Suburban voters are the major winners in the 2007 federal budget unveiled today, which featured a grab-bag of measures aimed at middle Canada and which appears headed for approval in the Commons.
While the Liberals and the NDP immediately decried Finance Minister Jim Flaherty's second budget, the Bloc Québécois gave it a provisional nod, thanks to hefty new payments promised to Quebec.
The budget had been considered a potential election trigger, but the minority Conservatives used targeted spending and tax cuts to fend off a snap vote.
Indeed, Mr. Flaherty's budget is stuffed with spending and tax breaks aimed mostly at voters in suburban ridings that the Tories will have to take in order to win a majority government.
Families will receive a $2,000 tax credit for each child, which will result in a maximum tax benefit of $310 per child; pensioners gain the expected income-splitting provisions; a special tax incentive will help working poor climb over the "welfare wall;" health-care gets a one-time funding boost to meet wait-time guarantees; and post-secondary education funding will rise 40 per cent.
New standards are meant to ensure that all First Nations residents have access to safe drinking water. Soldiers will get danger pay if assigned to a field unit that is on deployment or capable of being deployed.
Overall, spending comes in at $233.4-billion, with revenue at $236.7-billion.
"We made a choice. We chose to support hard-working families," Mr. Flaherty told the Commons as he presented the budget this afternoon.
A tax break on capital expenditure for manufacturing will be a "shot of adrenalin" for forestry, automotive and other industries, particularly in Ontario and Quebec, he said.
Meanwhile, changes to the accelerated capital cost allowance (ACCA) — which allows oil sands developments to write off expenditures at a faster rate — will be pulled back and redirected to green technologies.
"By creating a climate of hope and opportunity, Canada can be an example to the world of what a truly prosperous and compassionate country can be," Mr. Flaherty said.
Mr. Flaherty says he wants Canada to be seen as "a shining beacon in what can be a dark world."
Bloc Québécois Leader Gilles Duceppe said his party will vote for the budget, even though he has some concerns, because it adequately addresses the so-called fiscal imbalance. The Bloc's support virtually ensures passage and lessens the possibility of a spring election.
But other opposition parties were less impressed.
Liberal Leader Stéphane Dion immediately denounced it as "a bad budget." He said the Conservatives are simply restoring some of the money they cut previously in the areas of childcare, health care, provincial transfers and the environment.
"I've never seen a government do so little with so much," he said.
NDP Leader Jack Layton agreed.
"As this budget stands, what will happen is that the prosperity gap in Canada is going to continue to widen. This is a series of steps backward ... It looks like the kitchen table got a few crumbs and the boardroom table got big corporate tax cuts."
Two-thirds of new spending goes to resolving the so-called fiscal imbalance, Mr. Flaherty said. The remainder is split, with two-thirds of it going to tax reduction and the final third on program spending.
"Today, Mr. Speaker, we take historic action to restore fiscal balance in our country," Mr. Flaherty said in the Commons as he presented his budget.
"The long, tiring, unproductive era of bickering between the provincial and federal governments is over."
In a move that pays heed to the O'Brien report's advice to include a portion of oil revenues in the formula, provinces and territories will now have a choice on the payment formula.
They can either continue with the current formula, or opt to include 50 per cent of natural resource revenues in the equation.
