* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a discussion of the reasons for this.

Notes:

¹ Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year's report, as well as variations from year to year, result from changes in the explanatory economic variables upon which the estimates and projections are based. These changes and variations also reflect the availability of new data and improvements to the methodology used to derive the estimates and projections. In addition, the tax expenditure estimate or projection for a given measure is often affected by changes to other measures. In particular, the introduction or enhancement of broad-based non-refundable tax credits (e.g. the basic personal amount, Age Credit, Pension Income Credit and Child Tax Credit) along with reductions in the lowest personal income tax rate tend to reduce tax expenditure estimates and projections.

² The total tax expenditure cost of this measure has two components: the revenue forgone as a result of the reduced inclusion rate (which is shown in the main table), and the increased cost of the Charitable Donations Credit from any increase in donations that results from the measure. If all of the donations of listed securities would have been made in the absence of this measure, then (as shown in the main table) the total cost ranges from $8 million to $50 million between 2004 and 2009. If, on the other hand, all donations of listed securities came about as a result of the reduced inclusion rate on capital gains, and if in the absence of the measure the shares would have been sold instead of donated, then the cost of the measure ranges from $67 million to $215 million between 2004 and 2009, as shown below (in millions of dollars):

The true costs fall somewhere between the lower and upper bounds set by the ranges indicated.

³ The total tax expenditure cost of this measure has two components: the revenue forgone as a result of the reduced inclusion rate (which is shown in the main table), and the increased cost of the Charitable Donations Credit from any increase in donations that results from the measure. If all of the donations of ecologically sensitive land would have been made in the absence of this measure, then (as shown in the main table) the total cost ranges from small to $3 million between 2004 and 2009. If, on the other hand, all donations of ecologically sensitive land came about as a result of the reduced inclusion rate on capital gains, and if in the absence of the measure the land would have been sold instead of donated, then the cost of the measure ranges from $4 million to $11 million between 2004 and 2009, as shown below (in millions of dollars):

The true cost falls somewhere between the lower and upper bounds set by the ranges indicated.

⁴ The total tax expenditure cost of this measure has two components: the revenue forgone as a result of the reduced inclusion rate (which is shown in the main table), and the increased cost of the Charitable Donations Credit from any increase in donations that results from the measure. If all of the donations of cultural property would have been made in the absence of this measure, then (as shown in the main table) the total cost ranges from $4 million to $18 million between 2004 and 2009. If, on the other hand, all donations of cultural property came about as a result of this measure, and if the property would otherwise have been sold instead of donated, then the cost of the measure ranges from $15 million to $72 million between 2004 and 2009, as shown below (in millions of dollars):

The true cost falls somewhere between the lower and upper bounds set by the ranges indicated.

⁵ The higher levels for this tax expenditure in 2005 and 2006 reflect the fact that contributions in respect of the 39th general election were spread over two calendar years. The tax expenditure is expected to be higher in 2008 as a result of contributions in respect of the 40th general election. Since the date of the next general election is unknown, no projections are included in this regard.

⁶ The amount of the tax expenditure for this measure has been adjusted upward and reflects improvements to the previous methodology.

⁷ This tax expenditure relates to amounts earned in the year and claimed by the student (i.e. neither transferred nor carried forward).

⁸ This measure was introduced in Budget 2006, effective January 1, 2006.

⁹ For a given year, this tax expenditure represents the value of Education, Tuition and Textbook Tax Credits earned in past years and used in that year. The tax expenditure does not include the pool of unused Education, Tuition and Textbook Tax Credits that have been accumulated but will be deferred for use in future years.

¹⁰ The tax expenditure equals the tax revenue forgone from exempting scholarship, fellowship and bursary income from tax. Budget 2006 introduced a measure that makes all amounts received for post-secondary scholarships, fellowships and bursaries exempt from tax, where these amounts are received in connection with enrolment in a program for which the student can claim the Education Tax Credit. The maximum exemption for tax years prior to 2006 was $3,000 for these students. Budget 2007 extended this treatment to elementary and secondary school students, effective 2007. All other scholarships, fellowships and bursaries receive a tax exemption on the first $500.

