FEDERAL BUDGET (May 2, 2006) HIGHLIGHTS effective for the 2006 and later taxation years

• $100 per month child care benefit for each child under the age of 6, effective July 1,2006, which will be taxed to the lower earning spouse or common-law partner
• Deduction for the cost of tradesperson's tools in excess of $1,OOO per year (for tools acquired on or after May 2, 2006), with a maximum deduction of $500 per year
• Textbook tax credit for post-secondary students
• Scholarship and bursary income will be completely tax-exempt
• Introduction of children's fitness tax credit, in respect of up to $500 of eligible fees for a qualifying physical activity program or spot for a child under 16, starting in 2007
• Carry forward period for business losses, farm losses, and investment tax credits, extended from 10 to 20 years, for amounts incurred or earned in taxation years ending after 2005
• Introduction of credit in respect of amounts paid for public transit passes for travel on or after July 1,2006 (passes must be for at least one month)
• Introduction of the Canada Employment Credit for employees