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• Welcome to Students.
• Managing our Finances.
• Strengthening Health Care.
• Providing Tax Relief.

WELCOME TO STUDENTS

I'm Paul Martin, Minister of Finance. On behalf of Prime Minister Chretien and the government, we'd like to welcome you to this inter-active Budget '99 web-site.

I'm glad you want to know more about the budget - and how it's developed - because it directly affects our future as a country, and your future as a young Canadian.

A budget is much more than a dollars-and-cents calculation of taxes, revenues and government spending.

It is also about making the lives of Canadians better.

That means, for example, ensuring that our health-care system is there when you need it.

That young Canadians have access to the knowledge and skills they need to succeed in a fast-changing world.

That business has the type of economic conditions to create new jobs for today's and tomorrow's graduates.

Taken all together, you'll see that the budget is the government's plan of action - to build today for a better tomorrow.

Visiting this Web-site, you'll discover that a vital part of budget-making is to consult with Canadians from coast to coast. And that includes hearing the opinions and ideas of student groups and individuals.

And it's a process that doesn't end with the budget itself. This site is designed not just to help you understand what the budget does and why - but to encourage you to share your comments and suggestions.

This budget is a stepping stone to a new century and a new millennium for Canada. Your century and your millennium. And I think that the route we're mapping out - together -- is one you can travel with confidence.

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MANAGING OUR FINANCES

Canada has left the era of deficit-financing behind - clearing the way for us to meet the challenges of the 21st Century.

Although we've been hit in the past year by a difficult world economy, we're still on course for growth and job creation has been strong.

And we've got the resources to make strategic investments in key national priorities - such as health care and tax relief - without using borrowed money.

This is because our long-term plan - to balance the books and strengthen the economy - is paying off.

• Employment jumped by 453,000 jobs in 1998. This was our best performance this decade, and outpaced any other major industrialized nation.

• And this success is continuing. In January, the jobless rate fell to 7.8 per cent -- the lowest level since June, 1990.

• Particularly encouraging is the strong pick-up in jobs for young Canadians. Over the last 12 months, youth employment grew by over 200,000 jobs - our best performance in over 25 years.

Contributing to these gains is the turn-around we've achieved together in Canada's finances.

This year, we'll again balance the books or better -- the first time since 1951 that the government has been deficit-free for two consecutive years.
This is more than accounting. It's a win for all Canadians. Because balanced budgets help keep interest rates down, and promote economic growth and jobs.

That's why we're also going to balance the budget or better in both 1999-2000 and 2000-01. This is only the third time since Confederation that the government will go at least four consecutive years without running a deficit.

And every year we keep the books in balance or better, we're also helping continue the success of our Debt Repayment Plan. This is another critical step in freeing up resources that can be used to help Canadians today and in the years ahead.

So, as we enter a new century and millennium, we're taking the steps necessary to keep Canada strong - and to boost the standard of living and quality of life for all Canadians.

Live in the House of Commons

Three years ago, when the debt-to-GDP ratio was at its peak, 36 cents out of every revenue dollar -- more than one third -- went to debt interest.

This was money Canadians could not use to prepare for the future because their governments were too busy paying for the past.

Last year, with the debt ratio dropping, the portion of each revenue dollar servicing the debt also dropped -- to 27 cents.

This means the beginning of a new flexibility, a new freedom to strengthen health care, to provide needed tax relief, to fight child poverty, to protect the environment and to invest in a more productive economy.

In short, balancing the books means a new strength to build today for a better tomorrow.

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STRENGTHENING HEALTH CARE

There is no program that Canadians cherish more than Medicare. It reflects some of our basic, best values - fairness, compassion, mutual support when you're in need.

With a publicly funded health care system, it's your well-being that counts - and your family's -- not the size of your bank account.

Last year, Prime Minister Chretien pledged that the government's "next major investment will be in health care."

The budget keeps that promise.

Through the Canada Health and Social Transfer, we will give the provinces and territories an additional $11.5 billion in direct cash over the next five years.

That's the largest single new investment this government has ever made.

This is an investment to help our provincial partners deal with the immediate concerns of Canadians about health care - waiting lists, crowded emergency rooms and diagnostic services.

