Madam Speaker, I am splitting my time with the hon. member for Ahuntsic, the Parliamentary Secretary to the Minister of Social Development.
Supporting low income and modest income families is a priority for the government. We have delivered on our commitment in a number of ways through different instruments, including tax relief and, more specifically, by providing access to additional funds to help offset the costs of raising their children in a safe and supportive environment.
The government recognizes the important contributions that parents make to society. Parenting, as many members know, is never easy. I have five children, and frankly, I find that being Parliamentary Secretary to the Minister of Finance is a cakewalk compared to parenting five children.
It is particularly difficult if one is from a low income or modest income family, because of course money is always then an issue. On behalf of the government and other members of the Commons, let me begin by acknowledging these challenges and sacrifices of low income and modest income families on behalf of their children in order to provide a nurturing environment in which they can be raised despite their financial constraints, which are for many a constant struggle.
I would also be remiss if I did not remind members of the steps the government has taken to help low income and modest income families raise happy and healthy children. These measures are designed to offset the costs incurred by having children and to recognize the financial status of the families themselves. More important, these measures put money back in the hands of people who need it most, and I think that is a significant distinction. The help we have tried to provide is targeted to people who need the most help so that they can create safer and more nurturing environments for their children.
As hon. members will recall, the 2004 budget reaffirmed this enduring commitment by announcing a number of measures to help Canadian parents with their responsibilities. For instance, we accelerated the implementation of the multilateral framework agreement on early learning and child care. We introduced a new Canada learning bond. We enhanced the Canada education savings grant, matching rates for low income and middle income families. These measures are designed to help families through every stage of a child's development.
Members will also recall what was done prior to the most recent budget. In the year 2000, we introduced a five year tax reduction plan. I would draw the House's attention to the fact that in the five year plan of $100 billion in total, three-quarters of that was directed to benefits for individuals, with the most relief going to low income and modest income families with children. In 2004-05 the government's tax reduction plan will have reduced personal income taxes by 21% on average. Families with children benefit even more with an average tax savings in the order of 27%.
May I also remind the House that under this plan, families with children also benefited from reduced tax rates for all income levels, the elimination of the deficit reduction surtax, and the restoration of the full indexation of the personal income tax system, which protected families against automatic increases and erosion of benefits caused by inflation. The first number of measures were specifically targeted to people with low and modest incomes; the latter number applies to all tax filers.
The plan also included significant enrichments of the Canada child tax benefit, possibly the most significant initiative of this government in quite a number of years. It is to these changes that I would like to draw members' attention specifically.
The Canada child tax benefit, CCTB, is the main vehicle through which the government achieves its commitment to generally assist families with costs associated with raising children. It is a non-taxable amount paid monthly to help eligible families with the cost of raising children under the age of 18.
Since its inception this program has been significantly enriched. For example, the 2000 budget and the 2000 economic statement and budget update enriched the CCTB by an additional $2.6 billion. The CCTB enhancements under the five year tax reduction plan continue to benefit families with children, with the final steps implemented in July 2004.
These include increasing the family net income threshold at which the national child benefit supplement, the NCB supplement, is fully phased out and the CCTB benefit begins to be phased out, and reducing the phase-out rate of the base benefit of the CCTB. Taken together, these measures will ensure that more Canadians will receive CCTB benefits.
The 2003 budget went even further and announced further substantial increases in the NCB supplement by annual amounts of $150 per child in July 2003, $185 in July 2005, and $185 in July 2006. These enrichments translate into an increase of $965 million per year in the NCB supplement of the CCTB by 2007.
Currently the CCTB provides $9.1 billion annually in assistance to 3.5 million families, roughly 10% of the population, with annual benefits of up to $2,719 for the first child, $2,503 for the second child, and $2,507 for each additional child. In fact, I would say it goes to probably more than 10% of the population of Canada.
With these increases, together with full indexation restored under the five year tax reduction plan, the minimum CCTB benefit is projected to reach $3,243 for a first child, $3,016 for a second, and $3,020 for each additional child, by July 2007. Overall assistance to families with children through CCTB is projected to reach $10 billion annually, an increase of over 100% since 1996. So from 1996 to 2007, we will see a 100% increase in the benefit.
From an individual family's point of view, this means that over the same period the maximum annual benefit for a first child under CCTB will have more than doubled from $1,520 to $3,243. That is $1,723 more per year to help cover the costs associated with raising a child.
I would also like to add that the 2003 budget created a new child disability benefit. This benefit is paid for children qualifying for the disability tax credit, with the full $1,653 per child benefit being paid to all families receiving the national child benefit supplement who have a qualifying child. The measure is expected to benefit 40,000 low income and modest income families and will represent an investment of $50 million per year.
Given these initiatives, there could be no clearer evidence than this of the high priority the government attaches to families with children. The growth in the CCTB is a clear example of the government's efforts to put money in the hands of families of low and modest incomes.
Let me conclude by saying the Government of Canada continues to work diligently on ways to support families of low and modest incomes. The government's record on tax relief for families with children is solid. From the perspective of government, strong arguments can be made that assisting families is not only the right thing to do but the smart thing to do.
The fact of the matter is that it is also an area in which this government has created a number of initiatives, many of which have been very well received by Canadians. The government can be counted on to continue its support for low income and modest income families and expand and improve the multitude of supports like the CCTB that we have already put in place.