1992 Canadian federal budget

Budget of the Canadian federal government Budget of the Canadian Federal Government 1992 Canada 1991 Canadian federal budget 1991 1993 Canadian federal budget 1993 25 February 1992 34th Progressive Conservative Don Mazankowski 124.486 billion 163.505 billion $39.019 billionCanada's deficits and surpluses, 1963-2014 http://www.cbc.ca/news2/interactives/canada-deficit/ CBC News CBC/Radio-Canada 25 April 2015 The 1992 Canadian budget was a Canadian federal budget for the Government of Canada presented by Minister of Finance Don Mazankowski in the House of Commons of Canada on 25 February 1992. It was the fourth budget after the 1988 Canadian federal election. It is the first budget presented by Don Mazankowski. Background The budget is presented amid poor economic conditions and soaring federal deficit. Taxes The 1992 budget introduced significant changes to both personal and corporate income tax systems. Personal income taxes Reduction in the personal surtax rate: the general personal surtax rate is lowered by 1 percentage point (to 4%) on 1 July 1992 and another (to 3%) on 1 January 1993.Effective surtax rate is 4.5% for fiscal year 1992.Budget Papers 69S.C. 1993, c 24 s 103 Introduction of the Home buyers' plan (HBP): the budget created the HBP to allow individuals to withdraw up to $20,000 from their RRSPs to finance the purchase of a principal residence, repayable over 15 years.The measure was initially limited to proceeds received before 2 March 1993 for housing bought before 1 October 1993; subsequent budgets will expand the measure indefinitely which rendered both deadlines ineffective.Budget Papers 69, 142-143S.C. 1993, c 24 s 83 Creation of the Child Tax Benefit (CTB): starting January 1993 the CTB replaced family allowances, the child credit and the refundable child credit. The initial CTB amount is set at $1,020 with a Working Income Supplement of up to $500 for low-income working families.Budget Papers 136 Increase of the child care expense deduction: the maximum deduction is increased by $1,000;Maximum deduction reaches $5,000 per child under 7 (or eligible to the Disability Tax Credit) and $3,000 in any other case.Budget Papers 136S.C. 1993, c 24 s 23 The increase in the RRSP and RPP limits is delayed by a year.Budget Papers 94S.C. 1993, c 24 s 85(1) Improvements to the National Labour-sponsored venture capital corporation Tax Credit: the maximum yearly credit amount, set at $700 since 1985, is increased to $1,000 starting in fiscal year 1992. Income Tax Budget Amendments Act, 1996 S.C. 1997 25 37(7) https://www.parl.ca/Content/Bills/352/Government/C-92/C-92_4/C-92_4.pdf#page=68 Investments rules for the program are also relaxed.Budget Papers 158 Corporate income taxes The budget reduces taxes imposed on corporations by $2 billions over the 1992-1993 to 1996-1997 period. The budget specifically provides relief to the manufacturing and processing industries that have been seriously affected by the recession.Jannard Maurice La fiscalité des entreprises est réduite de deux milliards http://numerique.banq.qc.ca/patrimoine/details/52327/2173184 La Presse 26 February 1992 Montréal A4 fr Reduction in the manufacturing and processing tax rate: phased-in two steps, 22% on 1 January 1993 (down from 23%) and 21% on 1 January 1994;Achieved through a phased-in increase to the manufacturing and processing profit deduction listed in s 125.1 of the Income Tax Act.Budget Papers 68S.C. 1993, c 24 s 64 Faster depreciation for selected equipment: the CCA deduction rate for eligible manufacturing and processing machinery and equipment is increased from 25 to 30%.Budget Papers 68 Other taxes The withholding tax on direct dividends is reduced to 5% from 25%.Budget Papers 68 Expenditures Expenditure Control Plan The Expenditure Control Plan announced in the 1990 budget and extended in 1991 is continued and broadened in the 1992 budget:Budget Papers 70-711992-93 Estimates, Part I 12 The Prime MinisterBudget Implementation (fiscal measures) Act, 1992 s 14(1) and all cabinet ministersBudget Implementation (fiscal measures) Act, 1992 ss 14(2), 15 took a 5% pay cut on 1 April 1992; Departments' budget were further cut by 3% between 1992-93 and 1996-97 and spending reductions of $170 millions in 1992-93 alone were imposed; Federal departments' communication budgets were cut by $75 millions; Defence spending was cut by $258 millions in 1992-93 over previously planned levels, with cumulative cuts of $2.2 billions over the 1992-93 to 1996-97 period; Growth in spending on social housing by the CMHC was capped at 3% yearly until 1996-97, amounting to 27 millions in cuts for 1992-93; Other management initiatives are announced: 24 federal agencies are abolished or merged; 13 ministerial advising bodies are abolished or merged; New travel guidelines were introduced to reduce costs. Reactions The budget garnered mixed reaction from columnist