Together with the growing value of CHST tax transfers, it means federal support for health will reach a new high-mark by 2001.

Our commitment doesn't stop with help for provinces. The budget takes further action.

It provides almost $1.4 billion more to support health information, research and prevention, and health services for First Nations and Inuit.

There's nearly $330 million to help improve public access to health information, and to better inform people on how well our health care system is working.

$550 million for health-related research and innovation: the type of Canadian research that has already delivered significant discoveries from cancer treatments to help for burn victims.

And nearly $290 million to improve prenatal nutrition, to ensure food safety, for innovation in rural and community health, and to combat diabetes.

Just over 30 years ago, Medicare became a national fact of life. Today, the government is taking concrete steps to strengthen the system - so that Canadians can count on it being there for them in the new millennium.

Live in the House of Commons

Mr. Speaker, today we are announcing a significant increase in transfers to the provinces to support health care and a number of other initiatives which strengthen the federal government's contribution to Canada's health system.

Over the next five years, we will invest an additional $11.5 billion through the Canadian Health and Social Transfer.

$2 billion in new cash will be received by the provinces in the first year, continuing in the second.

In the third year, this will rise to $2.5 billion and remain at that higher level for the fourth and fifth years.

This means that cash transfers under the CHST will increase from the current $12.5 billion to $15 billion within three years -- by 2001-02.

This will bring the health component of the CHST to the level it was before the period of restraint in the mid-1990s.

Furthermore, flexibility will be given to the provinces to determine the timing of when they receive these funding increases over the first three years, so as to best enable them to meet the particular health needs of their citizens.

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PROVIDING TAX RELIEF

Getting taxes down is a key priority for Canadians - and for the federal government. People deserve to keep more of the money they work hard to earn.

And our approach to lowering taxes is clear and concrete. The budget proves that.

First: with the books in balance, we'll act every year to bring taxes down.

Second: Because our resources are still limited, we'll focus first and foremost on getting personal income taxes down. And

Third: We'll place top priority on low- and middle-income Canadians. Because lower taxes should also be fairer taxes.

Now that we've balanced the books - or better - for the second year in a row, we can build on last year's tax cuts. Without using borrowed money.

And the steps we're taking in this year's budget - combined with those from last year - will provide Canadians with $16½-billion in tax relief over the next three years.

For example, the amount of income all Canadians can earn tax-free will be $675 higher than just a year ago. This more than offsets the effect of inflation on basic tax credits since 1992.

Last year, we started the job of getting rid of the general 3% surtax - a tax on tax. This year we're eliminating the tax completely.

Most importantly, we are again doing more to help families with children.

Through the Canada Child Tax Benefit, our two previous budgets provided $1.7 billion for children of low-income families.

Now, we are adding a further $300 million to enhance the Benefit for modest and middle-income families. This will assist 100,000 additional families.

Together, the 1999 budget actions mean tax relief for every one of Canada's 15 million taxpayers.

The 1998 and 1999 budgets mark a good beginning. And as more resources become available, we'll cut the tax burden further. It's what Canadians want - it's what we want.

Live in the House of Commons

Tax relief of $16.5 billion will be provided over the next three years, $7.7 billion of which results from actions in this budget. For the two budgets together, that's tax relief of $3.9 billion in 1999-2000, $6 billion in 2000-01 and $6.6 billion in 2001-02.

Low- and modest-income Canadians and their families will benefit most. Compared to the situation before the 1998 budget, 600,000 additional Canadians will now pay no federal income tax, 200,000 as a result of the actions in this budget.

Finally, all 15 million Canadian taxpayers will receive tax reductions.

In addition, as a result of the reduction in employment insurance premiums announced in December, employers and employees are now paying $1.1 billion less for employment insurance. Relative to the premium rates that prevailed in 1994, employers and employees are now paying $3.5 billion less.

Mr. Speaker, the tax measures we have announced today are important and they are fair.

But our action to reduce taxes will not end here.

Let me be clear. As resources become available, the personal income tax burden in Canada will be further reduced.

This will occur year after year, each budget building on the progress made before.

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