing the economy. While significant investments are being made in infrastructure and maintenance projects, tax breaks and benefits for middle-class Canadians, families and seniors are also a huge part of the Liberals’ fiscal plan.
Here is what Budget 2016 means for you:
The budget provides more details about the previously announced Canada Child Benefit. The tax-free credit will provide higher monthly payments to low- and middle-income households. Families making more than $150,000 annually will receive lower benefits under the current system.
The Canada Child Benefit program replaces the Canada Child Tax Benefit, National Child Benefit and Universal Child Care Benefit.
Families with children under 18 will start to receive the Canada Child Benefit in July. While the amount of individual cheques will vary based on family income, the Liberals claim that “nine of out of 10 families will get more help than they do under existing programs.”
For example, a single mother of a child under the age of six who earns $30,000 a year will receive an annual tax-free benefit of $6,400. A family with two children and an annual income of $90,000 will receive $5,560 in annual child benefits.
The Liberals are calling the Canada Child Benefit “the most significant social policy innovation in a generation.”
However, the government is eliminating the children’s fitness and arts tax credits, which were introduced by the Conservative government. Those credits are currently worth up to $150 per child on eligible fitness expenses and $75 per child on arts expenses. Budget 2016 plans to slash those tax credits in half this year and eliminate them entirely in 2017.
The Liberals are also scrapping income splitting for families with children under 18.
A few days before the budget was tabled, Prime Minister Justin Trudeau confirmed that it would restore the Old Age Security eligibility age back to 65. The previous Conservative government had planned to push the retirement age to 67, starting in 2023.
The budget also includes other measures for seniors, such as increasing the Guaranteed Income Supplement benefit by up to $947 annually for single seniors. Starting in July, the increased supplement will benefit seniors who almost exclusively rely on OAS and are at a financial risk.
Single seniors with an annual income of $4,600 or less will receive the maximum increase of $947.
The budget includes a number of measures to help college and university students. Key reforms include Canada Student Grant increases of 50 per cent under the federal loan program.
For students from low-income families, that means average grant amounts will increase from $2,000 to $3,000. Students from middle-income families will get $1,200 per year instead of $800, and part-time students who qualify for the grant will get $1,800 -- an increase of $600 from previous amounts.
The budget will also ensure that students won’t have to repay their Canada Student Loan until they are earning at least $25,000 per year.
The government is also planning to eliminate the education and textbook tax credits for post-secondary students, starting Jan. 1, 2017. Students will still be able to claim credits carried over from previous years.
In addition to reopening shuttered Veterans’ Affairs offices across the country, the Liberals have included other benefits for veterans in the 2016 budget.
The Disability Award maximum will be increased to $360,000 in 2017 and the Earnings Loss Benefit for injured veterans will be increased to 90 per cent of their pre-release military salary. This applies to veterans who are participating in Veterans Affairs’ rehab or vocational assistance programs, or those whose injuries prevent them from “sustainable and gainful employment.”