The biggest losers of the 2016 federal budget: small business, wealthy Canadians
Every budget has its winners and losers, and the one tabled on Tuesday in Ottawa was no exception.
The government earmarked billions for First Nations and promised an injection of $11.9 more for infrastructure over the next five years. The mayors of Saskatoon and Regina were thrilled. So were tech startups, who found the threat of new taxes on stock options had not materialized.
But who really lost out in this budget? Global News has compiled a list of groups that probably want a do-over.
Under the previous government, the small business tax rate had been set to drop in the coming years, from 11 per cent down to nine per cent on the first $500,000 of qualifying income. The Liberals have changed that plan. The rate will now fall only half a percentage point, to 10.5 per cent, and any future reductions have been deferred.
If you make more than $200,000 a year, your tax rate is going up by four per cent in order to help offset the cost of reducing tax rates for lower-income earners. And if you happen to have kids, the childcare benefit granted under the previous government will also be vanishing, and your children won’t be qualifying for the increased spending the government has set aside for student grants (these are also designed to target lower income families).
Oh, and the boutique tax credits for education and textbooks? Those are gone too.
Security watchdogs and the RCMP
One of the first questions posed to Finance Minister Bill Morneau by reporters on Tuesday touched on the lack of any new spending on the bodies that monitor Canada’s national security agencies. There is also virtually no new money for the RCMP. Morneau said that Public Safety Minister Ralph Goodale is still “working together with provinces and territories” and “we expect to make a real difference in this area over the course of the next year.”
The government is, however, funneling more money to counter cyber-security threats, and dedicating an additional $35 million over five years to the Community Outreach and Counter-Radicalization Coordinator to help counter extremism.
The Department of National Defence
Sorry, Canadian Forces. No new planes, ships or vehicles for you — at least not within the next five years. As it continues to draft an overall strategy for equipping the Forces in the coming decades, the government has taken $3.7 billion in defence procurement spending and pushed it to some undetermined time after 2020.
This isn’t a cut to the defence budget, the finance minister argued on Tuesday, but that may come as small consolation to the mechanics trying to keep our CF-18s flying into their fourth decade of service.
Home-care/palliative care providers
The health-related components of this budget were largely focused on specific funding for individual programs like Nutrition North, or initiatives targeting women’s and men’s health. Big-ticket items like health transfers and home care or palliative care were ignored, likely to be dealt with down the road.
NDP leader Tom Mulcair told reporters that palliative care is “completely missing from the discussion” at a time when Canada’s aging population makes it a pressing issue.
Adrienne Silnicki, national coordinator for the Canadian Health Coalition, said in a statement that “if the Liberal Government is serious about improving public health care for all, they need to put some money into it … we need financial investments to make that happen.”
Anyone hoping for a balanced budget
A balanced budget is off the table for next year, and seemingly for the four years after that. The budget included no clear path for returning Canada to the black. The Liberals have defended their five-year deficit spending plan, saying it’s necessary to stimulate economic growth. The Conservatives have called the whole approach “a nightmare.”
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