Budget 1999 - Building today for a better tomorrow
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Archived - Building on the Canadian Opportunities Strategy

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"Innovation and knowledge are two sides of the same coin -- the true hard currency of the future, the sources of sustained growth."

Finance Minister Paul Martin
1999 budget speech

The Canadian Opportunities Strategy was introduced in the 1998 budget. It is a seven-part plan that will expand access for Canadians to the knowledge, skills and learning they will need for better jobs and a better standard of living in the 21st century. As a result of the 1998 budget, the government will be investing over $1.2 billion in 1999-2000 to make reaching these goals more accessible and more affordable. To this will be added over $300 million a year in Canada Millennium Scholarships starting in 2000.

Hundreds of thousands of Canadians have already benefited from the Canadian Opportunities Strategy. The very positive response to the Canada Education Savings Grant indicates that the strategy to build today for a better tomorrow is on the right track.

The number of Canadians benefiting will continue to grow as more of the Strategy's measures and programs, outlined below, are fully utilized, and as the government builds upon the investments made to date.

The 1999 budget builds on the Canadian Opportunities Strategy by investing more than $1.8 billion over the remainder of this fiscal year and the next three years in creating knowledge, disseminating knowledge, commercializing knowledge, and supporting employment.

The Canadian Opportunities Strategy: An Update

Providing financial assistance for students

Canada Millennium Scholarships

Canada Millennium Scholarships are an important part of the Canadian Opportunities Strategy. And with good reason.

Beginning in 2000, each year (for 10 years), as many as 100,000 Canadians who need help financing their studies and demonstrate merit will receive Canada Millennium Scholarships, thanks to a federal endowment of $2.5 billion.

Canadians of all ages in universities, community colleges and CEGEPs will be eligible.

For full-time students, scholarships will average $3,000 a year and students can receive up to $15,000 over a maximum of four academic years of study towards undergraduate degrees, diplomas or certificates.

The arm's length Canada Millennium Scholarship Foundation will manage the endowment and award the scholarships. The Foundation's Chairman, Jean Monty, has announced the names of the Members and Directors (including two students), and work is advancing on the design of the scholarships.

For more information:

Canada Study Grants

Since last year's budget, almost 34,000 students with children or other dependants whose financial needs are not fully met by student assistance and student loans, have received Canada Study Grants estimated to average $2,225. This initiative is helping students with the greatest financial needs.

For more information:

Support for advanced research

The government funds three granting councils that provide research grants, scholarships and fellowships for graduate and post-graduate students -- the Medical Research Council, Natural Sciences and Engineering Research Council, and Social Sciences and Humanities Research Council.

Already, more graduate students and projects are being funded because of the $405-million increase in funding to the granting councils over three years, beginning in 1998-99.

Helping individuals manage their student debt

The Canadian Opportunities Strategy introduced a number of measures to help manage student debt.

Tax relief for interest on student loans

For the first time, all individuals repaying federal and provincial student loans can claim a new 17-per-cent federal tax credit on the interest portion of their payments. One million Canadians stand to benefit when they file their 1998 tax returns.

For someone with a student loan of $25,000, the combined federal-provincial value of the tax credit will be about $530 in the first year, and up to $3,200 over the 10 years during which the loans are usually paid off.

Canada student loan interest relief

More graduates having trouble repaying their student loans are eligible for interest relief. Interest relief payments by the federal government between April and September 1998 increased by 137 per cent compared with the same period in 1997, and the number of people getting help with their interest payments increased by 29 per cent to over 70,000.

How has interest relief been enhanced?

Alternative payments to Quebec and the Northwest Territories will increase to help them finance their comparable programs.

For more information:

Encouraging families to save for education

Canada Education Savings Grant (CESG)

One of the best ways to help ensure the future of our children is to save for their education today. Canadians clearly agree because response to the new CESG has been very strong.

