• Increased the amount of income that low-income Canadians can receive on a tax-free basis by $500.
• Eliminated the 3-per-cent general surtax for taxpayers with incomes up to about $50,000 and reduced the amount for those with incomes between $50,000 and $65,000.

• Extended the $500 increase in the amount of income that can be received on a tax-free basis to all Canadians, and increased it for all Canadians by an additional $175, for a total of $675.
• Eliminated the 3-per-cent general surtax for all remaining taxpayers for whom the surtax was not removed in the 1998 budget.

• Proposing to implement actions as outlined in the Five-Year Tax Reduction Plan (implementation date for various measures contained in text) including:

• Restoring full indexation of the tax system effective January 1, 2000.
• Reducing the middle tax rate from 26 per cent to 24 per cent.
• Eliminating the 5 per cent deficit reduction surtax for income up to about $85,000 and reducing the rate to 4 per cent.

• Proposing to reduce capital gains inclusion rate to two-thirds.
• Proposing to permit a rollover of capital gains on the disposition of qualified small business investments.
• Proposing to defer the income inclusion from exercising stock options until disposition.
• Proposing to reduce the general corporate income tax rate to 27 per cent from 28 per cent.
• Proposing to reduce the corporate tax rate on income between $200,000 and $300,000 earned by a CCPC from an active business to 21 per cent from 28 per cent

• Introduced new tax treatment of child support payments, with payments non-deductible for the payer and non-taxable for the recipient.
• Announced two-step enrichment of the Working Income Supplement (WIS) of the Child Tax Benefit (CTB) of $250 million.
• Replaced the seven-year limit by an unlimited carry-forward of unused registered retirement savings plan (RRSP) room.

• Announced a new Canada Child Tax Benefit (CCTB) by simplifying and enriching the current CTB, starting July 1998, with an $850-million supplement for low-income families.
• Enriched the WIS in July 1997 from the $125 million announced in the 1996 budget to $195 million and restructured from a per-family to a per-child basis.

• Increased the limits to $7,000/$4,000 under the child care expense deduction.
• Enriched the supplement under the CCTB by another $425 million on July 1, 1999 and a further $425 million on July 1, 2000.
• Removed contributions to RRSPs and registered pension plans (RPPs) from the base for the alternative minimum tax.

• Set the design for the $850-million increase in the CCTB supplement amount in the 1998 budget.
• Proposed to enrich the CCTB by $300 million in July 2000 to enhance benefits for modest- and middle-income families.
• Proposed to improve the responsiveness of the goods and services tax (GST) credit.
• Proposed to ensure that the maximum GST credit supplement is provided to low-income single-parent families.
• Proposed to allow greater flexibility to transfer RRSP proceeds to financially dependent children upon the death of the RRSP owner.

• Proposing to implement a number of changes to the CCTB:

• CCTB base benefit to increase by $70 per child July 2000 including indexation.
• NCB supplement to be increased by $200 per child July 2001 including indexation.

• Proposing to raise the foreign property limit to 25 per cent for 2000 and 30 per cent after 2000.

• Increased the amount used to establish the education credit from $80 to $100 per month.
• Raised the annual limit on the transfer of the tuition fee and education amounts to those who support students from $4,000 to $5,000.
• Increased the annual limit on contributions to registered education savings plans (RESPs) from $1,500 to $2,000, and the lifetime limit from $31,500 to $42,000.
• Broadened eligibility for the child care expense deduction to assist parents who undertake education or retraining.

• Doubled the amount used to establish the education credit over two years to $200 per month.
• Made ancillary fees, such as health services and athletics, eligible for the tuition credit.
• Allowed a carry-forward of unused tuition and education credits.
• Increased annual contribution limits for RESPs from $2,000 to $4,000.
• Allowed transfers of RESP funds to an RRSP or to the contributor.

• Provided a Canada Education Savings Grant of 20 per cent on annual contributions of up to $2,000, along with carry-forward flexibility.
• Introduced a tax credit for interest on student loans.
• Allowed RRSP withdrawals for lifelong learning.
• Enhanced tax support for part-time education through the education credit and the child care expense deduction.

