Students: B+Ī high mark inflated a bit by previously announced, difference-making policies such as eliminating interest on federal student loans and allowing people to put off repaying these loans until they have an income of $40,000 and up. With a recession looming, tax hikes such as these would be politically hard to defend. Also left alone were income tax rates and the GST. Not in this budget: An increase in the 50-per-cent inclusion rate – the percentage of a gain that is taxable – for capital gains. Taxpayers pay the AMT or regular tax, whichever is the larger amount.
The AMT tax rate would rise to 20.5 per cent from 15 per cent, with an estimated $173,000 exemption for the 2024 tax year. The key tax announcement in the budget fleshes out a previously announced intention to modernize the alternative minimum tax, designed to make sure wealthy people don’t use deductions and credits to pay nearly nothing in taxes. High-income households may end up paying more income tax, but prebudget concerns about broader tax hikes have once again proven to be unfounded. They’re a must for people saving to buy a home, but do nothing to bridge the gap between income levels and home prices. Expect investment companies to start offering these accounts in the following weeks and months. The best we can say is that the Tax-Free First Home Savings Account, announced in the 2022 budget, will officially launch on April 1.
Higher mortgage rates have soaked up almost all the benefit of falling prices over the past 12 months. Nothing in the budget directly addresses the fact that houses remain unaffordable for the middle class in many cities. Modest help at best, but well-targeted to those who need it and unlikely to stoke inflation. Single people without kids will get a rebate of up to $234, while seniors get $225 on average. Milk and an on-sale box of cereal, in other words. The maximum rebate for an eligible household of two parents and two kids would be $467, which is equivalent to a bit less than $9 a week. The money can be used for anything, but let’s say it goes for food.
The Grocery Rebate is a branding flourish on a one-time cash payment to the 11 million low-income Canadians who receive the GST tax credit.
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