Canada's 2017 Federal Budget Summary

2017 Federal Budget Highlights

Finance Minister, Bill Morneau tabled the Liberal government’s second budget March 22, 2017 .  The Finance Minister is projecting a deficit for the current 2016/17 year of $23 billion after an expected budget deficit of $29.4 billion.  The government’s expectation is to bring the 2017/18 federal budget to a deficit of $28.5 billion.  The minister was non-committal to longer term deficit targets with no promises to balance the books by the end of the government’s term. No changes were made to business and corporate income tax rates.  Changes to the way capital gains are taxed rumoured to be in the budget were not changed,  The Minister stated that the Department of Finance will continue to review the tax treatment of capital gains.

Programs and Spending

  • $11.2 billion for affordable housing
  • $950 million towards innovation
  • $7 billion over next ten years to create 40,000 new daycare spaces
  • $691 million over five years for a new employment insurance benefit for caregivers
  • More flexible and extended parental leave employment benefits to eighteen months
  • Increased maternity benefits from 8 to 12 weeks pre due date
  • No additional money for RCMP, Border services and armed services until defense review completed
  • Departmental spending review in four departments
  • $524 million over five years enhance tax evasion programs
  • Elimination of Canada Savings Bonds
  • $3.4 billion over five years to improve socio-economic conditions of indigenous peoples
  • $300 million over next eleven years build housing in norther territories
  • $225 million towards housing for indigenous peoples living off reserves
  • $882 million towards improving medical outcomes to first nations
  • $250 million towards several programs to assist indigenous peoples with respect to education, culture, employment, language, environment and land claims
  • $147 million to expand military family resource centres
  • $187 million caregiver benefit to assist family members caring for veterans

Business Tax Measures

  • New rules in determining association of corporations
  • New classification rules with respect to oil exploration decreasing the ability to deduct certain expenditures in one year and moving them to a pool to be expensed over time
  • Reclassification of first $1 million of expenses of small oil and gas corporations from a 100% write off to a pool expensed over time
  • Enhanced write offs for investments in geothermal energy projects
  • Businesses can now distribute T4 slips to employees electronically without consent provided privacy safeguards in place
  • Elimination of gifts of medicine enhanced deduction to producers of medicine
  • Elimination of child care space investment tax credit
  • Government to review current tax planning strategies of small business corporations
  • Professionals will no longer be able to elect out of including the value of work in process in their income

Individual Tax Measures

  • Extension of anti-avoidance rules currently applied to TFSA’s, RRSP’s and RRIF’s to also include RESP’s and RDSP’s
  • Consolidation of various care giver credits to one single credit
  • Medical tax credit to include previously denied infertility treatments
  • Extension of mineral investment tax credit on flow through investments
  • Public transit credit to be eliminated
  • Extension of the tuition tax credit to include certain occupational training
  • Elimination of the home relocation loan deduction
  • Nurse practitioners will now be granted the ability to certify disability tax credit certificates
  • The repeal of the National Child Benefit supplements has been delayed to allow for certain required legislation to come into effect
  • Elimination of first time donor to charity super-credit

Trust and Estates

  • No additional changes in this budget after significant changes introduced in 2016

Excise Taxes

  • Ride sharing services such as Uber mandated to charge GST/HST
  • Elimination of tobacco manufacturers surtax but, increase of excise duty on cigarettes
  • Increase in alcohol excise tax
  • Elimination of GST/HST rebate to non-residents for tour packages
  • GST/HST elimination on Naloxone used to treat opioid overdoses 

These details can be reviewed on the government’s budget page.