Since the BC and Canadian budgets were recently tabled, I figure now is a good time to go over my finances from last year and see how the changes will affect me. (I bought Quicken 2008 recently and entered all my financial data into it, so now I can slice and dice all my income and expenses into neat little categories.)
In BC, the big change this year was the introduction of a revenue-neutral carbon tax. The carbon tax will start at $10/tonne in July and increase by $5/tonne every year. That translates into a 2.4 cents/litre for gas and 2.8 cents/litre for heating fuel. I don’t drive that often and heat is included in our rent – not that we ever turn it on anyway. The “revenue-neutral” part of the carbon-tax means that business taxes will decrease, personal income tax will drop by 2% next year and 5% in 2009, and every BC resident will get a $100 cheque in the mail.
I like the new carbon tax. I don’t think a 2.8 cent gas tax will stop anyone from driving, but it will reward those of us who don’t drive very much. The $100 cheques are just dumb. That money should have been used to improve public transit so that people have an alternative to driving.
I will save significant money with the new changes. A $100 cheque, plus an income 2%-5% tax break means another $200-$300 in my pocket. Last year, only 5% of my expenses were transportation related (compared to %14 for the average Canadian), so the carbon tax won’t add any significant new costs for me. My transportation cost breakdown was: $435 car sharing (includes gas and insurance), $400 car rentals (weekend trips), $150 public transit, $150 taxi rides, $100 bike repair. Or around $1300 in total. Most people would pay more than that in fuel costs per year, never mind the costs of a car loan, insurance, and maintenance. I’m really enjoying car-free living. And the BC budget also had a nice present for the car co-op.
As for the federal budget, the big surprise was the new Tax-Free Savings Account. It won’t be available until next year, which is too bad because I’ve already started investing more than $5000 per year into a non-RRSP account. Not having to pay taxes on the money I make off those investments would be sweet.