Finance Canada
Budget 2000 - Budget Plan, Chapter 1: Introduction and Overview -  2
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Making Canada’s Economy More Innovative

This budget proposes initiatives totalling $4.1 billion between 1999-2000 and 2002-03 to promote leading-edge research and innovation in universities, research hospitals and the private sector; to develop new environmental technologies and improve environmental practices; and to strengthen federal, provincial and municipal infrastructure.

Investing in Innovation, Knowledge and Skills

The budget builds on the Canadian Opportunities Strategy introduced in the 1998 budget and expanded in the 1999 budget. It:

• provides $900 million over five years to establish and sustain 2,000 new university research chairs across Canada;
• provides a further $900 million to the Canada Foundation for Innovation, bringing the Government’s total investment in the Foundation to $1.9 billion;
• invests $160 million in Genome Canada to advance the study of genes and biotechnology, especially their application to priority areas like health;
• invests $90 million over three years for federal departments and agencies that regulate biotechnology products and processes; and
• increases the tax exemption for income from scholarships, fellowships and bursaries to $3,000 from $500.

Promoting Environmental Technologies and Practices

• The Government will allocate $700 million between 1999-2000 and 2002-03 to develop new environmental technologies and improved practices in co-operation with provinces, municipalities, the private sector and non-governmental organizations.
• The budget proposals include a renewed Climate Change Action Fund, the Sustainable Development Technology Fund, a new Canadian Foundation for Climate and Atmospheric Sciences, new municipal-based initiatives for clean air and water, a National Strategy on Species at Risk and the Great Lakes Action Plan.

Strengthening Federal, Provincial and Municipal Infrastructure

• The federal government will renew its own infrastructure and work with other orders of government and the private sector to reach an agreement by the end of 2000 on a multi-year plan to improve provincial highways and municipal infrastructure in cities and rural communities across Canada.

Improving the Quality of Life of Canadians and Their Children

Increased Support for Post-Secondary Education and Health Care

• Canada Health and Social Transfer (CHST) payments will be increased by $2.5 billion to help the provinces and territories fund post-secondary education and health care.
• This is the fourth consecutive federal enhancement to the CHST. They can draw upon this new funding to meet the most pressing needs in universities and hospitals, or at any time over the next four years, as they see fit.
• Starting in 2000-01, CHST cash will reach $15.5 billion – a 25-per-cent increase over the last two years.
• Total CHST (cash and tax transfers combined) will reach an all-time high of almost $31 billion in 2000-01.

Support for Families With Children

• The Canada Child Tax Benefit will be increased by $2.5 billion a year by 2004, bringing to more than $9 billion its annual support for low- and middle-income families with children. This will mean a maximum benefit of $2,400 for a family’s first child and $2,200 for a second child.
• The duration of employment insurance maternity and parental leave will double to 12 months, giving new parents the opportunity to spend more time with their newborn or newly adopted children.
• The federal government reiterates its invitation from last fall’s Speech from the Throne to provincial and territorial governments to reach an agreement by December 2000 on an action plan to support early childhood development.

Assistance for Canadians With Disabilities

• Building on previous budget measures, the federal government will extend support and implement additional tax initiatives to expand opportunities for persons with disabilities and help them deal with medical and care-related costs.

Summary of Spending and Tax Actions

Table 1.1 presents the fiscal outlook to 2001-02, taking into account all of the spending and tax measures announced since the 1999 budget.

Table 1.2 presents the fiscal impact of the spending and tax initiatives announced in this budget, Table 1.3 presents the fiscal impact of the measures announced before the budget while Table 1.4 shows the total fiscal impact of the spending and tax measures proposed since the 1999 budget. The cost of these proposed spending and tax actions amounts to $6.2 billion in 1999-2000, $7.7 billion in 2000-01, $12.0 billion in 2001-02 and $14.6 billion in 2002-03.

During the four years from 1999-2000 to 2002-03, the cost of the spending and tax actions proposed since the 1999 budget will amount to $40.4 billion (Table 1.4).

Of this amount, $16.8 billion is for spending initiatives. This includes $2.5 billion for the CHST; $4.1 billion for research, innovation, environmental initiatives and infrastructure; and $1.7 billion for economic adjustments, primarily further farm assistance.

The tax relief measures legislated through this budget, including the assumed reductions in employment insurance premiums, amount to $23.6 billion over this fiscal year and the following three years.

Table 1.1
Summary Statement of Transactions: The Two-Year Planning Horizon

Table 1.2
Spending and Tax Initiatives Announced in the 2000 Budget

Table 1.3
Spending and Tax Initiatives Announced Before the 2000 Budget

Table 1.4
Summary: Spending and Tax Initiatives Since the 1999 Budget

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