• Proposing to increase the current partial annual exemption to $3,000 from $500 for scholarship, fellowship or bursary income.

• Lowered the threshold at which charitable donations begin to earn the 29-per-cent tax credit from $250 to $200.

• Removed the income limit for tax credits on donations of ecologically sensitive lands.

• Increased the limits on charitable donations eligible for tax credits from 20 per cent to 50 per cent of net income, and to 100 per cent of net income in the year of death and the preceding year.
• Expanded zero-rating of hospital beds to all health care facilities, including long-term care facilities.
• Allowed most charitable and public organizations to raise funds without collecting and remitting GST on sales.
• Extended GST relief on purchases of vehicle modifications necessary to serve individuals with disabilities.
• Provided a 100-per-cent GST rebate on books purchased by public libraries, educational institutions and other specified bodies.

• Reduced the inclusion rate on capital gains arising from the donation of publicly listed securities from 75 per cent to 37.5 per cent.
• Changed the income limit for donations to 75 per cent.
• Included 25 per cent of capital cost allowance (CCA) recapture in the net income limit.
• Sanctioned a new method of valuation for easements of ecologically sensitive lands.
• Increased resources for Revenue Canada to enhance information and compliance from charities.
• Simplified GST accounting, reporting and remittance requirements for charities.

• Increased tax-free allowances for emergency service volunteers.
• Allowed designated charities to treat certain services they supply to business customers as GST/harmonized sales tax (HST) taxable, thereby allowing charities to compete on an equal footing with other suppliers.
• Provided equivalent GST/HST treatment to charities operating authorized bottle return depots vis-à-vis commercial operators.

• Proposing to reduce tax on employment benefits in respect of donations of shares acquired through stock option plans to parallel treatment for donations of traded securities.
• Proposing to extend the charitable donations tax credit to donations of RRSP, RRIF and insurance proceeds that are made as a consequence of direct beneficiary designations.
• Proposing to reduce capital gains income inclusion by one-half in respect of gifts of ecologically sensitive land and related easements, covenants and servitudes.

• Expanded zero-rating of orthopaedic and orthotic devices under the GST.
• Enriched the tax credit for infirm dependants.

• Broadened the medical expense tax credit.
• Removed the limit on the attendant care deduction.
• Introduced a refundable medical expense credit for earners.
• Broadened the definition of preferred beneficiary for trusts benefiting people with disabilities.

• Introduced a new tax credit for caregivers who care for related seniors and persons with disabilities.
• Extended the Home Buyers’ Plan to persons with disabilities.
• Included training expenses for caregivers for the medical expense tax credit.
• Allowed certification for the disability tax credit by occupational therapists and psychologists.
• Exempted respite care services from the GST/HST.

• Proposed to expand the medical expense credit to provide enhanced tax assistance for persons with disabilities.

• Proposing to extend eligibility for the DTC to individuals requiring extensive therapy.
• Proposing to expand list of relatives to whom the DTC can be transferred.
• Providing an increase in credit of up to $500 for families caring for children eligible for the DTC.
• Proposing to increase the maximum child care expense deduction available in respect of persons eligible for the DTC to $10,000 from $7,000.
• Proposing to extend tax assistance for expenses relating to the costs of adapting a new home to the needs of a disabled person.
• Proposing to expand the attendant care deduction to include the cost of an attendant required in order to attend school.

• Eliminated the $100,000 lifetime capital gains exemption.
• Extended the base for the alternative minimum tax.
• Restricted the use of tax shelters.
• Extended the taxation of employer-paid life insurance premiums to the first $25,000 of coverage.
• Introduced income-testing of the age credit.

• Eliminated tax advantages available through trusts.
• Reduced the overcontribution allowance for RRSPs from $8,000 to $2,000.
• Capped the money purchase RPP and RRSP dollar limits at $13,500 through 2002 and 2003 respectively.
• Eliminated the retiring allowance rollovers for years of service after 1995.
• Eliminated double claims of personal credits in the year of personal bankruptcy.

