This Tuesday, February 11, 2014, Finance Minister Jim Flaherty unveiled the 2014 federal budget. While the government is still focused on eliminating the country’s deficit – it’s currently projected to be about $2.9 billion this year – there are a few carrots for some Canadians in this latest rendition. Here’s our breakdown of what to look for from the government this year.
No Income Splitting… Ever?
First off, one anticipated budget item that didn’t actually the cut is income splitting. Income splitting, which would allow Canadian families to “share” up to $50,000 of income in order to reduce their marginal tax rate, was a key part of the Conservatives election campaign platform in 2011.
While not particularly fiscally conservative (the plan could cost federal coffers up to $2.5 billion in lost tax revenue), it’s intended to target the more socially conservative wing of the party’s support. Specifically: families with stay-at-home moms. Critics have argued that the program would only really benefit a small percentage of Canada’s wealthiest families, while offering no tax-savings for single-parent families, or those where both parents are working for comparable, modest salaries and having to pay for childcare.
At an event on Wednesday (the day after the budget was released), Flaherty seemed to be siding with the plan’s critics when he told attendees that he thinks, “Income splitting needs a long, hard analytical look… I’m not sure that overall it benefits our society.”
A Focus On Job Training
The budget featured several training initiatives. For example, The Canada Apprentice Loan is designed to encourage more people to enroll in Red Seal trade apprenticeships. The program will offer interest-free loans of up to $4,000 “per period” of training. While details of the new Apprentice Loan program still need to be finalized, the government is committing more than $100 million to the program, enough to provide loans to about 26,000 apprentices a year.
Other job-training initiatives include $75 million over three years for the Targeted Initiative for Older Workers program, which helps unemployed older Canadians find jobs, a two-year $40 million program to fund 3,000 internships in “high-demand fields,” and nearly $30 million in training programs for the disabled.
A Civil Disservice?
Government employees, on the other hand, are expected to take a big hit to help bring the deficit down. The budget targets public sector employees’ ability to bank sick days, and will double the premiums that retired bureaucrats pay for coverage under the Public Service Health Care Plan. The latter is projected to save the government $1.5 billion in 2014-2015, and as much as $7.4 billion a year by 2018-2019.
Aid For The Auto Industry
Young workers aren’t the only ones getting a handout. The auto industry is getting $500 million over two years through a new Automotive Innovation Fund. Macleans’ magazine’s John Geddes writes that these funds are “almost certainly earmarked largely for helping Chrysler upgrade a minivan plant in Windsor, Ont.” (Flaherty represents the riding of Whitby-Oshawa, where General Motors Canada is a key employer.)
Other related budget expenditures include $378 million to repair and maintain existing bridges in the Montreal area, plus a further $165 million to build a new bridge over the St. Lawrence to replacing the aging Champlain Bridge, and nearly half-a-billion dollars towards a new bridge at the Detroit-Windsor crossing.
High-Speed For Rural Routers
If…it’s…taking…a…long…time for this site to load, it may be because you’re still using dial-up to access the internet. The government has pledged to spend $305 million over the next five years to bring high-speed access to about 280,000 homes in rural communities and the far north.
You’ll Spend More To Smoke
If the negative health impacts of smoking – not to mention having to shiver outside in the cold to indulge – weren’t enough to get you to quit smoking, maybe this item from the budget will: the feds are slapping an additional $4 in taxes on every carton.