Jean-Paul Gagné from Les Affaires who pointed out that the budget was unextraordinary but contained some interesting measures (reduction in the income surtax, no increase in the GST rate, Home Buyers' Plan).Gagné Jean-Paul Le premier budget de Maz le magicien 7 March 1992 6 fr Opposition The Liberal leader of the Official Opposition in Ottawa Jean Chrétien, and the NDP leader Audrey McLaughlin, criticized the budget for its lack of measures to fight unemployment. The Bloc Québécois leader Lucien Bouchard pointed out the budget was a proof that the federal government was at the end of its rope.The Canadian Press Rien pour contrer le chômage: la récession va durer longtemps, disent les chefs de parti 26 February 1992 La Presse B1 http://numerique.banq.qc.ca/patrimoine/details/52327/2173185 Business community and labour unions The budget was well received by the business community and especially real-estate and construction actors.Gilbert Mario Dansereau Suzanne Le milieu des affaires est satisfait du budget, les syndicats ne le sont pas http://numerique.banq.qc.ca/patrimoine/details/52327/2173185 19 June 2020 La Presse Montréal B1 fr The value of the Canadian dollar increased by 0.39 cents with respect to the United States dollar in the foreign exchange market the day after the budget speech. The TSX 300 index gained 35.52 points while the Montreal Stock Exchange index gained 19.39 points.Beauregard Valérie Le budget dope le dollar http://numerique.banq.qc.ca/patrimoine/details/52327/2173193 19 June 2020 La Presse 27 February 1992 Montréal D1 fr Quebec's labour unions (CSN, CEQ and FTQ) were disappointed by the budget pointing out the lack of measures to fight unemployment and poverty and the lack of new infrastructure projects. The unions also criticized the abolition of the Economic Council of Canada. Provinces Quebec's finance minister, Gérard D. Levesque, received the budget favourably talking about a step in the right direction in that it did not reduce transfers to provinces.Lessard Denis Québec accueille favorablement le budget, le PQ le juge " cosmétique " http://numerique.banq.qc.ca/patrimoine/details/52327/2173184 19 June 2020 La Presse 26 February 1992 Montréal A3 fr The PQ, the Official Opposition in Quebec, on the other hand decried the budget as cosmetic and not going far enough to fight unemployment although some tax relief measures (and especially the reduction in the personal surtax) were applauded. Ontario's NDP Finance minister Floyd Laughren also criticized the lack of measures to fight unemployment. Aftermath Legislative history The Child Tax Benefit was scheduled to enter into force on 1 January 1993S.C. 1992, c 48 s 12(2) and was included in a separate bill which received royal assent on 15 October 1992.S.C. 1992, c 48 Dissolution of some abolished crown corporation and other public bodies was included in bill C-63 which received royal assent on 15 February 1993.S.C. 1993, c 1 Some minor changes announced in the budget (notably amendments to the Canada Student Loans Act and pay cuts for the Prime Minister and federal ministers) were included in the Budget Implementation (fiscal measures) Act, 1992 which received royal assent more than a year after the budget speech, on 2 April 1993.Budget Implementation (fiscal measures) Act, 1992 Most significant tax measures of the budget were included in bill C-24 which received royal assent on 10 June 1993.S.C. 1993, c 24 Notes and references Notes note References Budget documents Budget Papers 1992 25 February 1992 Ottawa https://budget.canada.ca/archives/1992-pap-eng.pdf 9 February 2026 en Budget Papers Main estimates 1992-93 Estimates Part I — The Government Expenditure Plan 1992 Supply and Services Canada Ottawa 0-660-57324-5 https://archive.org/details/micro_IA40243511_2760/mode/1up 6 February 2026 1992-93 Estimates, Part I Enacted legislations An Act to amend the Income Tax Act, to enact the Children's Special Allowances Act, to amend certain other Acts in consequence thereof and to repeal the Family Allowances Act S.C. 1992 48 https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v015_n004_t000_000_19921218_p00000.pdf S.C. 1992, c 48 An Act to dissolve or terminate certain corporations and other bodies S.C. 1993 1 https://archive.org/details/actsofparl1993v01cana/page/n21/mode/2up S.C. 1993, c 1 Budget Implementation (fiscal measures) Act, 1992 S.C. 1993 12 https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v016_n001_t000_000_19930510_p00000.pdf#page=159 Budget Implementation (fiscal measures) Act, 1992 An Act to amend the Income Tax Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and certain related Acts S.C. 1993 24 https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v016_n003_t000_000_19930803_p00000.pdf#page=5 S.C. 1993, c 24 1992 Category:1992 government budgets Category:1992 in Canadian politics Budget, 1992 Budget, 1992 Category:February 1992 in North America