Canada budget 2014 looks to slash public servants’ benefits in effort to save billions

Jim Flaherty lowered his outlook for this year’s deficit to $16.6-billion from the $17.9-billion estimate in his November fiscal update. For 2014-15, the shortfall forecast has been lowered to $2.9-billion from $5.5-billion. 

At the same time, the minister has raised his surplus target for 2015-16 to $6.4-billion from $3.7-billion. In the coming years, that surplus is projected to grow steadily before reaching $10.3-billion in 2018-19, the government’s current forecast horizon. “It’s been a long road back from the Great Recession to a balanced budget,” he said.

What you need to know from the budget:

1. The cost of cigarettes is going up. A carton of 200 cigarettes will now carry about $21 in taxes, up from $17. The 24 per cent increase will apply to other tobacco products effective immediately. Oh, and duty free cigarette rates are going up as well.

2. The government plans to cap domestic wireless roaming rates, arguing it will “lower prices” and encourage competition. That won’t help you, though, if you go roaming in Mexico.

3. The government says it intends to legislate an end to the price gap between goods sold in the United States, for instance, and the same goods sold for more in Canada. How will the Conservatives do this? “Details will be announced in the coming months,” the budget says.

4. The government builds in a $3 billion cushion into its budget. If all the numbers line up as the government hopes, it could mean that the budget is balanced, even though the government said the budget wouldn’t be balanced until next year.

5. Overall, the federal budget this year is a very cautious document that doesn’t include many frills, but does have spending slotted on an as-needed basis — not as much cash up front. That leaves the government free for a more robust document next year to set up the fall 2015 election.

What you may want to know from the budget:

1. The Governor-General is paying more taxes: The only person in the country exempted from customs tariffs will lose that privilege. Last year, the government decided it was time the Governor-General also paid income taxes, and a pay raise to offset the loss in income.

2. Olympic athletes will be able to count the money they earn from amateur competitions when they look to calculate how much they can contribute to their RRSP. Bottom line: Olympians will be able to set aside more for retirement — unless all those gold medals may be worth a bit in the future.

3. Once approved, the government will have to provide an annual update on how various tax-saving measures are actually performing so you know if you’re really getting more money in your pocket.

4. Beer drinkers rejoice! The government has proposed new regulations to remove red tape hurdles on labeling for new beers. That will help some brews get to market faster — but not bring down the price of your favourite ale or lager. It also is looking to make it legal to bring beer and liquor across provincial borders, in the same way wine can be.

5. Search and rescue volunteers are being offered a tax credit for their work. The credit will be available to anyone with at least 200 hours of service.

 

NATIONAL POST