The Piece-of-the-Puzzle Budget

This same-day response to the 1998 federal Budget argues that Canada’s poor – who suffered most from cuts to social programs during the anti-deficit campaign – have first claim on the soon-to-be-rising fiscal dividend. The Budget contains some promising, though in one major case flawed, measures to help low- and modest-income Canadians. The second $850 million installment on the National Child Benefit was announced, which will permit increases to the new Canada Child Tax Benefit (which will begin in July of this year); however, Caledon cautions Ottawa to invest further in child benefits for low-income families at this formative stage of the new child benefit system rather than to improve benefits for non-poor families, as a matter of priority. The Budget offers welcome but inadequate income tax relief in the form of a $500 increase to the basic personal credit and spousal and equivalent-to-married credits for low-income taxfilers, as well as an end to the three percent general surtax for low- and middle-income taxpayers. The Achilles heel of the $500 supplement is that it is not fully indexed, and does not fully make up for ten years’ worth of partial deindexation. Caledon’s response to the Budget also comments on: the issue of paying down the debt, the increase in the child care expense deduction, the Canadian Opportunities Strategy (a package of measures designed to increase access to education, lifelong education, upgrading and continual skills development, the centerpiece being the Canada Millennium Scholarships Fund), measures for Aboriginal Canadians and for persons with disabilities, medicare and home care.

ISBN – 1-894159-01-2