• Announced new rules on taxpayer migration to ensure that gains that accrue while a taxpayer is a resident of Canada are subject to Canadian tax.
• Capped the maximum pension limit for defined benefit RPPs at $1,722 per year of service until 2005 (only affecting individuals earning over $75,000).
• Reduced the maximum age limit for deferring tax on savings in RRSPs and RPPs from age 71 to 69.
• Further constrained tax shelters relying on a mismatch of income and expenses.

• Allowed deductibility of health and dental premiums for the self-employed.
• Expanded the remote worksite concept.
• Clarified the tax treatment of relocation expenses.
• Strengthened the integrity of the certified cultural property regime.
• Expanded rules regarding employee options to allow the acquisition of units of mutual fund trusts.

• Proposed to prevent income splitting with minors.
• Proposed to address deficiencies in the rules governing the taxation of income earned through investments in foreign-based investment funds and transfers to non-resident trusts.
• Proposed special rules for the treatment of retroactive lump-sum payments.
• Proposed to provide more equitable treatment of income earned by communal organizations.

• Proposing to reduce the federal surtax on income not earned in a province from 52 per cent of basic federal tax to 48 per cent.
• Proposing the $1,000 deemed adjusted cost base and deemed proceeds of disposition for personal-use property not apply if the property is acquired as part of an arrangement in which the property is donated.

• Eliminated, for large private corporations, both the small business deduction and the enhanced scientific research and experimental development (SR&ED) benefits.
• Reduced the deduction for business meals and entertainment expenses from 80 per cent to 50 per cent to better reflect the personal consumption element of these expenditures.
• Increased the rate of tax on corporate dividends received by private investment corporations.
• Implemented measures to ensure that the income of financial institutions is measured appropriately for tax purposes.
• Eliminated the preference for sole-purpose SR&ED performers.
• Reduced regional investment tax credits.
• Modified the basis upon which insurance companies may claim reserves for income tax purposes.
• Ensured corporations cannot avoid paying tax when selling assets through "purchase butterfly" transactions.
• Tightened the rules applicable to foreign affiliates.
• Tightened the rules applicable on forgiveness of debt.

• Increased the large corporations tax (LCT) and corporate surtax.
• Introduced a temporary surcharge on banks and other large deposit-taking institutions.
• Eliminated the deferral of tax on unincorporated business income.
• Eliminated the deferral advantage for investment income earned by private holding companies.
• Replaced the film tax shelter mechanism for certified Canadian films with a tax credit.
• Tightened the rules relating to non-arm’s-length contract SR&ED.
• Introduced a voluntary measure for construction industry reporting.
• Tightened the rules concerning superficial losses.

• Extended the capital tax surcharge on large deposit-taking institutions.
• Reduced tax assistance for labour sponsored venture capital corporations (LSVCCs).
• Tightened the resource allowance rules.
• Repealed joint exploration corporation rules.
• Restricted eligibility of various expenses for flow-through share treatment.
• Enhanced incentives to invest in renewable energy.
• Limited SR&ED benefits for non-arm’s-length salaries and wages.

• Extended the capital tax surcharge on large deposit-taking institutions.
• Replaced tax shelters used to finance non-Canadian films with a tax credit.

• Extended the capital tax surcharge on large deposit-taking institutions.
• Allowed deductibility of countervailing duties and anti-dumping charges.
• Allowed more time for year-end distributions for mutual fund trusts.
• Harmonized financial institution designation for LCT and other purposes.
• Allowed an earthquake reserve deduction.
• Prevented unintended benefits under the SR&ED regime.
• Improved a range of international taxation rules.

• Proposed to extend the capital tax surcharge on large deposit-taking institutions.
• Proposed to ensure that electricity generating activities are taxed equitably.
• Proposed to clarify the tax status of non-resident funds that retain Canadian service providers.
• Proposed to update rules governing LSVCCs to ensure consistency with provincial programs, and address issues relating to corporate restructuring.
• Proposed improved capital cost allowances to encourage the productive use of flare gas.