¹¹ This measure was introduced in Budget 2006. Because it was effective in July 2006, the maximum amount on which the credit is calculated for the 2006 taxation year is $250. For 2007, the maximum amount on which the credit is calculated was increased to $1,000. This maximum amount has been indexed for years subsequent to 2007.

¹² Projections of this tax expenditure for 2007 and 2008 are based on preliminary tax return data. The decline of this tax expenditure in 2008 reflects the general decline in Canadian stock values in 2008.

¹³ Budget 2008 increased the maximum daily residency deduction by 10 per cent from $15 to $16.50, effective 2008.

¹⁴ This measure was introduced in Budget 2006, effective May 2, 2006.

¹⁵ This measure was announced in Budget 2007, effective 2007. Budget 2009 proposed to enhance this measure, effective 2009.

¹⁶ This measure was introduced in Budget 2005, effective 2005.

¹⁷ This measure was introduced in Budget 2007, effective 2007.

¹⁸ Budget 2007 and the 2007 Economic Statement enhanced this credit, effective 2007. Budget 2009 enhanced the credit, effective 2009.

¹⁹ Budget 2007 and the 2007 Economic Statement enhanced this credit, effective 2007. Budget 2009 enhanced the credit, effective 2009.

²⁰ Budget 2006 extended the lifetime capital gains exemption (LCGE) to qualifying fishing property, effective May 2, 2006. Budget 2007 announced an increase in the LCGE to $750,000 from $500,000, effective March 19, 2007.

²¹ The estimate for 2004 is higher than in other years due to the effects of the outbreak of avian flu in British Columbia. The deferred income from 2004 was reported in 2005, resulting in a negative tax expenditure for that year.

²² The tax measure was expanded to include prescribed flood or excessive moisture regions. This proposed expansion applies to the 2008 and subsequent taxation years.

²³ Estimates are based on Statistics Canada data available up to 2008, which includes cash purchase tickets for wheat, barley, oats, canola, flax and rye. Projections are calculated using a historical average growth rate.

²⁴ Amounts for 2004 are observed values. The Net Income Stabilization Account (NISA) and the Canadian Farm Income Program were replaced by the Canadian Agricultural Income Stabilization Program, with the effect that government contributions under NISA ceased as of December 31, 2003. All funds in participant accounts are paid out as of March 31, 2009. Tax expenditure estimates and projections reflect the wind-down schedule.

²⁵ This measure was introduced in Budget 2007. This tax expenditure represents the deferral of federal personal income taxes on government contributions to AgriInvest accounts. The smaller tax expenditure in 2008 than projected in prior years reflects the availability of new 2008 AgriInvest data from Agriculture and Agri-Food Canada and the ministère de l'Agriculture, des Pêcheries et de l'Alimentation du Québec on the levels of contributions and withdrawals in the accounts, and the higher than anticipated withdrawal rate from AgriInvest accounts.

²⁶ This tax expenditure has been adjusted to exclude the component of investment tax credits attributed to the Mineral Exploration Tax Credit for flow-through share investors. The tax expenditure for the Mineral Exploration Tax Credit for flow-through share investors is presented separately in this report. Other adjustments, including the removal of the effect of the alternative minimum tax and the effect of tax credit carry-forwards, have been made to ensure consistency with the general methodology used to assess tax expenditures.

²⁷ The credit was introduced on a temporary basis in 2000 and has been extended since. It is currently set to expire on March 31, 2010.

