justin trudeau government mandate - analysis and commentary - march 2017
TRANSCRIPT
Liberal Canada – Mandate – March
2017By: Paul Young, CPA, CGA
March 31, 2017
Agenda• Family Tax Benefit• Middle Class• Honesty and Integrity• Modest deficits• Marijuana legalization• Infrastructure funding• Foreign Aid • Help for Seniors• CPP Enhancement• Working relations with the Provinces• GDP• Employment
Key Planks
Income Bracket / $45,282
• Who makes under $45,282?• Accommodation and food Services• Healthcare/social services• Other services sectors• Part-time jobs
Income Tax Bracket ($45,282 – $90,563)
• Majority of the Canadians• Goods Producing• Service Sector
Liberal Tax cut
Liberal / Justin Trudeau - Tax Savings / Example
• Elimination of tax credits means more taxes for the government
• EI and CPP are payroll taxes as such reduced your after tax income
• Carbon Taxes bump up the price of consumer goods and Utility costs
• Liberals tax cut saved money, but that money will be lost through higher payroll taxes, carbon tax and the elimination of tax credits
People making under 45,282
• No Tax cut• Hikes to EI and CPP are planned• Elimination of the Transit tax credit or about $800 savings
per year gone in 2017
Elimination of Tax Loopholes
Comments:• Elimination of the boutique and educational tax credits -
http://www.huffingtonpost.ca/cleo-hamel/federal-budget-child-benefits_b_9558180.html
• TFSA moved back to 5,000 from 10,000 - http://www.slideshare.net/paulyoungcga/pensions-for-canada-analysis-june-17-2016
• Elimination of principal residency for property held in trust - http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa12-eng.html (Based on residency status)
• Crackdown on evasion - http://news.gc.ca/web/article-en.do?nid=1049689
Family Tax Benefit
Source: http://www.cbc.ca/news/politics/calculator-canada-child-benefit-1.3504399
Issues:• Where is the incentive to expand
beyond 30,000 income• Latest Retail Sales for August 2016
showed many people were using the family tax benefit to pay down debt or for savings Source: http://www.slideshare.net/paulyoungcga/retail-sales-canada-august-2016
• What about the impact of other government policies?• CPP hikes• Carbon Tax/Pricing• Hydro Rates
Poverty Levels / Canada • Family Tax Benefit will reduced poverty levels
• How?• Income
• Wages have become stagnated - http://www.slideshare.net/paulyoungcga/wages-and-employment-canada-july-2016 • Part-Time jobs are growing faster than full-time jobs • Good producing sector continues to bleed jobs
• Source: http://www.slideshare.net/paulyoungcga/government-policies-labour-market-canada-67545343
• Household spending • Sheltering and Food account for over 41% of the household spending -
http://www.statcan.gc.ca/daily-quotidien/160212/dq160212a-eng.htm
Middle Class
Key Comment:• Treasury to be drained by $1.4B – Source -
http://www.cbc.ca/news/politics/liberal-tax-drain-100-million-1.3413516 • Taxing the richest -
http://www.cbc.ca/news/canada/new-brunswick/higher-taxes-on-rich-may-miss-revenue-targets-experts-say-1.3031842 or https://www.youtube.com/watch?v=pICUvNi95AY
• – Canada is still one of the best countries in the world - http://news.nationalpost.com/news/canada/canada-named-the-country-with-the-best-reputation-by-global-survey-again or https://ca.news.yahoo.com/blogs/dailybrew/canada-tops-the-world-as-most-reputable-country-021908756.html or http://www.slideshare.net/paulyoungcga/middle-class-and-quality-of-life-canada
Honest and Integrity with Financial Numbers
• Fundraising on the public dime - http://www.therebel.media/innovations_minister_s_funding_announcements_follow_liberal_fundraisers
• Limo rides - https://www.thestar.com/news/canada/2016/08/18/limo-company-used-by-health-minister-for-1700-ride-offers-refund-to-taxpayers.html
• Moving Expenses - https://www.thestar.com/news/canada/2016/09/23/liberals-try-to-turn-tables-say-harpers-tories-paid-out-325k-in-relocation-expenses.html
• Climate Change - http://www.theglobeandmail.com/news/politics/canada-commits-265-billion-to-climate-change-funding/article27507453/
• Trudeau and Wynne campaigning - http://ipolitics.ca/2016/02/14/trudeau-and-wynne-may-be-getting-too-cozy-for-their-own-good/
• Trudeau and Nanny - http://www.cbc.ca/news/politics/trudeau-nannies-employment-1.3620702
