Canada’s pension and health care systems make important contributions to the quality of life and security of Canada’s seniors. Past actions of the federal government to put the public pension system on a sound financial basis, as well as tax relief provided in this and previous budgets, mean more financial security for today’s and tomorrow’s seniors. Similarly, investments in this and previous budgets provide provinces with growing resources to sustain and improve health care services.
Canada’s governments have taken action to ensure that the Canada Pension Plan (CPP) is financially sound and provides a secure base on which Canadians can plan for their retirements. As well, Old Age Security (OAS) and the Guaranteed Income Supplement continue to provide basic income security for low- and middle-income seniors. These benefits are already fully indexed to inflation in recognition of the particular importance of this protection for Canadians in retirement.
The full indexation of the personal income tax system being provided in this budget will specifically help seniors through:
- The age credit currently provides up to $592 in tax assistance for a single senior and up to $1,184 for a senior couple. Benefits are reduced when income exceeds $25,921.
- OAS benefits are currently reduced when income exceeds $53,215.
Over the course of the Five-Year Tax Reduction Plan outlined in this budget, seniors also benefit through:
- The GST credit currently provides a maximum benefit of $304 for a single senior and $398 for a senior couple. Benefits are reduced when income exceeds $25,921.
- The tax-free amount is currently $7,131.
- The income amounts are currently $29,590 and $59,180.
By 2004, as a result of the Five-Year Tax Reduction Plan:
Canadians know that they have a responsibility to prepare for their retirement. To do so, it is important for them to know what to expect from the public pension system.
In order for Canadians to make the best possible decisions regarding their personal savings for retirement, starting this year the Government will be sending to all CPP contributors annual statements of their contributions. As well, the Government is developing better information on the retirement income system; it will make this information available through these annual CPP mailings and other means.
To provide better opportunities for Canadians to diversify their personal retirement savings investments through registered pension plans and registered retirement savings plans, this budget proposes to raise the foreign content limit on those investments from 20 per cent to 25 per cent for 2000 and 30 per cent for 2001. This will also apply to the CPP.
With respect to health care, as outlined earlier, the federal government has made four consecutive investments in the Canada Health and Social Transfer to the provinces and territories. This means that in 2000-01, the transfer will reach an all-time high of close to $31 billion. As well, the federal government has made significant investments in this and recent budgets to advance research and innovation in the health care field and to provide better health information to Canadians.
$753 million to help the homeless through partnerships with communities and federal initiatives.
In December 1999, the federal government announced a $753-million contribution to help Canada’s homeless persons.
The cornerstone of the new approach is the Supporting Communities Partnership Initiative, to which the federal government will allocate $305 million of these funds over three years. Working closely with provincial and territorial governments, the federal government will help local communities design and put in place effective measures to help the homeless.
Funding for a range of existing federal programs will be increased to better serve the homeless and at-risk groups, including the Youth-at-Risk component of the Youth Employment Strategy, the Urban Aboriginal Strategy and the Shelter Enhancement Program. As well, the Canada Mortgage and Housing Corporation will invest an additional $268 million over five years in the Residential Rehabilitation Assistance Program to support necessary housing repairs on units occupied by low-income individuals.
Improving the Quality of Life for Canadians and Their Children
(millions of dollars)
|Post-Secondary Education and Health Care|
|CHST cash supplement1||2,500||2,500|
|Support for Families With Children|
|Canada Child Tax Benefit2||475||1,020||1,350||2,845|
|Extension of parental leave to federal employees||21||34||55|
|Early Childhood Development||Discussions with provinces|
|Opportunities for Canadians With Disabilities|
|Health and Activity Limitation Survey||3||7||2||12|
|Access to Canada Study Grants for persons with learning disabilities||–||–||–||–||–|
|Enhanced tax assistance2||15||45||45||105|
|Assisting the homeless||63||235||220||220||738|
|Total including tax initiatives||2,563||758||1,928||2,612||5,361|
|Total excluding tax initiatives||2,563||268||863||1,217||2,411|
|1 CHST supplement will be accounted for in 1999-2000 and will be paid to a third-party trust, on passage of authorizing legislation. Expected drawdown by provinces and territories is described in this booklet.
2 Tax initiative.
Note: Numbers may not add due to rounding.
The Government provides to parents incurring child care costs about $520 million per year in tax relief. Parents who work or study may deduct from their incomes up to a maximum of $7,000 for a child under age 7 and up to $4,000 for children aged 7 to 15.
The Government provides to parents living alone with a child and who do not pay child support about $470 million annually in tax relief. For 2000, eligible parents are entitled to a tax credit of 17 per cent of $6,140. This value will increase with indexation.
To support children living in foster homes, about $80 million per year is paid to child care agencies on their behalf. An amount equivalent to the maximum Canada Child Tax Benefit (CCTB) is paid for each child in care. It will increase by $20 million as a result of the proposed CCTB enrichments.
The goods and services tax (GST) credit is intended to offset some or all of the GST paid by low-income families. It provides up to $105 per child. The value of the child-related portion of the GST credit exceeds $425 million per year. The budget proposes to fully index the GST credit levels and thresholds.
