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Archived - The Budget in Brief 2005

Archived information

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

Also published as Chapter 1 of The Budget Plan.






Budget 2005—Delivering on Commitments

Introduction

Budget 2005 presents a balanced strategy to build a 21st century economy that will improve the well-being of all Canadians. A productive, growing economy creates jobs, boosts incomes, and supports investments in the quality of Canadian life, and gives us the means to meet our global responsibilities and seize global opportunities.

There are four key drivers that will increase Canadians’ well-being and ensure that our citizens can achieve their goals:

With the proper policy framework, these four drivers operate as a "virtuous circle," with each element strengthening and reinforcing the others to foster environmentally sustainable growth and an improving quality of life for Canadians. For example:

Budget 2005 incorporates all of these elements while maintaining a balanced budget, and setting aside additional resources for debt reduction and to deal with unforeseen economic shocks.

The Government has made several commitments to Canadians:

Budget 2005 delivers on these commitments.


Highlights

Economic Developments and Prospects

Securing Canada’s Social Foundations

Health Care

  • Health human resources.
  • Healthy living and chronic disease prevention.
  • Pandemic influenza preparedness.
  • Drug safety.
  • Environmental health.

Tax Changes to Improve Fairness and Support Participation

  • Acting on the recommendations of the Technical Advisory Committee on Tax Measures for Persons with Disabilities.
  • Doubling, to $10,000, the maximum amount of medical- and disability-related expenses that caregivers can claim on behalf of their dependants, beginning with the 2005 taxation year.
  • Introducing a non-refundable tax credit to recognize specified adoption expenses, up to a maximum of $10,000, effective for the 2005 tax year and beyond.

Improving Support for Seniors

  • Guaranteed Income Supplement benefits for low-income seniors will be increased by $2.7 billion over five years as a result of increases in monthly benefits of $36 for singles and $58 for couples by January 2007.
  • Funding for the New Horizons for Seniors program will be increased from $10 million to $25 million a year to promote voluntary sector activities by and in support of seniors.

Strengthening Aboriginal Communities

  • $345 million over the next five years for First Nations early learning and child care, special education, and child and family services.
  • $340 million over the next five years for First Nations housing on reserves, Aboriginal languages and culture, and the Aboriginal Healing Foundation.

Supporting Canada’s Heritage

  • Commits an additional $688 million for the Tomorrow Starts Today art and culture package that builds on earlier investments and extends the initiative for a full five years.
  • Invests $171 million over five years to celebrate Canada and to help Canadian diversity find its voice in communities across the country.
  • Provides $70 million a year to Sport Canada, doubling its ongoing funding to $140 million in 2005–06 from $70 million in 2004–05.

Justice Framework

A Productive, Growing and Sustainable Economy

Investments in Canadian Capabilities

Investing in People

Building on investments made by the Government of Canada in recent budgets, Budget 2005 makes significant strategic investments in building a highly skilled and adaptable workforce.

Investing in Ideas and Enabling Technologies

Budget 2005 makes major strategic investments in building a world-class research environment in Canada through measures such as:

Investing in Regions and Sectors

Budget 2005 helps strengthen the economies of Canada’s regions through initiatives, including:

Economic Policy Framework

A Fair and Competitive Tax System

Budget 2005 reduces taxes for individuals—especially low- and modest-income Canadians. It will also promote economic growth by making Canada’s tax system more efficient and competitive. Under the measures set out in the budget:

More Efficient and Effective Markets

To improve Canada’s business climate, Budget 2005 commits the Government to:

Moving Toward a Sustainable Environment and Sustainable Communities

Ensuring a Sustainable Environment

In Budget 2005, the Government of Canada is making major investments to preserve our natural environment and to address climate change. These investments, totalling over $5 billion over the next five years (including over $3 billion of new funding), include:

Delivering on a New Deal for Cities and Communities

Budget 2005 delivers on the Government of Canada’s commitment to provide cities and communities with long-term, reliable sources of funding to meet their needs. Specifically, the Government commits to:

  • In 2005–06, the share of the federal gas tax dedicated to cities and communities will be $600 million.
  • By 2009–10, the share will increase to $2 billion, representing 5 cents per litre.

The gas tax sharing, the goods and services tax (GST) rebate implemented in Budget 2004 and the Green Municipal Funds (referenced above) will provide Canadian communities with over $9 billion over the next five years.

Meeting Our Global Responsibilities

International Assistance

Foreign Policy

Defence and Security

Trade and Investment

Sound Financial Management

Table 1
Initiatives Included in 2004 Fall Update


  2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 Total

 

(millions of dollars)

10-Year Plan to Strengthen Health Care1 5,750 2,595 2,380 2,303 2,634 3,242 18,905
Equalization/ Territorial Formula Financing framework 1,454 1,590 2,042 2,508 2,992 3,493 14,080
Additional BSE (bovine spongiform encephalopathy) 311 187 24 12 12 544
Other 40 35 73 61 42 42 294

Total 7,555 4,407 4,519 4,884 5,680 6,777 33,824

1 Adjusted for impact of accounting for Wait Times Reduction Fund in 2004–05.

Table 2
Budget 2005 Initiatives


  2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 Total

 

