Canada Budget at a Glance: Key Takeaways from Morneau’s Plan

Morneau: Canada to Balance Budget in 5 Years

Here are the main highlights from the Canadian budget released Tuesday by Finance Minister Bill Morneau, the first since Prime Minister Justin Trudeau won office in October.

*Deficit spending: Almost C$120 billion ($91.7 billion) in deficits over six years, including C$29.4 billion in fiscal 2016-2017 and C$29 billion the following year. The government is “committed” to balanced budgets, yet doesn’t set a time frame for getting there.

*Stimulus: Enhanced spending on infrastructure, child benefits, and tax cuts for the middle class will provide a 0.5 percent boost to the economy in the fiscal year that begins April 1, and 1 percent the following year.

*Key numbers: Program spending to rise 7.6 percent to C$291.4 billion in 2016-17; revenue to fall 1.2 percent to C$287.7 billion.

*Debt: Record bond issuance of C$133 billion in 2016-17 to finance the deficit, with increased focus on two-, three- and five-year bonds. Government to consider selling 50-year bonds this year.

*Infrastructure: As pledged, C$120 billion over 10 years. Spending is more modest to start than forecast, with C$11.9 billion over the first five years on transit, waste water and affordable housing.

*Canada Child Benefit: Program will provide C$23 billion in payments to families with children in the 2016-17 fiscal year. Monthly payouts under the revised program to begin in July.

*Tax benefits removed: Credit on university education and textbooks is canceled, as is the capital gains exemption on charitable donations of stock and real estate.

*Old Age Security: Eligibility for OAS remains at 65, scrapping a move by the previous government to raise the age to 67 by

2023.

*Small-business tax cut deferred: The Liberals had pledged to carry out the previous government’s plan to lower the rate to 9 percent by 2019. Instead, the rate will remain at 10.5 percent.

*Expected changes not in the budget: No change in taxation on stock options; no move in the capital gains tax rules.

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