Monday, March 8, 2010
Canadian Finance Minister Jim Flaherty resisted the temptation to increase income tax or defer planned cuts in the rate of corporate tax in tabling the 2010 budget on March 4, announcing a deficit reduction package based largely on the removal of economic stimulus measures.
According to Flaherty, his 2010 “jobs and growth budget,” will be realized by achieving three key objectives:
Firstly, new stimulus measures, worth CAD19bn (USD18.4bn):
This is to be complemented by individual measures at municipal level, to the tune of a further CAD6bn, Flaherty explained.
The second feature of the government’s budget, as agreed with Canada’s opposition parties, will focus on improving the Canadian economy, harnessing innovation, and through this, protecting and creating jobs. Measures will include:
Lastly, the Budget commits to reigning in the country’s deficit, beginning when the economy is on a steady footing. This will include the removal of stimulus, currently being provided under the Economic Action Plan on a staggered basis; retrenchment through targeted spending reductions, worth CAD17.6bn over five years; and a comprehensive review of government administrative functions and overhead costs to identify additional savings and improve service delivery.
Flaherty underscored that the budget would not increase taxation at all, and major transfers for health care, education and pensioners would be sustained at current levels.
Flaherty projects that, as a result of the expiration of the Economic Action Plan and the measures in this Budget, the deficit is to decline by almost a half over the next two years to CAD27.6bn (USD26.7bn) in 2011–12; by two-thirds to CAD17.5bn (USD17bn) in 2012–13; and will be CAD1.8bn (USD1.75bn) in 2014–15.
The budget must receive approval by at least one of Canada’s opposition parties in order to be enacted.