42nd Parliament (Canada)

[RetiredAt63]

Since the election is over and the new PM and Cabinet are sworn in, I feel odd still posting to a thread called "Canadian General Election".

So - here we are, new government, many promises made.  So far the long-form census is apparently back, the inquiry about all the murders of native women will apparently happen, and I just heard on CBC that Canadian scientists have been unmuzzled.

Not to mention that opposition members are apparently invited to attend the next climate conference as part of the Canadian delegation.  Elizabeth May can finally go as a Canadian, last time she was there as part of the Afghanistan delegation, just to get in.

If people want to talk about the leadership issues in the CPC, please start a separate thread.  Not that we can't talk about all parties here, but let's talk about government stuff, not party stuff.

Eh, party stuff -sounds a lot more fun that it is.

[daverobev]

Biggest questions and concerns for me:

When will TFSA rollback happen?
When will child benefit changes happen?
When will family tax cut removal happen?

When will I be able to buy cannabis cigs?

When will CPP contribs get raised and by how much (this potentially biggest as I'm self employed, as is my wife, so an extra couple of percent on both 'sides' is a bit painful - you can argue all you want that CPP isn't a tax, and I agree, but it would be a couple of thousand I really won't need later on but could use now gone for 30 years...)

[RetiredAt63]

TFSA?
Child benefits - I am out of this one, but I thought the Liberal proposal benefited most people with children more than the Conservative plan. Parents, thoughts?
Family tax cut?

I assume most if not all will be addressed in the first budget. They are budget items, he can't do anything about them unilaterally.  What Trudeau has done so far hasn't needed Parliament.  At least it is meeting in December, since it could have legally (but not ethically) have waited until June.  Wow, do we ever need to rewrite some of our parliamentary procedures, they are back in horse and buggy days when travel from outlying areas of the country was measured in weeks, not hours.

Cannabis? I see some legislative needs here, it should be under the same sorts of controls/restrictions as alcohol and liquor - i.e. driving under the influence, age restrictions - sell in liquor stores or places that sell tobacco that are already asking proof of age?  And would age limits be a federal or provincial area?  They are provincial for alcohol and tobacco. Interesting . . . . .

CPP - well, you are in Ontario (so am I but I am already retired) - what will Wynne do about the provincial pension she has been talking about?

Actually, you and I made/make enough that the CPP is not our main source of retirement income, but for a lot of people it is a big chunk.  What hurt my protected retirement saving was that my RRSP contributions were tiny (not much room), because of my work pension.  At least you can control where your pension money is invested.  My benefits are very tightly defined and only somewhat indexed - that is going to hurt, 30 years from now.  Plus at 65 my pension goes down by the amount of CPP I am eligible for, so net zero.

Biggest questions and concerns for me:

When will TFSA rollback happen?
When will child benefit changes happen?
When will family tax cut removal happen?

When will I be able to buy cannabis cigs?

When will CPP contribs get raised and by how much (this potentially biggest as I'm self employed, as is my wife, so an extra couple of percent on both 'sides' is a bit painful - you can argue all you want that CPP isn't a tax, and I agree, but it would be a couple of thousand I really won't need later on but could use now gone for 30 years...)

[lostamonkey]

I am just speculating but I think all the tax changes will be effective 2016. The 2015 calendar year is almost over so it does not make a lot of sense to make those changes for 2015.

I think the legalization of Cannabis will take a few years. There will probably be strict rules about it's production and sales which will take time to sort out.

[daverobev]

AFAIK the ORPP will be scrapped as the feds will implement an expansion of the CPP, which I am mostly against (perhaps selfishly, but I do think OAS+GIS+CPP is plenty if you've paid in to CPP, but any CPP expansion won't benefit the actual poor/under employed).

I agree most stuff will probably not 'happen' til next year which hopefully means TFSA room stays as $10k for 2016, FTC stays for 2015 and so on. I imagine the replacement to the child benefit stuff will kick in in the middle of next year (UCCB and CCTB run from Jul-Jun, based on the previous year's return). We'll see.

Don't get me wrong, CPP aside I'm mostly happy with the new govt in theory, just wondering when it'll all happen. In theory the FTC is no big loss for us, the tax bracket change helps a little, etc.

[Gerard]

I'd be fine with an increase in CPP if it was accompanied by a corresponding rollback in the OAS. Either way, we're paying for pensions we might not need ourselves, but at least through the CPP there's a link between pay-in and eventual benefits. OAS is just welfare for well-off old people.

