Minister of Finance Jim Flaherty today presented a balanced federal budget that significantly cuts taxes, focuses federal spending on priority areas and pays down debt.
The budget delivers $20 billion in tax relief over two years—that is more tax relief than the previous four budgets combined. Key tax measures include:
- A one-point reduction to the GST, effective July 1, 2006.
- Broad-based income tax relief.
- Targeted tax measures to help Canadians with the cost of:
o Transit passes.
o Kids’ sports.
The budget prioritizes and focuses federal spending including:
- $3.7 billion over two years for the new $1,200 Universal Child Care Benefit.
- $1.5 billion more this year for agriculture.
- $1.4 billion more this year for policing, border security and public safety.
- $1.1 billion more over two years to rebuild the Armed Forces.
The budget is balanced and specifically commits $3 billion per year in debt paydown.
For 2005–06, the federal surplus is currently estimated at $8 billion.
With respect to restoring the fiscal balance, a commitment to address concerns over fiscal imbalance; greater certainty with respect to 2006–07 Equalization and Territorial Formula Financing payments; up to $3.3 billion in additional funding support to provinces and territories to help address short-term pressures in post-secondary education, affordable housing and public transit; and a commitment to a principle-based framework for fiscal relations, outlined in the companion document Restoring Fiscal Balance in Canada.
Further information on Budget 2006 can be obtained by visiting the Department of Finance website or by phoning 1 800 O-Canada (1 800 622-6232) or 1 800 926-9105 (TTY for the speech and hearing impaired/deaf).