WHAT HAS BEEN DONE

Tax Relief for Individuals, Families and Businesses

• The amount of income that Canadians can earn before paying federal income tax was further increased, and the top of the two lowest income tax brackets was increased so that Canadians can earn more income before being subject to higher tax rates.

• The Working Income Tax Benefit, first introduced in Budget 2007, has been effectively doubled. This enhancement lowers the “welfare wall” by further strengthening work incentives for low-income Canadians already in the workforce and encouraging other low-income Canadians to enter the workforce.

• The level at which the National Child Benefit supplement for low-income families is fully phased out and the level at which the Canada Child Tax Benefit begins to be phased out have been raised, providing a benefit of up to $436 per year for a family with two children. Additional monthly benefits under these programs began to be paid to families with children in July 2009.

• The Age Credit amount was increased by $1,000 to provide tax relief to low- and middle-income seniors. This means additional annual tax savings of up to $150 per year for low-income seniors.

• To assist first-time home buyers, Canada’s Economic Action Plan provided a tax credit of up to $750 as well as additional access to their Registered Retirement Savings Plan savings to purchase or build a home.

• Tax relief for individuals and families announced in Canada’s Economic Action Plan is now fully implemented, and Canadians are realizing its benefits.

• The Home Renovation Tax Credit provided an estimated 4.6 million Canadian families with up to $1,350 in tax relief on eligible renovation projects. Canadians will be able to claim the credit when they file their 2009 income tax returns.

• To help businesses adopt newer technology at a faster pace, a temporary two-year 100-per-cent capital cost allowance (CCA) rate for computers acquired after January 27, 2009 and before February 1, 2011 was introduced.

• To help businesses in manufacturing and processing industries restructure and retool to position themselves for long-term success, the temporary 50-per-cent straight-line accelerated CCA rate for investments in manufacturing or processing machinery and equipment was extended to include investments undertaken in 2010 and 2011.

• To help small businesses retain more of their earnings for reinvestment, expansion and job creation, the amount of small business income eligible for the reduced federal income tax rate was further increased to $500,000 effective January 1, 2009, following a previous increase to $400,000 from $300,000 as of January 1, 2007.

• The temporary Mineral Exploration Tax Credit was extended to March 31, 2010 to support mineral exploration activity across Canada.

• Actions the Government has taken since 2006 are providing important stimulus to the economy and creating jobs, with almost $160 billion in tax relief for  individuals and families over 2008–09 and the following five fiscal years. Key actions include:

  • All Canadians – even those who do not earn enough to pay personal income tax—are benefiting from the 2-percentage-point reduction in the Goods and Services Tax (GST) rate. Maintaining the GST Credit level while reducing the GST rate by 2 percentage points translates into more than $1.1 billion in GST Credit benefits annually for low- and modest-income Canadians, making purchases more affordable for these Canadians.

  • All tax payers are benefiting from the reduction in the lowest personal income tax rate to 15 per cent from 16 per cent.

  • The Tax-Free Savings Account, introduced in Budget 2008, is improving incentives to save through a flexible, registered general-purpose account that allows Canadians to earn tax-free investment income.

  • The Government has also introduced relief measures targeted to help families, students, seniors and pensioners, workers, persons with disabilities, and communities.

Helping the Unemployed

Canadians have felt the impacts of the global economic slowdown. Canada’s Economic Action Plan includes $7 billion over two years to support those workers most affected and help them access opportunities through skills development and training. The Government has delivered over $2.9 billion in support for the unemployed in 2009–10 and will provide a further $4 billion in 2010–11.

Over the course of the recession, the Employment Insurance (EI) program has provided Canadians with needed temporary support. Total EI expenditures are expected to be $6 billion higher in both 2009–10 and 2010–11 than they were last year.

Canada’s Economic Action Plan has taken immediate and decisive action to protect jobs and help Canadians directly affected by the global recession. At the same time, the Government has maintained a focus on the economy of the future by contributing to the development of a skilled, flexible and knowledgeable workforce. These initiatives will continue to support jobs and training through 2010–11:

• An extra five weeks of EI benefits have already been provided to over 512,583 EI claimants. This extension of benefits will remain available to workers making EI claims up to September 11, 2010.

• The EI premium rate will remain at $1.73 per $100 in insurable earnings in 2010, the lowest level since 1982. This represents projected relief of $11.1 billion over 2009 and 2010 for Canadian workers and their employers relative to what would have been the case had rates been set at the break-even level over these two years.

• More than 8,445 long-tenured workers are receiving additional benefits in order to participate in long-term training. The intake for workers participating in this program will continue until May 29, 2010. In addition, the Government has provided further assistance to more than 500,000 long-tenured workers by making between 5 to 20 weeks of additional benefits available to those who have paid into EI for years.

• In January 2010, over 160,000 Canadians were participating in approximately 5,900 work-sharing agreements.

• Payments have been made to more than 15,000 claimants under the Wage Earner Protection Program.

• The Government has responded to the needs of Canada’s self-employed workers by providing on a voluntary basis EI special benefits, including maternity, parental, sickness and compassionate care benefits, to the self-employed. The self-employed can now register for the EI program to gain access to these benefits.

