Finance Minster Jim Flaherty has tabled his first majority-backed budget. With the power to push through the Conservative agenda, he has taken aim at public pension plans in an attempt to shrink the size of the government and whittle down the deficit.
The federal government is increasing the eligibility age for Old Age Security (OAS) to age 67 from 65 to reflect the reality that Canadians are living longer and healthier lives, and may prefer to keep working. However, the changes won’t begin to take effect for another 11 years.
Aside from his $110 brogues, Finance Minister Jim Flaherty’s budget had little that was new for the nation’s senior population. Even the push back of the age of eligibility for OAS from 65 to 67, which comes into effect in 2023, doesn’t affect current recipients or those nearing retirement.
Despite its austerity, this budget was a huge boon for disabled clients. Under certain circumstances, a plan-holder can now withdraw up to 10% of the plan’s fair market value at one time, and there’s now a minimum required withdrawal for certain types of RDSP.
There were a few items of significant interest to small business owners in the 2012 Federal Budget. Most of them are reflected in the government’s expressed concern for closing perceived tax loopholes. Here are some prominent items relevant to small business owners that should be reviewed.
There’s no question, the biggest piece of news out of the federal budget is increased age at which Canadians will qualify for Old Age Security payments. The good news is that the government has given plenty of notice. Listen to the full podcast on Advisor ToGo.
Show clients you’re proactive by sending them this customizable letter about the Federal Budget.
Reaction to the federal budget came swiftly from several industry associations, accounting firms and advocacy groups. Here’s a selection of their thoughts:
Also from Rogers Publishing
Interactive Budget 2012 (MacLean’s)
Take a look at how the federal government’s revenues and spending patterns have changed over time—we’ve got the data going all the way back to 1938. And check out what your share of the debt burden adds up to, as well as which prime ministers presided over federal budget deficits or surpluses.
Harper’s very political budget (MacLean’s)
Revolution, ladies and gents! Light the torches! In his December year-end interviews, Stephen Harper used the term “major transformations” a half-dozen times. Fast forward to this afternoon. “We will eliminate the penny,” Jim Flaherty told the Commons. It was literally the first new policy measure he announced. “Pennies take up too much space on our dressers at home.”
Back in 2006, Finance Minister Jim Flaherty began his first budget speech by reflecting on how “budgets say something about your motivations and your goals.” Motivation and goal: lay the populist groundwork for turning Stephen Harper’s minority into a majority.