By: Laura Steiner
Finance Minister Bill Morneau presented his first budget this week. It had lots of good things to it. The Universal Child Tax Credit was turned into a Canada Child Benefit. Parents with kids under 6 years old will get $6400/year while those whose children are between 6-17 years of age will get $5400/year. The popular fitness tax credits, and arts tax credits have been cancelled.
Municipalities have new money. $120 billion in funding over the next 10 years for infrastructure and transit, which would benefit the Greater Toronto and Hamilton, and spending begins immediately. $1.5 billion will be spent on affordable housing over the next two years refurbishing units.
Ontario potentially benefits as well. The “Free Tuition” in the Ontario budget gets a bit of a boost as the Canada student loans program offers $3,000 grants to low-income families, and $1500 to middle-class families. But what qualifies as “middle class?” What qualifies as “lower class?
The guaranteed Income supplement for single low-income seniors is raised to $947/ year. How much of that will be eaten up by increases spelled out in the Ontario budget? The Ontario Drug benefit premiums are going up by $70/ year, and they’re raising the income level to qualify which will likely cut the amount of people on the plan. How much will that add to the overall cost of living?
There’s also a danger for Ontario. The Liberals campaigned on a promise to cut the small business tax rate to 9% from 11%, and didn’t do it. Ontario will impose the Ontario Retirement Pension Plan (O.R.P.P) beginning in 2017. How will the added burden caused by the O.R.P.P. and the higher tax rate affect small businesses? There doesn’t seem to be much consideration to what this non tax-cut could do in the long-term picture.
And then there’s the $29.4 billion deficit. As the Conservatives point out it does break the Liberals’ promise by nearly tripling it in one year (the Liberals said they’d plan on running $10.4 billion deficit per year over three years). The idea there is no plan to bring it to balance by the next election is troubling. But could they have done better? If the Conservatives had won in October we still would have the falling oil prices, and the falling dollar. Alberta would still be in rough shape. There is a chance that despite the potential $1 billion surplus we might be facing a similar situation even with a Conservative government.
In their election platform the Liberals promised to change the mission against ISIS, which they have done. It involves an increased focus on humanitarian and training efforts. However in this budget there is no new money for defense. How can they justify changing the mission but not include any new money? It doesn’t make much sense.
There’s a lot of good in this budget. Too bad the questions weigh it down.