²⁸ The negative tax expenditure for 2007 and subsequent years reflects a decline in the volume of reclassifications in respect of Canadian Development Expenses transferred to individuals investing in flow-through shares. As with any tax measure that accelerates the rate at which deductions can be claimed against income, the reclassification of Canadian Development Expenses (30 per cent/year deduction rate) as Canadian Exploration Expenses (100 per cent/year deduction rate) results in a relatively large positive tax expenditure in the first year(s) of an investment, followed by a period of relatively smaller negative tax expenditures. The overall tax expenditure is negative for 2007 and subsequent years because the positive tax expenditure associated with new spending in those years is more than offset by the negative tax expenditure resulting from reclassifications that occurred in previous years. For more information, see the entry for this measure in the "What's New in the 2008 Report" section of the 2008 Tax Expenditures and Evaluations.

²⁹ Projections for 2007 and 2008 are based on preliminary tax return information. The significant decline of this tax expenditure in 2008 and 2009 reflects poor market conditions in 2008. As in previous years, the approach does not take into account the ability of individuals to apply capital losses against previous-year capital gains.

³⁰ The Tax-Free Savings Account was introduced in Budget 2008 and is effective January 1, 2009.

³¹ Budget 2007 announced an increase in the lifetime capital gains exemption to $750,000 from $500,000, effective March 19, 2007.

³² This is a new item in the personal income tax table. Please refer to the corporate income tax section of the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a description of the measure.

³³ This measure was introduced in Budget 2006, effective 2007. Budget 2007 enhanced this measure for children with disabilities.

³⁴ The increase in the tax expenditure reflects enhancements to the credit announced in the 2005 and 2006 budgets. Specifically, Budget 2005 increased the maximum amount of the supplement from $571 to $750 per year, effective 2005, and Budget 2006 subsequently increased the maximum amount from $767 to $1,000, effective 2006.

³⁵ The Age Credit amount was increased by $1,000, to $5,066 from $4,066, in the Tax Fairness Plan (announced October 31, 2006 and confirmed in Budget 2007), effective January 1, 2006. Budget 2009 increased the amount by $1,000, to $6,408 from $5,408, effective 2009.

³⁶ The decline in this tax expenditure in 2007 and 2009 is mainly explained by the increase in non-taxpaying seniors due to increases in the basic personal amount and other non-refundable credits relevant to seniors (such as the Age Credit).

³⁷ Although this measure provides tax relief for individuals, it is implemented through the corporate tax system. See "investment income credited to life insurance policies" in the corporate income tax table for estimates and projections of this tax expenditure.

³⁸ The decline in this tax expenditure in 2007 generally reflects the increase in non-taxpaying low-income earners due to increases in the basic personal amount and the spouse or common-law partner amount, as well as the introduction of the Child Tax Credit. The decline in 2009 generally reflects the Budget 2009 increase in the basic personal amount and related amounts.

³⁹ This tax expenditure is based on data received from Veterans Affairs Canada. As part of the New Veterans Charter, in 2006 the Canadian Forces Income Support Benefit was established as a tax-free amount for eligible low-income veterans.

⁴⁰ This tax expenditure is based on data received from Veterans Affairs Canada. As of 2006, the Disability Award has replaced the Veterans Disability Pension for eligible new applicants (current disability pensioners have been grandfathered).

⁴¹ Budget 2006 doubled the maximum amount that can be claimed under the Pension Income Credit to $2,000 from $1,000 for the 2006 and subsequent taxation years. The introduction of pension income splitting in 2007 increases the number of individuals claiming the Pension Income Credit and thus increases the value of this tax expenditure.

⁴² This measure, announced on October 31, 2006 in the Tax Fairness Plan and confirmed in Budget 2007, allows Canadian residents to allocate up to one-half of eligible pension income to their resident spouse or common-law partner, effective 2007.

⁴³ Estimates and projections vary from those in last year's report due to changes in tax rates and estimated levels of assets, contributions, investment income, capital gains/losses and withdrawals. In general, tax expenditure estimates and projections will be higher in years in which assets grow strongly, reflecting the tax forgone on that investment income, and lower in years in which assets grow slowly or decline. The estimates and projections also reflect methodological improvements relating to the carry-over of capital losses.

