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Friday, March 31, 2017

Federal Budget Review 2009

Posted by Tim Stobbs on February 2, 2009

Well if I had to explain the budget this year to someone I would summarize the entire thing as: throw lots of money out the door and see what actually works as stimulus.  I mean there seems to be money for everything in that document which is should be since it is 343 pages long.

The down side of that approach was the fact that really nothing is going to change that much.  There wasn’t too much significant money put on anything that I would expect to see much change for job creation unless the provincial and municipal governments choose to accept their infrastructure money with its conditions.

So what was in that huge document?

Here’s a summary of some items that caught my eye:

  • Tax cuts: Personal exemption was raised from $10,100 to $10,320.  Then the next two federal brackets were shifted up 7.5% each.  Then the Working Income Tax Benefit was almost doubled.  In addition the Child Tax Benifit was increased and the Age Credit was increased.  Other than the last three items I can’t see much of a use of these changes.  The actual savings to me is going to be somewhere around $30 a month for the first three changes.  At that level I would have preferred if the government had kept the money and avoided adding more to the national debt and keep my taxes higher for more of my lifetime.  Total cost $20 billion.
  • Mortgage Purchase Program:  You know about this one.  The idea to have the government buy mortgages with borrowed money (ie: government bonds) from the banks to allow them to lend more.  It got a $50 billion dollar boost to bring the total to $125 billion.
  • More Credit:  Via CMHC, Export Development and the Business Development Bank of Canada to the tune of $13 Billion.
  • A New National Securities Regulator:  I keep hearing this is going to happen, but I’ll believe it when I see it.
  • Employment Insurance: Boosted maximum weeks for benefits for five extra weeks and rolled out an increase funding ($500 million over two years) for those on EI who are taking long term training. Also EI contribution rates are frozen for the next two years.
  • Training Funds: Rolled out a new fund to help train those not even on EI (self employed and those that didn’t quaify) $500 million and boost training funds in EI by $1 billion (both amounts over two years).
  • Home Reno Tax Credit: Spend between $1000 and $10000 over the next 12 months and you can claim 15% of those costs as a tax credit (to the max of $1350).  You can even do the work yourself (but you can’t bill out your own labour), but it has to be an improvement, repairs don’t count.  This program is just perfect for abuse in my mind, let’s see how the government handles getting copies of ever receipt in Canada for Rona, Home Depot and every other home improvement store in Canada at tax time next year.
  • First Time Home Buyers: Can take an extra $5000 each from their RRSP’s via the Home Buyer’s Program and get a tax credit to help cover their closing costs of $750.
  • Social Housing: Here there is lots of cash for energy retrofits (50-50 funding), low income seniors housing construction, disability housing construction, and social housing construction for First Nations and some for the North.
  • Infrastructure Spending: $7 billion here for a bunch of different project types.  The breakdown is insane so go pick up a copy of the document and read it to find out what’s being built near you.

That’s just a few things that caught my eye, there is much more to the document that what I’ve covered.  So what did you think of the budget?  Like it, hate it, or did you have a better idea?  If so please share.

Comments

5 Responses to “Federal Budget Review 2009”
  1. Mintycake says:

    I’m happy about the home reno tax credit, since we were going to do our basement anyway. Better to get something back vs nothing, right? Also happy about the EI rates being frozen plus 5 extra weeks…working in financial industry right now is not stable so there’s a chance I might lose my job. An extra 5 weeks, while not much, is still better than nothing. Personal excemption rates going up is good too…especially for those considering starting a family with a stay at home parent.

  2. cheryl says:

    There was lots of talk about something to help “working familes,” but this budget doesn’t seem to help my family at all. I guess I misunderstood what a “working family” is (though I’m pretty sure we ARE one, no matter what the gov’t thinks).

    Some kind of increase on how much a family can claim for childcare would have been nice, as there’s no way the current credit gets anywhere close to what daycare actually costs (not in Toronto, at any rate).

  3. Matt says:

    I’m not a big fan of the home reno rebate either to easy to abuse, and all the money is just going to go to Home Depot anyways.
    What I would do is raise the GST back up by the 2% that it was cut. But I would have no GST on new home or car purchases. I would also have no GST on any natural gas, electricity or water that is used by households. It really annoys me to have to pay tax on something that you need to have to survive. To me the GST cut had no real noticeable impact but it is a major revenue generator for the government.

    Finally I would make it more attractive for these massive oil sands projects, maybe by delaying taxes a few years if you have too. These projects are so big ($20 billion plus) the government just can’t compete. You can even add in more for being more environmental friendly … if there is such a thing in the oilsands.

  4. Canadian Dream says:

    Mintycake,

    True, something is better than nothing when you already have plans.

    Cheryl,

    I have to agree. There wasn’t much there for families. Also I didn’t see much for protecting the vulnerable during the recession. So much for good intentions.

    Matt,

    I agree with your statement. The GST was barely noticed in my life.

    Environmental friendly and oilsands?!? Hmm, I sure you can’t work those two into the say sentence and be serious. The whole process needs an overhaul to be friendly.

    Tim

  5. jsk says:

    All the latest Federal Budget News http://www.2012federalbudget.com

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