In early January Gord held a well-attended pre-budget consultation meeting in Brockville and also received ideas by mail, by hand and by e-mail.
Tax breaks, funding plans among highlights
Gord Brown, Member of Parliament for Leeds-Grenville says the Economic Action Plan presented by Finance Minister Jim Flaherty in the House of Commons Tuesday, January 27, will breathe stimulus into Leeds-Grenville.
“Much of the Finance’s Minister’s plan directly addresses the needs of our riding,” says Mr. Brown.
“From buildings and bridges, to relief for taxpayers, to help for businesses, communities, industries and workers, to help for homeowners, the budget provides assistance across many sectors to help keep our economy moving,” he explains.
The plan contains five main elements: improving access to financing and strengthening Canada’s financial system; action to help Canadians and stimulate spending; action to stimulate housing construction; action to build infrastructure; and action to support businesses and communities.
Of immediate interest to the riding are tax cuts, employment insurance enhancements, home renovation tax credits, and help for agriculture, Mr. Brown says.
Tax cuts include; a freeze on employment insurance payroll taxes, lower personal income taxes, increased child benefits, additional tax relief for seniors, tax relief for businesses, and an enhanced Working Income Tax Benefit Income.
For workers who face unemployment there are; five extra weeks of employment insurance benefits, more opportunities for skills upgrading and training, support for key Canadian industries under pressure and a guaranteed $10 million for each of the next two years for the Eastern Ontario Development Program.
For homeowners and those wishing to purchase a home the plan provides a tax credit for home renovations where homeowners can get back up to $1,350 on renovations to their house or cottage. First time buyers can get back up to $750 on closing costs and they can withdraw more from their RRSP to buy or build their first house. See more on these initiatives on Page 3.
Businesses will also see tax relief including an increase in the lowest tax bracket for small businesses to $500,000, a 100 per cent capital cost allowance rate for new computer purchases, and increased access to credit.
Farmers will be supported with a $500 million flexibility program to help them adapt to pressures and improve competitiveness. There will be $50 million invested in slaughterhouse capacity, and support for new farmers, inter-generational farm transfers and agricultural co-operatives.
“Of course, the plan calls for more money for buildings, bridges and roads,” Mr. Brown says. “Our recent historic investments through the Building Canada Fund will be improved with almost $12 billion in new infrastructure stimulus over two years.
“There is so much in this plan that it is difficult to know where to begin,” says Mr. Brown.
“I am grateful to the many people in Leeds-Grenville who participated in my pre-budget consultation process,” he says. “It provided many ideas that were incorporated into the budget.”
He notes that he is also pleased that the economic stimulus will not place the country in a structural deficit position.
“The deficit will be manageable and temporary,” he points out.
“The first signs of the coming recession were in August of 2007. Because of the actions the government began to take back in the fall of 2007 our GDP to debt ratio will still be the lowest in the G7 even with the current deficit,” he explains.
He notes that Canada entered the recession later than other countries and it is predicted that it will be out of recession sooner than other countries.
Tax relief
Canadians will benefit from $20 billion in tax initiatives this year and over the next five years as a result of the federal budget introduced in January.
The basic personal amount will be increased to $10,320 for 2009 from $9,600 in 2008, allowing individuals to earn more income before paying federal income tax.
The top of the first personal income tax bracket will be increased to $40,726 in 2009 from $37,885 in 2008, allowing more income to be taxed at the lowest 15 per cent rate, rather than the 22 per cent rate.
The top of the second personal income tax bracket will be increased to $81,452 in 2009 from $75,769 in 2008, allowing more income to be taxed at the 22 per cent rate, rather than the 26 per cent rate.
The new basic personal amount and bracket thresholds will be indexed for 2010 and future years.
Raising the level at which the National Child Benefit supplement for low-income families and the Canada Child Tax Benefit are phased-out, will provide a benefit of up to $436 for a family with two children.
Effectively doubling the tax relief provided by the Working Income Tax Benefit will help low-income Canadians over the “welfare wall” and into gainful employment.
Providing up to an additional $150 of annual tax savings for low- and middle-income seniors through a $1,000 increase to the Age Credit Amount, for a total savings of $961.
Home owners relief
Initiatives for homeowners will improve homes and help the economy.
A temporary Home Renovation Tax Credit that will provide up to $1,350 in tax relief and reduce the cost of renovations for an estimated 4.6 million Canadian families. The Home Renovation Tax Credit applies to work performed or goods acquired after January 27, 2009 and before February 1, 2010.
A First-Time Home Buyers’ Tax credit will provide up to $750 in tax relief to first-time home buyers.
We have increased from $20,000 to $25,000 the amount that first-time home buyers can withdraw from their RRSP to purchase a home.
With this budget we provide $300 million over two years to the ecoEnergy Home Retrofit program, which is expected to support an additional 200,000 energy-saving home retrofits.
The Home Renovation Tax Credit will be family-based, generally meaning that an individual, and their spouse or common-law partner qualify. Family members will also be able to share the credit amongst themselves.
The HRTC can be claimed for renovations and alterations to a dwelling or the land on which it sits that are enduring in nature. Costs associated with such projects will be eligible for the credit, including permits, professional services, equipment rentals and incidental expenses.
Routine repairs and maintenance normally performed annually or on a more frequent basis will not qualify for the credit. Individuals will need to keep receipts for expenditures and may claim the HRTC when filing their income tax returns for 2009.
Business tax relief
The budget provides tax and tariff relief to stimulate business investment.
It introduces a temporary 100 per cent capital cost allowance (CCA) rate for computer hardware and software acquired after January 27, 2009 and before February 1, 2011.
It extends the temporary 50 per cent straight-line accelerated CCA rate to investment in manufacturing or processing machinery and equipment undertaken in 2010 and 2011.
It provides over $440 million in savings for Canadian industry over the next five years by permanently eliminating tariffs on a range of machinery and equipment to lower costs for Canadian producers in a variety of sectors, such as forestry, energy and food processing.
More relief for agriculture
The budget supports farmers with a $500 million agricultural flexibility program that will facilitate the implementation of new initiatives, both federally and in partnership with provinces, territories and industry.
It invests $50 million over the next three years to strengthen slaughterhouse capacity across Canada and it amends the Farm Improvement and Marketing Loans Act to help make credit available to new farmers, support inter-generational farm transfers, and modify eligibility criteria for agricultural co-operatives.
For complete information on the Budget visit www.fin.gc.ca
