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Budget 2008 Thread

The Bread Guy

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Since it's coming out today, thought I'd start a thread....

Here's where to check for the documents,
here's where it fits in the parliamentary process,
and, if you believe these sorts of things, polling data showing how Canadians "feel" about the economy.

Here's the PM's latest promise on defence spending (21 Feb 08):
"I am therefore pleased to announce that the government has decided to set aside stable and predictable funding for this plan by increasing the automatic annual increase in defence spending from 1.5 per cent to 2 per cent, beginning in 2011-12."

And, as a bit of platform history (realizing it's been a minority gov't), here's a copy (archived) of the Tories' promises from the 2006 election campaign.

I'll update links here as they get filled with info....

- edited to add Ipsos-Reid material -
 
And here we go with a live blog from the National Post (keep hitting refresh to see the very latest).....

...and the Budget 2008 page sorta ready (but not quite)
 
First summary from Canadian Press - nothing on CF spending yet...:

Tories tighten fiscal belt with new budget, offer incentive to save
6 minutes ago

OTTAWA - The Conservative government is urging Canadians to stuff their mattresses even as it strips the linen off the Ottawa's longstanding budget cushion.

Finance Minister Jim Flaherty rolled out the sequel to his tax-cutting fall economic update Tuesday, tabling a budget of scattershot spending that drives the federal books perilously close to a deficit over the next two years.

The eye-catching centrepiece is a new, personal, tax-free savings plan. Yet the overall budget sets nothing aside for a national rainy day.

Program spending, which excludes debt servicing charges, will total $208 billion in 2008-09, up $6.9 billion - or 3.4 per cent - over last year. About $1.5 billion of the spending increase goes to new discretionary initiatives this year.

Combined with last October's $60-billion in corporate and personal income taxes, the budget leaves Ottawa precious little wiggle room going forward.

Debt repayment, which has stood well above $3 billion annually for a decade, falls to $2.3 billion this year and $1.3 billion in 2009-10. Surpluses are projected at zero, and there's no prudence or contingency funds built in.

"That means that $1.3 billion is all that's sparing the government from balanced budget versus a deficit," said economist Derek Holt of RBC Financial Group.

"And any shock to revenue or any unanticipated spending initiatives can soak that up that $1.3 billion and put them back into deficit in a heartbeat."

Flaherty appeared acutely aware that his budget, balanced on a knife's edge this year and next, will have Canadians accustomed to flush federal coffers wondering where the good times have gone.

"Some say we should not have provided tax relief for individuals, families, workers and seniors," Flaherty told the Commons in his budget speech.

"They call it 'blowing the surplus.' Well, Mr. Speaker, it takes a certain kind of Ottawa politician to view giving people their hard-earned money back as 'blowing the surplus."'

Prime Minister Stephen Harper and his cabinet have been assiduously lowering budget expectations for more than two months, while simultaneously accusing the opposition Liberals of a tax-and-spend agenda that's belied by the past decade of Liberal economic stewardship.

Making a virtue of thrift, the Conservatives have stripped the cupboard bare.

With one eye on its precarious minority status and the ever-present possibility of a snap election, the Tories fluffed the document with the usual smattering of politically attuned goodies.

A new savings program that will allow Canadians to put aside up $5,000 annually - tax free forever - is being trumpeted by Flaherty as the "single most important personal savings vehicle since the introduction of the RRSP."

But the bottom-line tax savings will be minimal, according to the budget projections, and opinion was split on who truly benefits from the provision.

Larry Chapman of the Canadian Institute of Chartered Accountants called the Tory program "quite generous" and predicts it will enjoy widespread participation based on results of a similar program in Britain.

But the RBC's Holt believes the complicated savings plan will appeal mostly to upper income Canadians. Seniors cashing out their RRSPs and looking for another tax shelter will also benefit.

"It's more about optics than it is about substance," said Holt.

The budget's other spending follows no particular theme.

There's an extension of help for manufacturers writing off the cost of new machinery and equipment, and a quarter billion dollars over five years for the auto industry, a sop to Ontario.

There's another quarter billion for carbon sequestration, a nod to the environmental movement.

There's money for infrastructure spending and public transit, an effort to bolster the Tories' flagging big-city support.

There's $300 million for nuclear energy development, new grant money for students to replace the depleted Millennium Fund, and money for police recruitment and prisons.

There's even $50 million to help farmers cull Canada's over-sized pig population.

While the list is long, the bottom line is that initiatives in the budget add up to just $1.5 billion in new spending this year, and just under $1.7 billion next year.

Planning surpluses, meanwhile, fall to zero this year and next, with a razor-thin surplus margin of $100 million projected for 2010-11.
 
