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Conservative budget offers families tax relief

Published May 7, 2006

"Overtaxed" Canadians got some relief with a $20-billion tax break over two years in the first budget of the new Conservative government.

The biggest winners were parents with preschoolers as Prime Minister Stephen Harper's family-friendly spending plan handed out assorted cash credits. They included a $100-a-month allowance for each child under the age of 6.

Finance Minister Jim Flaherty, who noted that "Canadians pay too much in tax," said there will be a 1 percent cut in the federal Goods and Services Tax, now at 7 percent, effective July 1.

A new "employment credit" totaling an extra $155 for working Canadians begins next year.

The budget will cut the corporate income tax rate to 19 percent from 21 percent by 2010, and eliminated capital tax this year and the corporate surtax in 2008. The 12 percent small business tax rate drops to 11 percent by 2009.

There are tax credits for textbooks, transit passes, tools and youth sport-fitness fees ,but the lowest income-tax rate will rise by 0.5 percent to 15.5 percent on July 1.

The government is spending billions more for policing, border security, the military, agriculture, highways and infrastructure, the provinces, native reserves and pandemic preparedness.

Prison sentence, trial in sponsorship scandal

Montreal advertising executive Jean Brault, who admitted defrauding the federal government of $1.6-million in the "sponsorship scandal," was sentenced to 30 months in prison.

Investigators said his company, Groupaction, performed little or no work on government contracts aimed at promoting Canadian unity in Quebec.

Meanwhile, a trial has begun for Chuck Guite, who administered the former unity program for the previous Liberal government. He is accused of defrauding the government of $1.5-million in advertising contracts.

Also, lawyers for former Prime Minister Jean Chretien have asked the Federal Court to release e-mails and secret submissions to the sponsorship inquiry that could prove bias and unfairness by Judge John Gomery.

News in brief

nMargaret Trudeau, former wife of late Prime Minister Pierre Trudeau, said she has suffered from bipolar depression for years and is urging fellow sufferers to seek treatment. She said the condition led to the erosion of her two marriages and she sought treatment only after the deaths of her son, Michel, in an avalanche 1998 and Pierre in 2000.

nThe Supreme Court of Canada ruled unanimously that homeowners who host parties, unlike bar owners, bear no responsibility for guests who drink and drive. The court was considering the case of Zoe Childs, 25, who was left a paraplegic by a drunken driver. She was seeking to sue the Ottawa driver and his hosts for $6-million.

nFormer Defense Minister John McCallum said he isn't entering the Liberal leadership race and will support Michael Ignatieff's bid instead. Vancouver member of Parliament Hedy Fry became the 12th person to join the race to succeed former prime minister Paul Martin.

Facts and figures

Canada's high-flying "loonie" (the nickname of the $1 coin with an image of a loon) is moving closer to parity with the U.S. dollar after more than 30 years.

The dollar was 90.35 cents U.S. on Friday while the U.S. dollar dropped to $1.1068 in Canadian funds, before bank exchange fees.

There was an increase of 0.1 percent in Canada's jobless rate to 6.4 percent in April, a 31-year low.

The Bank of Canada's key interest rate is unchanged at 4 percent while the prime lending rate is 5.75 percent.

Stock markets are higher, with the Toronto composite index at 12,244 points and the Canadian Venture Exchange 3,160 points.

Lotto 6-49: (Wednesday) 1, 17, 24, 29, 34 and 46; bonus 27. (April 29) 4, 29, 35, 40, 43 and 45; bonus 9.

Regional briefs

nA trial date of Nov. 1 was set for Michael White, of Edmonton, who is accused of second-degree murder in the death of his pregnant wife. White was arrested in July after the body of his wife, Liana - originally from Kelowna, British Columbia - was found in a ditch.

nAn agreement will give Quebec a greater role on the international stage with a semi-formal presence at a United Nations agency. Calling it a major breakthrough for federalism, Prime Minister Harper and Quebec Premier Jean Charest said the province would have an official representative within the Canadian UNESCO office in Paris.

Jim Fox can be reached at

[Last modified May 7, 2006, 06:58:06]

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