⁴⁴ The present-value estimates reflect the lifetime cost of a given year's contributions. This definition is different from that used for the cash-flow estimates and thus the two sets of estimates are not directly comparable. Further information on how these estimates are calculated is contained in the paper "Present-Value Tax Expenditure Estimates of Tax Assistance for Retirement Savings," which was published in the 2001 edition of this report. The present-value estimates do not reflect the potential effect of Tax-Free Savings Accounts on the average tax rate used to calculate the present value of the forgone tax on investment income.

⁴⁵ This measure was introduced in Budget 2009. See the "What's New in the 2009 Report" section for details.

⁴⁶ This temporary measure was introduced in Budget 2009. See the "What's New in the 2009 Report" section for details.

⁴⁷ The estimates and projections for this tax expenditure reflect the cyclicality of the housing market and its impact on the number of residence resales and on the average price of residences. Estimates and projections are based on housing market data and resale forecasts provided by Canada Mortgage and Housing Corporation and the Canadian Real Estate Association. Data on major additions and renovations obtained from Statistics Canada are used to estimate the average amount of capital expenditures on principal residences, which reduces the estimated amount of capital gains. The decline in the 2008 tax expenditure reflects the decrease in residential resale activity and prices in 2008.

⁴⁸ This measure was introduced in Budget 2006, effective July 1, 2006. Budget 2007 extended the credit to electronic fare cards and weekly passes used on an ongoing basis.

⁴⁹ The estimates and projections include the revenue impact associated with both the enhanced Dividend Tax Credit introduced in 2006, mainly applicable to dividends from large businesses, and the basic Dividend Tax Credit applicable to other dividends, mostly from small businesses.

⁵⁰ Prior to 2006, some families with young children who claimed little or no child care expenses were eligible to receive the Canada Child Tax Benefit (CCTB) under-7 supplement. Thus, the value of the tax expenditure was partially offset by the increase in the CCTB under-7 supplement that would follow any decrease in the amount of child care expenses claimed. The increase in the tax expenditure in 2006 and later years reflects the phase-out of the CCTB under-7 supplement as of June 30, 2006 for children under the age of 6, and June 30, 2007 for 6-year-old children.

⁵¹ This tax expenditure represents the revenue impact resulting from the application of previous-year capital losses against the net capital gains realized in the current year. The decline in this tax expenditure in 2008 reflects the reduced ability of taxpayers to use capital losses against capital gains in a period of declining capital markets.

⁵² Self-employed individuals may deduct the employer share of their Canada/Québec Pension Plan contributions paid for their own coverage. This is included in the tax expenditure for the non-taxation of employer-paid premiums.

⁵³ Estimates and projections include contributions paid to the Québec Parental Insurance Plan (QPIP). The QPIP was effective as of January 1, 2006.

⁵⁴ The basic personal amount has been increased by amounts over and above the inflation protection provided by full indexation (due to changes in Budget 2005, Budget 2006, the 2007 Economic Statement and Budget 2009).

⁵⁵ Tax expenditure estimates and projections for this measure are not available, mainly because data on payouts/winnings are incomplete. Data on payouts at casinos, video lottery terminals, horseracing, and racetrack slot machines, which constitute a rising share of total spending on gaming, are fragmentary. In addition, no data are available on the payouts/winnings from activities sponsored by charities and other non-government organizations.

Under federal-provincial agreements negotiated in 1979 and 1985, the federal government, in exchange for an ongoing payment, undertook to refrain from re-entering the field of gaming and betting to ensure that the rights of the provinces in that field are not reduced or restricted.

⁵⁶ The amount of the tax expenditure for this measure has been adjusted upward for all years, reflecting improvements in methodology.

* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a discussion of the reasons for this.

