For instance, the NDP called for about $700-million in new GIS benefits for seniors, more than twice what the budget offers. The budget was also silent on the NDP's call for an HST reduction for home heating fuel. And the budget did not include the NDP’s request for a doubling of Canada Pension Plan benefits. Rather, it noted that work is ongoing with the provinces on "options for a modest enhancement" of the CPP.
Under Mr. Flaherty's plan, the federal budget would return to balance by the 2015-16 fiscal year, with the $40.5-billion deficit in the current fiscal year, which ends March 31, shrinking to $29.6-billion in the coming year and to $19.5-billion in 2012-13, eventually sitting right on the bubble between red and black ink at about $300 million in 2014-15.
The government would then post a surplus of $4.2-billion in 2015-16, more than the $2.6-billion windfall anticipated in Mr. Flaherty’s October fiscal update and the first surplus since the 2008 global recession forced the government to spend billions on stimulus programs to prop up the economy.
Overall, the budget was projected to achieve $6.2-billion in savings over five years, through previously announced spending reviews and by closing tax loopholes. In addition, the budget proposed a further cost-cutting exercise that – if successful – would save $4-billion annually and potentially balance the books a year ahead of schedule. However, the budget did not provide a detailed breakdown of how that would happen.
All told, the government projects that the combination of savings, closing of tax loopholes and the expiry of crisis-era stimulus measures would mean program spending as a share of gross domestic product shrinks to about 13 per cent in 2015-16 from 16 per cent in fiscal 2009-10.
Ottawa's total debt would drop closer to pre-recession levels by 2015-16, declining to 29.7 per cent of GDP from 34 per cent two years ago.
The budget accepted private-sector analysts' forecasts for the economy, including faster growth this year as the crucial U.S. recovery accelerates, while maintaining the October projection of 2.7-per cent average growth from 2011 to 2015.
That's a slow rebound from recession, by historical standards, which helps explain why the budget forecasts showed unemployment at 7 per cent or higher through 2013. Nevertheless, the improved outlook included higher projections for government revenues, which were revised up in each of the five years.
Included among the “boutique” tax measures in Mr. Flaherty’s budget was a credit for people caring for family members including spouses, common-law partners and children. Introducing that measure effectively robs the Liberals of a key campaign plank. Other tax breaks include a credit of up to $500 per child for parents who enroll their children in artistic programs, and a $3,000 credit for volunteer firefighters who put in at least 200 hours of service.
The budget included $420-million to fund a one-year renewal of two pilot projects aimed at helping unemployed Canadians, including one that allows people claiming Employment Insurance to earn extra income on top of their benefits, and another that inflates benefits for claimants in regions with high jobless rates.
It also helps cities and municipalities by making permanent the federal government’s $2-billion annual contribution to the Gas Tax Fund.
