Who are the winners and losers in the 2019 federal budget? Here’s what you need to know
Finance Minister Bill Morneau unveiled the Liberal government’s final budget before the fall election on Tuesday.
It offers up a mixed bag of both benefits and potential consequences for Canadian stakeholders across a wide range of backgrounds.
Housing was a major focus of the budget with new measures proposed that the government argues will make it easier for millennials and first-time buyers to purchase a home.
While economists and critics differ on whether those measures will do what Morneau says they will, there are also a number of other ways the budget proposals will help — or potentially hurt — other Canadians.
Here are some of the winners and losers.
READ MORE: Federal budget 2019 coverage
People with student loans
Budget 2019 proposes lowering the floating interest rate, which most people with Canada Student Loans have among their debt loads, to prime. Currently, it sits at prime plus 2.5 per cent.
That change will go into effect this year and will mean people with student loans end up paying less on interest as they pay them back.
For the minority of those with Canada Student Loans on a fixed interest rate of prime plus five per cent, the government plans to lower those rates to prime plus 2.5 per cent.
The budget also proposes amending the Canada Student Financial Assistance Act so that borrowers do not accrue debt on their student loans in the six-month period after their leave school.
Officials estimate that could save student loan borrowers roughly $2,000.
WATCH: Incentives for first-time home buyers, skills training
People with rare diseases
Canadians with any of the roughly 7,000 rare diseases identified by the Canadian Organization for Rare Diseases can have hope they will get help dealing with the costs of their medications.
Budget 2019 proposes spending up to $1 billion over two years starting in 2022-2023 to help Canadians with rare diseases access the drugs they need.
Up to $500 million would be made available each year ongoing.
The plan is to have the federal government partner with provinces and territories with come up with a strategy to improve access to drugs for rare diseases across the country and negotiate better prices with drug manufacturers.
WATCH: No pharmacare but drug agency creation included
People looking to reduce their carbon footprint
Canadians who want to buy a zero emission vehicle or retrofit their homes to be more energy efficient will likely see things they like in the budget.
The government proposes spending $130 million over five years, starting this year, to install new recharging and refuelling stations for electric and hydrogen fuel cell vehicles in remote locations, workplaces, public parking spots and commercial and residential buildings.
It also proposes offering $300 million over three years, starting this year, to create an incentive of up to $5,000 for people buying an electric or hydrogen fuel cell vehicle with a retail price of less than $45,000.
WATCH: Liberals announce new clean energy incentives in federal budget
Transport Canada will also get $5 million over three years to work with auto manufacturers to get them to set voluntary sales targets for zero-emission vehicles to keep up with anticipated demand.
Budget 2019 also includes a plan to spend $1.01 billion in 2018-2019 through the Green Municipal Fund to help the Federation of Canadian Municipalities to make large community buildings more energy efficient, help homeowners with the costs of retrofitting their homes, and provide financing to improve energy efficiency in affordable housing developments.
Media and people who pay for it
Media and people who pay for their news will also likely see some benefits from the budget.
The government had proposed in the fall economic statement a fund worth $50 million over five years to support local news in underserved communities.
While that proposal is no longer on the table, the budget does propose three new tax measures.
First, subscribers to Canadian digital news will be able to claim up to $500 in costs towards eligible digital subscriptions for a maximum tax credit of $75 per year.
WATCH: Morneau says they’re still working towards balancing the budget
Second, qualified Canadian journalism organizations will be able to claim a 25 per cent credit on the salaries or wages paid to eligible newsroom employees, subject to a cap of $55,000 per employee for a maximum tax credit of $13,750 per year per eligible employee. According to the budget, organizations “carrying on a broadcast undertaking” will not qualify for the tax credit.
Third, qualified Canadian journalism organizations will be able to apply to be a new category of tax-exempt qualified donee that will let them issue charitable tax credits or donation deductions.
They will have to file yearly returns with the Canada Revenue Agency and disclose the names of any donors giving more than $5,000, as is the case for other charitable organizations.
WATCH BELOW: Finance Minister Bill Morneau presented the 2019 federal budget in the House of Commons Tuesday.
People with employer stock options or big earnings
Anyone who makes more than $250,000 and was hoping for a break on their taxes is out of luck.
There are no measures in the budget to lower personal income tax rates, including for high earners.
As well, the government is proposing to limit the use of employee stock options by changing the tax regime around them.
Stock options give employees the right to get shares in their employing company at a special rate, are essentially an alternate form of compensation.
They are currently taxed at the same rate as capital gains, which are roughly half the rate of personal income.
The government says that tax regime sees benefits go “disproportionately” to a small number of high-income people and “does not believe that employee stock options should be used as a tax-preferred method of compensation for executives of large, mature companies.”
On a similar note, small business owners hoping for a tax break are also likely to be disappointed in the budget.
There are no small business tax breaks included in Budget 2019.
People hoping to buy edible cannabis products
The measures proposed in Budget 2019 are not so much a negative as a change to the tax structure around new categories of cannabis products.
Right now, cannabis products are subject to a flat rate on the amount of cannabis in the product purchased by the consumer.
But after legalizing marijuana in October 2018, three new legal categories of cannabis products will be available in Canada, and those will be subject to a different rate of tax.
Cannabis edibles, cannabis extracts and cannabis topicals will instead be taxed on the concentration of THC they contain rather than the quantity of the cannabis plant.
THC is the psychoactive component of marijuana that produces the effect of a high.
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