Budget 2000 - Budget in Brief - 2
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Archived - Making Canada’s Economy More Innovative

This budget proposes initiatives totalling $4.1 billion between 1999-2000 and 2002-03 to promote leading-edge research and innovation in universities, research hospitals and the private sector; to develop new environmental technologies and improve environmental practices; and to strengthen federal, provincial and municipal infrastructure.

Investing in Innovation, Knowledge and Skills

The budget builds on the Canadian Opportunities Strategy introduced in the 1998 budget and expanded in the 1999 budget. It:

• provides $900 million over five years to establish and sustain 2,000 new university research chairs across Canada;
• provides a further $900 million to the Canada Foundation for Innovation, bringing the Government’s total investment in the Foundation to $1.9 billion;
• invests $160 million in Genome Canada to advance the study of genes and biotechnology, especially their application to priority areas like health;
• invests $90 million over three years for federal departments and agencies that regulate biotechnology products and processes; and
• increases the tax exemption for income from scholarships, fellowships and bursaries to $3,000 from $500.

Promoting Environmental Technologies and Practices

• The Government will allocate $700 million between 1999-2000 and 2002-03 to develop new environmental technologies and improved practices in co-operation with provinces, municipalities, the private sector and non-governmental organizations.
• The budget proposals include a renewed Climate Change Action Fund, the Sustainable Development Technology Fund, a new Canadian Foundation for Climate and Atmospheric Sciences, new municipal-based initiatives for clean air and water, a National Strategy on Species at Risk and the Great Lakes Action Plan.

Strengthening Federal, Provincial and Municipal Infrastructure

• The federal government will renew its own infrastructure and work with other orders of government and the private sector to reach an agreement by the end of 2000 on a multi-year plan to improve provincial highways and municipal infrastructure in cities and rural communities across Canada.

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Improving the Quality of Life of Canadians and Their Children

Increased Support for Post-Secondary Education and Health Care

• Canada Health and Social Transfer (CHST) payments will be increased by $2.5 billion to help the provinces and territories fund post-secondary education and health care.
• This is the fourth consecutive federal enhancement to the CHST. They can draw upon this new funding to meet the most pressing needs in universities and hospitals, or at any time over the next four years, as they see fit.
• Starting in 2000-01, CHST cash will reach $15.5 billion – a 25-per-cent increase over the last two years.
• Total CHST (cash and tax transfers combined) will reach an all-time high of almost $31 billion in 2000-01.

Support for Families With Children

• The Canada Child Tax Benefit will be increased by $2.5 billion a year by 2004, bringing to more than $9 billion its annual support for low- and middle-income families with children. This will mean a maximum benefit of $2,400 for a family’s first child and $2,200 for a second child.
• The duration of employment insurance maternity and parental leave will double to 12 months, giving new parents the opportunity to spend more time with their newborn or newly adopted children.
• The federal government reiterates its invitation from last fall’s Speech from the Throne to provincial and territorial governments to reach an agreement by December 2000 on an action plan to support early childhood development.

Assistance for Canadians With Disabilities

• Building on previous budget measures, the federal government will extend support and implement additional tax initiatives to expand opportunities for persons with disabilities and help them deal with medical and care-related costs.

Summary of Spending and Tax Actions

Table 1 presents the fiscal outlook to 2001-02, taking into account all of the spending and tax measures announced since the 1999 budget.

Table 2 presents the fiscal impact of the spending and tax initiatives announced in this budget, Table 3 presents the fiscal impact of the measures announced before the budget while Table 4 shows the total fiscal impact of the spending and tax measures proposed since the 1999 budget. The cost of these proposed spending and tax actions amounts to $6.2 billion in 1999-2000, $7.7 billion in 2000-01, $12.0 billion in 2001-02 and $14.6 billion in 2002-03.

During the four years from 1999-2000 to 2002-03, the cost of the spending and tax actions proposed since the 1999 budget will amount to $40.4 billion (Table 4).

Of this amount, $16.8 billion is for spending initiatives. This includes $2.5 billion for the CHST; $4.1 billion for research, innovation, environmental initiatives and infrastructure; and $1.7 billion for economic adjustments, primarily further farm assistance.

The tax relief measures legislated through this budget, including the assumed reductions in employment insurance premiums, amount to $23.6 billion over this fiscal year and the following three years.

Table 1
Summary Statement of Transactions: The Two-Year Planning Horizon

	1997-1998	1998-1999	1999-2000	2000-2001	2001-2002
	(billions of dollars)
Budgetary transactions
Budgetary revenues	153.2	155.7	160.0	162.0	168.0
Program spending	108.8	111.4	115.5	116.0	121.5
Operating balance	44.4	44.3	44.5	46.0	46.5
Public debt charges	40.9	41.4	41.5	42.0	41.5
Underlying budgetary balance	3.5	2.9	3.0	4.0	5.0
Prudence
Economic prudence				1.0	2.0
Contingency Reserve			3.0	3.0	3.0
Total			3.0	4.0	5.0
Budgetary balance	3.5	2.9	0.0	0.0	0.0
Net public debt	579.7	576.8	576.8	576.8	576.8
Non-budgetary transactions	9.3	8.6	8.0	-5.0	0.0
Financial requirements/surplus	12.7	11.5	8.0	-5.0	0.0
Percentage of GDP
Budgetary revenues	17.5	17.4	16.9	16.2	16.1
Program spending	12.4	12.4	12.2	11.6	11.6
Public debt charges	4.7	4.6	4.4	4.2	4.0
Total expenditures	17.1	17.1	16.6	15.8	15.6
Budgetary balance	0.4	0.3	0.0	0.0	0.0
Net public debt	66.3	64.4	61.1	57.8	55.2
Financial requirements/surplus	1.5	1.3	0.8	-0.5	0.0
Note: Numbers may not add due to rounding.

