The 2015 federal budget provided few surprises.
But, overall, industry organizations are in favour of the changes introduced that support families, seniors and businesses across the country.
See below for a roundup of their reactions.
Conference for Advanced Life Underwriting
CALU approves of the steps taken to update the minimum withdrawal rules of RRIFs, which haven’t been updated since 1992.
“The RRIF minimum withdrawal rules haven’t kept up with changes in life expectancy and interest rates,” says CALU Board member Clay Gillespie.
When the RRIF rules were created in the early 1990s, he adds, interest-paying investments were in the range of 6% to 8%, and the life expectancy from birth was in the mid-70s for men, and was 80-years-old for women. Today, a five-year Government of Canada bond yields 1.5%, and people will live to be an average of 80-years-old for males and 84-years-old for females.
Investment Funds Institute of Canada
IFIC is pleased the government achieved a small budget surplus, while also delivering measures to assist Canada’s growing population of retirees. The organization is in favour of doubling TFSA room, given “RRSPs aren’t appropriate for everyone, and TFSAs serve as an important alternative for those [with] lower incomes and for retirees.”
Still, says IFIC, one change that was not included in the budget was a recommendation to strengthen group RRSPs to make sure they more closely align with other retirement savings programs.
Investment Industry Association of Canada
The IIAC is supportive of yesterday’s federal budget, particularly of the increase in the TFSA contribution limit and of the reduction to RRIF minimum withdrawal amounts. Read more.
Canada’s life and health insurance industry is pleased with budget changes aimed at enhancing long-term investment opportunities.
CLHIA president and CEO Frank Swedlove says, “We support increased funding for infrastructure, most notably the recognition [in the budget] that P3 alternative financing can be an effective contributor. We also support the further release of 50-year government bonds over the next year.”
Further, initiatives to improve the effectiveness of Canada’s health care system are also welcomed, including tax benefits to help seniors and disabled Canadians stay in their homes.
Read: Budget 2015 quick hits
Chartered Professional Accountants of Canada
CPA Canada has awarded the federal budget a B-grade, as the government has attempted to better prepare Canadians for the future.
However, with the projected surplus being $1.4 billion for 2015-2016, the government will have little wiggle room in managing its finances, it adds, especially since the contingency fund is being trimmed to $1 billion from $3 billion.
But, the budget calls for some small business tax changes, and aims to help Canada’s manufacturing sector.
Canadian Federation of Independent Business
CFIB says small business owners will be thrilled to see several measures that will help them in the 2015 budget, particularly the 18% reduction in the small business corporate tax rate over the next four years. It adds, “We are especially pleased that government intends to legislate the full small business tax cut plan before the election.”
To help you break down the budget, the firm has provided an infographic.