Federal Budget 2012

Written by  //  March 30, 2012  //  Canada, Public Policy  //  No comments

Federal budget highlights
Federal Finance Minister Jim Flaherty has delivered a deficit-cutting budget in the House of Commons. Here is a look at some of its key details and measures:
Savings of $5.2 billion a year by 2015.
19,200 federal public sector jobs cut over three years.
Return to surplus by 2015 (an election year). 2012-13 deficit at $21.1 billion.
Penny to be discontinued this fall (it still holds value for spending).
Age of eligibility for Old Age Security rises gradually to 67 from 65 starting in 2023 — but does not affect anyone 54 or older as of March 31, 2012.
One review for major resource development projects, capped at 24 months, including current projects like the Northern Gateway pipeline.
Governor General to pay income taxes as of 2013 — but he’ll get a raise.
No significant tax changes for individuals.
Duty-free cross-border shopping limits rise this summer to $200 for 24-hour trips and $800 for trips of 48 hours or more.
Canada will continue with International Space Station mission to 2020.
Government to clear backlog in federal skilled worker program by removing some applicants and refunding their fees. They can reapply under new criteria.
Public servants to pay more into pensions under a 50/50 formula.
Retirement age for federal public servants rises to 65 from 60 for people hired in 2013.
A First Nations education act and $275 million to build and renovate schools on reserve, and renewal of the Urban Aboriginal Strategy.
CBC funding cut by 10 per cent over three years, with annual $60-million programming top-up rolled into base funding.
Canadian Forces regular force strength remains at 68,000. Reserves stay at 27,000.
Canada to review participation in some international organizations.
Katimavik program for youth will be eliminated.
Government will sell some official residences abroad and downsize others.
Atlantic investment tax credit phased out.

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Advocates slam Katimavik budget cuts
(Ottawa Citizen) A program that was lauded by the United Nations, modelled by other countries and designed to teach leadership and community awareness to young Canadians was a victim of Thursday’s budget cuts.
Katimavik, a Trudeau-era program, annually selects 1,100 young Canadians between the ages of 17 and 21 and sends them to diverse regions of Canada to volunteer with community-based organizations.
While many programs offer similar objectives, what differentiates Katimavik is that participants commit themselves to six-month terms, giving them a much deeper understanding of the region that they work within.
29 March
NDP issues two English-language press releases on federal budget: one for Canada, and one for Quebec
(Yahoo! News) The New Democrats did a very peculiar thing on Thursday afternoon.
Canada’s official opposition party issued two English-language press releases about the Harper government’s budget: one was for Canadians, and the other was for Quebecers.
The one for ‘Canadians’ was titled “Conservative budget slashes health care, pensions,” and starts like this: “NDP Leader Thomas Mulcair today slammed Stephen Harper’s Conservatives for introducing a budget that recklessly cuts the vital services that Canadians rely on—such as Old Age Security and health care.”
The second one is titled “The Conservative budget: no relief for Quebecers.”
Canada cuts size of flagship tech credit
(Reuters) Canada’s Conservative government plans to downsize its flagship tax credit for business research and development while allocating C$400 million ($400 million) in new cash for the creation of venture capital funds for high-tech startups.
The measures, contained in the federal budget on Thursday, are part of Prime Minister Stephen Harper’s plan to overhaul the country’s generous but labyrinthine system for business research and development in a bid to reverse its lagging performance and engender more companies like Blackberry maker Research in Motion.
Federal budget 2012: Conservatives to cut 19,000 public service jobs
(Toronto Star) Tough times are coming as budget announces layoffs, salary cuts, smaller workspaces and raises the age of retirement by five years.
Budget: Environmental reviews to be limited, simplified
(Canada.com) The federal government is overhauling its environmental review process for natural resource projects, announcing in Thursday’s budget it will implement defined timelines, hand over some reviews to the provinces and dedicate fewer resources to examining small projects.
In a move sure to rankle some environmental groups, the Harper government said it will soon introduce legislation aimed at having “one project, one review” in a defined time period.
Mike De Souza: Budget targets environmental critics
OTTAWA — Finance Minister Jim Flaherty’s budget takes aim at the federal government’s environmental critics, while reducing its own internal resources for promoting sustainable development.
The budget tabled Thursday proposes a few environmental protection measures. In contrast, it contains an $8-million plan to crack down on conservation groups, while maintaining the status quo on substantial tax incentives for the oil and gas sector.
The budget also proposes to eliminate a key federal advisory panel on business and environmental issues … The National Round Table on the Environment and the Economy, originally established in the 1990s to advise the prime minister, regularly produced reports that challenged the business and environmental policies of the government, particularly regarding climate change.
The proposed crackdown on charities would add new resources to the Canada Revenue Agency to monitor and restrict environmental groups from sending out emails to supporters and other activities that are considered to be political in nature.
Tories target lagging innovation with funding overhaul
The Prime Minister and Finance Minister Jim Flaherty laid out a major shift Thursday in how the federal government funds business research and development – one that will dole out more grants and fewer tax refunds – in a bid to tackle chronically lagging R&D investment. … The new innovation initiatives include a near-doubling of the National Research Council’s Industrial Research Assistance Program, which doles out cash and advice to R&D projects mainly by smaller businesses. The government is putting an extra $110-million a year into the program.
The government is also giving the NRC, which runs a network of specialized labs across the country, a one-time injection of $67-million to help it concentrate on “business-driven, industry-relevant applied research” and away from the pure research that made the 96-year-old institution famous.
28 March
The politics of austerity
(CBC) … national or provincial budgets are not the same as spending by households. … Government spending is quite different. Money spent on teachers, say, or social services, or road building, does not disappear from the economy. A little may leak out of the country as foreign holidays or foreign built machinery, but since Canada sells more that it buys from the world, that’s not really a problem. It stays and circulates, being taxed and re-taxed as if flows through the economy.
… If we really wanted to accept the Puritan kind of austerity, accept it as a society, share its hardship and take a good Rolfing, there is a kind of austerity that only governments can impose — with the stroke of a pen. That is the cold shower, the bitter medicine, of an across-the-board one-time tax increase to wipe out the debt. Such a sharp short shock, followed by a sharp rebound could well be better economic solution than years of painful contraction.

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