• The Government provided $750 million to the provinces and territories in 2009–10 in support of training and skills development programs, benefiting more than 122,000 Canadians, and will provide a further $750 million in 2010–11.

• It is expected that current projects under the enhanced Targeted Initiative for Older Workers will provide additional support to over 5,400 older workers.

• Over 3,500 summer jobs were created as a result of additional support provided to the Canada Summer Jobs Program in 2009–10. A similar number of additional jobs are expected to be created this summer.

• Training and skills development support will be provided to more than 11,500 Aboriginal Canadians through Aboriginal Skills and Employment Partnerships and the Aboriginal Skills and Training Strategic Investment Fund.

• Apprenticeship Completion Grants have already been provided to almost 16,000 apprentices who completed their apprenticeship training and obtained their certification in any of the designated Red Seal trades.

• Support is being provided to implement the Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications.

• Funding is currently supporting almost 300 youth internships in not-for-profit and community service organizations through the YMCA and YWCA.

Building Infrastructure to Create Jobs

Canadians in all regions have already benefited from the implementation of Canada’s Economic Action Plan in year 1:

• Commitments are in place for almost 16,000 projects across the country. Over 12,000 of these projects have begun or have been completed.

• One objective of the Economic Action Plan was to maintain or create 220,000 jobs. The Action Plan is on track. It has contributed to the creation of over 135,000 jobs recorded in Canada since July 2009.

• By the end of March 2010, most of the $37 billion in planned 2009–10 federal and provincial/territorial stimulus will have flowed into the economy.

• The Government has committed all of the funding available for projects under the $4-billion Infrastructure Stimulus Fund.

• Almost all of the $500 million available under the Recreational Infrastructure Canada program has been committed to almost 2,000 projects across the country to build and upgrade hockey arenas, soccer fields, swimming pools and other community-based recreational facilities. Over 1,500 projects are already underway or completed.

• More than half of the $1 billion of federal funds available over five years under the Green Infrastructure Fund has been committed and the Government is continuing to evaluate other proposals.

• The Economic Action Plan committed significant funds to repair and renovate the federal government’s building portfolio. A total of 324 repair and renovation projects have already been completed and over 900 projects worth over $128 million are currently underway.

• In addition, funding was provided to enhance the accessibility of Crown-owned buildings for persons with disabilities. To date, 40 projects have been completed and over 175 projects worth about $16 million are currently underway.

• On sections of the Alaska Highway from Summit Lake, British Columbia to the Yukon border, deck repairs to eight bridges were completed, 28 kilometres of asphalt road surface was repaved, and an intersection was rebuilt to make it safer. These investments totalled $12 million and were all completed on budget and during the short northern summer construction period.

• Implementation of the Small Craft Harbours Accelerated Infrastructure Program has progressed more quickly than anticipated. To date, 242 repair, maintenance, and dredging projects representing $177 million are in the engineering or tendering processes, under construction, or have been completed.

Stimulating Housing Construction

• Canadians who undertook eligible renovations to their homes before February 1, 2010 were entitled to receive up to $1,350 in tax relief from the temporary Home Renovation Tax Credit introduced last year in Canada’s Economic Action Plan. An estimated 4.6 million families in Canada will claim the credit on their 2009 tax returns.

• Canada’s Economic Action Plan has provided additional tax support to first-time home buyers, who benefit from greater access to their Registered Retirement Savings Plan savings to purchase or build a home, as well as up to $750 in tax relief from the First-Time Home Buyers’ Tax Credit.

• Homeowners have also benefited from the enhanced ecoENERGY Retrofit – Homes program to make energy efficiency improvements to their homes. The additional 300 million provided through the Economic Action Plan is expected to support an estimated 200,000 home retrofits.

• Through Canada’s Economic Action Plan, federal commitments of more than $1 billion in 2009–10 have helped Canadian families find suitable and affordable housing, while putting Canadians back to work.

• In 2009–10, $650 million of this investment is being matched by provincial and territorial governments, which are responsible for program design and delivery. As a result of this joint investment in social housing, in 2009–10 over 2,400 construction and renovation projects are underway across the country in support of some of the most vulnerable in our communities, including seniors, single-parent families, recent immigrants and Aboriginal Canadians living off reserve.

• The Government of Canada has also committed $75 million in 2009–10 to renovate and retrofit federally administered social housing. Over 700 projects are currently underway.

• In addition, in 2009–10, $300 million has already been committed through the Economic Action Plan in support of housing in over 400 First Nations communities and in the North.

Creating the Economy of Tomorrow

• Twenty Knowledge Infrastructure Program projects have already been completed, and planning, design, construction and renovation work has begun on a further 361 projects at colleges and universities across Canada. These projects represent over $1.8 billion in Knowledge Infrastructure Program funding, accounting for over 90 per cent of the total program budget.

