Finance Minister Ralph Goodale tabled the first minority government budget since 1979 Wednesday, delivering a package of spending and tax relief aimed squarely at appeasing the opposition and assuring Canadians campaign promises haven't been forgotten.
The document, Mr. Goodale's second since taking the post, vows money for defence, the environment and cities alongside measures Ottawa promises will ease the tax burden for the Canadian taxpayer.
"Canadians will expect us to take major steps to deliver on our commitments," Mr. Goodale said, presenting the five-year spending plan in the House of Commons.
"And that's exactly what this budget does."
In total, Wednesday's plan — the eighth straight balanced budget - outlines new spending of $42-billion over five years, and projects an underlying $4-billion surplus for 2005-2006.
The spending outline also factors in $11-billion in savings from Ottawa's expenditure review program, with the bulk of that cash — roughly 89 per cent -- coming from "improved efficiencies" in government operations.
Central to the plan is $12.8-billion over five years for defence spending, $5-billion during the same period for climate change and environmental protection and a continued vow of a "new deal" for Canadian municipalities.
For the taxpayer, Mr. Goodale has proposed raising the tax-exemption level on Canadians incomes to $10,000 by 2009, eliminating the 30-per-cent foreign property limit on pensions and registered retirement savings plans and boosting the guaranteed income supplement for seniors by a total of $2.7-billion over five years.
"Behind all the words and numbers in this budget are decisions that reflect directions set and commitments made," Mr. Goodale said.
"And taken together they help share the course of our national journey."
Paul Martin's Liberal government came in to Wednesday's budget as the first minority government since 1979 to walk a tightrope between fiscal prudence and the need to keep the opposition at bay.
The last time — when Joe Clark's Conservative minority offered up a tough-measures budget, including a gas tax — the opposition balked, triggering an election. This time, the Conservative opposition has suggested that it would be loath to send Canadians back to the polls so soon after last June's vote unless Mr. Goodale's budget was "pretty bad."
Addressing Parliament, Mr. Goodale — who took the unusual step of consulting critics as he prepared the document -- made a veiled mention of the opposition's impact on shaping Wednesday's budget and the rancor that followed October's Throne Speech, specifically demands from the Conservatives for tax breaks for Canadians.
"I am announcing today a set of new measures that will provide further relief to tax payers — especially low-and-most income Canadians, as specifically recommended by this House last fall," he said.
Specifically, the budget raises the tax-emption limit — basically the amount Canadians can earn before they start paying taxes — to $10,000 by 2009. For the 2004 taxation year, the limit stood at $8,150.
The increase is seen largely as a benefit to low-and-medium income families, although all Canadians benefit because all taxpayers claim the basic personal amount. In Wednesday's budget, Ottawa estimated that the proposed change would remove about 860,000 low-income earners from the tax rolls, including about 240,000 seniors.
Also for seniors, the budget proposed boosting guaranteed income supplement benefits by $2.7-billion over five years. As a result, monthly benefits would climb by $36 for singles and $58 for couples by January, 2007.
As an example, a single person now receiving maximum GIS benefits of $560 a month in addition to old age security pension gets a total of $1,032. By 2007, that figure would rise to $1,068.
On the defence side, Mr. Goodale earmarked $12.8-billion over half a decade, marking the biggest five-year defence outlay in 20 years. Much of that money comes in the later stages of the five-year period and some of it goes toward restoring past cuts.
