What you need to know about federal budget 2019
Here’s a look at the new measures you may have missed in budget 2019.
CANNABIS TAXATION ADJUSTMENTS (the higher you are, the more you pay)
With the sale of edible cannabis products poised to become legal later this year, the federal government says excise duties will be imposed on edibles, extracts and topicals on the quantity of tetrahydrocannabinol (THC) contained in a final product, beginning May 1. This means duties on products with low THC levels – such as cannabis oils – will generally be lower. There will be no changes to the current excise duty framework for most other cannabis products, including fresh and dried cannabis, and seeds.
HELP FOR STUDENTS
In addition to offering a new job training tax credit, Ottawa is also moving to make student loans more affordable. Students who have a floating rate on their Canada Student Loans will now pay the prime lending rate – which is currently 3.95 per cent – and won’t have to pay interest for the first six months after graduation. The government is also expanding the Student Work Placement Program, with the goal of creating up to 84,000 new student work placements across the country over five years.
MAKING HIGH-SPEED INTERNET MORE ACCESSIBLE
In its budget, the federal government is vowing to make high-speed Internet accessible for all of those living in remote and northern communities by 2030.
BOOSTING CYBER SECURITY SPENDING
Ottawa is planning to bolster its investment in cyber security, proposing $144.9 million over five years beginning this year, to help protect the country’s critical infrastructure in the finance, telecommunications, energy and transport sectors. This is in addition to the $507.7 million over five years the government committed in last year’s budget.
IMPROVED ACCESS TO THE CANADA WORKERS BENEFIT
In last year’s federal budget, Ottawa introduced the Canada Workers Benefit to help supplement the earnings of low-income workers. This year, the government is proposing to provide the Canada Revenue Agency with $4 million over two years beginning in 2019 to conduct targeted outreach to increase awareness of the CWB, and allow low-income workers to apply online for advance payment of the benefit through the CRA’s website.
BOOSTING HOUSING SUPPLY
While helping new buyers is a key focus for Ottawa in this year’s budget, the government is also looking to help create more housing supply. The government is focusing on the rental market, pledging to help build 42,500 new units across the country through an expansion of the Rental Construction Financing Initiative. Ottawa plans to make an additional $10 billion of financing available over nine years and extend the program until 2027-28.
CRACKDOWN ON MONEY-LAUNDERING
The role of fraud and money-laundering in Canada’s real estate market has come under increased scrutiny. Ottawa expects increased efforts to crackdown on money-laundering to bring in an additional $68 million in tax revenue over the next five years.
Ottawa also intends to change the criminal code offences when it comes to those who participate in money-laundering schemes.
STOCK OPTION RULES
Ottawa is taking aim at the preferential use of stock options by executives at large, mature companies, while still trying to preserve the benefit for start-ups and workers. The federal government says it plans to impose an annual $200,000 cap on the preferential treatment of stock options. They say this will make the option plan more equitable and align it with similar tax treatment in the U.S. According to the budget documents, 2,300 individuals with annual income of over $1 million claimed more than $1.3 billion in stock option deductions in 2017. Those 2,300 people represented just six per cent of the total number of individuals who claimed stock option deductions, but accounted for more than two-thirds of the total cost of the deductions to taxpayers.
GAS TAX FUND
As communities across the country suffer from massive infrastructure deficits, Ottawa is giving a one-time, $2.2 billion boost to municipalities for short-term issues through the Gas Tax Fund, doubling the government’s commitment from 2018-19.
PUBLIC PROSECUTION SUPPORT
In the wake of the SNC-Lavalin scandal, the federal government is boosting support for the Public Prosecution Service of Canada – which is responsible for carrying out the federal prosecution of criminal offences – to $21 million per year starting in 2020-21.
HELP FOR SUPPLY-MANAGED FARMERS
The government is pledging $3.9 billion in support for supply-managed dairy, egg, and poultry farmers to help deal with losses that result from free trade agreements. Ottawa is offering up to $2.4 billion to help sustain eligible farmers’ incomes, $250 million of which has already been allocated to dairy farmers to help with losses sustained from the Comprehensive Economic Trade Agreement (CETA).
METALS TARIFFS ASSUMPTION
The government is assuming the 25 per cent U.S. steel and aluminum tariffs will still be applied until the middle of 2019-20. The tariffs have been a point of contention among business leaders, especially since Canada, Mexico and the U.S. reached a new free trade agreement late last year. The budget also earmarks $100 million next year to support small-and-medium-sized businesses that produce and use steel and aluminum.