The Liberal government’s third full budget was expected to be a relatively lean one with any big moves saved until next year when a federal election is on the line. When it comes to measures that directly impact Canadian pocketbooks, it was a light budget indeed.
Smoking is becoming an ever more costly habit. With 37,000 Canadians dying from a tobacco related illness each year and 115,000 people taking up the practice annually, the Liberal budget will increase the price of a carton of 200 cigarettes by a dollar, along with corresponding increases to excise duties on other tobacco products.
But that’s not all. Citing taxation as one of the most effective ways to reduce smoking, the government will also advance the inflationary adjustments for tobacco excise duty to occur annually rather than every five years. Since the first increase will include all inflationary adjustments since 2014 – that means prices will jump six per cent on budget night or $1.29. The bottom line? A price of a carton of cigarettes just went up $2.29.
The budget did little to address concerns about overheated housing markets. This isn’t surprising, given the range of housing market interventions unveiled over the past two years in Ontario and British Columbia and the tougher mortgage qualification rules that took effect in January. Those moves were mainly aimed at curbing demand. With 30 per cent of Canadians relying on rental housing and vacancy rates in Toronto and Vancouver below 1 per cent, Tuesday’s budget turned the focus to supply. Funding for the CMHC’s Rental Construction Financing Initiative, which offers low cost loans to support the construction of rental housing, was increased to $3.75 billion from $2.5 billion over three years. This is expected to spur construction of 14,000 new housing units across Canada. Whether that will be enough to ease shortages and temper soaring rents in red-hot Vancouver and Toronto, remains to be seen.
The budget devotes $100 million over five years toward extending Internet access to Canadians in the most remote locations. The funds will go to the Strategic Innovation Fund, with special emphasis placed on projects related to next generation rural broadband and LEO satellites. The latter technology provides internet access across challenging landscapes at much lower costs than fibre optic technology. And “Canada is uniquely placed with space satellite industry leaders to build and operate LEO satellite technologies,” the budget states, creating jobs and market opportunities around the world.
Citing a lack of research into post-traumatic stress injuries among public safety officers, $20 million will be spent over five years toward establishing a new national research consortium to close the knowledge gap. Run between the Canadian Institutes of Health Research and the Canadian Institute for Public Safety Research and Treatment, the body will address the incidence and nature of PTSD in this group.
As the government prepares to legalize marijuana this summer, it will propose an excise duty framework designed to “keep cannabis out of the hands of youth and profits out of the hands of criminals.” Federally licensed producers will be taxed at a dollar per gram of cannabis or 10 per cent of the producer price. The provincial government will take 75 cents of the proceeds with the remaining 25 cents going into federal coffers to a maximum of $100 million. Any surplus over this amount will go back to the provinces.
refers: Financial Post