• Proposing to modify the thin capitalization rules so that they work more effectively.
• Proposing to repeal the non-resident-owned investment corporation provisions.
• Proposing to treat provincial deductions for SR&ED that exceed the actual amount of the expenditure as government assistance.
• Proposing to treat weak currency borrowing as equivalent to a direct borrowing in the currency that is used by the taxpayer to earn income.
• Proposing to clarify foreign tax credit rules and rules regarding the deductibility of foreign exploration and development expenses.
• Proposing to extend M&P tax credit to corporations that produce, for sale, steam for uses other than the generation of electricity.
• Proposing adjustments to improve the CCA system for certain rail assets; M&P equipment; and certain electrical generating equipment, and heat/water production and distribution equipment.
• Proposing to further extend to October 31, 2001, the capital tax surcharge on large deposit-taking institutions. A review of the application of this surcharge is however underway and the results will be announced when the financial sector review legislation is tabled.

• Tightened the GST rules governing the claiming of input tax credits and rebates by large businesses and exempt entities.
• Reinforced the GST rules relating to trusts, estates and partnerships to ensure fair and consistent treatment of similar businesses that are organized differently.
• Refined the criteria for businesses to be treated for GST purposes as being in competition with financial institutions.
• Permitted warranty companies to recover GST paid on reimbursements to warranty holders.
• Extended the GST accommodation rebate for visitors to Canada to non-resident businesses.
• Expanded zero-rating and rebate provisions for exported goods and services.
• Tightened the GST real property rules to ensure that all builders of multiple-unit residential buildings are treated equitably.

• Enhanced the GST/HST Visitor Rebate Program.
• Enhanced the alternate collection mechanism for direct sellers.

• Proposed GST/HST rebate for Multi-Employer Pension Plans to provide comparable sales tax treatment relative to Single-Employer Pension Plans.

• Proposing to introduce a new export distribution centre program to relieve GST/HST cash-flow burden.
• Proposing to introduce a GST rebate, equal to 2.5 percentage points of tax, for newly-constructed, substantially renovated or converted residential rental accommodation not eligible for an existing rebate.
• Proposing to reduce the annual exemption from the excise tax on tobacco exports from 2.5 per cent to 1.5 per cent of production.

• Strengthened outreach and education programs.
• Enhanced easy-to-understand automatic telephone information systems.
• Met with special taxfiler groups such as senior citizens and immigrants to help them comply.
• Established a single Business Number for streamlining registration for GST remitters, employers, corporations and importers/exporters.
• Introduced a "Business Window" initiative to provide one-stop service for small businesses.
• Simplified payroll reporting for small businesses.
• Reduced compliance costs for small- and medium-sized businesses by co-ordinating GST, income tax and excise tax audits.
• Streamlined procedures to simplify and expedite Customs clearance.
• Implemented a new approach to large business audits including audit protocol.
• Reinforced measures to target the underground economy.
• Proposed earlier identification of abusive tax avoidance and tax shelter schemes.
• Continued to improve sophisticated risk models to identify areas of high risk and a sector approach to compliance for small- and medium-sized businesses.
• Introduced forgiveness of penalties on voluntary tax disclosures to encourage taxpayers to comply voluntarily.
• Included exchange of information provisions to help deal with tax havens.
• Proposed new rules requiring residents of Canada to file an information return when they own foreign assets in excess of $100,000 in value.
• Required adequate documentation of transactions relating to transfer pricing and introduced new penalty provisions related to Revenue Canada reassessments.
• Increased resources for Revenue Canada for transfer pricing audits.

• Introduced mandatory reporting of federal and construction contracts.

• Proposed to allow corporations to offset interest on corporate tax overpayments and underpayments.
• Proposed to provide for civil penalties for misrepresentations of tax matters by third parties.
• Proposed to improve tax administration by sharing limited information with provinces.
• Proposed measures that will reduce tobacco contraband.

• Proposing that the Minister of National Revenue be given authority to obtain judicial authorization, in certain circumstances, to take immediate action to protect GST revenues.
• Proposing to permit an official of the CCRA to provide relevant taxpayer information to the police for investigation purposes.
• Proposing to extend penalties under the Act to persons who hinder, molest or interfere with an official who is performing a collection duty.
• Proposing to allow Statistics Canada to provide taxpayer information to provincial statistical agencies solely for use in research and analysis.
• Proposing to allow individuals to offset interest on income tax overpayments and underpayments.