• Through Budget 2009, the Government committed to provide the Canada Foundation for Innovation (CFI) with additional funding of $750 million to accelerate investment in state-of-the-art research facilities and equipment. Of the funding announced in Budget 2009, the CFI has already committed $150 million to 28 exceptional projects through its 2009 competition.

• The Government has allocated almost $250 million to upgrade and modernize federal laboratories doing research in a wide array of fields, from health and food to natural resources, after several years in which maintenance had been delayed or deferred. Construction has begun or has been completed for over 95 per cent of projects at 14 federal departments and agencies.

• The Economic Action Plan established the $1-billion Clean Energy Fund, including up to $150 million for clean energy research and development and $850 million for clean energy demonstration projects. To date, federal funding totalling over $610 million has been announced for specific projects under the fund.

• In addition, in response to unprecedented demand under the ecoENERGY Retrofit – Homes program, $205 million under the Clean Energy Fund has been allocated to finance up to 120,000 additional retrofits for Canadian homeowners.

Supporting Industries and Communities

• The Government is continuing to deliver support to vulnerable communities through initiatives such as the $1-billion Community Adjustment Fund. Approximately 80 per cent of the money available under the fund over two years has been committed and over 1,000 Community Adjustment Fund projects are now underway or completed.

• Of the $206 million available to the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) in 2009–10, $187 million has been committed to strategic investments to support job creation and economic growth in the region.

• The global economic downturn and the collapse in the U.S. housing market have created challenges for the forestry sector. Under the Economic Action Plan, Natural Resources Canada has fully committed $170 million allocated over two years.

• The Government has announced the creation of a $1-billion program to support environmental improvements for the pulp and paper industry. The Pulp and Paper Green Transformation Program will allow pulp and paper mills in all regions, particularly focused in British Columbia, Quebec and Ontario, to reduce greenhouse gas emissions while helping them become leaders in the production of renewable energy from biomass.

• The Government has provided support for 60 marquee festivals and events across Canada, such as the Royal Nova Scotia International Tattoo, the Montreal High Lights Festival, the Kitchener-Waterloo Oktoberfest, the Saskatoon Exhibition, and the Festival du Bois in Maillardville, Coquitlam, in order to attract visitors and create jobs in the tourism sector.

• The Government continues to receive and evaluate new industry and provincial/territorial proposals to add to those already in place under the multi-year Agricultural Flexibility Fund. To date, $219 million has been committed to multi-year initiatives. A total of $10 million is expected to be spent in 2009–10, and to date $52 million has been committed to be spent in 2010–11.

• The Economic Action Plan committed $200 million over two years to the Industrial Research Assistance Program to enable it to temporarily expand its initiatives for small and medium-sized enterprises. The National Research Council has committed the entire $100 million allocated in 2009–10 to help firms innovate and to hire new post-secondary graduates. In total, this funding has provided contributions to 1,200 small and medium-sized enterprises, helping maintain or create over 4,500 jobs, and has helped 460 post-secondary graduates find employment and gain invaluable experience.

• The Economic Action Plan has provided $175 million to the Canadian Coast Guard to purchase 98 new boats and to repair and refit 40 existing large vessels.

• In 2009-10, the Canada Cultural Spaces Fund committed $27 million of a total of $30 million in cultural infrastructure funding and committed $24 million of the 2010–11 allocation of $30 million, supporting 96 cultural infrastructure projects across Canada.

Improving Access to Financing and Strengthening Canada’s Financial Sector

• The Canadian financial system withstood the global financial crisis better than most. The global crisis, however, made it difficult for Canadian banks and other lenders to obtain funds from international markets at reasonable costs. To soften the impact of this crisis, Canada’s Economic Action Plan included measures to provide up to $200 billion to support lending to Canadian households and businesses through the Extraordinary Financing Framework.

• The Extraordinary Financing Framework measures, most of which are ending as credit conditions improve, included: the Insured Mortgage Purchase Program; a new 10-year maturity in the ongoing Canada Mortgage Bond program; the Canadian Secured Credit Facility; support for the Bank of Canada’s emergency liquidity measures; increased flexibilities and capacities for financial Crown corporations, including the introduction of the Business Credit Availability Program; and assurance facilities for banks and insurance companies. All of this support has been offered on a commercial basis to protect taxpayers.

• In Canada, total credit growth has shown signs of stabilizing. Overall, total credit growth in Canada remained stronger than in the U.S. through the third quarter due to significantly stronger Canadian household growth.

• The Business Credit Availability Program is continuing to help businesses find financing solutions to preserve jobs and fund growth. As of the end of January, Export Development Canada and the Business Development Bank of Canada reported total activity under the Business Credit Availability Program of about $5 billion, assisting almost 9,000 businesses. This achieves the target of at least $5 billion that was set out in Budget 2009.

• The Insured Mortgage Purchase Program will continue to make purchases of qualifying insured mortgages until the end of March 2010. This program has been successful in moderating the impact of the global financial crisis on credit conditions in Canada by providing funds to financial institutions that were then able to continue lending to businesses and consumers. To date, over $60 billion of term funding has been provided to banks and other lenders at a positive spread to the Government’s funding costs.

Source: “Budget 2010”