Canuck Politics

Finance Minister Jim Flaherty says Canada will run deficits until budget year 2014/15, two years longer than originally projected.

Opposition parties say Flaherty is incompetent and cannot be trusted.  Liberals promise their alternative plan will be unveiled during the next election.

Links:

• Update of Economic and Fiscal Projections (September 2009)

May 26 to 28, 2009 - Finance Minister Jim Flaherty says Canada’s 2009/10 budget deficit will grow to over $50 billion, about 50% higher than the $34 billion deficit projected in January.

Liberals demanded Flaherty’s resignation for ‘gross incompetence’.

The government defended its deficit, saying it is necessary during a recession and affordable given Canada’s favourable fiscal position relative to other leading economies.

Links:

• The Economist: How indebted rich countries will be in 2014

March 3 to 12, 2009 - Micheal Ignatieff tells Liberal Senators to pass the Conservative budget without any further delay.

Liberal Senators were intending to examine the budget, break it up into several parts, and pass the stimulus measures by March 27.

Stephen Harper and Jim Flaherty urged Liberals to pass the budget immediately so unemployed Canadians can access expanded Employment Insurance benefits.

Finance Minister Jim Flaherty announced the Canadian government will return to deficit spending as he tables the first recession budget in over a decade.

The budget includes stimulus spending on infrastructure projects, a home renovation tax credit, and income tax cuts for those earning less than $80,000 per year.  The government is expected to run a deficit of $33.7 billion for the 2009-10 fiscal year and $29.8 billion in 2010/11.

Flaherty said the uncertain economic outlook may still get worse, and the government is prepared to for larger deficits if current forecasts prove optimistic.

The budget includes a plan to return spending to a surplus after 5 years, and promises any future surpluses would be used to pay off the debt accumulated from deficit spending during the recession.

Links:

• 2009/10 Federal Budget

Canada’s opposition parties are threatening to defeat the Conservative government over cuts to political party subsidies included in Finance Minister Jim Flaherty’s economic update.

Flaherty says the federal budget will go into deficit after accounting for the planned economic stimulus spending agreed by the G-20 nations.

We cannot ask Canadians to tighten their belts during tougher times without looking in the mirror. Canadians have a right to look to government as an example. We have a responsibility to show restraint and respect for their money. Canadian tax dollars are precious … Today, our Government is eliminating the $1.75-per-vote taxpayer subsidy for politicians and their parties, effective April 1, 2009.

- Finance Minister Jim Flaherty

November 18 to 24, 2008 – The 40th session of Parliament opens with all political parties promising a new spirit of cooperation.  Despite this, opposition members set a confrontational tone in Question Period.

Finance Minister Jim Flaherty announced $60 billion in tax cuts, including:

• GST reduction from 6% to 5% effective January 1, 2008
• Personal income tax rate reduction for the lowest tax bracket from 15.5% to 15%, retroactive from January 1, 2007
• Personal income tax reduction from an increased personal exemption, effective retroactively from January 1, 2007
• Reduced employment insurance premiums for both employers and employees effective January 1, 2008
• 1/3 reduction of the corporate and small business tax rate to 15%, implemented over 5 years

Liberal leader Stéphane Dion, NDP leader Jack Layton, and Bloc leader Gilles Duceppe all oppose the broad-based tax cuts, preferring smaller targeted tax cuts and more spending on government programs.

Unlike the NDP and Bloc, the Liberal party intends to stage another whipped abstention to ensure there will not be an election over the issue.