- Interactive Budget -

Archived - Tax Relief

Introduction

When it comes to taxes, this government's position is clear: we're committed to reducing them. But only when we can afford them.

Tax cuts should never come at the cost of health care. Or education. Or a balanced budget.

Tax cuts should do what they're supposed to do – put real money back into the pockets of Canadian families.

That's one good reason that Canadians have worked so hard to eliminate the federal deficit. Because, just like credit card charges, high taxes are the price we pay for 25 years of over-borrowing as a federal government.

Now, thanks to the efforts of everyone we've balanced the budget this year – and we'll keep it balanced going into the next millenium.

And that means that we can move ahead with affordable tax relief for those in greatest need.

The Measures

The budget plan for tax relief has two key elements – both targeted directly toward middle and low income Canadians.

First, we're going to raise by $500 the basic personal exemption – that's the amount at which Canadians pay no tax whatsoever.

This will reduce federal taxes for everybody earning under $20,000, and for families under $40,000. That means 400,000 low-income Canadians will no longer pay any federal tax at all. And four and a half million Canadians will pay less tax.

Second we are completely eliminating the 3 per cent general surtax for people with incomes up to about $50,000, and we're reducing it for those earning up to about $65,000.

This surtax was introduced by the previous government to help bring the deficit down. In fact, the deficit went up and the surtax stayed on. Today, with the deficit behind us, we are taking the surtax off.

This move will directly assist middle-income Canadians and it means that 13 million taxpayers will no longer pay any surtax whatsoever. Another 1 million their taxes go down.

Targeted Tax Relief

In total, the actions taken in this budget, will see taxes cut for 14 million Canadians.

But that's not all that we have done in the area of taxes. We've also made – as we have in previous budgets – highly targeted moves to help certain people:

• We've provided tax relief to one million Canadians paying down student debt.
• We're allowing Canadians to access their RRSP's tax free for purposes of education and training.
• We've increased the limits for the child care expenses credit.
• And we've increased the Child Tax Benefit.

These are the first steps. They are proof positive of this government's commitment to provide tax relief that is affordable and that is directed to those who need it most.

In the years to come, we will to do more. And our success against the deficit will make that possible.

 - Interactive Budget -