• MP Renovation Cost - http://www.cbc.ca/news/politics/sohi-infrastructure-minister-office-renovations-debate-1.3634811
Modest Deficits
Comments:• The country is on track to run a deficit of C$34 billion ($25.7 billion) in the
current fiscal year, almost C$5 billion more than forecast in the government’s March budget, the report calculated. Over the next five years, Canadian deficits are tracking C$16 billion more than forecast. Source: http://www.bloomberg.com/news/articles/2016-10-13/td-expects-canada-to-run-bigger-deficits-than-trudeau-budgeted
Marijuana Legalization
Comments:• Enforcement issues -
http://www.theglobeandmail.com/news/national/canadian-cities-challenged-by-ottawas-pot-plan-vancouver-mayor/article32204568/
• Violations of international treaties - http://www.cbc.ca/news/politics/marijuana-legalization-pot-anti-drug-treaties-1.3780661
Infrastructure Funding
Provincial dilly-dallying over eligibility and fine-print details has held up money for several provinces, including Ontario, Alberta and Nova Scotia Source: http://www.canadianmanufacturing.com/regulation/billions-dollars-infrastructure-spending-yet-start-flowing-173930/
Foreign Aid
Comments: • Expectations were low, but the federal budget released on March 22 provides little
concrete encouragement in the area of international development. In a section ambitiously titled “Restoring and Renewing International Assistance,” the government commits to increasing the International Assistance Envelope (IAE) by $256 million over two years – mere peanuts in relation to its other initiatives.
• The Harper government’s IAE reached $5 billion six years ago in 2010–11 and the Trudeau government does not plan to even match that level until next year. If we take into account inflation, the Liberals are further still from the modest goal of “restoring” foreign aid levels, which the Conservatives slashed in recent years. - Source: http://www.cips-cepi.ca/2016/03/24/budget-2016-postponing-decisions-on-canadas-foreign-aid/
• Foreign Aid oversight - http://www.slideshare.net/paulyoungcga/why-does-foreign-aid-fail-to-help-poor-countries-59777482
Help For Seniors
• GIS improvements or $947/year (Targeted low income seniors) - http://www.benefitscanada.com/news/budget-2016-changes-to-oas-and-gis-benefits-78787• Issue hurting seniors
• Hydro costs hurting seniors• Proposed carbon taxation will eat into household spending• Drug/prescriptions• De-listing of OHIP Services
CPP Enhancement
• Contribution rate to go from 4.95% to 5.95 - https://www.sunlife.ca/Canada/GRS+matters/GRS+matters+articles/2016/Breaking+News/Consensus+reached+on+CPP+enhancement+good+bye+ORPP?vgnLocale=en_CA• Impact to business
• Financial burden to business which can make them less competitive to their peers elsewhere in the world - http://www.bnn.ca/cfib-calls-for-delay-on-final-agreement-of-cpp-changes-citing-need-for-more-analysis-1.521851
Working relations with the Provinces
• After nearly a decade of a prime minister notorious for public tussles with premiers who challenged his policies, Canada's provincial leaders reacted Tuesday to the electoral victory of a Liberal leader who has promised to work harmoniously to advance their interests.
• During his time as prime minister, outgoing Prime Minister Stephen Harper was not shy about aggressively engaging premiers who spoke out against his government and displayed an outward contempt for first ministers' meetings. http://www.cbc.ca/news/politics/justin-trudeau-s-majority-greeted-with-optimism-by-provincial-premiers-1.3280093
Issues facing the Premiers and lack of meeting with Prime Minister• Carbon taxation - http://www.producer.com/2016/10/carbon-tax-not-part-of-new-sask-climate-change-plan/ or
http://www.slideshare.net/paulyoungcga/climate-change-policies-cap-and-trade-emissions-carbon-tax-carbon-pricing-canada
• Healthcare accord - http://www.cbc.ca/news/politics/premiers-trudeau-health-care-1.3782875
GDP Growth
• Scotiabank RBC – March 28, 2017
Summary - Overall
Source – Stats Canada – March 10, 2017
Comment:• Public Sector grew employment by 65,000
Government spending not sustainable – Financial Post – June 28, 2016
Source – Stats Canada – March 10, 2017
Broken Promises
• http://globalnews.ca/news/3009595/justin-trudeau-campaign-promises-kept-broken/