In order to offer targeted tax reductions for small businesses, seniors, and families with children; to increase spending for the military, public and national security, public transit, and for the Canada Revenue Agency (CRA) to address tax avoidance and evasion; and to eke out a $1.4 billion surplus in 2015-16 and small increases over the following years, the Federal Government will reduce its $3 billion contingency fund to $1 billion over the next three years. Finance Minister Joe Oliver previously predicted surpluses of $6.4 billion for 2015-16, and $10.3 billion by 2018-19, but those hopes sank with plunging oil prices. Oliver’s modest updated surplus projections are $1.7 billion in 2016-17, $2.6 billion in 2017-18, $2.6 billion in 2018-19, and $4.8 billion in 2019-20. For 2014-15, Oliver will mark a deficit of $2 billion in the Federal Government’s books.
CPA Canada gives the Government a solid B grade for the 2015 Budget, despite again choosing tax breaks for designated groups over broad-based income tax reductions and tax simplification, and leaving itself little by way of contingency. The Budget earns its grade for the Government’s promises to reduce the small business tax rate from 11 percent to 9 percent over the next four years, to extend a program allowing faster write-off of machinery and equipment, to increase the Tax-Free Savings Account (TFSA) contribution limit, and to do more to tackle tax evasion.
To read more commentary on the 2015 Federal Budget, download the full pdf: 2015 Canadian Federal Budget Commentary.