Tuesday, May 02, 2006

Canadian Federal Budget Includes Modest Benefits to Seniors and Families with Disabled Children

Today's budget included an increase in the amount seniors can claim under the pension income credit from $1000 to $2000.

I liked what Finance Minister Jim Flaherty said about helping families with children with disabilities:

• Canadians value compassion, respect and inclusiveness. In support of those values, effective July 1st, this government is increasing the maximum annual Child Disability Benefit from $2,044 to $2,300.
• We are also extending this benefit so that more families can qualify.
• We are increasing the maximum amount of the refundable medical expense supplement to $1,000 from $767 for the 2006 taxation year. This supplement improves work incentives for Canadians with disabilities by helping to offset the loss of coverage for medical and disability-related expenses under social assistance when recipients move into the labour force.

Also Mr. Speaker, parents and grandparents of a child with severe disabilities face an important consideration. They need to find a way to secure their child’s long-term financial security when they are no longer able to provide support.
• This government will appoint a small group of experts to examine ways we can help to ease this concern.

On the big ticket tax cuts, this budget represents a triumph of politics over good economics and social policy. The one percent cut in the Goods and Services Tax is politically popular--and no, I am not giving my share of this back. But, the government is increasing taxes on the lowest tax bracket from 15% to 15.5%. The previous Liberal government's cut from 16% to 15% gave all taxpayers an income tax cut, but assisted low income earners the most. A cut in income tax provides greater incentives to work and invest than the cut in consumption taxes. That's my two cents plus GST worth on this topic.

You can read the budget speech here.

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