May 5, 2006
The Tory’s 2006 budget: highlights
Lower taxes, modest spending
NUNATSIAQ NEWS
In his people-pleasing first budget, Jim Flaherty, the Conservative finance minister, announced a litany of small tax breaks for lower and middle-income voters, plus new spending for some, but not all, of the things listed in the Kelowna Accord.
Aboriginal peoples
- A one-time payment of $300 million to the three territories for social housing; Nunavut will get $200 million, while Yukon and NWT will get $50 million each.
- A one-time payment of $300 million to provinces for off-reserve aboriginal housing. Of this, Quebec will get $38.2 million, and Newfoundland-Labrador $8.2 million.
- $450 million for better water supplies and housing on Indian reserves, education, and aboriginal women, children and families.
Tax measures
- The Canada Employment Credit, a tax credit available to anyone who holds a job, is worth $500 this year. Next year, the amount will double to $1,000, as of Jan. 1.
- A lower GST: on July 1, the GST will drop to 6 per cent from 7 per cent.
- A childcare tax credit worth $100 a month for each child under age 6.
- A children’s fitness tax credit worth up to $500 for each child under 16 enrolled in fitness or sports programs
- Increases in the basic personal deduction, the amount that all Canadians may earn without paying federal income tax. Budget documents say people earning between $15,000 and $30,000 a year will save almost $300 in 2007. Families earning between $45,000 and $60,000 will save almost $650.
- The lowest personal tax rate will rise to 15.5 per cent of taxable income as of July 1, half a per cent higher than the 15 per cent rate in effect from Jan. 1 to June 30.
- A new tax credit of up to $2,000 for employers who hire apprentices.
- A new $1,000 grant for first- and second-year apprentices.
- A new $500 tax deduction for tradesmen to help them buy tools.
- A new tax credit worth about $80 per year to help students buy books.
- Federal tax is eliminated from all scholarships, bursaries and fellowship grants received by students.
- The general corporate income tax rate will drop to 19 per cent from 21 per cent by 2010.
Other spending
- $2 billion for a new “made in Canada” climate change scheme, to be unveiled in the fall.
- $1.1 billion more over two years for the armed forces.
- $161 million to hire 1,000 more RCMP officers and federal prosecutors.
- $5.5 billion over four years for a variety of infrastructure funds.
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