Registered education savings plans (RESPs) were introduced in 1972. After 25 years there was a net accumulation of $2.5 billion in the plans. With the introduction of the CESG, this amount has grown to $4 billion during the last year alone. As a result, CESGs will likely total $300 million in 1998. The number of institutions offering RESPs has risen from 30 to 80 since the CESG was announced.

Here's why the response has been so strong.

A grant equal to 20 per cent of the first $2,000 in annual contributions for children up to age 18 -- up to $400 a year per child -- is added to the RESP. And unused grant contribution room can be carried forward to future years, so that in some cases an annual RESP contribution of $4,000 may be eligible for the grant.

The CESG means a family saving $25 every two weeks in an RESP for 15 years will accumulate an education fund worth $18,790, assuming a rate of return of 5 per cent. With the CESG, saving inside an RESP can yield an education fund worth 40 per cent more than saving outside an RESP.

For more information:

Helping Canadians upgrade their skills

To keep their job or get a new one, many Canadians want to take time away from work to upgrade their skills through full-time study. The Canadian Opportunities Strategy helps make this financially possible.

Tax-free RRSP withdrawals for lifelong learning

At least six million Canadians have RRSPs. Beginning this year, they can withdraw money tax-free to pursue full-time training or higher education lasting at least three months during the year.

Individuals may withdraw up to $10,000 a year from their RRSP to a maximum of $20,000 over four years -- and they have up to 10 years to repay their RRSP. Students with disabilities may qualify even while studying part-time.

For more information:
Contact Revenue Canada's Tax Service Offices

Tax relief for part-time students

When part-time students file their 1998 tax returns, they will benefit from two important tax changes.

About 250,000 part-time students will be able to claim an education amount of $60 for each month they are enrolled in a course lasting at least three weeks and including a minimum of 12 hours of course work per month.

Some 50,000 part-time students will also now be able to claim the child care expense deduction. Single parents can deduct child care costs for periods when they were enrolled in part-time course work.

In two-parent families, the higher-income spouse can deduct child care costs arising out of the part-time study of the other spouse equal to the least of: (1) actual expenses; (2) two-thirds of earned income for the year; and, (3) for each month a part-time education credit is claimed, $175 per child under age 7 and $100 per child 7 to 16.

Supporting employment

EI premium holiday for youth employment

Starting in 1999, employers have a new incentive to hire young Canadians -- they will not have to pay EI premiums for new jobs created for youth aged 18 to 24 in 1999 and 2000. This measure is expected to reduce payroll costs for employers by about $100 million in each year.

Youth at risk

The government is more than doubling funding for youth at risk who lack basic education and job skills. In 1998-99 alone, the additional $50 million enabled 5,000 more youth to participate in community-based projects, at an average cost of assistance of $10,000 each. In 1999-2000, the additional funding will rise to $75 million, and in 2000-01 a total of $100 million more a year will be invested.

Connecting Canadians to information and knowledge

Thanks to increased funding, more Canadian schools and communities now have access to the information highway.

SchoolNet is on course to connect Canada's 16,000 public schools and 3,400 public libraries to the Internet by March 31, 1999. The Community Access Program is helping to establish 10,000 public Internet access sites by March 31, 2001. And the Canadian Network for the Advancement of Research, Industry and Education (CANARIE) is putting in place the first national optical Internet -- the next generation backbone for the Internet. It's expected to be fully operational this year.

The 1999 Budget: Building on the Canadian Opportunities Strategy

The 1999 budget's additional investment of more than $1.8 billion over the remainder of this fiscal year and the next three years will build on the Canadian Opportunities Strategy in the following vital areas.

Creating knowledge

Disseminating knowledge

Commercializing knowledge

For more information:
See the 1999 budget booklet entitled Building a Stronger Economy Through Knowledge and Innovation.

Supporting employment

How can I get more information on the 1999 budget?

Information is available on the Internet at: http://www.fin.gc.ca/.

You can also obtain copies of this brochure or other budget documents from:

Distribution Centre
Department of Finance
300 Laurier Ave. West
Ottawa, Ontario, K1A 0G5
Tel.: (613) 995-2855
Fax: (613) 996-0518

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