The Conservative Government’s 2009
budget, unveiled yesterday, reflects efforts to deliver an economic stimulus to
encourage growth and restore confidence in the Canadian economy. The budget assumes
that real economic growth will contract by 0.8% in 2009, before expanding to 2.4%
in 2010.
The government’s stimulus package calls for $40 billion in spending over
the next two years, with the bulk of spending earmarked for infrastructure and
enhanced skills training, among others.
The focus today will be on the whether the budget wins the support of the opposition
parties. The Liberal party is scheduled to announce its decision on the budget
proposal at 11:00 AM EST.
Some highlights from the 2009 Budget
1. Tax cuts
Individuals
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| • |
Basic personal exemption amount increased from $9,600 to
$10,320. |
| • |
Two lowest personal income tax (PIT) brackets increased by
7.5% from 2008 levels. The top of the first bracket (income taxed at 15%) goes
from $37,885 to $40,726. The top of the second bracket (income taxed at 22%) moves
from $75,769 to $81,452. |
| • |
Two lowest personal income tax (PIT) brackets increased by
7.5% from 2008 levels. The top of the first bracket (income taxed at 15%) goes
from $37,885 to $40,726. The top of the second bracket (income taxed at 22%) moves
from $75,769 to $81,452. |
| • |
Temporary (two year) extension of all regular EI benefit
entitlements by five weeks and increasing the maximum benefit duration by five
weeks. |
Households
|
| • |
Higher level at which the National Child Benefit supplement
for low-income families and the Canada Child Tax Benefit are phased out. |
| • |
Effectively doubling the tax relief provided to low-income
earners by the Working Income Tax Benefit (WITB). |
2. Age Credit
| • |
Age Credit increased by $1,000 to help low and middle-income
seniors. |
3. Minimum RRIF Withdrawals
| • |
Seniors will be allowed to reduce their 2008 minimum withdrawals
from their RRIFs by 25%. Investors will be able to re-contribute up to 25% of
their 2008 minimum RRIF withdrawals by March 1, 2009, or 30 days after the legislation
is passed. |
4. First Time Home Buyers Tax Relief
| • |
First time home buyers will receive up to $750 in non-refundable tax credit
to assist them with the purchase of a first home.
|
5. Increase in Home Buyers withdrawal limit to $25,000
| • |
First time home buyers will have access to more funds from
their Registered Retirement Savings Plan – Homebuyers’ Plan withdrawal
limit increased to $25,000 from $20,000 |
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