Recently, Finance Minister Bill Morneau unveiled the 2018 federal budget. Budget initiatives continue to reflect the government’s multi-year pledge to improve the standing of the middle class. One significant highlight in this year’s budget is the beginnings of a national pharmacare program.
The federal government took a small step last week toward a national pharmacare program with its budget commitment to create an advisory council to begin discussions and offer recommendations. And while this part of the budget received a lot of attention, there are other areas that may be of interest to you and your clients.
The budget revealed the government’s sharp focus on gender diversity and inclusivity. In fact, the budget says “every single decision on expenditure and tax measures” was informed by its gender-based analysis tool. Here are four other areas that may be of interest to clients.
- Taxation of passive investment income. The budget proposes that companies earning more than $50,000 of income from passive investments in a year will see a gradual reduction for income eligible for the small business tax rate (set at 9% for 2019). Eligible income will be reduced by $5 for every $1 of passive income above $50,000. Companies earning more than $150,000 in passive income won’t be eligible for the small business tax rate. The change is proposed to apply to tax years that begin after 2018.
- Gender pay equity. The budget proposes to introduce new pay equity legislation covering 1.2 million people employed in federally regulated sectors. It would create a streamlined process for employers, set out timelines and provide independent pay equity oversight. There are few details on the impending legislation, but the government plans to continue consulting employers in the coming months.
- More funds for women entrepreneurs. The government is proposing a number of steps to help female entrepreneurs under a program called Women Entrepreneurship Strategy. The budget proposes to make $1.4 billion in new financing available through the Business Development Bank of Canada over the next three years. It also proposes to increase funding to women-led technology firms to $200 million from $70 million over the next five years.
- Boosting financial support for parents. The government proposes to provide $1.2 billion over five years starting in 2018-19, and $344.7 million per year thereafter for a new EI Parental Sharing Benefit. The benefit will provide additional weeks of “use it or lose it” EI parental benefits when both parents agree to share parental leave. The incentive is expected to be available as of June 2019.
In his speech to parliament, Morneau acknowledged that businesses are “concerned” about challenging trade talks and U.S. tax changes. He said the government “will be vigilant in making sure Canada remains the best place to invest, create jobs and do business – and we will do this in a responsible and careful way, letting evidence, and not emotion, guide our decisions.”
Sun Life Global Investments Chief Investment Officer Sadiq S. Adatia forecasts higher market volatility, but says that shouldn’t scare off disciplined investors in their retirement planning. “Even if markets grow more choppy, as we expect, that’s never a reason to stray from the long-term plan. Investment success depends in large part on patience, discipline and strong risk management. Staying invested in a well-diversified portfolio is a strategy that’s stood the test of time.”
As a trusted advisor, you can help your clients understand their financial goals and build a retirement plan that can guide them through market ups-and-downs so they can retire with confidence.
Read more details about the budget at Sun Life Global Investments or contact your Sun Life Sales Director if you have any questions.