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Our Children, Our Future
"Assisting families is not only the smart thing to do, it is
the right thing to do...Whether it be further services or income supports,
all orders of government must be prepared to do more for our
children."
Finance Minister Paul Martin
2000 budget speech
Providing children with a safe and nurturing
environment, investing in their health and education, and promoting secure
families are all critical to children's sound development and ability to
learn.
Governments can help parents meet their children's needs by providing
improved income support and services.
This
Budget helps children in three key ways by:
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increasing
the Canada Child Tax Benefit (CCTB) by $2.5 billion a year by 2004 to
more than $9 billion annually. The maximum benefit for a family's
first child will grow to $2,400 from the current level of $1,805;
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placing
special emphasis on the needs of families with children in the
Five-Year Tax Reduction Plan. The CCTB increase, together with general
tax reductions, reduces personal income taxes of families with
children by an average of 21 per cent by 2004; and
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doubling
the duration of maternity and parental leave under the Employment
Insurance program to one year. This will give parents the opportunity
to spend more time with their newborn and newly adopted children.
The
federal government is also inviting provincial and territorial governments
to join it in developing a national action plan to support early childhood
development.
These and other measures build on steps taken in previous budgets to
improve the quality of life of Canadian children and their families
Canada Child Tax Benefit
The
CCTB is the government's primary means for helping families with the costs
of raising children. With the enhancements proposed in the budget, about
3.8 million families, including more than 90 per cent of all children in
Canada, will receive benefits.
In its last three budgets, the government invested a total of $2 billion
more
a year in the CCTB.
This budget will put an additional $2.5 billion a year into the CCTB by
2004. As a result, benefits will be higher for all parents currently
receiving the CCTB and will be extended more fully to middle-income
families.
Raising and Extending Benefits
The
objective is to increase the maximum CCTB benefit to $2,400 for a family's
first child, and to $2,200 for a second child by 2004. This will be done
in several steps:
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First, so that their value is not eroded by inflation, CCTB benefits
will be fully indexed to the cost of living starting January 2000.
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Second, in July 2000, the base benefit will be increased by $70 per
child. When combined with increases announced in the 1999 Budget that
also take effect in July 2000, this will bring the maximum benefit for
the first child to $2,056 from $1,805 in July 1999.
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Third, by July 2001, the CCTB supplement for lower-income families
will increase by $200 per child. This increase, combined with ongoing
indexation of the entire supplement, constitutes the federal
government's third major investment in the National Child Benefit
System.
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Benefits
will also increase for middle-income families.
Low-income
families will receive $6 billion, and modest- and middle-income families
$3 billion, of the yearly total of over $9 billion by 2004.
Cutting Taxes for Families
General Tax Relief
The budget's tax reduction plan – which includes increases in the CCTB
as well as extensive general tax reductions – places special emphasis on
the needs of families with children. Relative to the current tax system,
their personal income taxes will be reduced by an average of 21 per cent,
compared to 15 per cent on average for all taxpayers.
A typical one-earner family of four with income of $40,000 will have its
net federal income taxes reduced by $1,623 a year by 2004 – a reduction
of 48 per cent. Next year, its net federal income taxes will be reduced by
$582.
A typical two-earner family of four with income of $60,000 will have its
net federal income taxes reduced by $1,546 a year by 2004 – a reduction
of 27 per cent. Next year, its net federal income taxes will be reduced by
$501.
Doubling EI Child-Related Leave
This
budget doubles the duration of employment insurance (EI) maternity and
parental leave to one year from the current maximum of six months. This
extended leave will be available to parents with a child born or adopted
on or after December 31, 2000.
This will be done by increasing parental leave to 35 weeks from the
current maximum of 10. Combined with 15 weeks of maternity leave and the
standard two-week waiting period, the amount of child-related leave will
double.
To make maternity and parental leave more accessible, the budget also
lowers to 600 from 700 the number of hours that must be worked to be
eligible for leave.
In
addition, parents will be able to work part-time while receiving parental
benefits, in the same way as regular EI claimants.
Finally, when both parents share the parental leave, only one waiting
period will apply, rather than two, as is currently the case. Parents will
now have greater flexibility in choosing whether one or both spend time at
home with a new child.
These changes will benefit some 150,000 families a year at an estimated
annual cost of $900 million.
Children with Disabilities
This
budget builds on measures in previous budgets to assist parents of
children with disabilities. It proposes:
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a
maximum supplement of $500 to the Disability Tax Credit (DTC) for
children with severe disabilities requiring full-time home care by a
parent;
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broadened
eligibility for the DTC to include persons with severe disabilities
who must spend extensive time in therapy each week;
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an
increase to $10,000 from $7,000 for the maximum annual child care
expense deduction in respect of children eligible for the DTC; and
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extension
of the attendant care deduction to students.
Canada Health and Social Transfer
Universal
health care and quality education are the highest priorities of Canadian
families. The government is putting more money into both through the
Canada Health and Social Transfer (CHST).
Click
here for the education/health story
Early Childhood Development
In
October 1999, federal, provincial and territorial Ministers of Social
Services agreed to work with their health colleagues to move forward
quickly on early childhood development.
This Budget reiterates the invitation in the Speech from the Throne for
all governments to work together and reach agreement on a national action
plan by December 2000 to support early childhood development.
Child-Centred Family Law
The
federal government plans to work with the provinces and territories to
improve family law so that it always puts the needs and best interests of
children first.
To facilitate this work, the budget allocates
$29 million to extend for two years federal financial assistance to the
provinces and territories for family-related services such as parenting
information and skills development, mediation and court-based support
programs.
Canadian Opportunities Strategy
The 1998 Budget introduced the Canadian
Opportunities Strategy to improve Canadians' access to skills and
knowledge.
The Canada Education Savings Grant (CESG) has been a particularly
successful element of the strategy. It provides a grant equal to 20 per
cent of the first $2,000 in annual contributions to a registered education
savings plan (RESP) for children up to age 18.
During the first 25 years of RESPs, $2.5 billion of savings were
accumulated. In the two years since the CESG was introduced, private
savings have doubled to $5 billion.
Government
contributions to individual RESP accounts are expected to reach about $750
million in 2000-01, nearly triple the amount estimated when the grant was
introduced.
This Budget enhances support for students by increasing to $3,000 from
$500 the amount of tax-free income from bursaries, fellowships and
scholarships, such as the Canada Millennium Scholarships. This will
increase federal tax assistance to students by about $30 million a year.
Click
here for the full children's story
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