APPENDIX A
List of recommendations

1. The Committee recommends that the Government of Canada continue to use prudent economic assumptions in the formulation of the budget.

2. The Committee recommends that assumptions about both short- and long-term interest rates continue to be set 50 to 100 basis points higher than the private sector average. The Minister should alter the prudence factor as circumstances warrant.

3. The Committee recommends that the government continue to employ a Contingency Reserve, which should be set at $3 billion per year. As at present, the Contingency Reserve should not be used to fund either increased program spending or tax cuts.

4. The Committee recommends that the government continue to use two-year planning horizons for the conduct of fiscal policy.

5. The Committee recommends that the government take steps to accelerate the downward trend in the net debt-to-GDP ratio and not rely solely upon growth in the economy. The unneeded portion of the Contingency Reserve should be applied to debt reduction.

6. The Committee recommends that the federal government establish a long-term target for a sustainable debt-to-GDP ratio.

7. The Committee recommends that the federal government establish an interim debt-to-GDP target range of 50% to 60%, to be achieved in this mandate.

8. The Committee recommends that any new spending initiatives be subject to the rigorous and detailed test of the principles of Program Review and that the results of that review be published at the time any new program is announced.

9. The Committee recommends that a comprehensive strategy for productivity enhancement be undertaken by the government and that a Productivity Covenant be established against which all federal initiatives would be judged.

10. The Committee recommends that the temporary 3% surtax be completely eliminated in the next budget.

11. The Committee recommends that the government announce a timetable for the elimination of the 5% surtax, starting with a 1-percentage-point decrease in 1999.

12. The Committee recommends that the 1998 budget measures, that increased the basic personal amount and spousal amount by $500 for lower-income taxpayers be increased by a further $200, bringing to $700 the amount of additional income that can be earned tax free.

13. The Committee further recommends that this $700 increase in the basic personal and spousal amount be available to all Canadian taxpayers.

14. The Committee recommends that the government reduce EI premiums by a minimum of 10 cents per $100 of insurable earnings.

15. The Committee recommends that the government reintroduce indexation when the fiscal situation permits, in the meantime measures should be taken to offset the impact of de-indexation.

16. The Committee recommends that the 20% Foreign Property Rule be increased in 2% increments to 30% over a five-year period. This diversification will allow Canadians to achieve higher returns on their retirement savings and reduce their exposure to risk, which will benefit all Canadians when they retire.

17. The Committee recommends that the federal government strengthen its involvement in the health care system by further increasing the cash floor by $1 billion starting in 1999-2000. If the cash floor is raised by $1 billion, the 1999-2000 total entitlements will increase by 6.3% as a result when compared to 1998-99 ($27.6 billion compared to $25.97 billion). Provinces will have received another $4 billion extra by 2002-03. Total CHST entitlement will reach $29.5 billion in 2002-2003.

18. The Committee recommends that the federal government provide adequate funding for the proposed Canadian Institute of Health Research.

19. The Committee recommends that federal government funding for health research be doubled. This target should be achieved within five years. The recommendations pertaining to the MRC, the CIHR and the Access to Quality Health Care Project would all be part of this total budget.

20. The Committee recommends that the annual federal government funding level of the Networks of Centres of Excellence Program be raised so that more high-quality research proposals be financially supported.

21. The Committee recommends, as it did last year, that the federal government increase its financial support of the Technology Partnerships Canada so that more strategic, targeted interventions in high-growth sectors, where Canadian firms can become world leaders, can be made.

22. The Committee recommends that the government enhance its financial support for federal government science, in particular the work of the NRC.

23. The Committee believes it is crucial that the effects of past changes to the tax treatment of charitable donations be evaluated. The Department of Finance should collect all the data needed to conduct such a review, and commence the evaluation as soon as possible.

24. The Committee therefore recommends that the Department of Finance eliminate the excise tax on jewellery.

25. The Committee is comforted by Revenue Canada's initiatives and encourages the government to favour sustainable management practices in this important forestry sector via an appropriate tax treatment of woodlot operators.

26. The Committee therefore continues to recommend that the government consider the introduction of income averaging for those forms of income that fluctuate substantially from year to year.

27. The Committee continues to recommend that the government provide targeted tax relief for all those who must bear large expenses as a condition of employment, such as is the case with mechanics' tools.

28. While the Committee is greatly encouraged by the establishment of earthquake reserves, it still recommends that the government continue working with the insurance industry to determine the tax treatment of earthquake reserves.