The Liberals majority election victory earlier this week caused many to speculate as to if Canada now has the best looking couple at the helm in the world. Although we are not sure about that, here are the top 5 things that we think will impact your financial plans going forward.
1. Income tax will increase on the top 1% of earners and will decrease for most others. For those earning between $44 700 and $89 401, the average savings will be $670 per year. For those making over $200 000 per year, the top marginal tax rate will be close to 50%.
2. Change in the Tax Free Savings Account limit. The annual allowable contribution will likely fall back to $5500 per year.
3. Give and Take for Families. The family tax cut currently allowing up to $50 000 of income splitting to a lower income earning spouse will likely disappear. A new Canada Child Benefit will likely be introduced providing an extra $2500 to an average family of 4. The Universal Child Care Benefit that is currently in place will no longer exist. Also, families with over $200 000 of household income will not be eligible to receive the new benefit.
4. Old Age Security Pension at 65. The Liberals have said that they will not move forward with plans to move the eligible age to 67.
5. Reform the CRA. Trudeau's plan includes a vague promise to have our tax department contact people who have tax benefits but aren't collecting them.
As with all elections, we need to keep in mind that promises do not necessarily translate to actions but if any or all of the above are true, planning your financial future just became even more important!