Pre-Budget Consultations: Have You Added Your Thoughts?

Canadians have responded enthusiastically to the federal government’s pre-budget consultations; tens of thousands of Canadians have shared their thoughts, the highest-ever turnout for pre-budget consultations on record according to Finance Canada. Suggestions provided by Knowledge Bureau follow. Have you added your voice? It’s easy to do it online at the link above.

In your opinion, how can we better support our middle class?

1. Parents and Students. Allow parents to transfer more than $5000 of the tuition, education and textbook amount from students in the family and index the new amount.
2. Help Indebted Graduates. Change the student loan interest amount to be a refundable tax credit to help pay down the heavy costs of student loans and get benefits immediately, even if not taxable.
3. Create a Volunteer Tax Credit. Recognize both time and money for charitable donations credits with a volunteer tax credit and make it refundable.
4. Provide Payroll Relief for Families with Minor Children. Reinstate a tax credit for minor children so withholding taxes on paycheques can reflect the costs of raising children and put money into middle-class pockets every two weeks.
5. Exempt Interest Income. Simplify the tax system by exempting the first $1000 of interest income from tax.
6. Increase Tax Assisted Retirement Savings Opportunities for the Middle Class. Increase the 18% earned income limitation for RRSP purposes to 20%, to increase retirement savings opportunities, especially for Millennials. Dollar maximums can be kept at 18% to cap benefits for the wealthier taxpayer.
7. Provide High Tax-Rate Relief on Final Returns. Cap the maximum tax rate payable (currently 33%) at 29% on the final return. This high income tax unfairly penalizes families in the year of death of a single person or last surviving spouse when untaxed registered pension fund remainders must be added to income. 

Q. How can we create economic growth, protect the environment and meet local priorities while ensuring that the most vulnerable don’t get left behind?

1. Protect and Clean Up. Provide opportunities for vulnerable people who are physically able to work to fix and build roads and/or assist in cleaning up and preserving the environment. This could be done by encouraging hiring or training by public-private sector initiatives.
2. Take the Vulnerable off the Tax Rolls. Double the Basic Personal Amount for people with disabilities and certain newcomers to Canada who face a more onerous challenge in establishing themselves financially, thereby also stimulating the economy with more funds for non-discretionary spending.
3. Leverage Caregiver Supports. Provide additional tax relief to families who hire private care for the vulnerable, to take the pressure off social systems and recognize the economic losses incurred when workers must provide unpaid support for disabled family members.

Do you agree? Do you have additional thoughts? Please weigh in.

The federal budget provisions, retirement and estate planning strategies will be covered in depth at the Distinguished Advisor Workshop – Spring Sessions. There is still time to register for the Winter Session – Advanced Personal Tax Update, being held in Toronto on January 25.

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