Income trusts capped in a housekeeping budget

• Income trusts capped in a housekeeping budget
• Staying the course: No surprises in Goodale’s first budget
• Advisors react to “non-event” budget
• Budget draws mixed reviews from industry associations
• Industry insiders analyze return to prudence
• The federal budget and your financial plan (Client letter)

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Further work needed

In last year’s budget, the federal government briefly broached the idea of TPSPs. Unlike registered plans, contributions would receive no upfront tax deduction. Earnings within the plan, however, could be withdrawn tax-free. The Finance Department said that consultations after the 2003 budget “raised a number of important issues which require further consideration.”

Cestnick thinks TPSPs will eventually come. In the past, Prime Minister Paul Martin has expressed interest in them. “I just don’t think they have the money right now.”

Still, there were small measures of immediate benefit to some clients. Clarke points to the acceleration of the small-business deduction limit. The $300,000 limit has been moved ahead one year, to 2005.

All the same, given the government’s emphasis on prudence, future budgets are likely to look much like 2004’s, says Cestnick.

“They’ve pretty much said that there will be no more tax cuts in the next two years because they’re expecting revenue as a percentage of GDP to fall even further,” he explains. “It’s going to continue to fall, and that’s because of the tax breaks they’ve given over the past five years.

“This kind of housekeeping is all we’re going to see this year, next year and the year after that.”

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What do you think about today’s federal budget? Share your thoughts about Goodale’s offering with your peers in the Talvest Town Hall on Advisor.ca.

Filed by Scot Blythe, Advisor.ca, scot.blythe@advisor.rogers.com.

(03/23/04)

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Scot Blythe

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• Income trusts capped in a housekeeping budget
• Staying the course: No surprises in Goodale’s first budget
• Advisors react to “non-event” budget
• Budget draws mixed reviews from industry associations
• Industry insiders analyze return to prudence
• The federal budget and your financial plan (Client letter)

Further work needed

In last year’s budget, the federal government briefly broached the idea of TPSPs. Unlike registered plans, contributions would receive no upfront tax deduction. Earnings within the plan, however, could be withdrawn tax-free. The Finance Department said that consultations after the 2003 budget “raised a number of important issues which require further consideration.”

Cestnick thinks TPSPs will eventually come. In the past, Prime Minister Paul Martin has expressed interest in them. “I just don’t think they have the money right now.”

Still, there were small measures of immediate benefit to some clients. Clarke points to the acceleration of the small-business deduction limit. The $300,000 limit has been moved ahead one year, to 2005.

All the same, given the government’s emphasis on prudence, future budgets are likely to look much like 2004’s, says Cestnick.

“They’ve pretty much said that there will be no more tax cuts in the next two years because they’re expecting revenue as a percentage of GDP to fall even further,” he explains. “It’s going to continue to fall, and that’s because of the tax breaks they’ve given over the past five years.

“This kind of housekeeping is all we’re going to see this year, next year and the year after that.”

What do you think about today’s federal budget? Share your thoughts about Goodale’s offering with your peers in the Talvest Town Hall on Advisor.ca.

Filed by Scot Blythe, Advisor.ca, scot.blythe@advisor.rogers.com.

(03/23/04)