The Family Income Supplement, which provides about $110 million per year, is extended to employment insurance (EI) recipients who have children and an annual family income below $26,000. It raises the benefit rate to as much as 80 per cent of insurable earnings, compared to 55 per cent for other EI recipients.
The Canada Pension Plan (CPP) provides about $400 million a year in benefits in respect of children of CPP disability benefit recipients and children of CPP contributors who die.
The Canada Education Savings Grant assists parents saving for their children’s higher education by providing a 20-per-cent top-up on the first $2,000 of annual contributions made to registered education savings plans for beneficiaries up to age 18. Grants from the federal government are expected to reach about $750 million next year.
Each year for the next 10 years, up to 100,000 full-time students in universities, community colleges and CEGEPs will receive annual scholarships of $3,000. With an initial endowment of $2.5 billion, the Canada Millennium Scholarships will provide $300 million in scholarships annually for 10 years, reducing student debts significantly.
To help students with the greatest needs, the Canada Study Grants provide up to $3,000 to over 30,000 post-secondary students with children. Study grants are also available for students with disabilities (up to $5,000), high need part-time students, and women pursuing doctoral studies.
The Canada Student Loans Program extends on average $1.7 billion per year in loans to about 350,000 students pursuing post-secondary education. Changes introduced in the 1998 budget help students who have difficulty repaying their loans.
To help post-secondary education students and the parents or others who support them, the tuition fee credit provides a 17-per-cent tax credit for students’ tuition fees. In addition, an education credit is available, based on an amount of $200 per month for full-time students and $60 per month for part-time students. Together, these credits provided $850 million in assistance to students last year.
The 2000 budget enhances the Government’s assistance to students by increasing from $500 to $3,000 the tax exemption for income from scholarships, fellowships and bursaries. This provision, which will apply to Canada Millennium Scholarships and Canada Study Grants, among others, will increase federal tax assistance to students by about $30 million a year.
In order to ease the burden of student debt, a 17-per-cent tax credit is provided in respect of the interest portion of payments on Canada Students Loans and similar provincial student loan programs. This measure provided about $135 million in assistance last year.
To help ensure pregnant women have healthy babies, the Canada Prenatal Nutrition Program provides $37.5 million annually in food supplementation, nutrition counselling and other services to at-risk pregnant women.
The Community Action Program for Children provides $56 million a year to community groups delivering services addressing the developmental needs of young children at risk. A similar program, called Brighter Futures, is directed at First Nations and Inuit children. It costs $76 million a year.
The Aboriginal Head Start program helps prepare young Aboriginal children living on and off reserve for their school years. It costs $47.5 million annually.
The federal government provides about $900 million annually for instructional services for First Nations students residing on reserve and about $200 million per year for the construction and the maintenance of on-reserve school facilities.
The federal government provides about $270 million in support for on-reserve children in families relying on social assistance and about $240 million for other child and family services.
The Cadet Program provides young people between 12 and 18 years of age with experiences in teamwork, leadership, time management and other skills. It costs about $140 million annually.
To help youth lacking job skills, the Youth at Risk program funds projects and other initiatives providing work experience to these young people. The federal government contributes about $150 million per year.
The Youth Employment Strategy provides young Canadians with summer employment, internships, and career and labour market information services. The Government’s investment in this program is $155 million a year.
SchoolNet helps to connect Canadian schools and classrooms to the Internet so that students benefit from the enhanced learning experiences that new technologies can provide. In the 1998 budget, the federal government provided $205 million over three years for connecting both schools and communities to the Internet through SchoolNet and the Community Access Program.
Projected Total Transfers to Provinces and Territories
1999-2000 to 2003-2004
|(billions of dollars)|
|CHST cash1 (current)||14.5||14.5||15.0||15.0||15.0||74.0|
|Total CHST cash||14.5||15.5||15.5||15.5||15.5||76.5|
|CHST tax transfers||14.9||15.3||15.8||16.5||17.2||79.7|
|Territorial Formula Financing||1.4||1.4||1.4||1.5||1.5||7.2|
|1 Includes $3.5-billion CHST supplement for health care as notionally allocated over three years in the 1999 budget.
2 The $2.5-billion CHST supplement provided in this budget is notionally allocated over four years. Provinces and territories can draw it down at any time over the four years.
3 Equalization associated with CHST tax transfers appears in both Equalization and CHST entitlements. The total has been adjusted to avoid double counting.
4 All figures from 2000-01 onward, except for CHST cash, are projections.
Note: Numbers may not add due to rounding.
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
300 Laurier Avenue West
P1 West Tower
Tel.: (613) 995-2855
Fax: (613) 996-0518
1 The Government of Quebec chose not to participate in the NCB System but has acted on its own in a comparable way. In practice, Quebec residents have effectively benefited from the CCTB increases in the same way as other Canadians. [Return]
2 Net taxes are defined as taxes payable minus refundable tax credits (such as the CCTB and the goods and services tax credit). [Return]
3 Although the Government of Quebec is not participating in the Agenda, it has stated that it agrees with its objectives. [Return]
4 See supplementary information at the end of this booklet. [Return]
5 Unless otherwise specified, spending estimates are the best available estimates for 1999-2000. [Return]