2007 Canadian federal budget

The Canadian federal budget for the 2007–2008 fiscal year was presented to the Canadian House of Commons by Finance Minister Jim Flaherty on March 19, 2007. The federal budget included $14 billion in new spending and $5.7 billion in tax cuts. This was the second budget of the 39th Canadian Parliament.

Since the government held a minority, the budget needed support of at least one opposition party. On March 29, 2007, Bill C-52, the enabling legislation to implement the budget, received First Reading in the House of Commons with the support of the Bloc Québécois. The New Democratic Party and Liberal Party voted against it.

Many politicians believe that the changes to equalization disregard the Atlantic Accord. There was speculation that some Atlantic government members would vote against the Budget, but only Bill Casey did, and was subsequently removed from Caucus.

On June 22, 2007, the Senate passed the budget with a vote of 45–21, with only liberal senators from Atlantic Canada and Saskatchewan voting against it. Conservative senator Anne Cools voted against it too, which in turn led to her removal from the Conservative caucus. The bill was given royal assent by the Governor-General, Michaëlle Jean, about two hours after the vote.^[2]

Areas of direction

Some of the key items in the budget were:^[3]

• $39 billion in transfers to provinces for public services and infrastructure
• $2000/child tax credit
• Increase age limit for RRSPs
• $9.2 billion in debt reduction
• $550 million/year to combat the welfare trap
• $140 million to establish a Registered Disability Savings Plan
• Subsidies up to $2000 on low-emissions automobiles and a Car tax up to $4000
• $1.5 billion in transfers to provinces for projects that combat climate change and air pollution^[4]
• $400 million to implement national electronic health records
• $612 million to reduce hospital wait times
• $300 million for HPV vaccines
• $60 million increase in Canadian Forces wages
• $600 million for farmer savings plans
• $400 million to offset agriculture production costs
• Increase in tobacco tax to offset GST reduction

These expenditures and cuts have led to some belief that this is pre-election budget, aimed at enticing voters.^[5]

Opposition

The Liberals and the New Democrats announced shortly following the presentation of the budget that they will not support in its current form.

Nova Scotian politicians have criticized the new equalization plan, as it cuts back payments on the assumption that various offshore programs will result in increased revenues. Nova Scotia premier Rodney MacDonald has stated that this situation is caused by the few Nova Scotian seats in the Federal Cabinet.^[6] This is expected to be a cut of approximately 5 million dollars.^[7] Newfoundland and Labrador premier Danny Williams criticized the budget as being a "betrayal" and a violation of the terms of the 2005 Atlantic Accord. Bill Casey, Conservative Member of Parliament for Cumberland—Colchester—Musquodoboit Valley, voted against the budget, because of the unfair equalization formula for Nova Scotia and Newfoundland and Labrador, and the effective cancellation of the Atlantic Accord.^[8] He has since been removed from the Conservative caucus.

Parti Québécois leader Andre Boisclair spoke in opposition to the budget, saying that the new money for Quebec was part of an effort to buy votes for the federalist Liberal Party of Quebec before the March 26, 2007 provincial election.^[9]

The Mayor of Toronto, David Miller, also criticized the budget for its alleged lack of funding for cities.

References

• CBC's report on the budget.

See also

• Domestic policy of the Harper government