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Budget 1999
Providing Tax Relief and Improving Tax Fairness: 3
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Table 6
Typical single parent with one child
Full-year impact of proposed measures

			1999 budget tax relief measures


Total income	Federal tax¹ pre-1998 budget	1998 budget impacts	Extending the $500 supplement	$175 increase to basic amounts	Surtax elimination	Canada Child Tax Benefit²	Total 1999 budget	Total 1998 and 1999 budgets	Total 1998 and 1999 as a % of federal tax³, ⁴	Federal tax post-1999 budget

$	$	$	$	$	$	$	$	$	$, %	$
10,000	-2,273	0	0	0	0	-350	-350	-350	-350	-2,623
15,000	-2,128	0	0	0	0	-350	-350	-350	-350	-2,478
20,000	-1,496	-123	-66	-60	0	-350	-476	-599	-599	-2,095
25,000	-772	-114	-95	-60	0	-351	-506	-620	-620	-1,392
30,000	648	-104	-129	-60	0	-397	-586	-690	-106.5%	-42
35,000	1,973	-97	-163	-60	0	-92	-315	-412	-20.9%	1,561
40,000	3,648	-129	-170	-60	0	-92	-322	-451	-12.4%	3,197
45,000	5,112	-168	-170	-60	0	-92	-322	-490	-9.6%	4,622
50,000	6,579	-207	-170	-60	0	-92	-322	-529	-8.0%	6,050
55,000	8,040	-246	-170	-60	0	-92	-322	-568	-7.1%	7,472
60,000	9,504	-181	-185	-65	-83	-92	-425	-606	-6.4%	8,898
65,000	11,024	-99	-185	-65	-205	-92	-547	-646	-5.9%	10,378
75,000	14,216	0	-184	-64	-405	0	-653	-653	-4.6%	13,563
100,000	22,046	0	-184	-64	-623	0	-871	-871	-4.0%	21,175

¹ Includes federal income tax, refundable Canada Child Tax Benefit (CCTB) and the goods and services tax (GST) credit. Does not include provincial income tax. Negative values indicate that refundable CCTB and GST credits received are greater than income tax paid. ² Design change announced in the 1999 budget – includes the effect of the $850-million increase announced in the 1998 budget as well as the $300-million increase announced in the 1999 budget. ³ Negative values indicate a reduction in net tax paid to the federal government. ⁴ Typical single parents with one child at incomes at about $25,000 and less receive more in federal refundable credits (CCTB and GST credit) than they pay in federal income tax. The federal tax reduction indicated in bold therefore represents the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amounts are repeated.

Table 7
Typical elderly single
Full-year impact of proposed measures

			1999 budget tax relief measures


Total income	Federal tax¹ pre-1998 budget	1998 budget impacts	Extending the $500 supplement	$175 increase to basic amounts	Surtax elimination	Canada Child Tax Benefit	Total 1999 budget	Total 1998 & 1999 budgets	Total 1998 & 1999 as a % of federal tax², ³	Federal tax post-1999 budget

$	$	$	$	$	$	$	$	$	$, %	$
12,500	-30	-55	-38	-30	0	0	-68	-123	-123	-153
15,000	407	-51	-55	-30	0	0	-85	-136	-33.4%	271
20,000	1,283	-46	-85	-30	0	0	-115	-161	-12.5%	1,122
25,000	2,158	-72	-85	-30	0	0	-115	-187	-8.7%	1,971
30,000	3,383	-101	-85	-30	0	0	-115	-216	-6.4%	3,167
35,000	4,953	-144	-85	-30	0	0	-115	-259	-5.2%	4,694
40,000	6,424	-187	-85	-30	0	0	-115	-302	-4.7%	6,122
45,000	7,894	-230	-85	-30	0	0	-115	-345	-4.4%	7,549
50,000	9,341	-206	-93	-32	-56	0	-181	-387	-4.1%	8,954
55,000	10,877	-132	-93	-32	-167	0	-292	-424	-3.9%	10,453
60,000	12,765	-66	-93	-32	-266	0	-391	-457	-3.6%	12,308
65,000	14,785	0	-92	-32	-375	0	-499	-499	-3.4%	14,286
75,000	18,947	0	-92	-32	-449	0	-573	-573	-3.0%	18,374
100,000	28,007	0	-92	-32	-651	0	-775	-775	-2.8%	27,232

¹ Includes federal income tax, refundable goods and services tax (GST) credit. Does not include provincial income tax. Negative values indicate that refundable GST credit received is greater than income tax paid. ² The negative value indicates a reduction in net tax paid to the federal government. ³ Typical elderly singles at an income of about $12,500 and less receive more in federal refundable credit (GST credit) than they pay in federal income tax. The federal tax reduction indicated in bold therefore represents the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amount is repeated.

