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Federal Budget Includes Higher Costs For Smokers, Drinkers, Transit Riders

Prime Minister Justin Trudeau's government has unveiled the 2017 federal budget, which includes cost increases for Canadians who smoke, drink and rely on public transportation.

Finance Minister Bill Morneau’s second budget includes higher costs for alcohol and tobacco products. The tax rate on alcohol will increase 2%, while the excise duty rate on cigarettes is increasing $0.53 to $21.56 per carton cigarettes. The price adjustments will be made every April 1 starting next year.

The federal government is also eliminating the transit tax credit, which allows the cost of transit passes to be deducted. Also, the government will be ensuring that ride-sharing services, such as Uber, charge sales tax on rides like traditional taxis.

The budget also projects the current deficit at $23-billion for 2016-2017, which is down from $25.1-billion in the last fiscal update.  The following year, the shortfall is expected to increase another $5.5-billion to $28.5-billion, and will include a $3-billion contingency fund.

However, the federal government projects that the deficit will decrease to $18.8-billion in 2021-22.

Canadians can also expect to pay slightly more for employment insurance, with premiums increasing from $1.63 to $1.68 for every $100 of insurable earnings.

The budget also dedicates $7-billion over ten years for subsidized daycare spaces and extended parental leave. The investment will also be put towards allowing expectant mothers to claim maternity benefits up to 12 weeks before their due date.

Cities and provinces in Canada will also be getting part of an $11.2-billion investment to be put towards affordable housing over a ten year period.

Adult and part-time students are also benefiting from the federal budget. Starting next year, the government is investing $59.8-million over four years to make student loans more readily available for those attending school part-time.  Another $287.2 million, will also be put towards improving  access to student loans for adult students.

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