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If you’re a millennial, here’s how Budget 2017 will affect you

More money for student grants, but booze, Uber and cigarettes are going up in price

If you’re a millennial, here’s how Budget 2017 will affect you

In their second budget, Prime Minister Justin Trudeau and Finance Minister Bill Morneau have focused on skills training, innovation, and the digital economy as a way to kick-start the Canadian economy.

That means new initiatives to help youth learn code, get young workers into skills training, and to provide funding for tech start-ups. It also means the cost of your Uber ride, bottle of wine, and pack of cigarettes are going up.

Student loans and grants

Last year’s budget pumped money into Canada Student Grants and Canada Student Loans. This year’s budget expands on that, with a plan to raise the income threshold to qualify for a federal loan or grant if you’re a part-time student, meaning more students will qualify.

The idea behind this is to ensure that part-time jobs holders or young adults with kids who need to go back to school to equip themselves with new skills don’t find the idea of signing up for part-time courses so financially daunting.

That’s going to cost $59.8 million over four years, starting in the 2018-19 academic year, but the government is projecting that 10,000 additional part-time students will benefit from Canada Student Grants and Loans.

Studying and Claiming Employment Insurance

If you’re unemployed and claiming employment insurance from the government to help fund day-to-day costs of living until you find a full-time job, there’s good news in this budget.

Right now, if you sign up for school, and that takes up more than 14 hours of your week, you’ll lose your employment insurance benefits. That’s a problem, especially if you’re looking to transition from one field to another.

This year’s budget plans to provide $132 million over the course of the next four years, to allow unemployed Canadians to go back to school to retrain themselves and receive EI benefits at the same time.

Flexi Hours and Unpaid Internships

The government is instituting two interesting changes to the Canada Labour Code.

First, federally regulated employees — those working in crown corporations, banks, the telecommunications sector, mining, airlines, and a handful of other industries —  will now have more ability to request flexible work arrangements, meaning you can adjust your start and finish times and work from home more frequently, or work from home.

Second, the government is limiting unpaid internships in federally regulated sectors, except if that internship is part of a formal education program. Morneau’s budget calls unpaid internships “unfair and exploitative”, and is pledging to ensure that any kind of unpaid internship will be regulated by labour standard protections like maximum hours of work and vacation time.

“These are small improvements, which are definitely not bad,” Alexandre Laurin, Director of the C.D. Howe Institute told VICE Money. “But none of these measures help people who don’t have a university degree to enroll in school. There isn’t anything bold in this budget that will actually help close the skills gap.”

Booze, Cigarettes & Uber

If you think you’re paying a lot for alcohol in Canada, you’re about to pay more. Excise duty rates on alcohol will be increased by two percent, effective March 23rd, 2017 — they’ve apparently not changed since the mid 1980s, so you can say this was a long time coming. Because excise levies are paid by the manufacturer or importer, expect to see this tax increase translate into prices at the store.

Those taxes will be pegged to inflation from here on out, meaning they will climb year-over-year.

The story is similar with cigarettes. Budget 2017 will raise excise duty rates on cigarettes and any other kind of tobacco products, albeit slightly ($21.03 to $21.56 per 200 cigarettes). It will also, interestingly enough eliminate the 10.5 percent surcharge tax on tobacco company profits, perhaps because as cigarette sales go down, the government isn’t getting much in the way of revenue from this tax.

In a blow to ride-sharing companies like Uber and Lyft, the government is proposing that ride-sharing providers register for the GST/HST and charge tax on their fares the same way that regular taxi providers do. So expect your monthly Uber costs to go up by roughly 13 percent.

Public Transit

The much-loved (at least by me) public transit credit of 15 percent, has been eliminated in Budget 2017.  No longer will you be able to gather your monthly transit passes and get back a couple of hundred dollars when you file your annual tax returns.

This is indeed puzzling, considering the government’s rhetoric on “creating a greener Canada,” but turns out, the incentive system behind the public transit credit, that is, to get more people to use public transportation, was not working. It is estimated that the government will save a whopping $1 billion by getting rid of this tax credit.

Public transit is still a Liberal priority — after announcing a $3.4 billion investment in transit in 2016, the government has pledged to pump $20.1 billion over 11 years to fund transit projects in Ottawa, Calgary, Toronto, Montreal, and Vancouver.

It’s a better allocation of spending. If you don’t pay taxes, you don’t get money from that. Funding better transit helps everyone.

Affordable housing & Foreign ownership of Canadian homes

And finally, housing. Acknowledging the complete and utter lack of data related to exactly how many foreigners are buying Canadian homes, the government will be introducing a new Housing Statistics Framework, that will provide $39.9 million to Statistics Canada over the next five years, to develop methods to gather data on foreign buyers. You can expect the first set of results from Stats Can this coming fall.

The government will also establish a National Housing Fund to address the need for affordable housing across Canada — that fund is going to get $5 billion over the next 11 years.

“I’m glad they are not pulling back on funding affordable housing. But overall, we’d would like to see measures in the budget that focus on training apprentices so the ability of lower income people to afford housing will only increase,” Angela MacEwen, Senior Economist at the Canadian Labour Congress told VICE Money.
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Cover: Ralph Damman/Vice Illustration

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