As long as it can stay balanced, I can live with it. Liberal surpluses were nothing more than theft from the working man. The government should not be in the business of making money. Chretien, Martin and their ilk were nothing but robber barons, preying on society. At least now Harper is giving some of it back.
 
This just in from CanWest, shared with the usual disclaimer - highlights mine:

Budget offers low-key defence spending increase
By Mike Blanchfield, Canwest News Service
Published: Tuesday, February 26, 2008

OTTAWA - With Canada's military all but committed to Afghanistan to 2011, Tuesday's federal budget delivered a politically low-key defence spending increase, while topping up aid money to the war-torn country by $100 million.

The budget also added an extra $89 million to bolster Canada's light foreign diplomatic presence to deal with the fact that one-quarter of Foreign Affairs staff are actually posted abroad.

"To be effective, we have to be on ground," the budget stated, noting the new diplomatic spending "will be focused on a limited number of priorities," including the Conservative's renewed emphasis on hemispheric relations with Latin America.

But with Conservatives and Liberals working to seek a consensus on the future of the controversial Afghanistan mission and to avoid an election over the war, Finance Minister Jim Flaherty played down spending on international affairs - devoting a scant few lines to the subject in his speech.

In fact, Prime Minister Stephen Harper had announced the budget's main defence initiative - raising the annual increase from 1.5 per cent to two per cent starting in 2011 - in a speech last week.

"In terms of a potential election budget, knowing that a big chunk of the country doesn't like defence spending, this doesn't show or play a huge increase," said defence analyst Brian MacDonald.

Afghanistan remains the single largest recipient of Canadian aid, and will get an extra $100 million, increasing the 10-year commitment to $1.3 billion by 2011.

Overall, this year's $18.2-billion defence budget will increase, as projected, to $19 billion.

After more than a decade of heavy spending cuts by the Conservatives and Liberals, the Paul Martin Liberals promised the military a five-year, $13 billion infusion in 2004 before the Harper Conservatives in 2006 topped that up with a further five-year $5.3 billion pledge.

The budget also added an extra $43 million over two years to upgrade the military's communications security establishment, and it earmarked an extra $282 million over the next three years to help veterans and their survivors.

The budget also affirmed previous commitments to double Ottawa's foreign-aid spending, especially to Africa, to $5 billion by 2011. This previously announced aid spending still leaves Canada well short of the 0.7 per cent of GDP benchmark called for the United Nations to which several European countries have already committed.[/quote]
 
From CTV.ca, the budget speech (since the Gov't of Canada links aren't working as of this posting).

And here's what's there re:  the military or defence (with a little LEO action thrown in):

"....We are providing $400 million to hire 2,500 new front-line police officers over the next five years. This money will be available to provinces and territories that have publicly committed to new recruitment programs.

Our Government is also delivering additional support for our brave men and women in the Canadian Forces and their families. In this budget, we are providing stable, predictable funding with annual increases in defence spending of 2 per cent starting in 2011-12.

We are also helping survivors of veterans with $282 million over this and the next two years to expand the Veterans Independence Program....."

Probably more detail in the background documentation once it's posted.
 
As of now (1650EST), the Budget 2008 site is working.....

Here's the Government's news release on the budget speech - highlights:

"....Budget 2008 also provides the most important federally driven personal finance innovation since the introduction of the Registered Retirement Savings Plan (RRSP): the Tax-Free Savings Account. This flexible, registered, general-purpose account will allow Canadians to watch their savings—including interest income, dividend payments and capital gains—grow tax-free.

“The Tax-Free Savings Account is the first of its kind in Canadian history,” said Minister Flaherty. “It will provide all Canadians with a powerful incentive to save. An RRSP is primarily intended for retirement, but the Tax-Free Savings Account is like an RRSP for everything else in your life.”

Budget 2008 also demonstrates responsible leadership by:

# Reducing debt.

Since taking office, the Government has reduced the federal debt by more than $37 billion, including $10.2 billion this fiscal year. The Government’s aggressive debt reduction has resulted in ongoing interest savings of $2 billion per year. Under the Tax Back Guarantee, the benefits of debt reduction are passed on to Canadians in the form of lower personal income taxes.

# Strengthening Canada’s tax advantage.

Since taking office, the Government has delivered almost $200 billion in tax relief over this and the next five years. Budget 2008 extends accelerated capital cost allowance treatment for the manufacturing and processing sector by three years on a declining basis—this will provide these businesses with an additional $1 billion in tax relief.

# Investing in the country’s manufacturing heartland.

In February 2008, Parliament passed the Government’s $1-billion Community Development Trust to support communities and workers. Budget 2008 builds on this investment by providing $250 million for an Automotive Innovation Fund to help Canada’s automotive sector adapt to the challenges of the future.

# Investing in the priorities of Canadians.

Budget 2008 is providing $400 million to hire 2,500 new front-line police officers over the next five years. Budget 2008 also supports the reduction of greenhouse gas emissions and will improve the safety systems for food, consumer and health products....."

