With the Liberal majority government in place I thought our personal finances were going to change. Not so fast. Let’s take a look at what some of the Liberal election promises mean to my wallet.
- OAS at 65? Not anytime soon for us. The Liberals said they would NOT go ahead with legislative plans to raise the age of eligibility for Old Age Security (OAS) by 2023. Whatever they plan to do a) we won’t reach this age until almost 25 years from now and b) I’m not counting on OAS payments for retirement anyhow. If I get paid by this program I consider this a bonus.
- Cut the Family Tax Cut? Not applicable for us, we don’t have kids. This means we could not transfer up to $50,000 of income to the lower-earning spouse anyhow.
- A new Canada Child Benefit? Not applicable for us.
- Tax increases for high income earners? Not applicable for us.
- Expanded CPP? I’ll believe it when I see it. The Liberals said they would work with the provinces to expand our Canada Pension Plan (CPP). I think that’s a good idea but whatever they plan to do a) we won’t reach age 60 for almost 20 years from now and b) I’m not counting on CPP payments for retirement income. If we get paid by this program it’s another bonus.
- Changes to the Tax Free Savings Account (TFSA)? This sucks. The Liberals have pledged to roll back the annual TFSA contribution limit to $5,500 (from the current $10,000 limit) although I hope this program will be indexed at very least. Each year, one of our investing goals is to max out our TFSAs.
- Tax breaks for property moguls and the ability to raid your RRSP, more? Not for us thanks. The Liberal campaign promised tax breaks to developers who build new rental properties in Canada. The election platform also promised to let Canadians raid their RRSPs, more often, with less strings attached, associated with the Home Buyers’ Plan. The withdrawal limit/raid associated with the Home Buyers’ Plan would remain $25,000 though.
- Student loans? I read that new graduates wouldn’t be forced to repay student loans until they earned at least $25,000 per year, with interest on the loan paid for by the government. Pretty good deal that didn’t apply to me when I was younger with my student loan back then nor will it apply now. I think helping students is a great thing though.
- The Liberals also promised to lower Employment Insurance premiums. That will impact me (along with other fortunate Canadians that have a job) but only in a slight way.
- GIS increase? This program will get a bump but I’m saving what I can now to avoid Guaranteed Income Supplement cheques. Hopefully this program is never applicable for us although I think the increase is a good idea given our demographic shift.
- The small business tax rate is intended to be lowered to 9%. That seems like a great thing, I’m all for lower taxes especially for small business owners, but it won’t help me out.
Am I happy the Liberals got elected? Absolutely but it doesn’t mean very much to my wallet. At least Harper is out. We’ll see how things shake down as Mr. Trudeau takes office.
What was your reaction to the massive Liberal win? Is Mr. Trudeau going to help your wallet?