Federal Budget 2024 | What’s moving in your wallet

Improved RAP

Buying a first home using your contributions to a Registered Retirement Savings Plan (RRSP) is becoming more attractive. For new purchases starting this Tuesday, the withdrawal limit under the Home Buyers’ Plan (RAP) increases from $35,000 to $60,000. Under this program, the buyer can withdraw this amount from their RRSP tax-free, add it to their down payment and repay it over 15 years. The “grace period” before starting this repayment, previously two years, increases to five years. Furthermore, still for first-time home buyers, the amortization period for repaying the mortgage loan can be up to 30 years.

Smoking harms your wallet

A budget classic, the carton of 200 cigarettes will increase by $4, on an average cost in Quebec of $139.01. The cartridge had already seen its cost increase by $1.49 on 1^er last April, under the “automatic inflationary adjustment”. Those who have opted for vaping rather than cigarettes are not spared: for a 60 ml bottle of liquid, for example, the excise duty increases from $10 to $22.40. These two increases will allow the government to generate additional revenues of 325 million this year and 1.7 billion by 2029.

Rent and credit score

“Every month, millions of tenants in Canada pay their rent in full and on time” but this good behavior does not improve their credit rating, notes the federal government. Hence the call for financial institutions to launch tools allowing tenants to record their rent payment history in their credit score. “This measure is all the more important for young people and for people who have just arrived in Canada, because it may be more difficult for them to build a credit history,” we can read in the budget. This measure is a key element of the “people’s banking system”, which would enable the secure exchange of financial data.

An automatic RESP

Many low-income parents don’t know it, but their child can receive up to $2,000 in Canada Learning Bonds, without any other contribution on their part. But you still need to open a registered education savings plan (RESP), which Ottawa will do automatically for every eligible child starting in 2028. It is estimated that 130,000 more children will be able to benefit from a Bonus each year. of Canadian studies. Parents will then be able to transfer this amount to their own RESP, contribute to it and be entitled to additional government grants. The age to retroactively apply for the Canada Learning Bond also increases from 20 to 30 years old.

Electric subsidies

The subsidy for the purchase of electric and plug-in hybrid vehicles, which will be gradually abolished in Quebec by 2027, is maintained at its current level by Ottawa, but only for two more years. It will cost 1062 billion in total to continue paying this subsidy of a maximum of $5000. However, no assurance is given on the renewal of the program after 2026, and no amount is otherwise provided for subsequently in the budget. We are satisfied with the results of this program: “From 2019 to September 2023, more than 450,000 zero-emission vehicles were purchased or leased in Canada – and the government is helping to increase this figure.”

$10 limit

Fees charged by financial institutions for insufficient funds to cover a check or pre-authorized transaction can reach $50, and the Trudeau government announced in 2023 its intention to control them. The amount is specified for the first time in the 2024 budget: they will be capped at $10 and the imposition of multiple fees when the same transaction occurs again will be prohibited. Ottawa also plans to require banks to notify their customers in the event of insufficient funds, and to grant them a grace period to correct the situation. A draft “insufficient funds fee regulation” will be presented in the coming months.