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Archived - Better Finances, Better Lives

The Budget in Brief

Canada is now in an era of budget surpluses.

When the government took office, it set out a plan to restore the nation's finances, build a stronger, more innovative economy and improve the quality of life for all Canadians. The plan is working.

The deficit is eliminated, the debt burden is falling, the unemployment rate is at its lowest level in more than two decades and disposable income is increasing.

With a growing economy and the nation's finances in order, this budget charts a course to greater prosperity in the 21st century.

This budget:

•       announces the fourth consecutive federal enrichment of the Canada Health and Social Transfer (CHST) to help provinces and territories meet what Canadians have identified as their highest priorities: health care and higher education;

•       puts forward a five-year plan to reduce taxes, immediately restores full indexation of the personal income tax system to protect taxpayers against inflation, and cuts tax rates for the first time in 12 years;  

•       improves significantly the income support available to parents by increasing the Canada Child Tax Benefit (CCTB) and enhancing parental leave; and

•       proposes initiatives to promote leading edge research in universities, research hospitals and the private sector; develop new environmental technologies and improved practices; and strengthen provincial and municipal infrastructure.

Maintaining Sound Financial Management

Canadians have achieved a financial turnaround of historic proportions by eliminating a $42 billion deficit in four years.

For the first time in almost 50 years, since 1951-52, Canada has recorded back-to-back surpluses:

• $3.5 billion in 1997-98; and

• $2.9 billion in 1998-99.

The government is committed to balanced budgets or better in 1999-2000, 2000-01 and 2001-02.

   
This would be the first time in 50 years that the budget has been in balance or surplus for five consecutive years. In fact, since Confederation in 1867 there have been only two other occasions when the Government of Canada recorded balanced budgets or better at least five years in a row.

The Debt Repayment Plan and sustained economic growth will ensure that the debt-to-GDP ratio – the level of the debt in relation to the country's annual income – remains on a permanent downward track. From a post-war peak of 71.2 per cent in 1995-96, it is expected to fall to about 55 per cent by 2001-02, and should fall below 50 per cent by 2004-05.

Total program spending in the coming year will be $4 billion below the 1993-94 level.

Canada Health and Social Transfer (CHST)

Universal health care and quality education are the highest priorities of Canadian families.

This budget increases CHST support for post-secondary education and health care by $2.5 billion.

Click here for the education/health story

Tax Relief for Canadians

The Five-Year Tax Reduction Plan, which places a special emphasis on families with children, will reduce personal income taxes for all taxpayers, especially middle- and lower-income Canadians.

Click here for the tax story

Our Children, Our Future

Governments can help parents meet their children's needs by providing improved income support and services.

That is why the government is increasing the Canada Child Tax Benefit by $2.5 billion a year by 2004 to more than $9 billion annually, and doubling the duration of maternity and parental leave under the Employment Insurance program.

Click here for the children's story.

Innovation

The economies that will thrive in the modern global economy will be those that excel at innovation.

That is why this budget proposes initiatives totalling over $4 billion between 1999-2000 and 2002-03 to promote leading-edge research in universities, research hospitals and the private sector; promote environmental technologies and improved practices; and strengthen provincial and municipal infrastructure.

Investing in Innovation, Knowledge and Skills

This budget:

•       provides $900 million over five years to establish and sustain 2,000 Canada Research Chairs by 2004-05;  

•       provides a further $900 million to the Canada Foundation for Innovation, which provides funding for leading-edge research and equipment in universities, hospitals and non-profit institutions, 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 priorities like health; and

•       builds on the Canadian Opportunities Strategy, introduced and expanded in the 1998 and 1999 budgets, by increasing 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 support for a renewed Climate Change Action Fund, a Sustainable Development Technology Fund, the new Canadian Foundation for Climate and Atmospheric Sciences, new municipality-based initiatives for clean air and water, a National Strategy on Species at Risk and the Great Lakes Action Plan.

Strengthening Provincial and Municipal Infrastructure

The federal government will 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 and municipal infrastructure in cities and rural communities across Canada.

To that end, the federal government is allocating $450 million over the next two years and $550 million a year for the next four years thereafter.

For an expanded summary click here.

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