The 2006 Federal Budget overwhelmingly focused in the area of personal income tax relief, including the anticipated 1% reduction in the GST to 6% effective July 1, 2006; offered to sustain commitments to existing infrastructure programs, and identifi
Fiscal Imbalance

The Budget has identified restoration of the fiscal balance for the Canadian Federation as a priority.  Extensive consultations will be conducted on a budget companion document, and a First Ministers’ Meeting held in the Fall, with funding and legislation to implement proposed actions in 2007.    


The Budget committed to continued funding for existing infrastructure programs, including a total of $16.5 billion in infrastructure initiatives, including:

  • $5.5 billion in new funding for the Highways and Border Infrastructure Fund, the Municipal Rural Infrastructure Fund, the Canada Strategic Infrastructure Fund, the Public Transit Capital Trust, and the Pacific Gateway Initiative;
  • Maintenance of the $3.9 billion in current funding under existing infrastructure initiatives; and,
  • Maintenance of the $7.1 billion in existing support allocated via the current gas tax funding commitment within the New Deal for Cities and Communities, and the ongoing rebate of the full GST paid by municipalities.


The Budget identified several public transit initiatives, including:
  • Up to $1.3 billion to support transit capital investments, which includes $351.5 million for Ontario;
  • A total of $370 million toward implementing a tax credit for the cost of transit passes; and, 
  • $2 billion over the next five years to develop a Climate Change program.

Child Care

The Budget did not reinstate the previous federal government’s commitment to national early learning and child care initiatives under the Early Learning and Child Care Initiative; instead offering families with children under the age of 6 years a benefit of $100 per month/per child for a total of $1200 per annum – an investment of $3.7 billion over two years.  

This Government also announced an intention to invest in creating child care spaces with a $250 million investment, effective 2007, to work with governments, businesses and community organizations to develop a plan to create these spaces. 


The Budget cited a commitment to allocate: 
  • up to $800 million for a one-time investment to increase the supply of affordable housing through a new Affordable Housing Trust, which includes $312.3 million for Ontario; and,
  • a one-time investment of $300 million to increase the affordable housing supply in Canada’s northern territories. 
AMO will be working hard with the support of its members to help the Federal Government and Premier McGuinty fulfill commitments to address fiscal fairness, and for real progress toward enhancing the fiscal sustainability of our communities through an upload of provincial health and social services costs from the property tax base.  

AMO will continue to advocate on the on-going concerns about child care spaces, emergency services planning and other municipal priorities that contribute toward strong and prosperous communities.