And I'm sure THIS'LL shock folks here!

 
Here's the part of the public budget documentation dealing with "Leadership Abroad" (here's a link to the whole public budget plan) defence/security highlights:

(....)

Budget 2008 follows through on the priorities identified in the Speech from the Throne:
supporting the United Nations–sanctioned mission led by NATO in Afghanistan;
playing an active role in the Americas; and
promoting our trade and investment interests around the world through increased diplomatic resources abroad.

The Government is bringing a long-term vision to the defence of our nation through reinvestments and predictable funding for the Canada First Defence Strategy, as well as investments in the Communications Security Establishment.

(....)

Canada First Defence Strategy

Protecting Canadians and Canada is a fundamental responsibility of government. With the Canada First Defence Strategy, clear priorities will be in place to guide future actions. This is why Budget 2008 is:

    * Providing the Canadian Forces with stable and predictable funding to permit long-term planning.

Communications Security

    * Providing $43 million over the next two years to the Communications Security Establishment to make the necessary investments to keep pace with rapid advancements in information and communications technologies.

(....)

Providing an additional $100 million for the reconstruction and development of Afghanistan, bringing Canada’s total projected Afghan aid program to $280 million in 2008–09

(....)

Afghanistan Reconstruction and Development

Afghanistan is a central focus of our international assistance, and Canada is committed to helping rebuild a free, democratic and peaceful country. To this end, the Government is providing an additional $100 million for reconstruction and development, bringing Canada’s 2008–09 assistance budget for Afghanistan to a projected $280 million. Additional resources will help the Afghan people, including through the provision of more training to the Afghan National Police and Afghan National Army to allow them to take increasing responsibility for security in Kandahar and throughout the country. These additional funds are above and beyond the commitment to double international assistance by 2010–11, and will increase Canada’s total aid commitment to Afghanistan to $1.3 billion over 10 years.

(....)

Canada First Defence Strategy

In an unpredictable and volatile world, protecting Canadians and Canada is a fundamental responsibility of the Government. The foundation for building the Canadian Forces of tomorrow was laid with the $5.3-billion, five-year Canada First defence plan announced in Budget 2006. Significant progress has already been made, with several major procurement projects announced and being implemented.

Building on this foundation, the Government is developing a long-term Canada First Defence Strategy. The strategy will set long-term objectives and make a long-term commitment of support for the Canadian Forces. This is a new and innovative approach to rebuilding the military where predictable long-term funding will support the modernization and growth of the Forces. The result will be a stronger, more flexible and high-tech military for Canada.

The Canada First Defence Strategy will also strengthen Canada’s industrial and technological advantages by setting the foundations for a new relationship with industry. A stable, predictable and long-term investment program will create new, significant and long-term opportunities for communities and businesses across Canada. Canadian industry will have the opportunity to position itself as high-tech leaders, invest proactively in research, and develop technologies that can be used at home and exported to foreign markets.

This budget provides the funding stability and predictability that will allow for the successful implementation of the Canada First Defence Strategy by increasing the automatic annual increase on defence spending to 2 per cent (from the current 1.5 per cent) beginning in 2011–12. Over the next 20 years, this is expected to provide the Canadian Forces with an additional $12 billion.
Communications Security

The Communications Security Establishment (CSE) plays a key role in safeguarding Canada’s national security. CSE is Canada’s national cryptologic agency and provides the Government with foreign signals intelligence services and information technology security. It also provides technical and operational assistance to federal law enforcement and security agencies.

Budget 2008 provides $43 million over the next two years in order for CSE to make the necessary investments to keep pace with rapid technological advancements in information and communication technologies.

(....)

Improving Canada’s Borders

Our two-way trade with the world is equivalent to approximately two-thirds of our gross domestic product, and one out of five jobs is directly linked to trade. On a typical day, 266,000 people, 18,200 trucks, 77,900 courier shipments and 5,000 marine containers enter into Canada. These numbers reflect the increased mobility of people and goods in today’s world. This openness brings important benefits to Canada’s economy and society, but it also presents a number of risks.

Given the importance of trade to our continued prosperity, our borders have to facilitate trade, travel and commerce, while protecting us from external threats. This is why Budget 2008 is investing in initiatives to:

    * Ensure that the Canada Border Services Agency (CBSA) has the resources it needs to deliver innovative border services given current economic realities and a new security environment.
    * Provide Canadians with access to better and more secure travel documents to cross international borders, particularly our border with the United States.
    * Ensure the integrity of Canada’s immigration program so that our borders are secure and our communities are safe.
    * Enhance the security of the Great Lakes/St. Lawrence Seaway region.
    * Address obstacles to cross-border trade through the Security and Prosperity Partnership of North America.

