In broad terms, the 2014 federal budget is a prudent, stay the course, budget. A central part of the Federal government’s economic policy is to have a balanced budget or surplus by 2015-2016. With uncertainty surrounding global economics, being as fiscally prudent as possible seems to be the right course of action.
As an investor, there are not a lot of direct effects from this budget; but there are some things that could indirectly make your investment plan better.
The federal government is going to attempt to take down internal trade barriers amongst provinces and tackle cross-border price discrimination. If they succeed, it improves the functionality of the economy.
With issues surrounding jobs and training, the government made it clear that if they can’t get into agreements with the provinces, it will simply go ahead with the job grants. With an aging population, if they can improve the efficiency of the labour market, it improves the economy which ultimately makes for a better investment plan.
- New Tax Rules to enhance fairness, integrity, and neutrality of the tax system including:
- Graduated brackets lost for testamentary trusts; but concessions for disabled beneficiaries
- Greater flexibility for tax reduction when making donations through Will and estate
- The end of the exemption to non-residents to shelter income for up to 60 months
- Changes to Pension Transfer Limits for underfunded pensions
- Foreign Account Tax Compliance Act (FATCA): An intergovernmental agreement was signed on February 5, 2014 to implement the exchange of tax information between Canada and the U.S.
- Simplified GST qualification
- Competitive Financial Services
- Consumers First: The theme focuses on the need for fair treatment of consumers
- Search & Rescue Volunteer Tax Credit
- Amateur Athlete Trusts
I trust you found these highlights useful. If you would like more information on the 2014 budget and how it may affect your investment or retirement plan, please contact me: 1.866.657.3882