Highlights of the 2007 federal budget ..

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WHAT THE BUDGET MEANS …

Here’s a little recap from the Globe and Mail ..

If you are a parent: You will receive a child-tax credit worth $310 per child for most families.

If you are a low-income earner: You will receive a Working Income Tax Benefit of $500 to help get off welfare.

If you are saving for your child’s education: Your $4,000 RESP annual contribution limit is eliminated, but there’s now a $50,000 lifetime cap.

If you are a senior: You can convert RRSPs to retirement income up to age 71, an increase of two years.

If you’re buying a car: You can receive a rebate of up to $2,000 for buying fuel-efficient vehicles. A green levy penalizes auto manufacturers up to $4,000 on inefficient vehicles.

If you are a student: The budget includes $35-million over two years — then $27-million a year — for scholarships for graduate students.

THE BIG PICTURE

Billions in extra funding to the provinces for health, infrastructure, post-secondary education and other items to address the so-called fiscal imbalance.

Tax Back Guarantee directs $1-billion a year in debt interest savings to personal income tax reductions.

Government spending projected to increase by $10-billion to $233-billion in 2007-2008, with program costs jumping by 5.7 per cent.

Total revenue projected at $236.7-billion in 2007-2008, leaving a surplus of $3.3-billion with $3-billion of that going to debt reduction.

Here’s the text of Finance Minister Jim Flaherty’s budget speech in the House of Commons March 19, 2007

Read it in the Canoe pages by clicking the above link, or in the Department of Finance site itself!

Deloitte also reminds us in their Daily Tax Highlights measures that concern BOTH individuals AND Businesses

FOR EXAMPLE:

The rate of capital cost allowance (CCA) for certain assets acquired on or after March 19, 2007, will be changed as follows:

o Buildings used for manufacturing or processing, to 10% from 4%.

o Other non-residential buildings, to 6% from 4%.

o Computer equipment, to 55% from 45%.

o Natural gas distribution pipelines, to 6% from 4%.

o Liquefied natural gas facilities, to 8% from 4%.

o Manufacturing and processing machinery and equipment, to 50% from 30% for equipment acquired prior to 2009 (straight-line depreciation).

Comments

What do you get if you’re not one of those special interest groups? Jack squat!

It’s quite interesting the different points of view that are showing up .. the ‘NEWS’ version, the ‘CRA’ version, etc .. I like Deloittes version the best .. sad to admit it, but makes my job easier to read the Coles Notes version instead of the entire Budget papers!

I’ve had several questions and phone calls from clients related to:

* the increase of the RRSP conversion limit up to 71 years of age, from 69 years .. and
* the increase of the Super CGE from $500,000 to $750,000

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