The recession of the early 1980s was a very difficult one for many of us to live through. It is said that the once busy downtown streets of Prince George were virtually a dustbowl for a time. People lost homes, businesses, and the stress load on everyone touched by it was enormous.
As a student at the time, I felt some of the weight of it, although I would learn that my load was not nearly the burden carried by adults just striving to raise a family.
When classes ended in the spring of 1983, I checked in at the local student employment centre looking for part-time work until my summer job started a few weeks later. It wasn't unusual to be able to pick up labour work for a day or two and receive a decent cash payday.
On this particular day, the job was to unload a truck full of rice into a discount grocery store in Surrey. It paid five dollars an hour and sounded like a great opportunity for a half-day workout and a pocket full of cash.
Normally the middle-aged men didn't like that sort of thing, and my younger back gave me an advantage.
But when I arrived at the loading dock of the grocery store, I was surprised that there were in the range of 15 to 20 men, most of them apparently family men, or at least they had that appearance, and were willing to sweat it out for what turned out to be pocket change. Five dollars an hour for unloading a few dozen 50 pound sacks of rice was a free workout more than it was a pocket full of cash.
I was humbled by the company I was keeping. These men were hungry, and many of them had families to feed.
With that many men on the job, we were done unloading within an hour or so, and the employer paid us on the spot, barely enough to stop by at McDonald's for breakfast.
But as I stood in line for my pay, more than a little crestfallen, I was struck by the hunger in the eyes of my co-workers. They were genuinely happy for the work, little as it was.
Never underestimate the attraction of a simple job that pays in cash. At least for those who are hungry.
Child tax benefits, other measures in the 2016 budget
There are a number of programs and policies which are intended to help parents raise healthy children in a fair tax regime.
More on the recent federal budget is presented here, especially as it pertains to investors and seniors, but also families with children.
Canada Child Benefit
There are currently two federal benefits, the Canada child tax benefit (CCTB) and the universal child care benefit (UCCB), that provide financial assistance to families with children under age 18.
To simplify existing child benefits and ensure help is better targeted to those who need it the most, the budget proposes to replace the CCTB and UCCB with a new Canada child benefit beginning July 1, 2016. The Canada child tax benefit will be income-tested and phased out.
The child disability benefit of $2,730 per month will remain but be phased out for families with incomes above $65,000 and at the same rates as the Canada child benefit.
Income splitting credit
A non-refundable income-splitting tax credit is available to couples with at least one child under 18 years of age.
It was introduced to allow a higher-income spouse or common-law partner to notionally transfer up to $50,000 of taxable income to their spouse or common-law partner to reduce the family's total income tax liability by up to $2,000.
The budget proposes to eliminate the family tax cut for 2016 and subsequent taxation years.
Education, book tax credits
Currently, students are eligible for three non-refundable tax credits. The budget proposes to eliminate the education and textbook credits. The education tax credit is 15 per cent of $400 per month for full-time students and 15 per cent of $120 for part-time students. The textbook tax credit is 15 per cent of $65 per month for full-time students and 15 per cent of $20 for part-time students. The tuition tax credit which is 15 per cent of the amount of eligible tuition fees paid will still be available to students.
Changes will be made to ensure that other income tax provisions that rely on eligibility for the education tax credit, such as tax exemption for scholarship income, will be unaffected by its elimination.
This measure will apply beginning
Jan. 1, 2017. Unused education and textbook credit amounts carried forward from prior years will remain available to be claimed in 2017 and subsequent years.
Children's fitness and
arts tax credits
The budget proposes to phase out the children's fitness and arts tax credits by reducing the 2016 maximum eligible amounts from $1,000 to $500 for the children's fitness tax credit and from $500 to $250 for the children's arts tax credit. The children's fitness tax credit will remain refundable. Both credits will be eliminated beginning 2017.
The supplemental amounts for children eligible for the disability tax credit will remain at $500 for 2016.
As always, this article is not meant as individualized tax or legal advice. Readers should consult their own tax professionals before proceeding with a strategy.
Mark Ryan is an advisor with RBC Wealth Management, Dominion Securities (member CIPF) and can be reached at [email protected], or by calling 250-960-4927.
