Dateline: 11/14/05
Faced with the opposition parties threatening an imminent election, Canadian federal finance minister Ralph Goodale made sure his economic update on November 14, 2005 included promises of individual and corporate tax cuts as well as spending on immigration services, education and training, research and development, and global commerce initiatives to carry the Liberals through an election campaign.
Here are the highlights.
Tax Cuts for Individuals
- Working Income Tax Benefit - to start in 2008, this benefit will reduce the financial barriers for people getting off welfare and into the workforce.
- Increase in basic personal tax exemption - the amount of income all Canadians can earn without paying income tax will be raised by $500, effective January 1, 2005. The basic personal amount will be raised an additional $200 in 2006.
- Reduction in lowest personal tax rate - Canadians with personal income under $35,595 will have their tax rate reduced by one percent, from 16 percent to 15 percent, effective January 1, 2005.
- Reduction in middle personal tax rates - the two middle personal income tax rates will each be reduced by one percent, effective January 1, 2010.
- Increase in level of top personal tax rate - the level at which the top personal tax rate begins to apply will be raised from $115,739 to $200,000 in 2010.
Tax Reductions for Business
- Corporate tax cuts- originally introduced in the February 2005 budget but dropped to get the support of the New Democratic Party. The general corporate tax rate will be reduced by two percent to 19 percent by 2010.
- Elimination of corporate surtax - the corporate surtax of 1.12 percent will be eliminated for all businesses by 2010.
- Elimination of federal capital tax - the federal capital tax will be eliminated as of 2006, two years ahead of schedule.
- Extension of Carry-Forward Periods - the tax plan proposes to extend the non-capital loss carry-forward period of all taxpayers to 20 years.
Education and Training
- Financial aid for post-secondary education - more than $2.1 billion over five years for low and middle income Canadians and $550 million over five years to extend Canada Access grants for students from low-income families.
- Workplace-based training - $3.5 billion over six years to increase workplace-based training.
- Post-Secondary Education Innovation Fund - $1 billion in 2005–06 to the provinces and territories.
- Canadians with disabilities - $265 million over five years to assist in participation in the workforce.
Immigration
- Settlement and integration services - $1.3 billion over five years to improve services for new immigrants to Canada.
Research and Development
- University-based research - over $2.1 billion in new funding this fiscal year and over the next five years.
- Internships and scholarships - support over the next five years for 3,500 internships and up to 500 MBA scholarships for natural and health sciences and engineering graduates.
Global Commerce
- CAN-Trade - $485 million over five years to implement an international commerce strategy to position Canadian firms in priority markets such as China and India.
- Canada's Pacific Gateway - $590 million over the next five years for transportation infrastructure to enhance Canada's Pacific gateway.
- Broadband deployment - an extra $100 million over the next five years to continue supporting broadband installation in rural, remote and First Nations communities in Canada.
