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Ottawa, June 30, 1999
1999-061

Budget 1999 Tax Relief Effective July 1

As part of the broad-based tax relief announced in the last two federal budgets, the 3-per-cent surtax will be eliminated for all Canadian taxpayers effective July 1. Also effective July 1, the amount of income Canadians can receive tax-free will be increased by $175 to $675 for all taxpayers. This will raise the basic amount to $7,131, and the spousal and equivalent-to-spouse amounts to $6,055.

The 1998 and 1999 budget measures mean that a typical two-earner family with two children and an income of $50,000 will have its taxes reduced by $550, or 15 per cent. The tax burden on a typical one-earner family with two children and an income of $30,000 will fall by $500, with the result that it will no longer pay any net federal tax.

"With the budget balanced, we have begun the process of getting taxes down for every Canadian," Finance Minister Paul Martin said.

These broad-based initiatives combine with a series of measures providing targeted tax relief to students, charities, persons with disabilities and the children of parents with low incomes.

Low-income families with children will receive higher payments starting July 1, when the maximum level of the National Child Benefit (NCB) supplement goes up by $180. Maximum payments under the Canada Child Tax Benefit (CCTB) – which includes the base benefit and the NCB supplement – will reach $1,805 for the first child and $1,605 for each additional child. The supplement will rise by a further $170 in July 2000.

The 1999 budget allocated an additional $300 million in July 2000 to increase CCTB payments for modest- and middle-income families. Taken together with the $850-million increase announced in the 1997 budget, these measures will increase the CCTB by $2 billion per year. This will bring annual federal support for families under the CCTB to almost $7 billion by July 2000.

"These tax changes will put more money into the hands of families with children – a key priority for the Government of Canada," said Human Resources Development Minister Pierre Pettigrew.

The 1999 budget actions will provide Canadians with $1.5 billion in tax relief in 1999-2000, $2.8 billion in 2000-01, and $3.4 billion in 2001-02. Together, the 1998 and 1999 budgets provide Canadians with $16.5 billion in personal income tax relief over the three fiscal years from 1999-2000 to 2001-02.

"We intend to continue bringing taxes down as quickly as possible without going back into deficit," Minister Martin said. "But we will do so at the same time that we invest in core priorities, such as health care and education."

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