The 1999 Budget: Building Today for a Better Tomorrow

The 1999 Budget continues the comprehensive plan for building a strong economy and a secure society that we have followed for five years. The plan has three fronts: 

• maintaining sound economic and fiscal management, 
• investing in key economic and social priorities and
• providing tax relief and tax fairness.

All of them work toward our overriding goal: increasing Canadians' standard of living and enhancing our quality of life.

Healthcare

Over the next five years, the provinces and territories will receive an additional $11.5 billion in transfers through the Canada Health and Social Transfer (CHST) -- with $6.5 billion of the total coming in next three years.

Under the recent federal-provincial-territorial health agreement, the provinces and territories have agreed to earmark all of this increase for health care -- and they have reaffirmed their support for the five principles of the Canada Health Act: universality, comprehensiveness, accessibility, portability, and public administration.

$8 billion will be provided through future increases in the CHST and an additional $3.5 billion as an immediate one-time supplement that the provinces will have the flexibility to draw down on according to their own needs and priorities.

The 1999 Budget also invests $1.4 billion over the remainder of this fiscal year and over the next three fiscal years to:

• enhance the quality, timelines and availability of health information;
• expand and integrate research and innovation in health care;
• improve health services provided to First Nations and Inuit; 
• and, continue exploring with the provinces innovative approaches to rural and community health care.

Knowledge and Innovation

The 1999 Budget builds on the Canadian Opportunities Strategy we outlined last year by investing more than $1.8 billion over the remainder of this fiscal year and the next three years in the creation, dissemination and commercialization of knowledge, and in support of employment.

Lower Taxes

Our 1999 Budget builds on measures outlined in the 1998 Budget -- providing an additional $7.7 billion in tax reductions over the next three years.

Combined with tax reductions identified last year, the 1999 Budget delivers $16.5 billion in tax relief over three years -- $3.9 billion in 1999-200, $6 billion in 2000-01, and $6.6 billion in 2001-02. And for the first time since 1965, not a single penny has been borrowed to pay for it.

Every Canadian taxpayer can now look forward to a tax cut -- and 600,000 lower-income Canadians will pay no federal tax at all.

Rock Solid Fiscal Discipline

In 1998-99 we will balance the books or better -- the first time since 1951-52 that the Government of Canada has been deficit-free for two consecutive years.

We are committed to further balanced budgets or better in both 1999-2000 and 2000-01. This will mark only the third time since Confederation that the Government of Canada has recorded four consecutive balanced budgets.

Thanks to continued strong economic growth and The Debt Repayment Plan we outlined in the 1998 Budget, Canada's debt-to GDP ratio is on a permanent downward path.

In 1995-96 when Canada's debt-to GDP ration reached it peak, 36 cents out of every federal revenue dollar went to paying interest in the debt. Last year that had fallen to 27 cents.

Last year the debt-to-GDP ratio saw its single largest decline since 1956-57 -- from 70.3% to 66.9%.

In 1998-99 it should fall to 65.3% and by 2000-01 it should be just under 62%.

The 1999 Budget