[choppingwood]

I'm excited about the long-form census becoming mandatory again. I'm hoping to work as a field enumerator in May through July or so, which I did during the last census as well. It will be easier than trying to convince people of the benefits of filling out the longer form.

No doubt I'll get to listen to a lot of angry Alberta citizens along the way.

Just need to do lots of walking this winter, so that I'm fit enough to enjoy this.

Trudeau said that the cannabis thing would take a while because they have to figure out how much to tax it! A true mustachian would stock up before it gets taxed, I suppose.

[music lover]

OAS is just welfare for well-off old people.

That's incorrect. Everyone with a low income or modest gets OAS, but once a person's income reaches a threshold, it begins to get clawed back. If your income is too high, it all gets paid back.

[Al1961]

OAS is just welfare for well-off old people.

That's incorrect. Everyone with a low income or modest gets OAS, but once a person's income reaches a threshold, it begins to get clawed back. If your income is too high, it all gets paid back.

True, but the claw back doesn't start to kick in until $72k per individual. In theory, a retired couple could make $144k and still keep the full ~$13k in OAS. Generous program for the comfortably well off.

[daverobev]

OAS is just welfare for well-off old people.

That's incorrect. Everyone with a low income or modest gets OAS, but once a person's income reaches a threshold, it begins to get clawed back. If your income is too high, it all gets paid back.

True, but the claw back doesn't start to kick in until $72k per individual. In theory, a retired couple could make $144k and still keep the full ~$13k in OAS. Generous program for the comfortably well off.

Yeah that's crazy. Should start reducing at $30k or less.

[RetiredAt63]

A bit off topic, but part of policy discussions, so here goes:

Re CPP - it is a pension - a self-financing pension.  If you want larger CPP payouts, you will have to put more into it (or employers will).  TANSTAAFL

Re OAS and GIS - you youngsters might want to look at the amounts before you complain about them? 

I'll do OAS first - it is a maximum of $6839.40 - clawback starts at $70,954 and is all recovered by $118,055.   Of course people with that income have been saving for their retirements - this is why TFSA's are so much nicer than RRSPs and RSPs after a certain point, and also better than RRSPs totally if you have never made much money.  It is also why so many people suddenly get a huge tax bill the year they hit 71 and start having to have RRIFs.  It is also why anyone applying for their OAS (and CPP) should make sure there is automatic tax payment as they go, or tax time will be a nasty surprise).  What being eligible for clawback also means is that you have been a financially productive member of society, you had income, you saved (pension or other investments), you paid and are still paying lots of taxes.  How mustachian of you. And of me - much as it hurts, I would rather pay taxes, because it means I made enough money last year to be taxable.  The alternative is so much worse.

GIS is for those who really have little. Take someone who never worked (which includes most housewives 10 years older than me and up) - no pension, maybe a bit from their spouse's pension?  No CPP because they didn't work.  Maybe a house?  Maybe not.  If a house, might as well sell it because of carrying costs.

So someone who is single, divorced or widowed, no other income, would get a grand total of  $6839.40 OAS and $9273.96 GIS for a whopping $16,113.36.  A basic senior's residence in my low cost of living area is $19,260. This is someone who is either elderly, or has a disability which has prevented them from having other income.  Given age/health, they probably have health costs as well as the ordinary costs of being housed, fed, clothed, and some interests in life.

Given that the clawback starts at $17,280.00, they can have another $1166.64 before they start losing some to taxes.  Not having done my taxes with this, I don't know where they start actually paying taxes on it given personal exemptions and medical cost exemptions, but they are not living on a huge amount of money.

I think I'd better post this before I think of more to say, this is a lot longer than I had planned  ;-)

From the Service Canada web site: (note these are maximums, there are residency requirements)

Maximum OAS = $569.95/month or $6839.40/year - marital status doesn't affect this

Maximum GIS = $772.83/month or $9273.96/year - single, widowed, divorced, $17,280 maximum individual income
Maximum GIS = $512.44/month or $6149.28/year - married or common law, $22,848 maximum combined income if partner gets full OAS
Maximum GIS = $$772.83/month or $9273.96/year - married or common law, $41,424 maximum combined income if partner gets no OAS
Maximum GIS =$512.44/month or $  6149.28/year -if partner receives the Allowance
If your spouse/common-law partner receives the Allowance    $512.44    $41,424 (combined income)

Allowance for the Survivor
If you are a surviving spouse or common-law partner - $1,211.79/month  or $14541.48/year    $23,256 maximum individual income

[Gerard]

Re OAS and GIS - you youngsters might want to look at the amounts before you complain about them? 