Notes:

¹ Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year's report, as well as variations from year to year, result from changes in the explanatory economic variables upon which the estimates and projections are based. These changes and variations also reflect the availability of new data and improvements to the methodology used to derive the estimates and projections. Estimates and projections reflect the impact of reductions in the general corporate income tax rate from 23 per cent to 21 per cent on January 1, 2004, 19.5 per cent on January 1, 2008 and 19.0 per cent on January 1, 2009. The 4-per-cent corporate surtax (equivalent to a 1.12-per-cent corporate income tax rate) was eliminated on January 1, 2008.

² Available data now allows the additional deduction for donations of medicine to the developing world to be shown separately from charitable donations.

³ Available data now allows deductibility of gifts of cultural property and ecologically sensitive land to be shown separately.

⁴ This is a new item in the corporate income tax table. Please refer to the personal income tax section of the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a description of the measure. The increase in the tax expenditure in 2006 reflects the elimination in Budget 2006 of capital gains tax on donations to public charities of publicly listed securities. The further increase in 2007 reflects the extension of this measure to private foundations in Budget 2007. Finally, the increase in 2008 reflects the elimination of capital gains on donations of exchangeable shares in Budget 2008. The tax expenditure is the amount of revenue forgone resulting from the reduced inclusion rate for capital gains realized when listed securities are donated. It does not include the impact of increases in donations that result from this measure. These impacts are captured in the item "deductibility of charitable donations". See footnote 2 in the personal income tax table for a further discussion of this issue.

⁵ This is a new item in the corporate income tax table. Please refer to the personal income tax section of the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a description of the measure. The increase in the tax expenditure in 2006 reflects the elimination in that year of capital gains tax on donations to public charities of ecologically sensitive land. The further increase in 2007 and the decline in 2008 and 2009 reflect expected variations in the annual levels of donations. The tax expenditure is the amount of revenue forgone resulting from the reduced inclusion rate for capital gains realized when ecologically sensitive land is donated. It does not include the impact of increases in donations that result from this measure. These impacts are captured in the item "deductibility of gifts of ecologically sensitive land". See footnote 3 in the personal income tax table for a further discussion of this issue.

⁶ This is a new item in the corporate income tax table. Please refer to the personal income tax section of the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on Department of Finance website) for a description of the measure.

⁷ The 2007 estimate is based on information from 2006 corporate income tax data and the growth in gross domestic product between 2006 and 2007.

⁸ The Federal Accountability Act prohibits political contributions from corporations as of January 1, 2007. Some tax expenditure occurred in 2007, however, as many firms reporting income in the 2007 tax year earned a portion of that income in the 2006 calendar year.

⁹ The large declines in 2008 and 2009 reflect, for the most part, the projected reduction in realized capital gains in these years resulting from the economic downturn.

¹⁰ Available data now allows costs to be shown separately for the components of this tax expenditure.

¹¹ The amount of this tax expenditure can fluctuate from year to year depending on the amount of current-year losses and the availability of income against which to apply these losses.

¹² The amount of this tax expenditure reflects the impact of Budget 2003, Budget 2006 and Budget 2009, which increased the amount of small business income eligible for the lower tax rate, and Budget 2004, which accelerated the Budget 2003 increase. In addition, Budget 2006 reduced the small business tax rate and the 2007 Economic Statement accelerated the rate reduction. Finally, the reduction in the tax expenditure between 2007 and 2009 reflects the reduction in the benchmark rate as well as the impact of the current economic climate (see footnote 1).

¹³ Estimates and projections were computed on the basis of an analysis of payments to non-residents and withholding tax collections available for 1997 to 2007.

¹⁴ This category includes the tax expenditure attributable to the exemption of estate and trust income distributions, including distributions by income trusts.

