Hey there, time traveller!
This article was published 21/3/2013 (1192 days ago), so information in it may no longer be current.
OTTAWA -- Cynics might label it the "nothing to see here, move along" budget.
Manitoba Tory MP Shelly Glover says it's "pretty darn good with so many great initiatives that "it is pretty hard to find something to criticize."
Either way, Finance Minister Jim Flaherty's ninth budget introduces no new taxes or major spending cuts, focuses new spending mainly on renewing or extending existing programs and promises to pull the books back into the black in two years, no ifs, no ands, and no buts.
Although Flaherty's fiscal projections from a year ago proved to be far off the mark, thanks to global economic pressures, he insists Canada will have a surplus again before the next election.
"Before I proceed, I need to make one thing very clear," he said early in his budget speech in the House of Commons. "And it is simply this; Our government is committed to balancing the budget in 2015. Period."
Flaherty, who has consistently been unable to meet his deficit targets in recent years, is working on a razor-thin margin to achieve a modest $800-million surplus in 2015-16, which is just two budgets down the road. He acknowledged the government could have done more to aim for a higher surplus that year but he didn't feel the need.
"We can get there in 2015 with quite modest choices," Flaherty said at a news conference before delivering the budget speech. "We do not need to slash and burn."
A year ago he predicted the deficit for 2012-13 would be $21 billion, but after slower than expected economic growth and a hit from dropping oil prices, that has now jumped to $26 billion. The deficit for 2013-14, a year ago predicted to be $10 billion, will now be $18 billion, Flaherty said.
The Conservatives are eager to have a balanced budget by 2015 because voters will go to the polls again that year, and the government doesn't want to campaign on a deficit budget.
Flaherty stressed the government's discretionary spending -- the amount spent on operations and not including transfers to the provinces -- has flatlined in recent years. In fact, direct operating expenses are down $4 million in 2013-14.
Most of the government's spending hikes go to provincial transfers for health care, infrastructure and social programs.
Unlike last year, this budget doesn't make major cuts. Flaherty does hope to put $4 billion more into the government's wallet over the next five years by closing tax loopholes and going after tax cheats. The Canada Revenue Agency will be given new powers to get information from banks about financial transfers of more than $10,000 to overseas banks, and certain loopholes that allowed some to double dip on tax credits are being closed.
There were a few interesting new initiatives sprinkled within the documents, including cutting the price on sports equipment and baby clothes by eliminating import tariffs and encouraging young people to donate to charity with a new "super credit" for first-time donors.
But the three big platforms of the budget -- investments in manufacturing, a new infrastructure program and skilled job training promotion -- while large dollars on paper, are a jumble of extensions of existing programs and new programs still in development.
The New Canada Job Grant, referred to repeatedly in the budget documents as the "centrepiece" of this year's fiscal plan, won't even take effect until 2014-15 because Ottawa needs the private sector and the provinces to agree to participate, and kick in an equal amount of money.
Flaherty admitted he can't even guarantee businesses or provinces will get on board. He needs to renegotiate $500 million in labour market agreements with the provinces that expire next year. Glover said this is separate from the $1.9 billion Labour Market Development Agreements, which will remain in place.
Glover said she can't imagine either business or the provinces saying no to the new program.
"What province is going to turn down $300 million?" she asked.
The promised aid for Canada's battered manufacturing sector comes in the form of extensions of temporary tax credits Flaherty introduced in previous budgets. That includes a two-year extension of the accelerated capital cost allowance for new machinery and equipment. The program was to end in 2014 but will now be available until the end of 2015.
Flaherty also extended the temporary-hiring credit for small business, which allows small employers to reduce EI premiums up to $1,000.
Municipalities will be most interested in the renewal of the Building Canada Plan, which will fork over $47 billion in new money to provinces and municipalities for local and national infrastructure projects over the next decade. The money is a renewal of the existing Building Canada Plan, which began in 2007 and expires in 2014. There are no details available yet about Manitoba's share of the funding, though most of it will be doled out on a per capita basis, said Glover.
Nearly three-quarters of the funding for major infrastructure won't be available until the last five years of the program. Flaherty said that is because major projects don't need big cash up front as they deal with planning and environmental reviews, and the bigger sums for actual construction are not needed for several years.