For The Next Budget: What We Think Was Missing

By Evelyn Jacks

It is a time when Canadian savings rates are low and personal bankruptcies are increasing. Governments are also concerned about the ability of over-leveraged home owners to pay off mortgages when interest rates rise in the future. Here is what we think was missing from this budget to help with these issues:

• For Savers: Increase the TFSA contribution limit ó perhaps up to $1000 a month
• For Pre-retirees: remove the 18% RRSP contribution level for lower income earners. Anything you can save for your RRSP is a good thing, up to the normal maximum dollar limits.
• For Pensioners: anyone receiving periodic pension income from either RPP or RRSP/RRIFs should be able to income split at any age and spend/reinvest their savings. Also, the government should consider permanently removing the requirement to minimum amounts out the RRIF ó last yearís temporary measure was a good one in turbulent times. 
• For Students: increase the amount of tuition fees that can be transferred to parents or supporting individuals from $5000 to anything the student can't use.
• For Caregivers: Allow a deduction for all costs of giving home care to the terminally ill. There is an expectation that families will help fill gaps the medical system can't fund. There is a huge economic cost to this and the tax system should recognize this.
• For the Sick and Disabled: Remove the 3% of net income limitation on the claimability of medical expenses and make this a deduction rather than a tax credit for anyone with a Disability Tax Credit claim.

Evelyn Jacks is President of The Knowledge Bureau and author of Essential Tax Facts 2010, Master Your Taxes, and Make Sure It's Deductible; all available from the Knowledge Bureau bookstore at bulk purchase pricing for advisors and their clients.