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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

2023 Federal Budget and you

Key takeaways

  • The federal government released its most recent budget on March 28, 2023
  • There are proposals in the budget that may impact the finances of almost every Canadian

The federal government outlines its fiscal priorities

On March 28, 2023, the Government of Canada released its budget : A Made-In-Canada Plan | PDF 2.7mbOpens a new website in a new window .  All proposals will need to be passed by parliament to become law.  

Let’s look at some of the highlights and how they may impact your money. 

The green economy

The budget promises new funds and incentives for investing in the green economy. This includes tax credits for clean electricity and hydrogen investments, and investments in new machinery and equipment that manufacture or process clean technologies. This could attract more investors to sustainable investing solutions.

The Canadian Dental Care Plan

Building on the present Canada Dental Benefit for children under 12-years-old, the 2023 budget would provide dental coverage for uninsured Canadians with an annual family income of less than $90,000 (with no co-pays for family incomes under $70,000), starting by the end of 2023. 

For families whose incomes are greater than $90,000, there may still be a need to invest in personal health and dental insurance

For businesses and entrepreneurs

In this budget, the federal government has received commitments to reduce credit card transaction fees for small businesses, potentially saving them significant money they may choose to invest in other ways to protect their business and support their employees

This budget also proposes to increase the maximum employment deduction for tradespeople’s tools from $500 to $1,000 for tax year 2023 and beyond.

Budget 2023 also proposes changing the rules for intergenerational share transfers for qualified small business, family farm or fishing corporations from a parent to a corporation controlled by one or more adult children of the transferring parent. It also expands the definition of “child” to include nieces, nephews, grandnieces and grandnephews in addition to children, stepchildren and children-in-law.

There are also additional proposed conditions on the eligibility of intergenerational share transfers.

The budget also proposes to introduce tax changes beginning in January 2024, to allow small businesses to create employee ownership trusts, further helping them with succession planning. 

Registered education savings plans (RESPs)

This budget is proposing to raise the RESP education assistance payment (EAP) withdrawal limits from $5,000 to $8,000 for full-time students, and $2,500 to $4,000 for part-time students. Divorced or separated parents will also now be allowed to open a joint RESP for their children. 

The grocery rebate

To help consumers with inflation and a possible recession this year, Budget 2023 provides for a one-time payment through the Goods and Services Tax Credit system. The maximum amount under the grocery rebate would be $153 per adult, $81 per child and $81 for singles.

Income taxes

Budget 2023 proposes changes to the Alternative Minimum Tax (AMT) applied to individuals to better target high-income individuals for whom much of their income is made up of taxable capital gains and who claim a lot of tax credits such as donations to reduce the taxes they owe. 

Beginning in 2024 the Canada Revenue Agency (CRA) will introduce a new automatic tax filing service for Canadians who presently don’t file tax returns, so they can receive certain benefits to which they’re entitled such as a tax refund. The CRA is also expanding eligibility for people to file their tax returns by phone. 

What's next?

Now that you know more about the 2023 Budget, you may choose to meet with an advisor to:

  • Discuss how the budget proposals may impact the finances or you or your business
  • Review your business succession plans
  • Open an RESP
  • If your workplace benefits are with Canada Life, contact a heath and wealth consultant.

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. 

This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice.

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