Budget 2006: Focusing on Priorities

May 03, 2006

Hard working Canadians in Alberta will have more money in their pockets as a result of the first budget of Canada’s new government. It provides real tax relief for every person in the province regardless of age or income level. I'm proud of our new government and delighted to support our fiscal framework for a stronger Canada.

Ottawa has been overtaxing Albertans for years and our government is delivering real tax relief that makes a difference. In fact, our government’s first budget offers nearly $20 billion in tax relief for Canadians over the next two years – more than the last four federal budgets combined.

Overall, the government’s first budget delivers more than twice as much tax relief as new spending. These measures include:

• a 1-percentage-point cut in the GST as of July 1, 2006;
• a new Canada Employment Credit;
• a permanent legislated reduction in the lowest tax rate to 15.5 per cent as of July 1; and
• increases in the basic personal amount – the amount that all Canadians can earn without paying federal income tax.

As a result of these measures, Albertans will pay $1 billion less in taxes in 2007. Also, families earning between $15,000 and $30,000 per year will be better off by almost $300 in 2007, and those earning between $45,000 and $60,000 will save almost $650.

This budget also delivers on the government’s other key priorities:

• The Universal Child Care Benefit, which provides all families with $1,200 a year for each child younger than six, will put an estimated $289.3 million in the hands of Alberta parents over the next year.

• To ensure safe streets and safe communities this budget is providing $161 million for 1,000 more RCMP officers and federal prosecutors.

• As part of the implementation of the 10-Year Plan to Strengthen Health Care, Alberta will receive $47 million more in support of health care – and the reduction of wait times – bringing total federal cash transfer support for health in Alberta to $1.9 billion in 2006-07.

The government’s first budget also provides significant support for seniors, students, transit riders and new Canadians.

• The government is helping seniors by doubling the amount of eligible pension income that can be claimed under the pension income credit. It will provide savings of up to $155 for eligible pensioners and remove approximately 85,000 pensioners from the tax rolls altogether.

• The government is creating a new Textbook Tax Credit, which will benefit approximately 1.9 million Canadian students, at a cost of $260 million over two years.

• The Post-Secondary Education Infrastructure Trust will support investments for infrastructure and equipment, such as modernization of classrooms and laboratories, of up to $1 billion, of which $101.3 million will benefit post-secondary institutions in Alberta.

• To support families and promote healthy active living, the government is providing a physical fitness tax credit for up to $500, to cover registration fees for children’s sports.

• To improve transit system infrastructure, Alberta is getting $40.1 million right away. Further, any surplus funds in excess of $2 billion in fiscal year 2005-06 will be used to provide these provinces with up to $91.4 million for a Public Transit Capital Trust.

• People who use Alberta’s transit systems will benefit from a new 15.5-per-cent tax credit on the purchase of monthly transit passes.

• Municipalities across Canada will receive an estimated $4.4 billion over the next four years as a share of federal gas tax revenues – money they can invest in roads, clean water and other priorities. Alberta will receive $57.2 million for these purposes.

• Large cities like Edmonton are a destination for many immigrants to Canada. Effective immediately, the Government will cut the Right of Permanent Residence Fee to $490 from $975 and grant partial refunds to people who have already paid the higher fee but have not yet received permanent resident status or have not yet arrived.

• The Affordable Housing Trust will support investments to increase the supply of affordable housing, including transitional and supportive housing, of up to $81.1 million in Alberta.

Our government is following through on the commitments we made during the election campaign. The results of our acting on these priorities will be a stronger Alberta and a better life for all Canadians.

To read the budget in full, click here.