Prudent Planning – a Promise Delivered
On April 21st, Finance Minister Joe Oliver rose to deliver Economic Action Plan 2015 in the House of Commons. This budget was important for many reasons, but was groundbreaking for two central reasons. First, it represents a balanced budget for Canada, which makes our country the first in the G7 group of nations to balance its budget following the global recession. Second, and more importantly, this budget represents the Prime Minister delivering on his central promise to Canadians in 2011 that we would balance the federal budget and offer some targeted relief to Canadians. Prudent planning and setting priorities at the federal level has kept our economy on track during these difficult global economic times.
Last week I brought together many of the great business minds from the manufacturing sector, from agriculture and from small business in Durham for a Budget Breakfast in Bowmanville. It was a good way to examine the Budget in depth and answer questions from the job creators across our area. This week’s column provides an opportunity to highlight the central themes from the Budget Breakfast and demonstrate that our government has been prudent in planning our finances to get to a balanced budget and to assist families and job creators going forward.
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The key theme of our budget this year and in previous years has been to balance the budget without raising taxes and without cutting transfers to other levels of government. The federal tax burden is the lowest that it has been in fifty years, but it is important to note that transfers to the government of Ontario have gone up and we are investing more in provincial and local infrastructure. Control of spending federally happened by trying to slow the overall growth of government.
To help create more jobs we are continuing our support for the auto industry by creating an innovation fund for automotive supply companies and by maintaining our commitment to the Auto Innovation Fund. We are also extending the acceleration of the capital cost allowance to encourage more companies to invest in equipment and machinery to grow their business. We also increased the Lifetime Capital Gains Exemption for farming families and continue to grow new markets for our farmers. The small business sector remains critical for job growth, so we are phasing in a lowering of the small business tax rate to 9%. This was very well received with the Canadian Federation for Independent Business saying
“CFIB applauds the government for lowering the tax burden on Canada’s small businesses now that the budget has been balanced,” said Dan Kelly, president of CFIB. “Reducing the small business corporate tax rate was viewed by CFIB members as the most effective measure the federal government could take to strengthen the performance of small firms. We are especially pleased that government intends to legislate the full small business tax cut plan before the election. We gave the 2015 budget an “A”.”
The budget also provides targeted tax relief to groups that need it most, namely seniors and families with children. A few years ago our government brought in pension income splitting for seniors and this year we are also reducing the minimum withdrawal factor for RRIFs to ensure seniors have more financial flexibility. We also doubled the contribution rate for the popular Tax-Free Savings Accounts which allow seniors and all Canadians to save more tax free. This is a perfect complement to the RRSP and recognizes that people should be encouraged to save more. Families with children have benefited from the increase in the Universal Child Care Benefit (UCCB) from $100 per month to $160 per month for children under 6. We have also expanded the UCCB so now children ages 6 – 17 will receive $720 per year, per child. We also doubled the popular Child Fitness Tax Credit. All of these measures help target Canadians who have seen pressures on their household with either a fixed income or slower income growth not helping them keep up.
I invite you to check out more in the budget at www.budget.gc.ca. There are some other great measures in the budget for other groups and organizations. This budget was about keeping our commitment to Canadians and to show that smart and steady leadership over the last few years has helped our country lead the world following the so-called Great Recession. I am proud to say our government has kept its word and kept to the disciplined plan for our economy that has been showing real benefits for Canadian families.