Canada 2010 Federal Budget Highlights

Canada 2009 Budget

Canadian Finance Minister James M. Flaherty released the 2010 Federal Budget today. The Canadian government plans to cut its record deficit ($54-billion) in half in two years and hopes to return to surplus in 2015.

19-billion dollar, The second half of the original $47-billion stimulus package that was outlined in 2009, will be injected into the economy in 2010.

Canadian economy grew at 5% in 2009 final quarter and expected to grow 2.6% in 2010, 3.2% in 2011, and 3% in 2012.

Now, let’s look at some important highlights that will affect you directly:

• No tax increases or tax relief.
• The basic personal amount (this is the amount you can earn without paying taxes) will increase to $10,382 in 2010.
• The government is maintaining its freeze on EI premium rate at $1.73 per $100 of insurable earnings until the end of 2010. In 2011, the allowable increase will be y a maximum of 15 cents per $100.
• A deceased individual’s RRSP or RRIF can be transferred tax-free to a registered disability savings plan of a financially dependent disabled child.
• Single parents with one child under the age of six will be able to save $168 a year, as the the Universal Child Care Benefit will be taxed in the hands of an Eligible Dependent for single parents.
• Families of children with disabilities will be able to carry forward the Registered Disability Savings Plan (RDSP) unused grants and bonds for 10 years.
• Financial institutions will be required to disclose sufficient information about the terms and conditions regarding their products and services for greater transparency. Mortgage calculations and pre-payment penalties will have to follow the same suit.
• Changes will be made to the Income Tax Act. Canadians will be able to receive notices of assessment electronically.
• Some cosmetic procedures which are not considered medically necessary, such as hair transplants, Botox injections, liposuction, and teeth whitening will no longer be used for medical expense tax credit.

These are just some highlights I have picked. For more information about this budget, visit Canada Budget 2009.

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