2019 Federal Budget: Investing in the Middle Class

The Canada Training Credit accumulates $250 per year for eligible Canadians aged 25 to 64 who file a tax return and earn between $10,000 and $147,667. Workers can draw on the CTC to cover up to half the cost of eligible training fees at colleges, universities, and other institutions. Unused amounts carry forward, up to a lifetime maximum of $5,000, and the CRA shows the balance on each year's Notice of Assessment.

The First-Time Home Buyer Incentive provides a shared equity mortgage from the Canada Mortgage and Housing Corporation of 5% to 10% of the home purchase price. Qualifying buyers must have a household income under $120,000 and a maximum mortgage four times their income ($480,000). The incentive reduces monthly mortgage payments without interest, but must be repaid when the home is sold or after 25 years.

The Home Buyers' Plan withdrawal limit increases to $35,000 from $25,000, allowing first-time home buyers to access more RRSP savings for a down payment. Couples can now access up to $70,000 combined ($35,000 each) from their RRSPs tax-free. The withdrawal must be repaid over 15 years beginning two years after the year of withdrawal, or included in income.

The Canada Workers Benefit replaces the Working Income Tax Benefit and increases the maximum annual amounts to $1,355 for single individuals and $2,335 for families. The phase-out thresholds are increased so more low-income workers benefit from the expanded credit. An advance payment option delivers CWB payments quarterly for eligible workers who apply.

A new Employment Insurance Parental Sharing Benefit provides five additional weeks of EI benefits when a second parent takes parental leave. Under standard parental benefits, couples can access a combined 45 weeks (instead of 40); under extended benefits, 75 weeks (instead of 69). The benefit encourages both parents to share caregiving responsibilities.

Budget 2019 establishes an Advisory Council on the Implementation of National Pharmacare to study options for a universal prescription drug coverage program. The Council, chaired by Eric Hoskins, releases its final report in June 2019. No immediate tax changes arise from this announcement, but the groundwork is laid for future pharmaceutical cost-sharing between federal and provincial governments.

RDSP rules are amended to allow a qualifying family member (parent, spouse, or common-law partner) to open and manage an RDSP for an adult who lacks the mental capacity to enter into a contract, without obtaining a legal guardianship order. This removes a significant barrier for families in provinces with complex and expensive guardianship processes.

Businesses investing in new depreciable property can immediately deduct up to 100% of the cost in the year of acquisition using the Accelerated Investment Incentive. The incentive applies three times the normal first-year CCA rate, effectively allowing immediate expensing of most equipment, machinery, and qualifying property. Zero-emission vehicles and clean energy equipment qualify for immediate full expensing.