The New Budget 2010



By: ORIT ALON  
Published: March 5th 2010


Jim Flaherty, Minister of Finance, reads Budget 2010
Pic: PMO

The Honourable Jim Flaherty, Minister of Finance, tabled a budget plan yesterday that builds on Canada’s economic recovery with action to create jobs and growth, sustains our nation’s economic advantages and includes a disciplined plan to return to balanced budgets. “We present today a jobs and growth budget,” said Minister Flaherty. “In this budget, we are completing our Economic Action Plan to create jobs now. We are taking additional measures to protect existing jobs and create new jobs. We are also looking ahead to secure our long-term economic growth.”

 

Budget 2010 will help solidify Canada’s economic recovery and sustain our economic advantage now and for the future. The budget plan has three key objectives. First, it confirms $19 billion in new federal stimulus under Year 2 of Canada’s Economic Action Plan to create and protect jobs. This new stimulus will be complemented by $6 billion from provinces, territories, municipalities and other partners. Second, it invests in a limited number of new, targeted initiatives to build jobs and growth for the economy of tomorrow, harness Canadian innovation, and make Canada a destination of choice for new business investment. Third, it outlines a three-point plan for returning to budget balance once the economy has recovered - follow through with the exit strategy built into the Economic Action Plan, restrain spending through targeted reductions, undertake a comprehensive review of government administrative functions and overhead costs to identify additional savings and improve service delivery. Administrative and program savings in departments will make up the largest share of the budget's restraint measures at $8.1-billion, followed by $4.5-billion in foreign aid, $2.5-billion from National Defence and $2.5-billion by closing tax loopholes.

 

Critics say the strategy is both unworkable and too optimistic, with little margin for error. "The proposition Harper and Flaherty are putting to Canadians is that limiting the ambitions of future governments is the price to pay to avoid cutting transfers to the provinces or raising taxes," said Chantal Hebert.

 

The main concern is about not raising taxes or cutting major transfers for health care, education and pensioners. As a result of the expiration of the Economic Action Plan and the measures in this budget, the deficit is projected to decline by almost half over the next two years to $27.6 billion in 2011–12, and by two-thirds to $17.5 billion in 2012–13. In 2014–15, the deficit is projected to be $1.8 billion.

 

“Canada’s history shows what a free people served by good government can accomplish together,” said Minister Flaherty. “We are at a key moment in that history, as we emerge from the global recession. Our government means to be a partner in Canada’s recovery, not an obstacle to its growth.”




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