Federal government sets its sights on skilled immigrants, increasing RRSP limits
Finance Minister John Manley unveiled the biggest budget in Canada’s history yesterday. The government will spend a record $143 billion in total this year, including money for some new and interesting human resource initiatives.
Here’s a summary of what the federal government is doing. For Canadian HR Reporter’s in-depth coverage of the budget, check out the March 10 print issue.
Immigration
The federal government is investing a total of $41.4 million over the next two years to help immigrants find jobs and to attract skilled immigrants to Canada — and to encourage them to settle outside of the “big three” cities of Vancouver, Toronto and Montreal.
“Canada’s distinct knowledge advantage is built by expanding the skills of our labour force and by helping every Canadian who wants to work, including new Canadians, to apply their talent and initiative to productive enterprise,” said Manley.
The money will be used on things like second language skills, faster recognition of foreign credentials and pilot projects to attract skilled immigrants to smaller communities.
About $13 million will be used in partnership with provincial and territorial governments, regulatory bodies and employers to speed up the credential assessment process for certain in-demand professions.
Another $6.6 million will be used to fast-track skilled workers through the immigration process, and $8 million will be used to streamline the process for issuing student visas.
To encourage immigrants to settle outside of the big cities, $3.8 million will be spent on attracting skilled workers to smaller communities across the country.
RRSP limit boosted
By 2006 the RRSP plan will be boosted to $18,000 per year from its current limit of $13,500, where it has stood since 1993.
“With this measure, Canadians will be able to better plan for their retirement,” said Manley. “They will be able to rely upon the sustainability and strength of all three pillars of Canada’s retirement system: the Canada Pension Plan, Old Age Security and registered pension and retirement savings plans.”
The announcement brings an increase in tax-assisted retirement savings for Canadians with high incomes. The current RRSP contribution limit is 18 per cent of earnings for the previous year, up to a maximum of $13,500. Anyone earning more than $75,000 was affected by the limit. When the new limit is reached in 2006, only those with earnings in excess of $100,000 will be affected.
The government is also taking special steps to help firefighters by accelerating their pension accrual rates.
Changes to EI premiums
The federal government is lowering employment insurance premiums.
“There have been nine reductions since 1994,” said Manley. “Today I am announcing an even lower EI contribution rate in 2004 of $1.98 — 12 cents lower than the current rate.”
Manley also announced the government is launching consultations with the aim of setting a new employment insurance rate-setting mechanism for 2005 and beyond. The goal is to balance premium revenue with expected program costs.
In recent years, the revenue coming into employment insurance has far exceeded the amount being paid out, resulting in large surpluses in the plan.
Helping disabled Canadians find jobs
The budget allocates $193 million per year to help disabled persons improve their prospects for employment.
“No one understands better the challenges facing persons with disabilities than they, themselves, and the people who care for them,” said Manley. “Our government will work directly with these groups through a new, independent advisory committee on disability issues.”
Palliative care
The government is launching a new compassionate family-care leave program to provide employees with a gravely ill family member with six weeks of employment insurance benefits.
“Too often family members must make difficult choices between work and being able to provide compassionate care,” said Manley. “This budget expands the employment insurance program to allow compassionate care leave from work for those who must look after a gravely ill child, parent or spouse.”
Training and development
As part of a $1.5 billion investment in higher learning, the government is contributing $100 million towards creating the Canadian Learning Institute.
The institute will share information, best practices and concrete examples of what works when it comes to skills and learning.
Here’s a summary of what the federal government is doing. For Canadian HR Reporter’s in-depth coverage of the budget, check out the March 10 print issue.
Immigration
The federal government is investing a total of $41.4 million over the next two years to help immigrants find jobs and to attract skilled immigrants to Canada — and to encourage them to settle outside of the “big three” cities of Vancouver, Toronto and Montreal.
“Canada’s distinct knowledge advantage is built by expanding the skills of our labour force and by helping every Canadian who wants to work, including new Canadians, to apply their talent and initiative to productive enterprise,” said Manley.
The money will be used on things like second language skills, faster recognition of foreign credentials and pilot projects to attract skilled immigrants to smaller communities.
About $13 million will be used in partnership with provincial and territorial governments, regulatory bodies and employers to speed up the credential assessment process for certain in-demand professions.
Another $6.6 million will be used to fast-track skilled workers through the immigration process, and $8 million will be used to streamline the process for issuing student visas.
To encourage immigrants to settle outside of the big cities, $3.8 million will be spent on attracting skilled workers to smaller communities across the country.
RRSP limit boosted
By 2006 the RRSP plan will be boosted to $18,000 per year from its current limit of $13,500, where it has stood since 1993.
“With this measure, Canadians will be able to better plan for their retirement,” said Manley. “They will be able to rely upon the sustainability and strength of all three pillars of Canada’s retirement system: the Canada Pension Plan, Old Age Security and registered pension and retirement savings plans.”
The announcement brings an increase in tax-assisted retirement savings for Canadians with high incomes. The current RRSP contribution limit is 18 per cent of earnings for the previous year, up to a maximum of $13,500. Anyone earning more than $75,000 was affected by the limit. When the new limit is reached in 2006, only those with earnings in excess of $100,000 will be affected.
The government is also taking special steps to help firefighters by accelerating their pension accrual rates.
Changes to EI premiums
The federal government is lowering employment insurance premiums.
“There have been nine reductions since 1994,” said Manley. “Today I am announcing an even lower EI contribution rate in 2004 of $1.98 — 12 cents lower than the current rate.”
Manley also announced the government is launching consultations with the aim of setting a new employment insurance rate-setting mechanism for 2005 and beyond. The goal is to balance premium revenue with expected program costs.
In recent years, the revenue coming into employment insurance has far exceeded the amount being paid out, resulting in large surpluses in the plan.
Helping disabled Canadians find jobs
The budget allocates $193 million per year to help disabled persons improve their prospects for employment.
“No one understands better the challenges facing persons with disabilities than they, themselves, and the people who care for them,” said Manley. “Our government will work directly with these groups through a new, independent advisory committee on disability issues.”
Palliative care
The government is launching a new compassionate family-care leave program to provide employees with a gravely ill family member with six weeks of employment insurance benefits.
“Too often family members must make difficult choices between work and being able to provide compassionate care,” said Manley. “This budget expands the employment insurance program to allow compassionate care leave from work for those who must look after a gravely ill child, parent or spouse.”
Training and development
As part of a $1.5 billion investment in higher learning, the government is contributing $100 million towards creating the Canadian Learning Institute.
The institute will share information, best practices and concrete examples of what works when it comes to skills and learning.
