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2017 Fall Update

The Fall Economic Statement builds on the progress we have made together over the past two years. This includes cutting taxes for 9 million middle class Canadians, introducing a new Canada Child Benefit, and strengthening the Canada Pension Plan so that future generations of workers can retire with dignity.

Since 2015 we have been focused on supporting the middle class and those working hard to join it. Our plan is working. Today more Canadians have a job, we have the fastest growing economy in the G7, and we are investing in the long term while reducing the deficit.

Thriving Economy

Thriving Economy
  • The numbers are clear. Canada’s economy is growing faster than it has in more than a decade,with average growth of over 3.7% over the past four quarters.

  • This makes Canada the fastest growing economy in the G7 — growing 40% faster than the United States or Germany, and more than twice as fast as France, Japan or the UK.

  • With the fastest growth in the G7, we have more flexibility to re-invest the benefits of that growth.

Falling Deficits

Debt to GDP
  • Our plan to strengthen the middle class is based on the idea that investing in the economy in a fiscally responsible way is the best strategy for achieving strong, sustainable and balanced growth.

  • Canada has the best balance sheet in the G7. The budgetary balance is projected to improve and the federal debt-to-GDP ratio is firmly on a downward track.

  • We will maintain this downward deficit and debt ratio track. This will preserve
    Canada’s low-debt advantage so that we can continue to invest in our middle class.

Thriving Employment

Thriving Employment
  • The economy has created over 450,000 jobs in the last two years, the majority of them fulltime.

  • The unemployment rate has dropped to its lowest level since 2008.

  • End-of-year update: over 600,000 jobs!

Small Businesses

Small-Business Tax
  • We are fulfilling our commitment to lower taxes on small businesses. After lowering the tax rate from 11% to 10.5% in 2016, we are now following-through, to 10% in January, 2018, and 9% in January, 2019.

  • We are implimenting a simplified proposal to limit income sprinkling, while continuing to support owners who invest in their growth, create jobs, strengthen entrepreneurship and grow our economy.

  • Recognizing the importance of maintaining family farms and businesses. Based on feedback we have heard, we will not be moving forward on any measures that could affect the transfer of a family business or farm to the next generation.

  • We are limiting tax deferral opportunities related to corporate passive investment by establishing a $50,000 threshold on corporate investment-income earned annually — this corresponds to having roughly $1 million in retained-earnings. This retains flexibility for small businesses to continue to save for new equipment, expansion, parental leave, or retirement. Passive income above this level will not be eligible for the small-business tax rate. This is will affect only about 2% of small businesses — i.e.: those 2% of private corporations now holding between $200 and $300 billion in passive investments.

Canada Child Benefit

CCB-Improvements
  • When the Canada Child Benefit (CCB) was first introduced in July 2016, the extra money in parents’ pockets had an immediate effect on consumer confidence and economic growth.

  • Canada now has the fastest growth in the G7, giving us more flexibility to re-invest the benefits of that growth in the middle class, and those working hard to join it.

  • 90% of families receive more through the CCB than they did under the previous government’s programs. There were over 3.3 million families receiving CCB payments in 2016-17, which provides $6,800 on average per family.

  • We are taking further action to strengthen the Canada Child Benefit to make sure it keeps pace with the rising cost of living, by making annual cost of living increases to the CCB starting in July 2018—two years ahead of schedule.

  • Our new CCB measures will provide an additional $5.6 billion in support to Canadian families over the 2018-19 to 2022-23 period.

  • For a single parent of two children making $35,000, a strengthened CCB will mean $560 more next year, tax free, for books, skating lessons or warm clothes for winter.

  • The added confidence these increases bring to families is proven to have an immediate impact on economic growth.

Working Income Tax Benefit

CCB-Improvements
  • We know that many people work long hours, sometimes in more than one job, to advance their careers and support themselves and their families.

  • By helping low-income workers take home more money, the Working Income Tax Benefit offers real help to 1.5 million Canadians.

  • Our government is doing more to help those working hard to join the middle class by enhancing the Working Income Tax Benefit by an additional $500 million per year starting in 2019.

  • The maximum amount of WITB for 2017 is $1,043 for a single person without children or $1,894 for a family.

  • For someone living alone—now the most common type of household in Canada, according to the latest census—this could mean not having to make the choice between paying rent or buying groceries for the week.

  • For a single mom, a more generous Working Income Tax Benefit, combined with a stronger Canada Child Benefit, means more money for books, skating lessons or warm clothes for winter.