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Finance Minster Jim Flaherty has tabled his first majority-backed budget. With the power to push through the Conservative agenda, he has taken aim at public pension plans in an attempt to shrink the size of the government and whittle down the deficit.
Budget delays OAS eligibility to 67
The federal government is increasing the eligibility age for Old Age Security (OAS) to age 67 from 65 to reflect the reality that Canadians are living longer and healthier lives, and may prefer to keep working. However, the changes won’t begin to take effect for another 11 years.
OAS delay may be catalyst for change
The OAS eligibility increase could be a step toward changing the mindset of Canadians around work and retirement, and may motivate employers to ramp up efforts to encourage employees to save.
Budget shines spotlight on retirement
The federal budget contains a number of measures relating to public pensions, public sector pensions and private retirement saving. Among the changes: a move to a 50-50 contribution formula for federal public sector workers, an increase in the retirement age from for public sector workers hired in 2013 and later, and planned implementation of pooled registered pension plans.
Budget sets out tax rules for sickness and AD&D plans
Effective March 29, 2012, employer-paid premiums for critical illness insurance and accidental death and dismemberment insurance for coverage in 2013 and beyond are now a taxable benefit.
LTD insurance required for federally regulated employers
The federal budget remained fairly silent on employer-provided benefits and healthcare provisions, but one quiet note in the document could play into future considerations for employers that self-insure their disability plans.
MPs’ pensions untouched by budget
The pension plan enjoyed by members of Parliament seems to have emerged relatively unscathed—at least for now. The budget promises to begin moving “over time” toward making parliamentarians pay 50% of their pension contributions and refers to further adjustments, but these won’t take effect until after the next election in 2015.
Budget 2012: Small business issues
There were a few items of significant interest to small business owners in the 2012 Federal Budget. Most of them are reflected in the government’s expressed concern for closing perceived tax loopholes. Here are some prominent items relevant to small business owners that should be reviewed.
Industry reacts to Budget 2012
Several organizations have started to release their comments regarding this year’s federal budget. Here’s a summary of what they had to say.
Also from Rogers Publishing:
Interactive Budget 2012 (Maclean’s)
Take a look at how the federal government’s revenues and spending patterns have changed over time—we’ve got the data going all the way back to 1938. And check out what your share of the debt burden adds up to, as well as which prime ministers presided over federal budget deficits or surpluses.
Harper’s very political budget (Maclean’s)
Revolution, ladies and gents! Light the torches! In his December year-end interviews, Stephen Harper used the term “major transformations” a half-dozen times. Fast forward to this afternoon. “We will eliminate the penny,” Jim Flaherty told the Commons. It was literally the first new policy measure he announced. “Pennies take up too much space on our dressers at home.”
Flaherty tables a cautious budget, casts ahead to next steps (Maclean’s)
Back in 2006, Finance Minister Jim Flaherty began his first budget speech by reflecting on how “budgets say something about your motivations and your goals.” Motivation and goal: lay the populist groundwork for turning Stephen Harper’s minority into a majority.