¹⁵ The Fifth Protocol to the Canada-U.S. Tax Treaty, which came into effect in 2008, includes an exemption from withholding tax for interest paid to U.S. residents. This exemption is phased in for interest paid to non-arm's length U.S. residents and is fully effective in the year of ratification of the updated treaty for arm's length U.S. residents. A statutory exemption from withholding tax for all interest payments to arm's length foreign lenders also came into effect as of January 2008. Projections for this category therefore include the cost of the statutory exemption from withholding tax for interest payments to all arm's length non-U.S. foreign lenders starting in 2008. The changes to withholding tax rates for interest payments to U.S. lenders (both arm's length and non-arm's length) that were announced in Budget 2007 are contained in the Canada-U.S. Tax Treaty; these changes alter the benchmark and therefore do not affect the tax expenditure for this category.

¹⁶ This category includes exemptions for interest paid to non-resident persons or organizations that would be exempt from income tax in Canada were they residents in Canada. Also included are exemptions on interest paid under certain securities-lending arrangements set out in subparagraph 212(1)(b)(xii) of the Income Tax Act, and interest exempt under certain other domestic and treaty provisions which, due to data limitations, cannot be specifically divided between benchmark items and tax expenditures.

¹⁷ Estimates and the 2008 projection are based on data obtained from Statistics Canada.

¹⁸ This is a new item in the corporate income tax table. Please refer to the personal income tax section of the publication Tax Expenditures: Notes to the Estimates/Projections(published in 2004 and available on Department of Finance website) for a description of the measure.

¹⁹ The 2009 projection is calculated using a historical average growth rate. Since this tax expenditure is calculated on a cash-flow basis, an increase in the balance of uncashed grain tickets represents additional income that is being deferred and results in a positive tax expenditure. A decrease in the balance of uncashed grain tickets indicates that less income is being deferred and results in a negative tax expenditure. The tax expenditure estimates and projections are volatile over time since a small number of corporations are affected in a narrowly defined sector. Estimates, which include 2008 for this item, and the projection are based on data obtained from Statistics Canada.

²⁰ The estimates and projections published in prior publications were based on the estimate from Budget 2006. The current estimates and projections are based on actual tax return data for 2006 and 2007 and partial tax return data for 2008.

²¹ This is a new item in the corporate income tax table. This measure was announced in Budget 2007. The tax expenditure represents the deferral of federal income taxes on contributions to AgriInvest accounts.

²² This measure provides a tax exemption in respect of a portion of the taxable income of a mutual insurance company that insures property used in farming or fishing (including the principal residence of farmers and fishers). This is the first time this measure has been included in this document.

²³ This credit was introduced in Budget 2003 and phased in at 5 per cent in 2003, 7 per cent in 2004 and 10 per cent in subsequent years.

²⁴ Additions to earned depletion pools were eliminated as of January 1, 1990. The tax expenditure reflects use of the existing earned depletion pools.

²⁵ The tax expenditure is the revenue cost of the resource allowance net of non-deductible Crown royalties and provincial mining taxes. Over a five-year period beginning in 2003, the resource allowance was phased out and a deduction for Crown royalties and mining taxes phased in, so that by 2007, this tax expenditure is eliminated. Costs for 2007 relate to companies that did not have a December 31 year-end for which the 2007 year included a portion of 2006. Year-to-year variation reflects volatility in the relationship between the resource allowance and Crown royalties. See the technical paper "Improving the Income Taxation of the Resource Sector in Canada" (Department of Finance, March 2003) for further details.

²⁶ The general corporate income tax rate was extended to resource income over a five-year phase-in period beginning in 2003. Although the rate difference between the general and resource rates no longer existed as of 2007, there were still costs in that year associated with 2006 rates for companies with off-calendar taxation years, for which the 2007 tax year included some income earned in 2006.

²⁷ The Alberta government announced on September 21, 2006 that the Alberta Royalty Tax Credit (ARTC) program would be discontinued effective January 1, 2007. Although the ARTC no longer existed as of 2007, there were still costs in that year associated with the measure for companies with off-calendar taxation years, for which the 2007 tax year included some royalty credits earned in 2006.

²⁸ The negative tax expenditure for 2006 and subsequent years reflects a decline in the volume of reclassifications in respect of Canadian Development Expenses transferred to corporations investing in flow-through shares. For more information about this measure, please refer to the "What's New in the 2008 Report" section of the 2008 Tax Expenditures and Evaluations publication (available on the Department of Finance website).

