Canadian Budget 2007

The Canadian federal government today brought down the 2007 budget. There are a number of changes for individual and business taxes plus some other items that we will address after examining the documents further.

Here are a few high lites:

Tax Items

Families

* A $2,000 child tax credit will provide up to $310 per child in tax relief.

* Increase in the spousal and other amounts will provide up to $209 in tax relief, ending the marriage penalty.

* Increase in the age limit to 71 from 69 for registered retirement savings plans and registered pensions.

* Eliminate the $4,000 limit on annual contributions to registered education savings plans (RESPs), increase the lifetime contribution limit to $50,000 from $42,000, and extend RESP eligibility to more part-time studies.

* Increase the maximum annual Canada Education Savings Grant to $500 from $400.

* The public transit tax credit will be extended to new electronic fare products and weekly passes used on an ongoing basis.

Business

* A two-year incentive for investments in manufacturing and processing equipment—50-per-cent straight-line write-off on new investments before 2009.

* The capital cost allowance rate for buildings used in manufacturing and processing will increase to 10 per cent from 4 per cent.

* Other capital cost allowance rates will also be increased and, together, will take Canada’s tax rate on new business investment from fifth-lowest in the Group of Seven (G7) to third-lowest.

* The lifetime capital gains exemption for farmers, fishers and small business owners will be increased to $750,000 from $500,000.

* Long-haul truck drivers’ deduction for meal expenses rises to 80 per cent from 50 per cent.

* Ensuring corporations pay their fair share of taxes by providing new resources to the Canada Revenue Agency to detect and close down tax avoidance through offshore tax havens.


Budget 2007 proposes a number of measures to help Canadian businesses , including:

* An independent review of Canada’s competition policy.

* A 20-per-cent reduction in paper burden for companies, including small businesses.

* $60 million over two years to streamline the regulatory review of large natural resource projects.

* A Global Commerce Strategy to advance Canadian business in global markets.

* A one-time $600-million payment to establish new, cost-shared savings accounts for farmers once agreement is reached with provinces and territories.

* Immediate one-time $400-million payment to farmers to address rising costs of production.

* A plan to create a Canadian advantage in global capital markets.

After we complete our analysis of the budget, we will be posting further opinions on certain issues.

Click on the title of this document to go to the government's budget pages.