The Canadian federal government released their 2017 budget to limited fanfare on March 22, as many were worried about increased taxes and reduced support for small business. But, the result has been termed a ‘wait and see’ budget by many who have reviewed it.
With the political climate in the United States still very unclear, it makes sense that the Canadian government would ‘wait and see’ what direction they go.
Budget Highlights of Note
- Increased taxes on cigarettes and alcohol
- Increased EI premiums
- Phasing out of the Canada savings bond program
- Removal of the public transit tax credit
- Increased flexibility around parental leave
- 40,000 new subsidized daycare spaces
The Campbell Lee & Ross Perspective
We see the 2017 Federal Budget as positive, in the sense that there were no big surprises in this budget.
Unfortunately, the looming negative is the massive $25-$28 billion deficit that Canada will have this year. The concerning part is that the 5 year budget forecast does not eliminate the deficit, which is projected to be 15.8 billion in 2021-2022.
Ultimately, the path to a balanced budget is long, so the national debt will continue to grow. Our team will be monitoring the impact of the budget as it relates to best investment guidance for our clients.