Budget 2010: Showing You the Money

After several years of going to Ottawa to report on the budget, I still get a weird, almost perverse joy out of reading what the government says it's going to do for us, for itself and for the rest of the country.

Hopefully this streak of geekery will be helpful to you as well. It's true, there's not a lot of money on the table this year, but if you'd like to know where money can be found, read on.

My wishlist

My wishlist items are small potatoes compared to, say world peace, a balanced budget or funding for schools/Afghanistan/insert your big deal here, but these are the items I would love to see and how each panned out in the end.

• No income tax hikes. (They've promised. I hope they deliver and don't simply hide it in some new fee or user tax, couched in words about all the good that new capital will do for the community or something like that.) Update: What do you know? It looks like this one came through. Although the main budget documents are a little light on details, they say the government is offering up $3.2 billion so Canadians can earn more income before paying federal tax and before being subject to higher tax rates. Hm.

• Extend the home renovation credit for another year. (We're on the verge of buying our first house. It would be useful to still have this at our disposal.) Update: No love. Sorry kids! The home reno credit fell into the group of temporary measures the government has no plans to continue. That said, it might be worth checking out the ecoENERGY Retrofit Homes program if a project like that is something up your alley and within your means – the government is spending another $80 million on the plan to finance another 60,000 retrofits under the rebate program.

Finally, I'm not sure how they would do this next one, but I would love it if they would

• find some way to help or encourage consumers to battle down their own debt problems. (An economist would tell you that 19% plus interest rates should be enough. They're right. Still, it would be nice to have someone acknowledge or even attempt to coach us out of this mess most of us have gotten ourselves into.) Update: It's only somewhat related, but the minister did announce that the government would be moving ahead with a Code of Conduct for the credit and debit card industry in Canada. There is also word the government will propose legislation to give the Minister of Finance authority to regulate the market conduct of the debt and credit card networks, if needed. To be honest, it's not clear yet what this means, but it's an interesting development. Also, they're talking about allowing credit unions to incorporate and compete with banks on a federal level. Competition is good, no?

My budget (what we got)

For years the budget really has been a "something for everybody" affair that addressed nearly every community and delivered the kitchen sink too.

A lot of items were simply bobbles – a few dollars here for transit passes, a few dollars there for children's fitness. None of these are really life changing, but at the same time I don't want to spread much criticism around either – every little bit helps. (The adage about looking gift horses in the mouth comes to mind too.)

This year there really wasn't anything of the sort going on.

There were a few things that don't really impact my pocketbook, but that were pretty cool in an intellectual sort of way - a little bit of environmental spending for the Great Lakes was an interesting thing. And even though manufacturers are not entirely impressed, making Canada a "tariff free zone" for manufacturing is definitely up there as well.

After much of this government's bad behavior on the science front (also, remember this?) the olive branch extended to the science and research communities also comes to mind.


Personal curiosity aside though, let's talk about cold hard cash. Items which are nearest and dearest to financial minds of this household include the Employment Insurance measures, small business rules and any income tax savings that can be had.

Employment Insurance
They've extended the amount of time people can receive EI benefits by five weeks. Since being laid off during Recession 2009, I still collect EI on the weeks where work is thin. I don't expect it'll come to this but to someone else in my position, those extra five weeks could mean the difference between needing to go get a job at Starbucks, or not. (Retraining programs fall into this category too.) Also interesting/happy news? The government says it will maintain the current freeze on EI premium rates until 2011.

Small business measures
To be honest, I'm not sure I can really call myself a small business just yet, but the man does work for a manufacturing entity which fits the bill. At the end of January, Export Development Canada and the Business Development Bank of Canada Business Credit Availability Program was assisting just under 9,000 businesses. The program is now slated to continue for at least one more year.

Although new entrepreneurs will likely find it more difficult to access this capital – one measure of most entrepreneurial success is how successfully would-be business owners are when it comes to securing financing – the credit availability will hopefully be good for creating and maintaining some jobs.

Similarly, industry advice suggests that businesses of all sizes need adequate access to financing to acquire vehicles and equipment as the economic recovery matures. "Although access to financing has normalized somewhat for larger finance and leasing companies that can access capital markets directly, some smaller companies, although creditworthy, cannot obtain enough financing." To address this, the budget outlines a new Vehicle and Equipment Financing Partnership with experienced lenders which will hopefully expand financing options for the small and medium-sized leasing cos.


Other measures

These budget tidbits don't actually impact our family, but they impact enough other people that it's worth the effort to mention them here.

Universal Child Care Benefit
Currently only one parent can claim childcare and GST/HST credits, no matter how equally custody is split. Going forward, the budget proposes to allow parents who share custody of a child to split the credits as well.

For charities
Very significant reforms are proposed to change how charities need to disburse their donations each year. At the moment charities must disburse (spend on their stated cause) 80% of all donations they take in each year – a condition which leaves some living donation check to donation check each year. The budget proposes to eliminate all disbursement quota requirements, except those which require charities to disburse a minimum amount of investment capital and other assets which are not used directly in the charity's mission. I'm definitely curious to see how this one plays out.

Registered Disability Savings Plans
These relatively new plans are designed to help parents and caregivers save for the long-term financial needs of any severely disabled children in their lives. Grants and bonds from the government are available to those who make their own contributions to such a plan. Recognizing that some families may not be able to contribute every year, however, the budget proposes to allow families to carry these entitlements forward 10 years. More notably, the proposed changes will allow parents and grandparents to rollover their registered retirement savings plan (RRSP) assets into an RDSP on death, tax free in the same way money can be transferred tax free to a surviving spouse. (Trust me when I say this is a pretty big deal for some families.)

Seniors
Although the budget is again a little light on details, it proposes to spend $10 million on the New Horizons for Seniors Program, which supports projects that focus on volunteering among seniors. As far as money is concerned, the government also plans to review government-supported retirement income systems (think Old Age Security and the Canada Pension Plan) this spring "to ensure Canada's retirement income system remains strong and efficient."


Whew! That is all. Thanks for helping me get my annual fix.

Until next time...

Kate McCaffery is a freelance writer in Toronto, Ontario. Visit mccaffery.ca/kate2.0/ for more information.