How Will The Federal Budget Affect Your Personal Finances?

By | Financial Planning

The new federal budget is here, and with it come a slew of changes affecting the nation at large. But what about the individual? Where does the new budget change your day to day spending patterns – your budget? As it turns out, it will do so in a number of ways.

A Costlier Night Out

Let’s look at the example of going out for a night on the town: to start with, getting there and back will cost a little bit more. Budget 2017, regrettably, ends the public transit tax credit that allowed commuters to claim a non-refundable tax credit equal to 15 per cent of the cost of their bus or transit passes. What’s more, if you were to take an Uber or other ridesharing service, your costs will likely be going up too: these services now have to charge GST/HST.

Your evening’s libations will cost a bit more too: the tax on beer, wine and liquor is going up immediately by two per cent. Smokers will see a jump in excise duties on cigarettes as well.

Students to See Major Changes

The new federal budget is not just dedicated to being a buzzkill. It will also offer some benefits to your personal financial plan, both in short term spending and long term opportunities. Students, in particular, will find that the budget changes the way they think about finances. The tuition tax credit has been expanded to include occupational skills courses that are not at a post-secondary level, and Canada Student Loans will be broadened and expanded. Part-time students will get financial assistance as will students who are parents.

Digital Literacy Improvements

Personal finance is going digital faster than ever before. There are so many great new online resources, apps, and alternatives to traditional financial management on digital platforms, that almost anyone seeking to improve their personal finances can find something that works for them. Fortunately, the new budget makes access to these resources even easier, while taking steps to ensure that more Canadians will be able to protect themselves online. The budget will feature a new Affordable Access Program that allows internet providers to offer low-cost home internet packages along with a refurbished computer to low-income families, and a near $30M investment in programs that will aim to teach basic digital skills, including internet safety, to low-income Canadians, seniors and those living in northern and rural communities.

Overall, the long term impact of the 2017 federal budget remains to be seen, but it makes sense to take a look at your personal finance strategy for the year ahead in light of these and other new changes.

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