1991 Canadian federal budget

Budget of the Canadian Federal Government 1991 Canadian federal Budget '90 logo.svg 250 Canada 1990 Canadian federal budget 1990 1992 Canadian federal budget 1992 26 February 1991 34th Progressive Conservative Michael Wilson 126.086 billion 158.405 billion $32.319 billionCanada's deficits and surpluses, 1963-2014 http://www.cbc.ca/news2/interactives/canada-deficit/ CBC News CBC/Radio-Canada 25 April 2015 The Canadian federal budget for fiscal year 1991–92 was presented by Minister of Finance Michael Wilson in the House of Commons of Canada on 26 February 1991. 27 February 1991 La Presse http://numerique.banq.qc.ca/patrimoine/details/52327/2170925 live https://web.archive.org/web/20200625161335/http://numerique.banq.qc.ca/patrimoine/details/52327/2170925 2020-06-25 2020-06-17 numerique.banq.qc.ca Taxes The budget did not bring sweeping tax changes after the consequential 1987 Income tax reform and the introduction of the GST on January 1, 1991. Personal income taxes Minor changes focused on improving tax incentives to disabled individuals and included:The Budget 158-159 Increase to the Disability Tax Credit from $575 to $700 and indexation after the 1991 Fiscal year;S.C. 1991, c 49 s 90 Amendments to the medical expenses deduction rules to include previously non-deductible expenses (for instance part-time attendant care, trained service animals, incontinence products);The Budget 145S.C. 1991, c 49 s 89 Costs incurred by businesses to modify their premises to accommodate disabled persons are now fully deductible in the year of installation;The Budget 146 Changes to taxable benefits rules to exclude reasonable amounts provided for the transportation of disabled employees.S.C. 1991, c 49 s 2(5) Corporate income taxes The budget announced a restriction on the deductibility of provincial payroll and capital taxes.The Budget 150 ndeed, these taxes – unlike provincial corporate income taxes − were considered fully deductible expenses for federal income tax purposes. Several provinces (for instance, Ontario) raised their payroll taxes in the early 1990s to raise additional revenues. This, while minimizing impact on businesses that could partially offset the increase by claiming a federal tax deduction. These deductions were costing the federal government about $700 million per year.Ottawa acts to guard coffers against new provincial taxes Toronto Star February 27, 1991 Ottawa B3 en The budget laid out the following provisions:The Budget 151-152 A cap of $10,000 for the deductibility of provincial payroll and capital taxes; A 6% tax allowance for taxable income in excess of the $10,000 cap; The new measures are phased-in over 1992 and 1993 with full effect to take place on January 1, 1994:The Budget 152 In 1992 corporations are allowed to deduct 2/3 of provincial capital and payroll taxes and the lesser of 1/3 of the taxes paid or $10,000. The tax allowance is set at 2%; In 1993 they are allowed 1/3 of provincial taxes and the lesser of 2/3 of the taxes paid or $10,000. The tax allowance is set at 4%; In 1994 the lesser of the taxes paid or $10,000 is deductible and the allowance is set at 6%. The $10,000 limit would preserve deductibility for 80% of businesses (those with a payroll less than $750,000 a year) and the 6% tax allowance would ensure Ottawa would not collect additional taxes for the 20% remaining businesses if the payroll and capital taxes rate remain at their budget date level. Legislation to implement these measures was indefinitely delayed and they have never been in effect for capital taxes.Canada - Corporate - Other taxes https://taxsummaries.pwc.com/canada/corporate/other-taxes taxsummaries.pwc.com en-gb Excise taxes Effective February 27, 1991:The Budget 147 Excise tax on cigarettes is increased by 3%; Excise tax on cigares is increased from 40 to 65% of the price. Expenditures The budget announces that the Expenditure Control Plan unveiled in the previous budget is extended:The Budget 8-9 The 5%-growth ceiling for CAP payments to Ontario, Alberta and BC is extended for 3 additional years; Freeze on EPF per-capital entitlements extended throughout 1994-95 and capped at GDP growth minus 3% thereafter;Budget Implementation Act, 1991 s 2 Several programs are frozen (PUITTA, Telefilm Canada, loans financing by EDC); Previously announced projects are cancelled (contribution to the Toronto Ballet Opera House) or delayed (contribution to new concert halls in Edmonton and Montreal, cultural research institute in Montreal); Expenditures for the Green Plan are spread over 6 years instead of 5. Budget for 1991-92 is cut by 125 millions;1991-92 Estimates, Part I 11 Funds for the Canadian Job Strategy are reduced by 100 millions. Additional cuts amount to 1.2 billions in 1991-92 and 14.8 billions over five years.1991-92 Estimates, Part I 11 Aftermath Legislative history Provisions pertaining to federal transfers to provinces (EPF and PUITTA) and Unemployment Insurance were contained in the Budget Implementation Act, 1991 which received royal assent on 17 December 1991.Budget Implementation Act, 1991 It is the first time the Budget Implementation Act designation is used to designate a legislation brought forward to implement budget measures. Additional expenditure control measures are included in the Bill C-56 (named the Spending Control Act) which was read a third time and adopted by the House of Commons on 27 April 1992 in a 137–84 vote (with 12 paired votes) and received royal assent on 18 June 1992.Spending Control ActHouse of Commons Debates, 34th Parliament, 3rd Session, vol. 6, p. 492.House of Commons Debates, 34th Parliament, 3rd Session, vol. 8, p. 9748. No legislation was ultimately brought forward to restrict the deductibility of provincial payroll and capital taxes. Notes and references Notes References Budget documents The Budget 26 February 1991 Ottawa 3 November 2024 https://budget.canada.ca/archives/1991-plan-eng.pdf The Budget The Budget Speech 26 February 1991 Ottawa 3 November 2024 https://budget.canada.ca/archives/1991-sd-eng.pdf The Budget Speech The Budget in Brief 26 February 1991 Ottawa 3 November 2024 https://budget.canada.ca/archives/1991-brf-eng.pdf The Budget Speech Main estimates 1991-92 Estimates Part I — The Government Expenditure Plan 1991 Supply and Services Canada Ottawa 0-660-56383-5 https://archive.org/details/micro_IA40242802_1127/mode/1up 6 February 2026 1991-92 Estimates, Part I Enacted legislations An Act to amend the Income Tax Act, the Canada Pension Plan, the Cultural Property Export and Import Act, the Income Tax Conventions Interpretation Act, the Tax Court of Canada Act, the Unemployment Insurance Act, the Canada-Newfoundland Atlantic Accord Implementation Act, the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and certain related Acts S.C. 1991 49 https://archive.org/details/actsofparl1991v03cana/page/n15/mode/2up S.C. 1991, c 49 Budget Implementation Act, 1991 S.C. 1991 51 https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v014_n008_t000_000_19920224_p00000.pdf Budget Implementation Act, 1991 Spending Control Act S.C. 1992 19 https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v015_n002_t000_000_19920821_p00000.pdf#page=36 Spending Control Act 1991 Category:1991 government budgets Category:1991 in Canadian politics Budget, 1991 Budget, 1991 Category:February 1991 in North America