Table 2
Spending and Tax Initiatives Announced in the 2000 Budget

	1999-2000	2000-2001	2001-2002	2002-2003	Cumulative total
	(millions of dollars)
Spending initiatives announced in this budget
Improving the quality  of life for Canadians and their children
Post-secondary education and health care1	2,500				2,500
Support for families with children			607	965	1,572
Opportunities for Canadians with disabilities		33	37	32	102
Total	2,500	33	643	997	4,173
Making Canada’s economy more innovative
Investing in research and innovation	1,095	208	278	268	1,849
Promoting environmental technologies and practices	235	148	143	159	685
Strengthening federal, provincial and municipal infrastructure		300	550	750	1,600
Total	1,330	656	971	1,177	4,134
Maintaining essential public services
Defence	350	400	550	600	1900
Furthering international co-operation	175	110	155	200	640
Operating and capital	118	795	834	760	2,506
Total	643	1,305	1,539	1,560	5,046
Total spending initiatives	4,473	1,994	3,153	3,733	13,353
Tax initiatives announced in this budget
Personal tax relief		2,835	4,600	5,830	13,265
Canada Child Tax Benefit		475	1,020	1,350	2,845
Corporate income tax		5	390	545	940
Reduction in employment insurance premiums2		235	1,010	1,805	3,050
Tax fairness measures		15	40	45	100
Total		3,565	7,060	9,575	20,199
Total spending and tax initiatives announced in this budget	4,473	5,559	10,213	13,308	33,552
1 CHST supplement in 1999-2000 will be paid to a third-party trust in 2000-01, on passage of authorizing legislation. Expected drawdown by provinces and territories is described in the booklet Improving the Quality of Life of Canadians and Their Children. 2 For planning purposes, employee EI premium rates are assumed to decline by 10 cents in 2001, 2002 and 2003. Actual rates are set each year by the Employment Insurance Commission. Note: Numbers may not add due to rounding.

Table 3
Spending and Tax Initiatives Announced Before the 2000 Budget

	1999-2000	2000-2001	2001-2002	2002-2003	Cumulative total
	(millions of dollars)
Spending initiatives announced before the budget
Improving the quality of life for Canadians and their children
Assisting the homeless	63	235	220	220	738
Maintaining essential public services
Defence	284	146			429
Economic adjustment	661	511	500		1,672
Operating and capital	387	205			592
Total	1,331	862	500		2,693
Total spending initiatives	1,394	1,097	720	220	3,430
Tax initiatives announced before the budget
Reduction in EI premium rates	345	1,157	1,165	1,175	3,841
Tobacco taxes	-25	-140	-140	-140	-445
Total	320	1,017	1,025	1,035	3,396
Total spending and tax initiatives announced before this budget	1,713	2,114	1,745	1,255	6,826
Note: Numbers may not add due to rounding.

Table 4
Summary: Spending and Tax Initiatives Since the 1999 Budget

	1999-2000	2000-2001	2001-2002	2002-2003	Cumulative total
	(millions of dollars)
Spending initiatives
Improving the quality of life for Canadians and their children
Post-secondary education and health care	2,500				2,500
Support for families with children			607	965	1,572
Opportunities for Canadians with disabilities		33	37	32	102
Assisting the homeless	63	235	220	220	738
Total	2,563	268	863	1,217	4,911
Making Canada’s economy more innovative
Investing in research and innovation	1,095	208	278	268	1,849
Promoting environmental technologies and practices	235	148	143	159	685
Strengthening federal, provincial and municipal infrastructure		300	550	750	1,600
Total	1,330	656	971	1,177	4,134
Providing essential public services
Defence	634	546	550	600	2,329
Furthering international co-operation	175	110	155	200	640
Economic adjustment	661	511	500		1,672
Operating and capital	505	1,000	834	760	3,098
Total	1,974	2,167	2,039	1,560	7,739
Total spending initiatives	5,867	3,091	3,873	3,953	16,783
Tax initiatives
Personal tax relief		2,835	4,600	5,830	13,265
Canada Child Tax Benefit		475	1,020	1,350	2,845
Corporate income tax		-65	320	475	730
Reduction in EI premiums	345	1,392	2,174	2,980	6,890
Tax fairness measures	-25	-55	-30	-25	-135
Total	320	4,582	8,084	10,610	23,595
Total spending and tax initiatives	6,186	7,672	11,957	14,563	40,378
Note: Numbers may not add due to rounding.

How Can I Get More Information on the 2000 Budget?

Information is available on the Internet athttp://www.fin.gc.ca/

You can also obtain copies of this brochure or other budget documents from the

Department of Finance Canada
Distribution Centre
300 Laurier Avenue West
P1 West Tower
Ottawa, Canada
K1A 0G5

Tel.: (613) 995-2855
Fax: (613) 996-0518

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