I have no trouble with GIS, and I would be okay with paying more taxes to increase it a little. It's the OAS I object to. It goes to people who earn too much, and it gets paid out years before most people need assisted living. It's basically vote-buying for the elderly upper middle class, paid for with the taxes of young people.

[RetiredAt63]

Do you know the history? And why the levels were set where they are?  I don't, I think some research is needed. (Note, did some, not much, but found an article that said almost 1/3 of OAS recipients are eligible for GIS - that means a lot of them have tiny retirement incomes other than OAS/GIS - ouch) The GIS is set to bring people up to some international base level but I suppose it would work just as well for them if OAS were smaller (or clawed back much sooner) and GIS were increased.

Financial policy is interesting, it is so easy to argue both sides.  I am glad to get my OAS, and gladder still to not need the GIS.  Given my recent financial history (as in, divorces are incredibly expensive, but extravagant spouses are even more expensive) I am glad for the extra money.

And I wonder if the gradual shift to 67 will still be implemented.  Others on the forums have talked about more difficulty finding jobs as older employees.  We may be living longer, but our working lives are probably not (not talking FIRE here, just regular work until 65 approach).

Re OAS and GIS - you youngsters might want to look at the amounts before you complain about them? 

I have no trouble with GIS, and I would be okay with paying more taxes to increase it a little. It's the OAS I object to. It goes to people who earn too much, and it gets paid out years before most people need assisted living. It's basically vote-buying for the elderly upper middle class, paid for with the taxes of young people.

[Gerard]

I am glad to get my OAS, and gladder still to not need the GIS. 

Amen. And I'll take the OAS when it comes, in the same way I'll happily pay my ridiculously low Toronto property taxes. But I don't need it, and I would have no trouble with a government that reduced it, or better yet replaced it with a combination of a higher GIS (to prevent all-out poverty) and a larger CPP pay-in (to tie people's get-back to their put-in).

[daverobev]

One frustration I have is that everything is based on your previous year's income. One of the arguments against UCCB is that it is pre-tax, but I'd much rather that - if I'm earning little one year (2014), any change in child benefit, trillium benefit and so on doesn't happen til the middle of the following year. And conversely, if you're earning loads in a given year, you'll still be getting the previous year's benefit. Ditto pension (RRSP) contributions - I'd much prefer to, *knowing* how much I'm earning and how much contribution room that should get me, contribute and deduct from this year, not last year.

I know in *theory* it works out... but it's a massive PITA. If I was earning well last year and not this year, RRSP contribs this year aren't worth it.

So for the new child benefit, I would *much* rather see everyone get a set amount, and pay back whatever percentage as tax/clawback. But then, I guess I'm ok at budgeting - I don't end up in April going "oh my god I owe the government $500 what am I going to to!!!"

[RetiredAt63]

If income is a roller-coaster, you can contribute in a low income year based on the higher previous income year, but not use it as a tax deduction until the next high-income year.  Same with charitable contributions.

This is also useful for people just starting in the work force - they can start an RRSP (to gain the longer earning period)  but not use it for income tax purposes until their incomes get higher and it is of greater benefit.

My income didn't change much from year to year, so it didn't really hit me much, but I could always see how it would be nice to do it in the year you made it, just as we do CPP and RSPs at work.

 

One frustration I have is that everything is based on your previous year's income. One of the arguments against UCCB is that it is pre-tax, but I'd much rather that - if I'm earning little one year (2014), any change in child benefit, trillium benefit and so on doesn't happen til the middle of the following year. And conversely, if you're earning loads in a given year, you'll still be getting the previous year's benefit. Ditto pension (RRSP) contributions - I'd much prefer to, *knowing* how much I'm earning and how much contribution room that should get me, contribute and deduct from this year, not last year.

I know in *theory* it works out... but it's a massive PITA. If I was earning well last year and not this year, RRSP contribs this year aren't worth it.

So for the new child benefit, I would *much* rather see everyone get a set amount, and pay back whatever percentage as tax/clawback. But then, I guess I'm ok at budgeting - I don't end up in April going "oh my god I owe the government $500 what am I going to to!!!"

[RetiredAt63]

I finally read Friday's paper (yes retirement is much too busy) and saw that we do not have the Trudeau^TM government.  We have the Government of Canada.  Nice to see that the concept of a government being identified by the leader of the majority party is where it belongs - gone.