April 16, 2024

2024 Canadian Federal Budget: Key points and what it means for your finances

By Paul Moser and Andrée-Anne Guénette

Wondering how announcements in Canada’s 2024 budget might impact you and your money? Read on for some highlights.

Please note: This article offers excerpts from the 2024 Federal Budget sourced from the Government of Canada’s website. It is not an analysis of the budget, and does not reflect Sun Life Assurance Company of Canada’s views.

The Canadian government released the 2024 Federal Budget today, the annual fiscal and economic report.

Here are a few highlights from today’s Budget that may affect you:

Housing measures

  • Increase the Home Buyers' Plan withdrawal limit from $35,000 to $60,000, enabling first-time home buyers to use the tax benefits of an RRSP to save up to $25,000 more for their down payment, faster. The newly increased limit would be available to first-time buyers after April 16, 2024.
  • Extend the grace period during which homeowners are not required to repay their Home Buyers' Plan withdrawals to their RRSP by an additional three years. This grace period extension would apply to Home Buyers' Plan participants who made a first withdrawal between January 1, 2022, and December 31, 2025, who will now only have to begin repaying their Home Buyers' Plan withdrawals in the fifth year after the year in which they withdraw. For a couple who withdrew the maximum in 2023, extending the grace period could allow them to defer annual repayments as large as $4,667 by an additional three years.
  • Allow 30-year mortgage amortizations for first-time home buyers purchasing newly constructed homes. Extending the amortization limits by five years for first-time buyers purchasing new builds will enable more younger Canadians to afford a mortgage and will encourage new supply. This new insured mortgage product will be available to first-time buyers starting August  1, 2024.

Measures for students, renters, workers with disabilities

  • Extend for an additional year the increase in full-time Canada Student Grants from $3,000 to $4,200 per year, and interest-free Canada Student Loans from $210 to $300 per week. Increased students grants and loans will be available for the 2024-2025 school year.
  • Allow renters to choose to report their rent payment history to credit bureaus, to strengthen their credit scores and unlock pathways for more renters to become homeowners. Calling on banks, fintechs, and credit bureaus to prioritize launching these tools.
  • Add up to an additional $821 every year to workers with disabilities through the Canada Workers Benefit Disability Supplement, beyond the basic Canada Workers Benefit amounts of up to $1,590 for a worker and up to $2,739 for a family.

Measures for affordability

  • Grant Canadians more flexibility to renew or switch between home internet, home phone, and cell phone plans. Carriers will be:
    • prohibited by the CRTC from charging consumers extra fees to switch carriers.
    • required to help consumers identify plans, which may include lower-cost plans, in advance of the end of a contract.
    • required to provide a self-service option, such as an online portal, for customers to easily switch between or end plans with a provider.
  • Cap the non-sufficient funds (NSF) fees charged by banks to $10 per instance, as well as other NSF measures. The intent is to help Canadians who are struggling to make payments to improve their financial situation. Banks charge NSF fees when there isn’t enough money in a bank account to cover a cheque or pre-authorized debit transaction.

Measures on taxes and rebates

  • Increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024. The first $250,000 of capital gains income earned by Canadians each year won’t be subject to the new two-thirds inclusion rate.
  • Return fuel charge proceeds from 2019-20 through 2023-24 to an estimated 600,000 businesses, with 499 or fewer employees through a new refundable tax credit. This would deliver over $2.5 billion directly to Canada's small- and medium-sized businesses.

For a more detailed look at today’s Budget from an investment perspective

Go to this article from Sun Life Global Investments

Read more:

  • You can create your own budget to keep track of your finances and make sure you have enough money to meet your needs and goals. Use this  Budget Calculator to help you manage your spending.
  • Check out Managing your money on sunlife.ca for ideas, strategies, and resources for your finances.
  • Remember to take care of what’s important to you and protect what you’ve earned: How to build and protect your wealth with insurance.
  • It’s never too late or too early to start saving for retirement. The  Retirement Savings Calculator can help you set goals for your retirement. 

This article does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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