Liberals Reveal New 2016 Budget
After sweeping the election last year and winning a majority, Justin Trudeau’s Liberal Party has proposed its first budget to both applause and criticism.
In the past, Prime Minister Trudeau mentioned how important it is to him that the government step up and invest in the country’s future first and “balance the books” after. He made it sound as though they would purposely run deficits for a few years before reducing the country’s debt.
Now with this budget it appears that the Liberals have abandoned any plan for reducing debt for the next decade at least. But that may not be a bad thing. There’s no rulebook saying a country should have a surplus or that deficits must be eliminated.
While the full 2016 Budget is available to the public, it’s pretty big and most people probably don’t have time for it. So here’s a quick breakdown of what direction the government plans to take us in with their financial plan courtesy of the CBC.
Deficit: $29.4 billion this year, $29 billion the next before falling - but no surplus forecast before the next election.
Debt: Expected to grow by $113 billion by 2020-21, but debt-to-GDP ratio to stay mostly flat at around 32 per cent.
Growth: Deficit based on 0.4% annual growth - much lower than economists predict.
Canada Child Benefit: New monthly tax-free benefit will replace Universal Child Care Benefit (UCCB) as well as the family tax cut. Benefits will be up to $6,400 a year per child under 6, and $5,400 for each child aged 6 through 17. Size of benefit is determined by income level but the government says that 9 out of 10 families will receive more than they did under UCCB.
Tax credits: Children's arts and fitness tax credits phased out by end of 2017. But teachers get a $150 credit for teaching materials.
Employment Insurance: Changes make it easier to qualify for benefits, and extends benefits for workers in regions that have been hit hardest by slow resource economy. Plus: a bigger-than-expected cut in EI premiums next January.
Infrastructure: $120 billion over 10 years, focusing first on public transit, water, waste management and housing infrastructure.
Indigenous Peoples: $8.4 billion over five years, with $2.6 of that to improve primary and secondary education on reserves. Other funding for drinking water and housing, as well as family and child services.
Student grants: Increased 50%, to $3,000 per year for low-income; $1,200 per year for middle-income students and 1,800 per year for part time students.
Seniors: Guaranteed Income Supplement increased by up to $947 annually. Retirement age returns to 65.