Ottawa: As expected the federal budget stayed on the road to deficit reduction and is reflection of Flaherty’s determination to get the books balanced. Many are calling it a cautious budget, somewhat boring budget that contained no big breaks for most Canadian families. He lowered the outlook for deficit to $16.6B from $17.9B estimate in Nov. Finance minister was seen pushing the Canada Jobs Grant program, although no province has signed on it yet. Ottawa plans to take the provincial share of Canada Jobs Grant program and launch it April 1 in provinces where a deal isn’t reached soon. $300-million in current federal job-training transfers will be redirected by the time it’s fully implemented. The budget proposes to dedicate $108.2-million for veterans of modest means. For veterans who are medically released from the Forces, the government wants to make it easier for them to land jobs in the public service. They will be given preference in external job competitions. Flaherty also promised to bring Legislation to tackle cross-border price gaps.
Bruce Ralston, MLA for Surrey-Whalley has called the budget a ‘do-nothing budget’. He said, ” This is really is a do-nothing budget. There are still nearly 300,000 more people unemployed today than before the recession, yet this budget has no significant new investments to create good middle-class jobs. The Conservatives are clearly delaying any new ideas until next year, because next year is an election year and are playing politics while millions of Canadian families are still struggling”.
MP Nina Grewal has welcomed the Economic Action Plan 2014 and its constructive steps towards fiscal balance. She said, “By delivering a functional, pragmatic budget, the Government has shown its commitment to the prosperity and safety of Canadian families”. In her statement she said , “While the NDP and Liberals had been publicly calling for the federal budget to include new tax hikes on Canadians and more deficit spending, our Government rejected both demands. Indeed,Economic Action Plan 2014 contains no new taxes on families and businesses, while also continuing to ensure government spending was efficient and effective as possible”.
MP Jasbir Sandhu also termed the budget as “do-nothing” budget. He said, “It is clear that the Conservative government does not understand the challenges facing Canadian families. They have completely ignored the needs and safety of Surrey residents, and I am sure these concerns are echoed throughout the country”. He further added, “I am very disappointed to see that they are not dedicated to public safety, especially considering the recent escalation of crime in Surrey”.
In a statement given to Asian Journal, Minister of Finance Mike De Jong said, “The Federal Government is heading towards a balanced budget and that’s something we support and attach a great importance to. We also see the tax credit for volunteers in search and rescue as a very positive item in the federal budget. It’s clearly something that the many search and rescue volunteers who give so freely of their time to help those in need will benefit from. I think it’s a very positive step that the federal government’s budget lays out plans to extend the Canada student loan program to cover Red Seal trade apprenticeship programs. Our biggest concern is with the Canada jobs grant. I think British Columbia and the federal government agree on the objectives, but it won’t work unless the provinces, territories and the federal government are working together. So I’m hopeful that Minister Kenney will continue to engage with our Minister Bond and her provincial and territorial colleagues and find a resolution to this that is fair and ultimately works for those who require training in British Columbia and across Canada”.
Our tax expert, Grant Glimour of Glimour Knotts Chartered Accountants finds the budget fairly conservative, with the emphasis on continuing the trend to returning to a balanced budget rather than introducing significant new tax measures. Grant pointed out certain key areas of the main impact to small business :
Eliminating Eligible Capital Property
For many years non tangible assets such as goodwill, incorporation costs, customer lists, franchise rights and farm quotas have been treated under Eligible Capital Property (ECP) rules which differ significantly to the Capital Cost Allowance (CCA) rules applied to tangible assets. Under ECP rules only 75% of the capital expenditure is added to the cumulative eligible capital pool and is deducted at a rate of 7% per year on a declining balance basis. In contrast the full cost of tangible assets have been added to the capital cost pool, and assigned a class with rates that range from 5% deductibility to 100% deductibility per year. In addition the ECP regime has become increasingly complicated. The budget has announced that the government will initiate a public consultation on repealing the ECP rules and replacing it with a new CCA class. The timing and implementation of this proposal is still to be determined.
Remitting Source Deductions
Employers are required to remit source deductions on employee taxes a set number of times a month depending on the size of the total average monthly withholdings. These thresholds are being increased in two categories. For those having to remit twice a month the threshold is increasing to $25,000 from $15,000. For those remitting four times per month the threshold increases to $100,000 from $50,000 for remitting four times per month. This change will apply in respect of amounts to be withheld after 2014.
Extending Class 43.2
Class 43.2 which was introduced in 2005 to allow for accelerated CCA for investments in specified clean energy generation and energy conservation equipment has been expanded to include water current energy equipment and equipment used to gasify waste fuel.