3 Main Focuses of the 2016 Federal Budget
Tuesday, March 22nd, 2016 marks the day in which Federal Minister of Finance Bill Morneau presents his first federal budget under Prime Minister Justin Trudeau’s Liberal Government. Trudeau notably states:
“When middle class Canadians have more money to save, invest and grow the economy, everyone benefits.
When middle class Canadians have confidence in their disposable income, consumer demand is strong and businesses have the confidence to invest.
When middle class Canadians have the ability to save and invest, they have greater confidence in their ability to adapt to unforeseen downturns.
When middle class families are secure in their jobs, they have the ability to invest in the education of their children and save for their retirement.”
That being said, here are the three main focuses presented in the 2016 Federal Budget:
1. Strengthening the Middle Class
- Canada Child Benefit: Effective July 1st, 2016, the taxable Universal Child Care Benefit and non-taxable Canada Child Tax Benefit is to be cancelled and swapped with a new, improved non-taxable Canada Child Benefit that is focused on supporting every family with a net income under $65,000 per year. The new CCB offers up to $6,400 a year per child under 6, and $5,400 those aged 6 to 18. However, this amount differs for households over $30,000 and is completely eliminated for incomes over $190,000.
- Family Tax Cut: Effective 2016, the Family Tax Cut, which allows couples with children less than 18 years of age to split their income once one parent has a higher income than the other, will be cancelled.
- Employment Insurance: The liberal government aims to remove the changes to the EI led by previous Prime Minister Stephen Harper’s government. PM Trudeau promises to reduce the 910-hour minimum that is required to be eligible for EI to the regional labour market threshold, as well as reduce the EI waiting period from two weeks to one week. These changes will cost about $1.25 billion per year.
2. Driving Economic Growth and Innovation
- Infrastructure Projects: Budget 2016 promises to invest $11.9 billion in long-term infrastructure over five year to provide well-paying jobs and strengthen the economy for the future. This mainly includes plans to:
– Modernize public transit
– Rehabilitate water systems
– Provide affordable housing infrastructure
– Protect infrastructure systems from climate change
3. Supporting Those Who Need It Most
- Indigenous Peoples: Budget 2016 plans to spend $8.4B over five years, with $2.6B to improve primary and secondary education on reserves, and other funding on housing, water, family and child services to improve socioeconomic conditions both on- and off-reserves.
It is clear that PM Trudeau’s 2016 Federal Budget’s main focuses sound promising for the betterment of the country. As stated in the introduction to the document, “Challenges like the ones Canada is facing cannot be solved with short-term solutions, and opportunities can’t be realized without smart, sustained investments. By investing in the things Canada’s economy needs to prosper over the long term, Budget 2016 sets the stage for stronger economic growth that will benefit more Canadians in the years to come”.
Writer: Mariam Walaa
Disclaimer: All investing can potentially be risky. Investing or borrowing can lead into financial losses. All content on Bay Street Blog are solely for educational purposes. All other information are obtained from credible and authoritative references. Bay Street Blog is not responsible for any financial losses from the information provided. When investing or borrowing, always consult with an industry professional.