Budget offers only a smattering of savings for Canadian families

ROB CARRICK -n The Globe and Mail

Wait till next year, Canada.

While there’s a lot of talk about easing the financial burden on families in the federal budget, the actual savings are at best minor. In fact, the most notable tax measure for the average person was one that will make cigarettes more expensive.

People anticipating income splitting for families and a doubling of the limit for tax-free savings accounts should check back 12 months from now, when the government introduces a budget it will take into the next election campaign. For now, the budget is most interesting as a document of how important the middle class has become in federal politics.

What’s actually being done for consumers? Mainly, the government will lean on business to lower prices, eliminate fees and improve disclosure to customers.

The budget will also address the use of some types of trusts and offshore vehicles by high-net-worth families to minimize taxes, boost a tax credit to help defray the costs of adopting a child and make it a little easier for some young people to qualify for student loans. Measures to prevent virtual currencies like bitcoin from being used for money laundering or to finance terrorism were also announced.

Top consumer themes set out by the government:  Get prices down for wireless phone services with legislative changes that will increase competition, address the Canada-U.S. price gap on consumer goods with new laws to prevent unjustified price discrimination against Canadians and push back against the financial industry with a few small measures.

Charging customers a fee to receive a printed copy of their credit card statement will be prohibited. To improve disclosure, the government will require lenders to better explain collateral charge mortgages, which differ from traditional mortgages because they make switching banks more expensive for consumers. Without outlining any specific concerns, the government also announced a review of Canada Deposit Insurance Corp. to ensure it adequately protects the savings of Canadians in light of lessons learned in the financial crisis and more recent banking developments. CDIC protects up to $100,000 in bank accounts and term deposits.

High-net-worth families are the focus of budget measures that will limit the tax benefit of having a deceased person’s assets moved into a financial structure called a trust. Income from assets in a trust would, with a few exceptions, eventually be taxed at the highest rate.

Adoptive parents will benefit from an increase in the adoption tax credit to $15,000 from $11,774. The credit is designed to defray the costs of adopting a child and will be indexed to inflation for future years.

A small change on student loan rules will help more young people qualify for financial assistance. The budget would eliminate the value of cars and trucks owned by students in assessing whether they qualify for a loan.

Conspicuously absent in the budget are the boutique tax breaks seen in previous years – tax credits for your kid’s art lessons and hockey fees and your own spending on bus passes.

Taxes actually go up in one instance. The excise duty on cigarettes will rise to $21.03 per carton of 200 from $17.