Federal Election Promises That Affect Personal Finances
Today we have a very special episode – our 100th episode!!!
Originally, I had planned to finish up the series about personal finances and death but I felt like that was a little too dark…so instead we’ll talk about the politics – a topic only a little less darker than death.
With the federal election quickly coming up on September 20th, I thought that it would be more valuable to see what promises the main parties have made that will affect your personal finances.
Most of these proposals are just promises, so they may never happen but it’s important to know what’s on the table. It’s also likely that we will have another minority government which can further change policies.
Before we jump into the episode – please vote and select the candidate of your choice. You can find your voting location on your voters care or online. It’s easy to vote and there is even a way to do it if you don’t have ID.
Ok, so let’s jump into things
Federal Election Promises Liberals
The central promise from the liberals is to create affordable childcare with a goal of cutting cost by 50% by the end of the year and then eventually dropping it to $10 a-day. To do this they will invest in building new infrastructure to increase the supply of childcare spots across Canada. The idea is that the increase of spots will follow economics 101 and push down market prices.
This promise is definitely a big one. The cost of childcare is dibilitatingly high and many families can’t afford it leading to instances where the mother will often leave the workforce to take care of the child.
A new tax-free savings account will also be created for Canadians that are under 40 and are trying to save for a home. The rules are a little thin here, but the limit for this account will have a max of $40,000. They also propose to increase the home buyers’ tax credit from $5,000 to $10,000.
For working Canadians, they will also improve the Canada workers benefit. This is a refundable tax credit that targets low-income Canadians and is tied to your employment income. The amount that you earn above approx. $13,000 reduces the tax credit until it is completely phased out at earning around $24,500.
To help cover those that are still impacted by COVID-19, certain benefits will also be continued with a focus on hiring subsidies.
To help cover the charges of these new programs, the Liberals will increase taxes on a couple key demographics. The big one is increasing corporate taxes on large financial institutions and insurance companies. They will also continue with their plan to tax luxury cars, boats, and planes.
Finally, they will limit the tax credits and deductions that those in the highest federal tax bracket can claim. – which is those that earn over $216,500’ish. The change will force them to pay a minimum rate of 15% versus the federal rate of 33% in the highest bracket
To help make housing more affordable too, they will add an anti-property flipping tax and tax vacant property and land held by non-resident and non-Canadians
Some other smaller promises include mandatory 10 days of sick days a year for federal employees.
Federal Election Promises – NDP
The central component of the NDPs platform is a universal pharmacare program. It’s no doubt that medication can be debilitatingly high for some Canadians and this program would eliminate this fee for all Canadians, which would allow them to use their money for other expenses or financial goals.
The spillover from a universal pharmacare plan would likely also lead to a drop in medical insurance as the insurance companies would no longer need to pay for medication.
Similar to the Liberal’s promise, they also pledge to create universal $10/day care. This promise isn’t fully fleshed out yet, but they promise to work with each province to achieve this goal.
They also promise that they would reduce the costs for internet and cell phones leading to average savings of $1,000.
To help assist with the COVID-19 recovery they propose to subsidize new and rehires. This subsidy would cover the employer portion of EI and CPP.
To help pay for the increased spending, the NDP would also add a wealth tax of 1% per year on those with net worth of $10 million. It’s important to point out that it’s uncertain how this would be implement this as it’s really hard to implement a wealth taxes and many countries have frequently failed in the past.
They would also increase the amount that is paid on Capital gains taxes. Under current rules, you only have to include 50% of the gain but under the NDPs plan, you would have to include 75%.
The highest federal tax bracket would also increase to 35% from 33%
Federal Election Promises – PC
The platform for the PCs includes a bunch of smaller promises with the goal of balancing the budget in the next decade. It’s likely that they didn’t make as many promises as they are expecting to reduce expenditures.
The biggest promise is to double the Canada’s workers Benefit for individuals and families. This would increase the benefit to $2,800 for individuals and $5,000 for families.
There would also be a 5% GST holiday over December where all purchases excludes the GST portion on purchases.
The conservative would also cut Trudeau’s childcare spending plan and implement a refundable tax credit that would rebate up to 75% of eligible childcare costs. This tax credit would be tied to income that include families with incomes up to $150,000. It’s also promised that parents would be able to earn an income while they are on parental leave.
To boost the hospitality industry, they would offer a 15% tax credit for vacations within Canada next year and have a 50% rebate on food and non-alcoholic dining from Monday to Wednesday for a month.
Don’t Forget to Vote!
That’s it for today but I hope that this helped with your voting decision on Sept 20th, 2021. You can find your voting location on your voter’s card or online here.