Opinion

Budget 2019 – Don’t spend your new Canada Training Credit just yet

Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr

Published

6 years ago

6 minute read

On March 19, 2019, the federal government tabled its election-year budget. One of the new provisions is a refundable credit called the Canada Training Credit. However, the $250 credit won’t even be available until you file your 2020 income tax return in April of 2021.

Further, if you are born in 1995 or later, you won’t qualify yet. If you were born in 1954 or earlier, you would never be eligible.

In addition, the maximum benefit you can receive is $5,000 in a lifetime (which will take 20 years to get at $250 a year) and the benefit can only be used to a maximum of 50% of eligible tuition costs.

So let’s consider the following scenario:

It is 2019 – you are 25 years of age making $27,000 a year and file your taxes every year.

You decide to take advantage of this credit and enroll in your first semester of schooling in the fall of 2023.
According to Statistics Canada, the average Canadian undergraduate pays $3,419 per semester.

So, you take time off work to go to school full-time in the fall, thus reducing your income by 1/3 in the year to $18,000.

Under the current 2019 rules, you would only have $39 in federal income tax. This amount is low because the tuition credits reduce your taxes.

By 2023, you have built up a “pool” of $250 per year after you turned 26, and believe you have a $1,000 pool available for that year.

When you file your 2023 return the $1,000 is triggered as a refundable tax credit. But you won’t be getting $961 back ($1,000 – 39).

Here’s the catch:

The $1,000 pool reduces the amount you can claim for tuition credits as well, which changes the tax owing to $189 Federal income tax. Meaning the $1,000 pool that you waited for is reduced by 15% by the time you pay it out.

Cash in jeans: $811.

But what if the course you decided to go into begins in January of 2023? You go for the January-April semester, work from May-August, and attend school September-December.

Using the same $27,000 – your income is now reduced by 2/3 while attending full time. Your income is only $9,000 as a result of the May-August period.

Your tuition (possibly paid through student loans) is $6,838 for the year.

Your tax is now zero because even before tuition credits you are below the Basic Personal Amount in your earnings.

Does this mean you get the full $1,000?

No.

Because your income is less than $10,000 in 2023, you don’t get the $250 for that year. As such, you only get $750, and your tuition credits available for carryforward are reduced by $750 as well, thus having a future negative impact on tax of $112.50.

Net result: $637.50 cash in jeans

What if you are a parent that decides to stay home with the kids until they are in school full time and go back to school in 2023?
Unfortunately, because you did not make more than $10,000 a year in any of the years, you get zero.

What if you were laid off, collecting regular EI benefits, and decide to go back to school?
Regular EI Benefits don’t qualify for the $10,000 income calculation. As a result, unless you had special EI benefits like parental leave or earned income from another source greater than $10,000, you don’t qualify.

What if you were self-employed through a small business corporation and paid yourself dividends instead of wages and then decided to upgrade your training?
Your dividend income does not qualify, and so you are not eligible for amounts to be added to the pool.

So assuming you qualify, and you wait the four years to build up a pool of $1,000 (remember that the $1,000 is only a net $850 because of the reduction in tuition credits). That same Statistics Canada report says that tuition is increasing at 3.3% per year. That means by you waiting four years so you can get the Net $850 means your annual tuition has likely increased from $6,838 to $7,786 ($948).

You waited four years, and the tax amount you receive won’t even cover the inflationary price increase on tuition.

In Conclusion

Those that do qualify won’t see anything until April 2021; the actual net amount of what they will see is only $212.50; and their annual tuition will likely have increased by $225.65.
Students under the age of 25 will see nothing;
People over the age of 25 that don’t have more than $10,000 of income will see nothing;
Seniors will see nothing;
Parents looking to re-enter the workforce will see nothing; and
People who have been laid off and have less than $10,000 of non-EI income will see nothing.

Seems like a lot of complex legislation for nothing.

—
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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Scott Bessent says U.S., Ukraine “ready to sign” rare earths deal

Published on April 30, 2025

Todayville

MxM News

Quick Hit:

During Wednesday’s Cabinet meeting, Treasury Secretary Scott Bessent said the U.S. is prepared to move forward with a minerals agreement with Ukraine. President Trump has framed the deal as a way to recover U.S. aid and establish an American presence to deter Russian threats.

Key Details:

Bessent confirmed during a Cabinet meeting that the U.S. is “ready to sign this afternoon,” even as Ukrainian officials introduced last-minute changes to the agreement. “We’re sure that they will reconsider that,” he added during the Cabinet discussion.
Ukrainian Economy Minister Yulia Svyrydenko was reportedly in Washington on Wednesday to iron out remaining details with American officials.
The deal is expected to outline a rare earth mineral partnership between Washington and Kyiv, with Ukrainian Armed Forces Lt. Denis Yaroslavsky calling it a potential turning point: “The minerals deal is the first step. Ukraine should sign it on an equal basis. Russia is afraid of this deal.”

Diving Deeper:

The United States is poised to sign a long-anticipated rare earth minerals agreement with Ukraine, Treasury Secretary Scott Bessent announced during a Cabinet meeting on Wednesday. According to Bessent, Ukrainians introduced “last minute changes” late Tuesday night, complicating the final phase of negotiations. Still, he emphasized the U.S. remains prepared to move forward: “We’re sure that they will reconsider that, and we are ready to sign this afternoon.”

