Hi Everyone. I know we're on for 5 pm, but I thought I'd jump in a bit early. I see Dan has asked about the Senators. Would that be the NHL team, or the house of sober second thought? Neither mentioned in the budget so far as I can see.
Wayne raises an excellent point about the budget measure that would raise the age of OAS eligibility to 67 from 65. It won't start kicking in until 2023 and it won't take full effect until 2029. Seems to me that a new NDP or Liberal government could reverse the measure.
MP pensions were mentioned in the budget, but zero in specifics. The general idea is to make MPs contribute more to their pensions, but changes won't happen any time soon. An opportunity to show politicians leading the austerity wave by example was lost.
Thanks for joining us Rob - I know you've had a long day poring over the budget in the lock-up, and appreciate your time.
A reader named Alexem posted the first question of the chat:
Will there be any changes to the contribution levels for the TFSA?
Albin, you raise an intersting point about OAS reform and how younger Canadians will sacrifice so that older people can receive full benefits. I think the government has found an effective way to short-circuit any generational friction. The OAS changes won't start kicking in until 2023, and it won't be until 2029 until the take full effect. In other words, we have 11 years to forget all about these changes.
AlexM, here's the answer to your TFSA question: No. Not a word in the budget about higher TFSA limits. Not surprising, given that this budget had an austerity flavour and higher TFSA limits mean more foregone tax revenue.
Regarding the eco-energy retrofit program, the budget notes that this program wraps up March 31. No word on an extension.
Dario has asked a great question about the impact of the government's plan to eliminate that most annoying of coins, the penny. First of all, it affects only cash transactions, not debit or credit. Second, the onus will be on retailers to start rounding the price of goods so that you get change in nickels, dimes etc. Retailers will be expected to round down to $1 in cases where something costs $1.01 or $1.02 and round up TO $1.05 when the price is $1.03 and $1.04.
Angelo, no word on the F-35 program.
George, RRSP and RRIF rules are just crying out for an updating to reflect longer lifespans. But this stuff was not tackled in the budget.
Jim, our problem with OAS is not related to immigration. It's just not an issue. Blame the aging baby boomer demographic. It's becoming the dominant population segment and it will be drawing more and more not just in OAS benefits but also health care services.
George, there are numerous changes to the registered disability savings plan. I'd call it tweaking to make the program more responsive to the needs of the disabled and their families. Suggest you get the rundown using the link to the main budget document I provided below.
Steve, actuaries have declared the Canada Pension Plan to be sound for the next 75 years. I wouldn't worry about it. As for OAS, there are experts who believe it would remain affordable even if the government were not to make the changes in today's budget. So, bottom line, the answer is yes in both cases.
ALR, you raise a good point here about people staying in the workforce longer as a result of OAS reform. The backdrop here is an unemployment rate for young adults that is twice the national rate. More seniors in the workforce would seem to mean more competition. Can't be good for young job seekers.
Eric, suggest you contact your pension plan administrator. Haven't seen any specifics on this.
You bet, Tricia. The Mint will stop punching out pennies in the months ahead, but they're still legal tender. Roll 'em up, and bring 'em in to the bank.
Marc, way too soon to tell, but some will certainly be gone. Stay tuned.
Rebecca, the budget makes very little mention of students, and there seems to be nothing for daycare workers.
Absolutely, Dan. One of my colleagues in the Globe's Ottawa bureau (yes, I'm based in Ottawa, not Toronto), was saying on the way back from the lockup that this is the kind of budget where the full impact and implications will take some time to emerge. The OAS change is a good example. Won't take full effect until 2029.
Mikey, the retirement age hasn't changed. The budget simply announces a future increase in the age of eligibility for Old Age Security to 67 from 65.
June, I think this is a reference to some moves to remove HST from some very specific, very targeted medical spending for health-care professionals and individuals. Nothing across the board here.
Thanks for the questions so far - please keep them coming and we'll get to as many as we can. Just a reminder that we'll be focusing on personal finance questions.
