1996 Canadian federal budget
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 | |
| Presented | 6 March 1996 |
|---|---|
| Parliament | 35th |
| Party | Liberal |
| Finance minister | Paul Martin |
| Total revenue | 149.889 billion [1] |
| Total expenditures | 158.608 billion [1] |
| Deficit | $8.719 billion[1] |
|
‹ 1995 1997› | |
The Canadian federal budget for fiscal year 1996–97 was presented by Minister of Finance Paul Martin in the House of Commons of Canada on 6 March 1996.[2] It is the first Canadian federal budget that was identified with an unofficial subtitle: Securing the Future.[a]
Personal income taxes
Incentives for investments in Labour-sponsored venture capital corporation (LSVCCs) are tightened:[3][4]
- The tax credit rate is cut to 15% from 20% ;
- The maximum yearly credit is cut from $1,000 to $525 ;
- Minimum holding periods to benefit from the LSVCCs credit is increased from 5 to 8 years.
The budget proposes to remove the 7-year limit on the carry-forward of unused RRSP room. Limits for RRSP contributions are frozen until 2003 and legislated through 2005,[5] and the age limit for contributions is to be reduced from 71 to 69.[3]
The maximum amount of the Working Income Supplement (WIS) was increased to $750 in July 1997 and $1,000 in July 1998.[6]
Child Support Payments tax treatment
Child support payments prescribed by court orders or agreements made after 30 April 1997 will no longer be deductible for the payer and included in the income of the recipient. Most payments made under agreements made before 1 May 1997 are not affected (under certain conditions). Spousal support payments are not affected by the change.[7][8] The measure is hailed by the Official Opposition.[9]
Student Assistance Measures
The budget announced several enhancements to measures assisting higher-education students:[10]
- The Education Tax Credit was increased by 25% (from $80 to $100 per month);
- The limit on the amount of the Tuition Tax Credit that can be transferred if unused is raised from $680 to $850;
- RESP annual contribution limit is raised from $1,500 to $2,000 and the lifetime limit from $31,500 to $42,000;
- Single parents studying full-time will be allowed to claim the child care expenses deduction against any type of income. Full-time attendance in high school will also be recognized.
Corporate taxes
The budget extends the capital surtax[b] on banks by a year (until 31 October 1997) and life insurance companies by 3 years (until the end of 1998).[11][12]