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.