Finance Minister Bill Morneau presented a fall economic update full of increased spending thanks to prosperous economy, and forecast his government is forecast to have a deficit of $19.9 billion. That’s down from the forecast $28.5 billion.
- Strengthening the Canada Child Benefit (CCB) by indexing it to inflation. The increase will be effective in July, 2018; two years before schedule
- Enhancing the Working Income Tax Credit (WITB) by $500 million/year. This is projected to increase by 65% by 2019. Payments depend on family
- Lowering the Small Business tax rate to 10%, effective January 1, 2017. This is projected to save small businesses up to $7500/ year.
“Canada’s economy is growing faster than it has in a decade, allowing us to do even more to help the middle class and those working hard to join it,” Morneau said.
The update provided a number in revenue gained through the practice of income sprinkling. The Liberals project $1.2 billion/ year over the next six years from that measure. That is part of the controversial package of small business tax reforms.
Conservative Finance Critic Pierre Poillevre took aim at the deficit. “This prime minister promised a small $10 billion deficit. Remember that? Today we learned the deficit is double that. There is literally not a single year, into the distant future , when this government projects, ever, eliminating the deficit,” he said in a CBC report.
NDP House Leader Guy Caron called it nothing more than damage control. “This fiscal update could be summarized in two words: Morneau Shepell. The Liberal government is trying to deflect the tension away… I can tell you right now, it will not work.” he said.
Morneau has been facing criticism over his failure to place financial holdings in a blind trust.