Justin Trudeau’s Liberal party won a big majority in Monday’s federal election. Now it’s time to deliver on the campaign promises, including those focused on an idling economy.
Here’s what advisors can expect:
- Your wealthier clients are going to pay more tax. The Liberals will introduce a new 33% tax bracket, up from 29%, for those that earn more than $200,000 per year. Expect this to happen almost immediately.
- However, your middle-class clients will have a few more dollars to invest once the Liberals drop the tax rate for those earning between $44,700 and $89,401 from 22.5% to 20%, a nice round number.
- The Universal Child Care Benefit is gone to be replaced by the non-taxable Canada Child Benefit. The most-needy benefiting to the tune of $533 per month per child. Those earning over $300,000 get nothing.
- Also gone is one of the most controversial pieces of the Conservative’s tax plan – income splitting for families.
- The $10,000 TFSA contribution limit for 2015 will likely be rolled back to $5,500 in 2016, exactly where it was prior to the change in June from the Conservatives.
- Starting in 2017, EI premiums will be reduced by 23 cents per $100 earned to $1.65. While a smaller cut than the Conservatives were promising, it still puts more money in the hands of your clients.
- Ontario Premier Kathleen Wynne suggested during the federal election campaign that if Justin Trudeau was elected as prime minister the expansion of the CPP might result in the scaling back or elimination of ORPP