Table 8
Typical elderly couple
Full-year impact of proposed measures

			1999 budget tax relief measures


Total income	Federal tax¹ pre-1998 budget	1998 budget impacts	Extending the $500 supplement	$175 increase to basic amounts	Surtax elimination	Canada Child Tax Benefit	Total 1999 budget	Total 1998 & 1999 budgets	Total 1998 & 1999 as a % of federal tax², ³	Federal tax post-1999 budget

$	$	$	$	$	$	$	$	$	$, %	$
20,000	-307	-91	0	0	0	0	0	-91	91	-398
25,000	453	-119	-87	-60	0	0	-147	-266	-58.7%	187
30,000	1,498	-110	-121	-60	0	0	-181	-291	-19.4%	1,207
35,000	2,705	-105	-155	-60	0	0	-215	-320	-11.8%	2,385
40,000	4,176	-122	-182	-60	0	0	-242	-364	-8.7%	3,812
45,000	5,646	-164	-182	-60	0	0	-242	-406	-7.2%	5,240
50,000	7,116	-207	-182	-60	0	0	-242	-449	-6.3%	6,667
55,000	8,566	-249	-182	-60	0	0	-242	-491	-5.7%	8,075
60,000	10,094	-177	-198	-65	-89	0	-352	-529	-5.2%	9,565
65,000	11,982	-111	-198	-65	-188	0	-451	-562	-4.7%	11,420
75,000	16,044	0	-196	-64	-386	0	-646	-646	-4.0%	15,398
100,000	25,626	0	-196	-64	-582	0	-842	-842	-3.3%	24,784

¹ Includes federal income tax, refundable goods and services tax (GST) credit. Does not include provincial income tax. Negative values indicate that refundable GST credit received is greater than income tax paid. ² The negative value indicates a reduction in net tax paid to the federal government. ³ Typical elderly couples at an income of about $20,000 and less receive more in federal refundable credit (GST credit) than they pay in federal income tax. The federal tax reduction indicated in bold therefore represents the increase in the net benefits they receive from the tax and transfer system. Percentages are not meaningful so the dollar amount is repeated.

1998 and 1999 budgets: relief for families

Tax relief actions in the 1998 and 1999 budgets particularly benefit low- and modest-income Canadians and their families.

As illustrated in the table below, a typical single parent with one child earning $20,000 received $123 in federal tax relief from the 1998 budget. The 1999 budget provides an additional $476 to this individual -- $126 through the increase in personal credits and $350 in increased CCTB benefits -- for total relief of $599 as a result of both budgets.

Table 9
Federal tax relief for Jane
Single parent with one child and an income of $20,000

	Net federal relief


	(dollars)
Pre-1998 budget federal tax¹		-1,496
1998 budget tax reduction
Increased tax-free income	-104
3% surtax reduction	-19
Total	-123
1999 budget tax reduction
Increased tax-free income	-126
3% surtax elimination	0
Total	-126
Canada Child Tax Benefit²	-350
Total relief³	-599	-599
Post-1999 budget federal tax¹ (net benefit)	-2,095

¹ Negative values indicate that Jane receives more in federal refundable credits (CCTB & GST credit) than she pays in federal income tax. ² 1998 and 1999 budget increases. Negative values indicate an increase in benefits and thus a reduction in tax. ³ Full-year impact.

As illustrated in the table below, a typical one-earner family of four earning $30,000 received $145 in federal tax relief from the 1998 budget. The 1999 budget provides an additional $353 to this family -- $169 through the increase in personal credits and $184 in increased CCTB benefits -- for total relief of $498 as a result of both budgets.

Table 10
Federal tax relief for Louis & Marie
One-earner couple with two children and an income of $30,000

	Net federal relief


	(dollars)

Pre-1998 budget federal tax		451
1998 budget tax reduction
Increased tax-free income	-60
3% surtax reduction	-85
Total	-145
1999 budget tax reduction
Increased tax-free income	-169
3% surtax elimination	0
Total	-169
Canada Child Tax Benefit¹	-184
Total relief²	-498	-498
% of federal income tax	-110.4%
Post-1999 budget federal tax³ (net benefit)		-47

¹ 1999 budget increases. Negative values indicate an increase in benefits and thus a reduction in tax. ² Full-year impact. ³ Negative values indicate that Louis and Marie receive more in federal refundable credits (CCTB & GST credit) than they pay in federal income tax.

As illustrated in the table below, a typical two-earner family of four earning $50,000 received $183 in federal tax relief from the 1998 budget. The 1999 budget provides an additional $373 to this family -- $189 through the increase in personal credits and $184 in increased CCTB benefits -- for total relief of $556 as a result of both budgets.

Table 11
Federal tax relief for Don & Jenna
Two-earner couple with two children and an income of $50,000

	Net federal relief


	(dollars)
Pre-1998 budget federal tax		3,716
1998 budget tax reduction
Increased tax-free income	-41
3% surtax reduction	-142
Total	-183
1999 budget tax reduction
Increased tax-free income	-189
3% surtax elimination	0
Total	-189
Canada Child Tax Benefit¹	-184
Total relief²	-556	-556
% of federal income	-15.0%
Post-1999 budget federal tax		3,160

¹ 1999 budget increases. Negative values indicate an increase in benefits and thus a reduction in tax. ² Full-year impact.

Conclusion

In the 1998 budget, with deficit elimination finally secure, the government was able to move more forcefully on tax reduction, putting in place a comprehensive set of tax measures to support Canada's students, families and workers as they pursue higher education, training and lifelong learning. The government was also able to undertake broader tax relief measures directed at low- and middle-income Canadians.

The 1999 budget builds on those measures to extend and enhance tax relief for all Canadians. The government has done so without prejudicing the soundness of Canada's finances or the security of our society.

As resources become available, the government will provide as much tax relief as possible. This will occur year after year, each budget building on the progress made in the years before.

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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