The federal government unveils Budget 2011 this Tuesday, March 22. Ill be in the lock-up and posting a report to the Canadian Business Online and/or MoneySense website(s)just after 4pm. Do visit the homepage(s) for one of the first full summaries of what the budget means for the finances and investments of Canadians.
What could be in it?
A tax break for childrens artistic and cultural activities looks almost a certainty. Some other items that could be in the budget, from what Ive heard and read, include:
Increase in Guaranteed Income Supplement and cut in fuel taxes (NDP demand) Changes to retirement system (see KPMG analysis below) Ottawa to pay for harmonizing sales tax in Quebec (Bloc Quebecois demand) Possibly more EI funding for retraining and job sharing
Willbudget proposalsmake it into law?
Will the budget last? Most observers believe the Liberals want to trigger an electionbut the betting seems to be that the NDP or Bloc Quebecois will likely receive enough concessions to abstain from a vote of non-confidence. Even if an election is called, it will be an uphill battle to unseat the Conservatives: the latest polls show they enjoy 36% support, a level that would nearly give them a majority if it held up.
Conservatives want to balance the federal budget by 2015 No big spending measures likely (except for increase to GIS) – Ibbitson Liberals want to repeal corporate tax cuts and cancel military spending
KPMG analysis of possible inclusions:
Increase the thresholds at which the two highest tax rates apply Increase the contribution limits for TFSAs and RRSPs Increase the age at which individuals must begin withdrawing RPPs and RRIFs Reduce RRIF minimum withdrawal requirements Introduce Pooled Registered Pension Plans More support to allow seniors to work without affecting their RRSPs and RRIFs Extend filing deadline for reporting income from trusts or partnerships Review Alternative Minimum Tax to determine effectiveness Raise charitable donation tax credit rate to 39% from 29% Eliminate capital gains tax on donations of real estate and land to public charities