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Archived - Text Versions of Video Presentations by Paul Martin, Minister of Finance

Cutting taxes for Canadians

Last fall, our government made a promise – to deliver a multi-year plan for further real and lasting tax cuts.

Budget 2000 keeps that pledge. In fact, it makes the most important structural changes to the tax system in more than a decade.

Our plan will cut taxes by a cumulative $58 billion over the next five years – saving the average taxpayer 15 per cent.

And we've structured these tax cuts to ensure that families benefit ever further. Indeed, for families with children, we're talking about an average saving of 21 per cent on their tax bill.

Let me just mention three specific elements of our tax plan:

• One: We're immediately restoring indexation to keep inflation out of taxpayers' pockets. This will put an end to 'hidden' tax hikes – and preserve the value of the tax credits that help low and modest-income earners.
• Two: We're reducing the tax-rate on middle-income earners to 23 per cent from today's 26 per cent – starting with a cut to 24 per cent this July. And
• Three: to better help our most valuable natural resource – our children – we're enriching the Child Tax Benefit, and extending it more fully to middle-income families.

As well, to make our businesses more competitive – so they can provide the jobs people need – we're dropping the corporate tax rate for such sectors as high-technology services. This will put them on a level playing-field with other Canadian industries.

And we're easing capital gains taxation to encourage entrepreneurship, risk-taking and greater availability of capital.

What will all this mean to working Canadian families at the end of the day? Let me give you three examples:

• A one-earner family of four, with an income of $32,000, will pay no net tax next year.
• A two-earner family with an income of $40,000 will see their taxes cut almost in half in 2001 – and pay no net tax at all by 2004.
• And a typical two-earner family of four with an income of $60,000 will see net federal income taxes reduced more than $1,500 a year by 2004. That's a saving of 27 per cent.

To find out how our tax cuts will benefit you, please visit our web-site 'tax calculator.' You'll also find more information on this and other important aspects of Budget 2000.

Improving our quality of life

Budgets are about people.

That's why Budget 2000 takes new steps to help strengthen our country's economy – to provide the jobs we need -- and to deliver further major tax cuts for all Canadians.

But it also acts on other vital values and goals we share.

The very first step of Budget 2000 is to increase cash funding for the Canada Health and Social Transfer. This is the program that helps provinces deliver post-secondary education and health care.

Last year's budget boosted the CHST funding we give provinces by $11.5 billion over five years. That was our government's single largest new investment ever. And we said we would do more, as resources allowed.

So now, in this budget, we're putting an additional $2.5 billion into health and education through the CHST.

Indeed, this money will boost federal funding to the provinces for health and education to a new all-time high of $31 billion next year.

But there's another area where we're doing more – that's assisting families with children.

We're doing this by again increasing and expanding the Child Tax Benefit, which covers more than 8-out-of-10 children in Canada. Here are some of the steps we're taking:

• Starting immediately, we're fully indexing the benefit. That means the real value of the CTB will not be eroded by inflation.
• There'll be more cash for the benefit too. By 2004, maximum support for a first child will rise to $2,400 a year (compared to just over $1,800 now)
• And middle-income families will experience a significant increase in the benefit.

What's the bottom line? By 2004, the Child Tax Benefit will be providing more than $9 billion each year to help families. And $6 billion will go to low-income families.

The story doesn't end here.

The budget also confirms that we're doubling the duration of maternity and parental benefits.

And we're boosting and expanding the tax credits available to parents of children with disabilities.

You can get more information on these and other Budget 2000 measures by browsing this web-site. It's a good investment you can make to learn about the investments your government is making.

Innovation for better lives

Canadians live in exciting times. Rapid advances in technology and the growing global economy offer unparalleled opportunities to us all.

But in this very competitive world, you can't take full advantage of those opportunities by standing still. It's the people and countries that excel at innovation – developing and using new ideas, skills and tools – that will enjoy the brightest future.

That's why Budget 2000 makes exciting new investments in research and education.

Let me give you just a couple of examples.

• First, $900 million is being added to the Canada Foundation for Innovation – so it can help universities, colleges and research hospitals with the laboratories and equipment needed for state-of-the art research.
• Second, another $900 million is also being invested over five years in the Canada Research Chairs program. This will mean 2,000 new research positions at universities across Canada – to help attract and keep the best and brightest minds here at home.

Of course, one of the highlights of this budget is that it reduces income taxes for all Canadians. But we've also included tax measures that will help business start-ups, and promote growth in the knowledge-based industries that are so vital to Canada's future.

And the budget makes sure students get full advantage of financial aid – such as our Millennium Scholarships -- by increasing the tax exemption for income from scholarships and bursaries to $3,000 (from $500 today).

There's another vital area of investment you should know about.

Our children's legacy must include clean air and water. That's why better environmental technology and research is both a social obligation and an economic opportunity.

Budget 2000 helps by including almost $700 million in measures to harness the latest technology for preserving and improving the environment.

These include a renewed Climate Change Action Fund; a Sustainable Development Technology Fund; and important initiatives to assist municipalities.

You can find out much more about these actions – and the other important measures in Budget 2000 -- through this web-site.

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