Federal budget 2008

February 26, 2008
Government of Canada Federal Budget

(CBC News) Flaherty delivers ‘prudence’ in 2008 budget
Budget thin on major initiatives
Finance Minister Jim Flaherty brought down a budget Tuesday that was short on big spending pledges but one he called “prudent” while facing the prospect of a slowing economy.
“Some would have us go down the path to higher spending, higher interest payments and higher taxes, perhaps even an increase in the GST,” Flaherty said in the prepared text of his address for the budget, which was tabled in the House of Commons in Ottawa.
With economic growth expected to come in at around 1.7 per cent for 2008, the government’s coffers are projected to become less bountiful. From a $10.2-billion surplus for the 2007-08 fiscal year, which will go to pay down debt, the government sees sharply smaller surpluses of $2.3 billion for 2008-09, and $1.3 billion the year after that.
With Stephen Harper’s Conservatives in a minority situation, the future of the government hinges on its ability to win support among the opposition parties for its spending plans.
Budget Highlights

Flaherty unveils new tax-free savings plans
$5,000 annual contribution limit on new accounts
Finance Minister Jim Flaherty used his latest budget to unveil plans for new Tax-free Savings Accounts (TFSA), which will debut in 2009.
The accounts will allow Canadians 18 and older to invest up to $5,000 annually, and carry forward unused contribution room. There will be no lifetime contribution limit.
Unlike an RRSP, contributions to the new accounts will not be tax-deductible, but there will be no tax on investment income, including capital gains.

Cities, transit groups praise budget
Montreal, Toronto, Vancouver to benefit from $500-million fund
Municipality and transit associations applauded the Conservative government’s $500-million boost for public transit in Tuesday’s budget, calling the extra money a pleasant surprise.
BUT
Cities must wait years for new infrastructure funding

New Crown corporation to build public-private partnerships
Municipalities struggling with the costs of roads, bridges and public transit didn’t get the cash injection they were seeking: most new infrastructure spending in the 2008 budget won’t reach them for years.
Finance Minister Jim Flaherty announced that the federal Gas Tax Fund, which is currently only runs to 2014, would become permanent.

Budget seen as disappointing for tech, science
Outside of research into genomes and nuclear energy and the correction of various tax issues, the federal government’s budget is being seen as a bust for the science and technology sectors.

Budget far from green, environmentalists say
Government cuts $2,000 rebate for fuel-efficient cars
Environmentalists panned the federal budget on Tuesday, saying it offers very little that will help Canada curb pollution and cut back on greenhouse gas emissions.
Finance Minister Jim Flaherty didn’t even mention the word ‘climate change’ when he tabled the budget.
The budget axes a federal program that offered a $2,000 rebate to consumers who bought fuel-efficient vehicles. The program, which was announced with much fanfare in last year’s budget, will come to an end March 31, 2009, with vehicles built after 2008 ineligible for a rebate.
The budget also, as expected, makes no mention of carbon taxes.
The budget did offer some environmental perks, including $250 million to support the development of fuel-efficient cars.”This will help preserve the environment,” Flaherty said in his budget speech. “It will also help preserve and create high-quality jobs.”
Other environmental aspects of the budget include:

  • $500 million for public transit projects.
  • $250 million for projects to capture and store the carbon dioxide produced by industry so that the gas isn’t released into the atmosphere.
  • $300 million to support nuclear energy.
  • $21 million for law-enforcement officers to crack down on pollution in national parks.

The government is also promising to introduce industrial targets this spring for large emitters

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