There are a number of measures aimed at students and on education and training. For example, exam fees would be eligible for the existing tuition tax credit.
The federal government is taking advantage of a rebounding economy to offer a wide range of small but strategic goodies in its 2011 budget delivered Tuesday. Laying out what he called a "low-tax plan for jobs and growth," Finance Minister Jim Flaherty told the House of Commons the Conservative government's sixth budget will help secure Canada's economic recovery.
The budget contains no tax increases and keeps the government on track to eliminate the deficit by 2015-16. As Flaherty and Prime Minister Stephen Harper had warned, there is little in the way of major new spending programs -- such as the two-year, $60-billion federal stimulus program that has come to an end -- but contains a multitude of small measures designed to appeal to a wide range of Canadians and maybe to the opposition parties.
According to the finance minister, Canada's economy is performing well but the global situation is still fragile and the Conservative budget aims to strike a balance with that in mind.
"Fundamentally, we stay the course. We stay on track, we make sure we get back to a balanced budget, to protect our country and Canadians going forward," Flaherty said during a press conference ahead of his budget speech in the Commons. "We want to be in good shape when the next crisis comes, just as we were in good shape when the last crisis came," he said, referring to the 2008 recession.
Spending measures needed
Flaherty said the targeted spending measures in the budget are fundamental to the government's economic recovery plan, which it calls "the next phase" of its Economic Action Plan.
"We have to be targeted in what we do. The Canadian experience with large untargeted social programs has been large bureaucracies, excessive costs, excessive spending and higher taxation," Flaherty said.
The budget includes more money for low-income seniors, a return of the ecoEnergy Home Retrofit program and measures to attract doctors and nurses to rural areas, all demanded by the NDP, and money for caregivers looking after disabled family members, a nod to the Liberals.
But the measures don't add up to a lot. The budget includes about $2.3 billion of new spending - at one per cent, the lowest increase in years. The spending equals the unexpected growth in revenues and some cost savings, leaving the projected deficit unchanged. Cost savings will come partly by closing some tax loopholes, which Flaherty said will not make the richest Canadians happy, and by launching more strateigc reviews of government departments.
By 2015-16, Canada will have a surplus of $4.2 billion, according to the government's plan.
Some observers called the budget "a dog's breakfast" because of all of the small measures in it. "There seems to be something for everybody," said Scott Clark, a former deputy finance minister in the late 1990s. "If there's an election, this is their platform," he said, adding that he views it as a "purely political budget."
As expected, the budget is silent on the Bloc Quebecois' key demand of $2.2 billion for Quebec to compensate for the HST and the corporate tax cuts scheduled for this year and next stand despite Liberal demands to roll them back to last year's rate.
There are no personal income tax cuts in the budget but Flaherty says the Conservative government is helping individiuals, workers and families through a range of other measures that help Canadians save money and he said this year's budget directs money to people who need help the most.
It includes a top-up for the poorest one-third of seniors receiving the Guaranteed Income Supplement, amounting to $600 a year for singles and $840 for couples.
Three years after it was promised in the 2008 campaign, the budget includes a Children's Arts Tax Credit that would allow parents to claim 15 per cent of registration costs for eligible arts and culture programs for children under 16 years old. The tax credit is non-refundable and can only be claimed on expenses up to $500.
Caregiver tax credit
The government is also promising to introduce a Family Caregiver Tax Credit -- a 15 per cent non-refundable tax credit on an amount of $2,000. The measure is aimed at approximately 500,000 Canadians who look after family members who are infirm and it would start in 2012.
Giving a nod to rural Canadians, the budget includes a tax credit for volunteer firefighters. Again, it's worth 15 per cent of an amount of $3,000, for firefighters who perform at least 200 hours of service per year. The fine print on this measure, however, says that firefighers who currently get a tax emeption on honoraria for their services must choose between that tax exemption, and the tax credit. They can't take advantage of both measures.
While there are a number of measures to appeal to rural Canada, cities were not left out of this year's budget. The Gas Tax Fund, which provides $2 billion per year for infrastructure, would be enshrined in law, the budget proposes, to provide greater certainty to cities and provinces that the funding will continue to flow.
For older Canadians, eliminating the mandatory retirement age of 65 for federally regulated employees and a $10 million investment over two years for New Horizons for Seniors in support of projects that raise awareness about elder abuse are included in the budget.
There are a number of measures aimed at students and on education and training. For example, exam fees would be eligible for the existing tuition tax credit.
With the 2011 budget now tabled, it is up to the opposition parties to decide if there is enough in it to warrant their support, or, trigger an election by voting against it. The Conservatives need at least one opposition party to side with them in order to stay in power.
"We don't want an election," Flaherty told reporters Tuesday. He denied that the budget was crafted with the opposition parties' demands in mind. "The idea is not to craft a package that suits party A, party B, party C," said Flaherty. "It's a good budget for Canadians."
No comments:
Post a Comment