News & information archive

June 10, 2011

Federal budget announced

The federal government tabled their 2011 budget on June 6, 2011. As expected, the government reintroduced the March 22, 2011 budget with a few minor modifications.

Key highlights

Key highlights from the 2011 budget include the following:

Enhanced anti-avoidance rules for RRSPs and RRIFs are being proposed to deal with tax planning schemes such as swap transactions. These proposals are similar to the current rules applied to tax-free savings accounts (TFSAs).
Proposals affecting individual pension plans (IPPs) include the introduction of a minimum amount required to be withdrawn annually from an IPP starting at age 72 (similar to current minimum withdrawals from RRIFs) as well as changes to funding for past services contributions.
While no specific tax legislative measures were introduced in the budget, it was clear that the government’s intention is to proceed with the development of the framework for Pooled Registered Pension Plans.
A package of proposed integrity measures aimed at helping build confidence in giving to legitimate charities such as the Canadian Medical Foundation.
To strengthen health care in Canada, the budget proposes to forgive up to $40,000 of the federal component of Canada Student Loans for new doctors and up to $20,000 for nurses practicing in under-served rural and remote areas.

Further details regarding the entire budget, including additional proposals and economic developments, are available on the Department of Finance Canada website.

If you have any questions regarding the federal budget, and any potential impact on your investment portfolio, please contact your MD advisor.

Note: Measures introduced in the federal budget are only proposals until they receive Royal Assent (at which point they will become law).

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