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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.

Either way, the total will be capped to make sure a have-not province does not end up with more cash than a have-province.

The provinces will also receive more funding for education and social services, with post-secondary education to receive an $800-million boost in 2008-09.

Mr. Flaherty said the budget should "end the bickering" between provinces over the issue.

"We've arrived at a solution. It's expensive ... [but] it had to be done once," he said.

When asked why he had not taken up the option to pass a slice of the GST back to cities, Mr. Flaherty told a press conference that it was time for provinces to address their own needs, including the pressure of funding major cities.

"The day of governments with their hands out to other governments has passed. It is time for governments to be self-reliant," he said.

"By restoring the fiscal imbalance, the provinces can concentrate on what their constitutional responsibilities are."

In health, any province that guarantees treatment within a certain time frame within five key medical areas — cancer care, heart care, cataract surgery, joint replacement and diagnostic imaging -- will share in a one-time $612-million pot this year.

Provinces that meet their guarantees will be entitled to $10-million plus their per capital share of an additional $500-million. The three northern territories will share the remaining $12-million.

The funds, which are being placed in a trust, can be spent any way that the province or territory chooses. But the commitment to honour the guarantee must be made before the end of this month.

Women will also gain from a $300-million vaccination program against the human papilloma virus, considered a precursor to cervical cancer, and Status of Women Canada will receive $10-million a year.

In higher education, the budget pledged $800-million in new money — a 40 per cent boost — but that will only flow to provinces after Ottawa has had a chance to discuss how it will be used and what accountability measures need to be put in place.

And five special centres will be established to help Canadian Forces members and families deal with stress, at a cost of $10-million a year. A further $19-million this budget and $20-million a year thereafter will be used to create a Veterans' Ombudsman.

Broad-brush tax cuts were conspicuously absent when compared to last year's financial plan, accounting for about 40 per cent of spending over three years in this budget compared to about 75 per cent in 2006/07

But business still has plenty to chew on. The manufacturing sector will have a two-year window to write off new equipment.

And the focus of the accelerated capital cost allowance (ACCA) will move from oil sands developments to green technology: Investment in renewable energy sources will gain the accelerated tax break for equipment acquired before 2020.

Cars are also in the ecological spotlight. Fuel-efficient cars will get a rebate, while a green levy will be slapped onto inefficient vehicles, payable by the manufacturer or importer.

That means a car that uses 5.5 litres or less for each 100 kilometres will gain a $2,000 rebate, while a car that uses 16 litres or more per 100 kilometres will pay a $4,000 levy.

In a number of other moves:

Companies will receive a tax incentive for donating pharmaceuticals to developing countries.

Public transport tax credits will be extended to include electronic fare cards and weekly passes.

The duty-free threshold for shoppers spending 48-hours out of the country will rise to $400 from $200.

Long-haul truck drivers will be able to claim 80 per cent of their meal expenses, up from the current 50 per cent.

A National Trust will be established, modelled on the British program of the same name, to protect land, buildings and national treasures.