Budget 1998 - Information
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Archived - Tax Relief for Canadians

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With an improving fiscal situation over recent years, the government has been able to offer targeted tax relief where the need was greatest and the social and economic payoff was the largest -- for working parents with low incomes, charities, students and the disabled.

Now that the budget is balanced, and we are beginning to repay the debt borrowed in private markets, the government is in a position to do even more. The 1998 budget continues the policy of providing targeted tax relief and also begins the process of general tax relief, starting with those who need it most -- low- and middle-income Canadians. Over the next three years, $7 billion in tax relief will be provided to those Canadians.

Beginning General Tax Relief

The 1998 budget proposes two new measures that will provide general income tax relief for low- and middle-income Canadians. Taken together, these measures will provide close to $1.4 billion in tax relief to 14 million low- and middle-income Canadians by 1999-2000 -- 90 per cent of all taxpayers.

Increasing Tax-Free Income

Eliminating the General Surtax for Most Canadians

Providing Progressive Tax Relief

These measures provide a very progressive distribution of tax relief. It recognizes the need to begin lowering taxes for those who need it most -- Canadians with low- and middle-incomes.

As a result of these two measures, single people earning $30,000 a year will see their tax burden reduced by 3.0 per cent, while singles earning $50,000 a year will receive a 2.4-per-cent tax reduction. For families, taxes will fall by 3.3 per cent at $50,000. A family with an annual income of $30,000 will get a 31-per-cent reduction in taxes with its total federal income taxes falling to about $300 -- or about 1 per cent of income.

Continuing Targeted Tax Relief

Enriching the Canada Child Tax Benefit

Increasing the Child Care Expense Deduction

To help working Canadians with children, the 1998 budget proposes to increase the limit on the child care expense deduction.

Assisting Self-Employed Canadians with Health and Dental Premiums

Helping Individuals Care for Family Members

Many Canadians provide care and support for family members who are elderly or disabled. Currently, caregivers receive tax assistance through the infirm dependant credit. The 1998 budget proposes:

Improving Access to Knowledge and Skills

The 1998 budget proposes a Canadian Opportunities Strategy to help expand access to knowledge and skills Canadians will need for jobs and higher standards of living.
Tax measures include:

Increasing Support for Emergency Service Volunteers

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