As first reported by Ukrainian media and confirmed by multiple Ukrainian officials, Economy Minister Yulia Svyrydenko is in Washington this week for the final stages of negotiations. “We are finalizing the last details with our American colleagues,” Ukrainian Prime Minister Denys Shmyhal told Telemarathon.

The deal follows months of complex talks that nearly collapsed earlier this year. In February, President Trump dispatched top officials, including Bessent, to meet with President Volodymyr Zelensky in Ukraine to hammer out terms. According to officials familiar with the matter, Trump grew frustrated when Kyiv initially refused U.S. conditions. Still, the two sides ultimately reached what Bessent described as an “improved” version of the deal by late February.

The effort nearly fell apart again during Zelensky’s February 28th visit to the White House, where a heated Oval Office exchange between the Ukrainian president, Trump, and Vice President JD Vance led to Zelensky being removed from the building and the deal left unsigned.

Despite those setbacks, the deal appears to be back on track. While no public text of the agreement has been released, the framework is expected to center on U.S.-Ukraine cooperation in extracting rare earth minerals—resources vital to modern manufacturing, electronics, and defense technologies.

President Trump has publicly defended the arrangement as a strategic and financial win for the United States. “We want something for our efforts beyond what you would think would be acceptable, and we said, ‘rare earth, they’re very good,’” he said during the Cabinet meeting. “It’s also good for them, because you’ll have an American presence at the site and the American presence will keep a lot of bad actors out of the country—or certainly out of the area where we’re doing the digging.”

Trump has emphasized that the deal would serve as a form of “security guarantee” for Ukraine, providing a stabilizing American footprint amid ongoing Russian aggression. He framed it as a tangible return on the billions in U.S. aid sent to Kyiv since the start of Russia’s 2022 invasion.

Business

New federal government plans to run larger deficits and borrow more money than predecessor’s plan

Published on April 30, 2025

Todayville

Fr0m the Fraser Institute

By Jake Fuss and Grady Munro

The only difference, despite all the rhetoric regarding change and Prime Minister Carney’s criticism of the Trudeau government’s fiscal approach, is that the Carney government plans to run larger deficits and borrow more money.

As part of his successful election campaign, Prime Minister Mark Carney promised a “very different approach” to fiscal policy than that of the Trudeau government. But when you peel back the rhetoric and look at his plan for deficits and debt, things begin to look eerily similar—if not worse.

The Carney government’s “responsible” new approach is centered around the idea of “spending less” in order to “invest more.” The government plans to separate spending into two budgets: the operating budget (which appears to include bureaucrat salaries, cash transfers and benefits) and the capital budget (which includes any spending that “builds an asset”). The government plans to balance the operating budget by 2028/29 (meaning operating spending will be fully covered by revenues) while funding the capital budget through borrowing.

Aside from the fact that this clearly complicates federal finances, this “very different” approach to spending actually represents more of the same by continuing to pursue endless borrowing and a larger role for the government in the economy.

The chart below compares projected annual federal budget balances for the next four years, from both the 2024 Fall Economic Statement (FES)—the Trudeau government’s last fiscal update—and the 2025 Liberal Party platform. Importantly, deficits from the 2025 platform show the overall budget balance including both operating and capital spending.

CanvasJS.com

Let’s start with the similarities.

In its final fiscal update last fall, the Trudeau government planned to borrow tens of billions of dollars each year to fund annual spending, with no end in sight. Based on its election platform, the Carney government also plans to run multi-billion-dollar deficits each year with no plan to balance the overall budget. The only difference, despite all the rhetoric regarding change and Prime Minister Carney’s criticism of the Trudeau government’s fiscal approach, is that the Carney government plans to run larger deficits and borrow more money.

In the current fiscal year (2025/26) the Trudeau government had planned to run a $42.2 billion deficit. The Carney government now plans to increase that deficit to $62.3 billion. Trudeau’s most recent fiscal plan forecasted annual deficits from 2025/26 to 2028/29 representing a cumulative $131.4 billion in federal government borrowing. Over that same period, the Carney government now plans to borrow a cumulative $224.8 billion.

The Carney government’s fiscal plan does include a number of tax changes that are expected to lower revenues in years to come—including (but not limited to) a personal income tax cut, the elimination of the GST for some first-time homebuyers, and the cancelling of the planned capital gains tax hike. But even if you exclude these factors from the overall budget, the Carney government still plans to borrow $52.9 billion more than the Trudeau government had planned over the next four years.

By continuing (if not worsening) this same approach of endless borrowing and rising debt, the Carney government will impose real costs on Canadians. Indeed, 16-year-olds can already expect to pay an additional $29,663 in personal income taxes over their lifetime as a result of debt accumulation under the previous federal government, before accounting for the promised increases.

One of the key promises made by Prime Minister Carney is that his government will take a different approach to fiscal policy than his predecessor. While we won’t know for certain until the new government releases its first budget, it appears this approach will continue the same costly habits of endless borrowing and rising debt.