Tax Bulletin – 2017 Federal Budget: Mostly for the Middle Class [Comparative table format]
As widely anticipated, the second budget of Federal Finance Minister, the Honourable Bill Morneau, projects significant deficits over the next several years. The deficit is expected to $23B for 2016–2017 decline to $18.8B in 2021–2022.
Several of the measures announced today are aimed at making the middle class stronger. For example, the injection of $1.8B over six years, starting in 2017-2018, over six years, starting in 2017-2018, so Canadian workers can acquire the necessary skills and tools to succeed in a changing economy. According to the government, “this means more opportunities to upgrade their skills, gain experience or get help to start their own business.”
Some measures are intended to strengthen Canada’s public health care system to meet the needs of Canadian families while others are designed to improve tax fairness by closing loopholes and cracking down on tax evasion and tax avoidance with investments of $523.9M over five years.
Innovation and infrastructure
In terms of innovation, of note is the creation of the new Strategic Innovation Fund with a budget of $1.26B over five years, which represents an additional $200M over three years. The purpose of the Fund is to consolidate and simplify existing business innovation programming, and as a result businesses will have “access to a simpler application process, more timely processing, and assistance that is more responsive and focused on results.”
Public transit will be a priority for Canadian communities. The government will invest $20.1B over 11 years through bilateral agreements with provinces and territories. The new Canada Infrastructure Bank is expected to begin operations by the end of 2017 with the mandate to invest at least $35B over 11 years, although its potential location has not been determined.
The government also plans to support innovative companies by making available $400M through the Business Development Bank of Canada, beginning in 2017–2018 for established Canadian entrepreneurs.
Lastly, the creators of wealth in Canada – businesses – are left wanting with no tax reductions being announced for either SMEs or large corporations, no measures either for Canadian exporters who face an uncertain commercial climate with our neighbours to the South. Let’s hope the government’s economic update in the fall of 2017 will provide Canadian businesses with more answers than questions.
We invite you to read the following pages for an overview of the main tax measures of the 2017 budget.
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