Federal Budget Updates
Apr 29, 2021
The Federal Government introduced its updated budget on April 19th. At 739 pages (and 232,903 words), this document outlines many new support programs and spending initiatives aimed at fighting climate change and helping small and medium-sized businesses. While this budget is long, here are key highlights that may directly affect you or your families:
Increased OAS Benefits
The budget proposes a one-time payment of $500 to anyone over the age of 75 receiving Old Age Security (OAS) benefits. In addition, the budget proposes a permanent increase to OAS benefits by 10% in July 2022 for individuals who are age 75 and over.
National Child Care Program
The goal of this proposed program is to build a Canada-wide, community-based system to provide quality childcare at affordable costs. The budget proposes funding to reduce average childcare costs by 50% by the end of 2022.
Tax on Luxury Goods
Effective January 1, 2022, vehicles valued at more than $100,000 and boats valued at more than $250,000 will be subject to a new luxury tax. The vehicle tax will be 10% of its full value, or 20% of the value over $100,000 ($250,000 for boats), whichever is less.
Tax on Non-Resident Owners of Real Estate
The budget proposes to introduce a new 1% tax on the value of unoccupied or underused residential real estate owned by non-residents of Canada. This tax would be levied annually beginning in 2022. Since Canadian residents and Canadian citizens living overseas will be exempt from this tax, we do not expect that it will impact you.
It is also significant to note that the budget did not include personal tax increases, wealth or estate taxes, changes to the taxation of capital gains and investment income, or changes to the principal residence exemption.
We will continue to monitor and keep you updated of tax changes and new government support programs.
The views expressed are those of the author and not necessarily those of RGF Integrated Wealth Management, which makes no representations as to their completeness or accuracy.
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