Tuesday’s federal budget contained a slate of promises for select groups of Canadians — and some gained more than others.
This will be the budget Conservatives take on the campaign trail as they try and sell Canadians on another four years of Tory government. And most of their courting plan involves tax cuts.
Huffington Post Canada looked at four different demographic groups to see which households benefit most from measures introduced in the new budget.
The budget handed out many goodies to seniors — the demographic with the highest voter turnout —and traditional nuclear families with young children, specifically families where one parent is the main breadwinner.
There’s not much in the budget for Gen Y and Gen Xers who don’t have children, and little on other issues like the cost of housing and tuition or addressing debt loads.
“Two types of families were the real winners in this budget: those with kids under age 18, and those with lots of extra money to save. If you’ve got both, and two parents, one of whom is a stay-at-home parent, this was a big bonanza budget,” said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives.
Here’s a look at how different Canadian households will fare:
Low-Income Single Parents
About one-in-five Canadians families are single parent households. These families will see some extra cash in their pockets thanks to the doubling of the Universal Child Care Benefit, which will now max out at $160 per child per month, though it is a fraction of child care costs across the country.
The expanded children's’ fitness tax credits is less likely to benefit low-income parents, who find extracurricular programs difficult to afford in the first place. However, parents might also be able to benefit from new job training initiatives that will increase eligibility for loans.
Seniors seem to be the biggest winners in this pre-election budget as baby boomers retire in droves. The document aims to alleviate fears that some people are outliving their savings, especially after the 2008-2009 recession battered retirement funds.
The budget relaxes requirements around registered retirement income funds, reducing the minimum withdrawal by about 30 per cent. The doubling of the TFSA limit also benefits seniors, particularly those over 71 who are no longer allowed to contribute to their RRSPs, thereby providing them with a higher after-tax income. Seniors also received a renovation tax credit to help make their homes accessible.
This growing demographic has been hard hit by economic weakness since the recession, but there was little in the budget to address the issues most affecting them. The doubling of the TFSA to $10,000 will help some to put aside more money tax-free in order to save more for a first home, education or retirement.
However, as Yalnizyan points out, this only helps those who can put aside more than $5,500 in savings even as this group continues to pile on debt, largely thanks to student loans and the high cost of housing in many cities. Another potential benefit for urban commuters is promised funding for public transit, but that doesn’t kick in for another two years.
The budget contained lots of goodies for this demographic. Two-parent families with young children benefit from the increase in the child care credit as well as a doubling of the fitness tax credit. The biggest Conservative gift to this group is the the controversial Family Tax Cut, also known as income splitting, which allows families with children to split their incomes, for a tax credit maxing out around $2,000.
It is most beneficial to families with large gaps in pay, such as those with a stay-at-home parent. But, Yalnizyan says, fewer than 20 per cent of couples with children under 18 fit that model.