(millions of dollars)

Securing Canada’s Social Foundations              
Additional federal health investments   100 152 174 189 190 805
Tax fairness 5 62 62 72 72 82 355
Seniors   89 439 718 746 773 2,765
Strengthening Aboriginal communities 40 142 187 102 82 82 635
Supporting Canada’s heritage   379 309 303 299 327 1,616
Strengthening the justice framework   51 51 51 21 21 193

Total cost 45 823 1,200 1,419 1,408 1,474 6,369
A Productive, Growing and Sustainable Economy              
Investing in people 700 73 817 1,343 1,303 1,331 5,567
Investing in ideas and enabling technologies 235 111 119 122 114 111 811
Investing in regions and sectors 120 365 386 422 445 403 2,141
A fair and competitive tax system 15 187 557 1,152 4,301 6,556 12,768
More efficient and effective markets   5         5

Total cost 1,070 740 1,879 3,039 6,162 8,401 21,292
Moving Toward a Sustainable Environment and Sustainable Communities              
Ensuring a sustainable environment 300 586 657 1,010 1,065 1,165 4,783
Investments in communities: gas tax   600 600 800 1,000 2,000 5,000

Total 300 1,186 1,257 1,810 2,065 3,165 9,783
Less amounts earmarked in previous budgets   470 550 750 250 200 2,220

Total cost 300 716 707 1,060 1,815 2,965 7,563
Meeting Canada’s Global Responsibilities              
International assistance 711 100 368 657 970 1,307 4,113
Strengthening National Defence   500 600 1,100 2,125 2,675 7,000
Ensuring the security of Canadians   179 204 209 206 211 1,009
Strengthening the capacity of the Foreign Service   13 15 18 18 18 82
Setting new trade and investment priorities   4 4 4 4 4 20

Total 711 796 1,190 1,988 3,323 4,215 12,224
Less amounts earmarked in 2004 fall Update     268 557 870 1,207 2,901

Total cost 711 796 923 1,431 2,453 3,008 9,323
Other 903 367 551 951 801 776 4,349
Total spending and tax initiatives 3,029 3,442 5,260 7,900 12,640 16,623 48,895
Less ERC savings available for budget initiatives -287 460 937 1,661 2,064 2,219 7,054
Total net cost of initiatives 3,316 2,982 4,323 6,239 10,576 14,404 41,841

Table 3
Initiatives Since Budget 2004


  2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 Total

 

(millions of dollars)

Securing Canada’s Social Foundations              
10-Year Plan to Strengthen Health Care1 5,750 2,595 2,380 2,303 2,634 3,242 18,905
Additional federal Health investments   100 152 174 189 190 805
Equalization/Territorial Formula Financing framework 1,454 1,590 2,042 2,508 2,992 3,493 14,080
Tax fairness 5 62 62 72 72 82 355
Seniors   89 439 718 746 773 2,765
Strengthening Aboriginal communities 40 142 187 102 82 82 635
Supporting Canada’s heritage   379 309 303 299 327 1,616
Strengthening the justice framework   51 51 51 21 21 193

Total cost 7,249 5,008 5,622 6,230 7,034 8,209 39,353
A Productive, Growing and Sustainable Economy              
Investing in people 700 73 817 1,343 1,303 1,331 5,567
Investing in ideas and enabling technologies 235 111 119 122 114 111 811
Investing in regions and sectors 431 552 410 434 457 403 2,686
A fair and competitive tax system 15 187 557 1,152 4,301 6,556 12,768
More efficient and effective markets   5         5

Total cost 1,381 927 1,903 3,051 6,174 8,401 21,837
Moving Toward a Sustainable Environment and Sustainable Communities              
Ensuring a sustainable environment 300 586 657 1,010 1,065 1,165 4,783
Investments in communities: gas tax   600 600 800 1,000 2,000 5,000
Total 300 1,186 1,257 1,810 2,065 3,165 9,783
Less amounts earmarked in previous budgets   470 550 750 250 200 2,220

Total cost 300 716 707 1,060 1,815 2,965 7,563
Meeting Canada’s Global Responsibilities              
International assistance 711 100 368 657 970 1,307 4,113
Strengthening National Defence   500 600 1,100 2,125 2,675 7,000
Ensuring the security of Canadians   179 204 209 206 211 1,009
Strengthening the capacity of the Foreign Service   13 15 18 18 18 82
Setting new trade and investment priorities   4 4 4 4 4 20

Total 711 796 1,190 1,988 3,323 4,215 12,224
Less amounts earmarked in 2004 fall Update     268 557 870 1,207 2,901

Total cost 711 796 923 1,431 2,453 3,008 9,323
Other 943 402 624 1,012 843 818 4,643
Total spending and tax initiatives 10,584 7,849 9,779 12,784 18,320 23,401 82,719
Less ERC savings available for budget initiatives -287 460 937 1,661 2,064 2,219 7,054
Total net cost 10,871 7,389 8,842 11,123 16,256 21,182 75,665

1 Adjusted for impact of accounting for Wait Times Reduction Fund in 2004–05.