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Federal budget 2019: Here's what Canadians can expect

Jessy Bains
Canada's Finance Minister Bill Morneau speaks after he tried on a new pair of shoes during a pre-budget photo opportunity with children in Toronto, Ontario, Canada, March 14, 2019.  REUTERS/Mark Blinch
Canada's Finance Minister Bill Morneau speaks after he tried on a new pair of shoes during a pre-budget photo opportunity with children in Toronto, Ontario, Canada, March 14, 2019. (REUTERS/Mark Blinc)

The federal government is asking Canadians to take a break from the drama around the SNC-Lavalin scandal, and instead pay attention to the country’s finances.

Finance Minister Bill Morneau unveils the Liberal party’s latest budget today at 4 p.m. EST. The wishlist for goodies among various stakeholders is long. We could see new money for broadband internet, especially in rural areas. Relief for home buyers locked out of the market is widely expected to be included.

Getting a foot in the door

UBC professor Paul Kershaw wants to see language that signals the scale of the gap between home prices and earnings. He also wants to see acknowledgment that, despite a cooldown in parts of the country, housing prices remain a big problem for younger generations.

Kershaw, along with Generation Squeeze, thinks there’s a lot Ottawa can do, including lowering taxes on the earnings of ‘regular folks’, while increasing taxes on speculators and flippers. But he’s not holding his breath during an election year.

“If I were a betting person, and knowing that many have appropriately discouraged the Finance Minister from relaxing stress tests and amortization periods, I would expect an increase to the First Time Home Buyers Tax Credit and/or an expansion of the amount of Tax Sheltered RRSP savings that people can allocate toward a down payment,” Kershaw told Yahoo Finance Canada.

Relief for taxpayers

Aaron Wudrick, Federal Director of the Canadian Taxpayers Federation, wants to see broad-based tax relief.

“Especially for individuals, coupled with spending reductions would be ideal, along with a plan to pay down debt,” Wudrick told Yahoo Finance Canada.

“The government should also eliminate corporate welfare programs that benefit only select businesses and instead put that money towards tax relief so that all businesses can benefit.”

Wudrick would like to see the Liberals follow through on a promise to balance the budget in 2019, or at least come up with a plan to get back to balance in a reasonable timeframe. He says rising government debt cannot be ignored any longer.

Growing the economy

The economy has been sending mixed messages as of late. Sluggish GDP growth and a Bank of Canada on hold, stand in stark contrast to some of the best jobs growth in a long time.

Bank of Nova Scotia economist Rebekah Young says the government is on track to lower the deficit to a greater degree than predicted in the fall economic update. Young says if Morneau plans to open up the nation’s wallet, it needs to be spent wisely.

“If they are going to spend – as we think they will – the bulk of it would be best targeted at boosting Canada’s waning growth potential.”

“In any case, the government will stick to its downward debt-to-GDP anchor (forecast at 30.9% for 2018/19), which will contain any additional spending. The spending magnitude implied by the windfall would not significantly change the outlook.” Young told Yahoo Finance Canada.

Filling in skills gaps

Personal finance expert Rubina Ahmed-Haq wants to see money for real change.

“If the government of Canada wants adults to go back to class and gain skills to apply for jobs that companies are finding hard to fill, than make those courses accessible in every corner of Canada,” Ahmed-Haq told Yahoo Finance Canada

“Also make them affordable, so Canadians can easily apply and not worry about the costs. Also build relationships with companies looking for highly skilled workers who can hire workers once their training is complete.”

Help for seniors

A growing number of Canada’s seniors are finding themselves in financial difficulty. Ahmed-Haq hopes help is on the way for seniors living on a fixed income.

“There is some indication that there will be a focus on pharmacare.”

“That focus should be on helping seniors because they require greater care than any other segment of the Canadian population,” said Ahmed-Haq.

Something for small businesses

There haven’t been many rumours about measures for small business. Monique Moreau, VP of national affairs at Canadian Federation of Independent Business (CFIB), hopes some of the concerns among entrepreneurs will be addressed.

Moreau told Yahoo Finance Canada her wishlist includes “reversing or stopping the CPP increases, ending the federal carbon tax in the four provinces impacted by the carbon backstop¸ grandfathering existing passive investments to exempt them from the tax changes announced in 2017, and recognizing the vital formal and informal roles spouses play in a small business by fully exempting them from the new income splitting rules.”

Moreau says she would also like to see measures like trading credits, and a ‘holiday’ from EI premiums paid by employers when they hire a young worker. She would also like to see a reduction in red tape.

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Yahoo Finance Canada Morning Brief
Yahoo Finance Canada Morning Brief