Today, the Federal Government has released their 2017-18 Budget, projecting for Canadians a sense of what we can expect in the coming year – a cautious approach to increased efficiencies, closed tax loopholes, and a steady deficit.
From the budget, we can expect only $200 million in new spending, but also an increase to the deficit of more than $5 billion by 2018. Instead of planning to eliminate the deficit, the federal government has outlined a plan to maintain a balanced net debt-to-GDP ratio of approximately 31% over the next 5 years, with the projected deficit of $28.5 billion declining to $18.8 billion from the 2017-18 year to 2021-22. On the taxation front, at this time there are no changes to the corporate or personal tax rates, nor capital gains, nor the small business deduction threshold. That said, the budget proposes to address a range of tax loopholes and inefficiencies, such as preventing tax avoidance through straddle transactions and eliminating the tax deduction for home relocation loans.
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