2017 Federal Fall Economic Statement

2017 Federal Fall Economic Statement

• 1.
  Edelman Ottawa |155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000 This year’s Fall Economic Statement comes at an opportune moment for the Liberal Government. The Statement outlines huge gains for the Canadian economy. The Liberals look to take advantage of increased revenue to further invest in the economy. At the same time, the Government used the Statement to address recently announced tax changes which created their largest controversy since taking office two years ago. It’s clear that the Government remains committed to the formula that won them a majority in 2015: government investment over debt reduction. Overall, the economy is expected to grow by 3.1 per cent in 2017—Its best performance in over a decade. The update stated that the strong economic growth seen over the last year will provide the government with an additional $47 billion over the next five years — $8.9 billion this year alone. Of this, $1.8 billion will be allocated towards new spending over the next year. The deficit forecast has also been updated, down to $19.9 billion for 2017-2018. The Liberal spending plan includes investments in the form of tax relief and anti-poverty programs. 2017 FEDERAL FALL ECONOMIC STATEMENT OUR PERSPECTIVE REAL GDP GROWTH James Moore Special Advisor, Public Affairs +1.604.648.3401 | James.moore@edelman.com Christopher Vivone Senior Vice President 613.569.9000 | chris.vivone@edelman.com Darcy Walsh Senior Vice President & General Manager 613.569.9000 | darcy.walsh@edelman.com
• 2.
  Edelman Ottawa |155 Queen St. Suite 1302 | Ottawa, ON K1P 6L1 | 1.613.569.9000 2017 FEDERAL FALL ECONOMIC STATEMENT STAKEHOLDER RESPONSE HIGHLIGHTS Canada Child Tax Benefit (CCB) ›› The Canada Child Tax Benefit will be indexed to inflation starting in July 2018—two years earlier than planned, and will see an additional $5.6 billion in additional benefits through to 2023. However, indexing the tax-free benefit will cost the Government an additional $5.6 billion between 2018-19 and 2022-23. Working Income Tax Benefit ›› The Working Income Tax Benefit will see an additional $500 million in funding per year, starting in 2019. Additional details on increased benefits for current recipients and an expansion on eligibility will come in the 2018 Budget. Small Business Tax Cut ›› Minister Morneau confirmed details previously announced on the lowering of the small business tax rate — down from 10.5% 10% in 2018 and to 9% in 2019. “Greater economic growth and a lower deficit are good news for all Canadians. It is especially encouraging for the businesses that are carrying our economy forward, often with great-risk and little reward.” Perrin Beatty, President and CEO of the Canadian Chamber of Commerce “More spending. Higher deficits. And no end in sight to the ever-mounting Liberal debt.” “It’s terrible news. Justin Trudeau cannot be trusted on tax breaks for Canadians. It’s terrible news that the deficit has doubled with no plan to limit it.” Andrew Scheer, Leader of the Conservative Party of Canada “This fiscal update can be summarized into two words: Morneau Shepell. [This] is simply and attempt by the Liberal Government to distract, to change the channel, from the heavy questioning that the Minister is under right now.” Guy Caron, NDP Parliamentary Leader / Jagmeet Singh, Leader of the NDP “Good day for the Liberal government and the finance minister, these are fantastic growth rate numbers. Unemployment is low and the economy is expected to grow by 3%. Politically this fiscal update is a good move for the Liberal government but they must maintain and be prudent with their books.” Kevin Page, President and CEO, Institute of Fiscal Studies and Democracy