²⁹ For confidentiality reasons, estimates and projections for the 2006 to 2009 period are not published.

³⁰ The amount of this tax expenditure can fluctuate significantly from year to year depending primarily upon the level of construction activity.

³¹ Estimates and projections vary from those in prior reports due to a methodological change made to improve their accuracy.

³² Variations from last year's report reflect the availability of new data as well as the impact of the current economic climate.

³³ Refundable tax provisions of the corporate income tax system provide some integration of the corporate and personal income tax regimes. For more information about these measures, see the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website).

³⁴ This item includes the additional 6 2⁄3 per cent refundable tax on investment income as well as the Part I tax paid on investment income in excess of the benchmark rate.

³⁵ The large values in 2008 and 2009 reflect, for the most part, the capital losses projected in these years resulting from declines in the stock market.

³⁶ The large values in 2008 and 2009 reflect, for the most part, the non-capital losses projected in these years resulting from the economic downturn.

³⁷ Budget 2007 increased to 80 per cent from 50 per cent, over five years, the deductible portion of the cost of food and beverages consumed by long-haul truck drivers during certain long-haul trips. This measure also applies to employers that pay, or reimburse, such costs incurred by long-haul truck drivers that they employ. This measure applies to eligible expenses incurred on or after March 19, 2007.

³⁸ Estimates and projections vary from those in prior reports due to a methodological change to improve their accuracy.

* The elimination of a tax expenditure would not necessarily yield the full tax revenues shown in the table. See the publication Tax Expenditures: Notes to the Estimates/Projections (published in 2004 and available on the Department of Finance website) for a discussion of the reasons for this.

Notes:

¹ Unless otherwise indicated in the footnotes, estimates are based on administrative data from the Canada Revenue Agency or data from Statistics Canada.

² Unless otherwise indicated in the footnotes, changes in the estimates and projections from those in last year's report, as well as variations from year to year, result from changes in the explanatory economic variables upon which the estimates and projections are based. These changes and variations also reflect the availability of new data and improvements to the methodology used to derive the estimates and projections.

³ The Goods and Services Tax rate was lowered from 7 per cent to 6 per cent effective July 1, 2006, and to 5 per cent effective January 1, 2008. The 2006 rate reduction lowers the tax expenditures for 2006 and 2007, and the 2008 rate reduction reduces them further for 2008 and 2009.

⁴ These refunds are paid to Aboriginal governments that have an agreement providing for a Goods and Services Tax/Harmonized Sales Tax (GST/HST) refund for goods and services acquired for self-government activities.

⁵ Vendors are not entitled to claim input tax credits to recover the GST/HST paid on inputs to exempt supplies. Final consumers and businesses do not pay the direct sales tax on exempt goods and services.

⁶ The National Sales Tax Model used to generate the estimates and projections is based on the 2005 national input-output tables from Statistics Canada and the latest release of the National Income and Expenditure Accounts.

⁷ Certain importations are tax-free including, for example, duty-free personal importations by Canadian travellers.

⁸ The Visitor Rebate Program (VRP) was replaced by the Foreign Convention and Tour Incentive Program effective April 1, 2007. Estimates for the VRP do not include amounts credited by suppliers at the point of sale.

⁹ A large range of generally high-cost agricultural and fishing equipment is zero-rated to reduce cash-flow problems for farmers and fishers.

¹⁰ Estimates are based on personal income tax data. The GST rate reductions do not affect the credit.

¹¹ The rebate rate for municipalities increased from 57.14 per cent to 100 per cent effective February 1, 2004.

¹² Based on estimated expense claims reported for the personal and corporate income tax systems. The estimate for 2007 and projection include the increased deductibility of meal expenses on certain trips by long-haul truck drivers. See footnote 37 in the corporate income tax table for additional details.