WHAT YOU NEED TO KNOW: HIGHLIGHTS FROM THE FEDERAL ECONOMIC UPDATE
The federal Liberals gave an update Tuesday on the government’s finances, and with it, how they plan to spend a $46.6-billion windfall generated by better-thanexpected economic growth. Here are some highlights:
❚ They plan to spend $ 14.9 billion of that over five years, leaving the rest to pull down the deficit.
❚ The deficit this fiscal year is now projected to be $ 18.4 billion, down from the spring projection of $ 25.5 billion. By 2021- 2022, the deficit will fall to $ 10.9 billion. It had originally been projected to come in at $ 15.8 billion. ❚ The Canada Child Benefit will be indexed to inflation starting in July, 2018, two years ahead of schedule. Over five years, the increases are projected to cost about $ 5.6 billion. As an example, the government says someone currently receiving the maximum amount of $ 6,400 for a child under six would see that rise to $ 6,496 next year, and $ 6,626 by 2019- 2020. ❚ The Working Income Tax Benefit program will expand to allow more people to qualify at cost of $ 500 million a year, starting in 2019. The program is designed to account for the fact that when people go off government assistance and get a job, their paycheque may not be as high as government support and so there’s less incentive to work. The benefit seeks to make up some of that pay difference. ❚ Taken together, measures to lower the small- business tax rate to 10 per cent next year and nine per cent in 2019, along with ongoing overhauls to the tax code, will cost the government $ 1.3 billion between 2017 and 2022, but that doesn’t take into account one of the major changes coming to tax rules on how passive investments are handled. ❚ Almost $ 9 billion in program spending is detailed in the update, some of which has not been previously announced, or has only been detailed in very broad strokes. Among the new programs: over $ 1 billion for Fisheries and Oceans Canada and the Canadian Coast Guard over six years; $760 million for security at Canada’s embassies and consulates over six years; $ 4 million over two years to expunge the criminal records of Canadians previously convicted of consensual sexual activity with same- sex partners; $ 526 million for legalization of marijuana and a further $ 150 million over six years to handle drug- impaired driving.