Canadian Interest

What to Expect From the Conservatives?

May 3, 2011


Now that the Conservatives have won a long-coveted majority, what pocket book measures can Canadians expect from the new Government? The Election Platform put out by the Conservatives contains the following key proposals (the * represents proposals that will be implemented when the federal budget is balanced):

Children’s Arts Tax Credit: A $500 credit per child for participation in eligible arts or cultural activities. The Arts Credit was included in Budget 2011 and it is a good bet that we’ll see it in the first budget, so be sure to file those receipts away.

Family Caregiver Tax Credit: A $2,000 tax credit to support caregivers of infirm dependants.

Guaranteed Income Supplement Top-up: Extra GIS transfers of up to $600 for single seniors and $840 for senior couples.

Family Tax Cut*: Allow families with children to share up to $50,000 of household income for federal income-tax purposes.

Children’s Fitness Tax Credit*: Double the value of the tax credit for physical activities from $500 to $1,000 and make it refundable.

Adult Fitness Tax Credit*: A $500 tax credit towards fitness activities for adults.

Doubling the Tax-Free Savings Account Limit*: Annual TFSA contribution limit will be boosted from the current $5,000 to $10,000.

No Changes to the Canada Pension Plan: The Conservatives will instead implement a Pooled Retirement Pension Plan.

Most of the pocket book proposals coming out of the new Government in its first few years of office are likely to be very modest. The Conservative record on election promises is somewhat mixed. While they cut the GST and sent out “beer and popcorn” cheques, they also taxed income trusts and did not fully implement a capital gains exemption.

PS: I’m delighted that this blog has yet again been included in The Globe & Mail’s list of the best of the money blogs. Many thanks to Kerry Taylor (aka Squawk Fox) and Rob Carrick for the nomination.

Election 2011: Comparing Party Financial Platforms

April 25, 2011


KPMG has put together a handy table comparing the platforms of all the major political parties on the topic of corporate taxes, personal taxes, child and family care, education, environmental measures and sales taxes. The Conservatives are saying they will continue with the current plan of cutting corporate taxes to 15% by next year. The Liberals are proposing to cancel the planned corporate tax cuts for 2011 and 2012 and keep it at the 2010 rate of 18%. The NDP is proposing to increase corporate taxes to 19.5%, which according to their platform will provide the bulk of the funding for their spending initiatives.

In addition to the initiatives in Budget 2011, the Conservatives are proposing a slew of personal tax initiatives when the budget is balanced. That would include a doubling of the Tax-Free Savings Account annual contribution limit, income-splitting for families, a doubling in the Children’s Fitness Tax Credit and a new Adult Fitness Tax Credit. The Liberals are proposing a voluntary defined contribution plan within the CPP and the Dippers are promising an increase in CPP benefits with a stated goal of doubling the amount but the plan is light on details.

The KPMG article boils down the platforms into a few pages nicely but if you are so inclined here are the links to the entire platforms of the national parties: Conservatives, Liberals, NDP and the Greens.

Why 30-year olds are screwed?

April 12, 2011


In his recent newsletter, financial planner Kurt Rosentreter explains why 30-year old Canadians are, financially speaking, screwed. One reason for the dismal outlook is simply the way things are today what with traditional pensions disappearing and home prices as high as they are. But the main reason, according to Mr. Rosentreter, is the way today’s 30-year olds are playing the hand they are dealt: being totally clueless when it comes to spending, taking on monster debt loads at today’s low, low interest rates and saving little or nothing despite not having a pension.

Today’s 50 year old will make it – they are the last generation to get in before the big mortgages hit and they may still get inheritances from their financially responsible, recession era parents who will die in the next 20 years, providing money for their retirement thankfully. It’s today’s 30 year olds who will be 50 in twenty years that are screwed. With little hope of being debt free in 20 years, with a bad attitude towards savings and debt elimination, with rising costs of children’s education, no pensions coming, frequent career change, wild stock markets, record low interest rates and longer and longer life with rising health care costs, today’s 30 year olds need to win the lotto to have a hope of achieving their financial retirement as culturally expected in Canada. Working to age 70, albeit part time, may become the norm for many in the next twenty years.

I would add one more point to Mr. Rosentreter’s list on why 30-year olds are screwed. The effect of retiring Baby Boomers on public finances is going to be akin to a swarm of locusts moving through a field of crops. Today’s retirees can count on receiving benefits from Old Age Security and Canada Pension Plan. 30-year olds have no such assurance and may find that they are left to fend for themselves.