Blogs & Comment

The 2010 budget and personal finances

The federal government releases its 2010 budget today. Yesterday, I chatted with Andrew Dunn, Deloitte Canada’s National Tax Leader, about what the impact might be on thepersonal finances of Canadians.
There is not much elbow room this time around, said Dunn. The fiscal deficit is $56 billion.*
If there are any changes impacting the personal finances of Canadians, said Dunn, some likely candidates would be increases to the contribution limits for RRSPs, TFSAs (especially for the elderly), and RESPs.
In addition, lifetime carry-forwards of contribution room may be another possibility for RESPs (as currently exists for RRSPs and TFSAs). And a lifetime maximum (e.g. $100,000) could be placed on TFSA deposits (as exists currently for RESPs).
If any of the above changes are in the budget, they may not take effect in 2010 but instead be phased in over future periods.
There could be more developments on other fronts — for example, the initiatives mentioned in last years budget for protecting consumers of financial products.
Today, Ill be in the budget lock-up and will have a report on how the budgetimpacts the personal finances of Canadians. It will be posted at 4PM on the MoneySense website site(and likely the Canadian Business website too, I believe).
*Footnote: The federal government debt stands at 34% of GDP, which is still above the governments target of 25%, said Dunn.Moreover, since much of the federal reduction in debt since the 1990s was accomplished by offloading to provincial governments, he said, we might also include provincial debt in the government debt-to-GDP ratio. When we do, Canadas level of public-sector indebtedness doesnt look any better compared to other countries. It jumps to 60%.