Ottowa Announces C$7 Billion In Tax Relief To Cities

by Mike Godfrey, Tax-News.com, Washington

04 February 2004

The Canadian government announced on Monday that it intends to provide cities with C$7 billion (US$5.2 billion) in tax relief over the next decade, whilst also pledging not to “spend itself into deficit.”

Commenting on the pronouncement, Finance Minster Ralph Goodale explained that the GST rebate will be worth between C$500 million and C$600 million in the first year. “This is a very significant beginning on a new relationship," he observed.

"The government of Canada is unalterably committed to fiscal prudence, as evidenced by annual balanced budgets and steady reduction in the debt relative to the size of the economy," added a government policy statement, outlining its priorities for the new parliament.

Prime Minister Paul Martin has also committed the government to carry through $4.4 billion in corporate tax cuts whilst pledging $2 billion in extra funding for provincial healthcare.

The Federal government has been in surplus for each of the last six fiscal years, and will this year deliver a somewhat reduced surplus of C$2.3 billion.

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