Strengthened Front-Line Capacity

Better borders start with a stronger on-the-ground presence. The CBSA provides a critical front-line contribution to the prosperity and security of Canada by managing the access of people and goods to and from the country. Budget 2008 commits $75 million over the next two years to ensure that the CBSA has the resources it needs to deliver efficient and secure border services at more than 1,200 domestic and international locations. These funds will increase the number of on-site border services officers at key border installations in order to meet evolving operational demands resulting from increased trade and travel.

(....)

More Secure Borders

Canada continues to be a destination of choice for millions of individuals seeking to stay temporarily to travel, work or study. While our economy and society are enriched by the movement of people across our borders, it also poses a number of risks.

Border security remains a priority for Canadians. Criminals are increasingly more sophisticated and well funded, including those who engage in document fraud to illegally move people or goods across borders. Further to biometric field trials in Canada that were successfully completed in 2007, the Government will introduce the use of biometric data, such as fingerprints and live photographs, in its visa-issuing process to accurately verify identity and travel documents of foreign nationals who enter Canada. This initiative will enhance the integrity and efficiency of the border by preventing criminals from entering Canada, and facilitating the processing of legitimate applicants. Budget 2008 provides $26 million over two years for this initiative. Canada will join other countries such as Australia, the United States and the United Kingdom, which have recognized the value of using biometrics in their immigration and border processes.

(....)

There ya go, folks - feel free to throw more grist into the mill......
 
While for the most part I am a supporter of this government, I have to question their "Tory" credentials when the allow spending to increase year after year, and include boners like a $200 million dollar fund for the Auto industry. Since the auto industry consumed the previous $500 million the Martin government gave it without any improvement or turn around, why would anyone believe this will create or save jobs at all.

Corporate welfare eats vast quantities of our tax dollars and has never delivered on its promises. A short sharp shock to the system may be bad in the short run, but the prolonged agony these bail-outs cause is far worse; the companies continue to fail but there is much less available to invest in new and different industries which actually make profits by selling products people want.
 
I am very impressed by Dion's solicitude for Canadians' dislike of going to the polls. He'd even vote for a budget he doesn't like to spare Canadians the trouble.

What a guy.
 
JBG said:
I am very impressed by Dion's solicitude for Canadians' dislike of going to the polls. He'd even vote for a budget he doesn't like to spare Canadians the trouble.

What a guy.

He just doesn't want to get his ass handed to him and go down in history as the guy that destroyed the party. It has nothing to do with us, and all to do with him.
 
recceguy said:
He just doesn't want to get his *** handed to him and go down in history as the guy that destroyed the party. It has nothing to do with us, and all to do with him.

recceguy, I think you missed the stealth [sarcasm] [/sarcasm] tags on that last post.
 
recceguy said:
He just doesn't want to get his *** handed to him and go down in history as the guy that destroyed the party. It has nothing to do with us, and all to do with him.
I forgot to put a [/sarcasm] tag on my post. I had honestly not noticed the post immediately above.
 
This was buried on page 161 of the Budget-Canada is getting a new icebreaker:

Protecting and Securing Canada’s Sovereignty
The Canadian Coast Guard’s most capable Arctic icebreaker, the CCGS
Louis S. St-Laurent, is scheduled to be decommissioned in 2017. As such,
the Government will replace this vessel with a new polar class icebreaker that
has greater icebreaking capabilities. Budget 2008 provides $720 million for
the procurement of this vessel.
Canada must complete comprehensive mapping of its seabed in both the
Arctic and Atlantic Oceans to support the submission to the United Nations
Commission on the Limits of the Continental Shelf by the end of 2013.
Budget 2008 provides $20 million over the next two years to carry out data
collection activities and legal work to enable Canada to present an effective
submission to the Commission.
 
milnewstbay said:
The eye-catching centrepiece is a new, personal, tax-free savings plan. ...

A new savings program that will allow Canadians to put aside up $5,000 annually - tax free forever - is being trumpeted by Flaherty as the "single most important personal savings vehicle since the introduction of the RRSP."
Since I'm already saving all that I can afford (and I assume most Canadians do the same), I would have preferred they just hike the personal exemption by up to $5K while increasing the allowable contributions to RRSPs.

 
I suspect the main motivator of the tax free savings allowance is to avoid the problems that come from breaking your RRSP. In one sense, the government does not want that money locked away, so a more easily accessible alternative will help achieve some policy goals. Providing a means to save up for a new car or refrigerator is a fairly sly broad based economic stimulus.

As well, upper income Canadians will make use of this (well, duh...), and it provides a handy place to put any windfalls that might come your way. In our context, a reservist who is eligible for the long service gratuity now has a choice of where to place the money besides RRSP or out in the open. This is probably important if there is little room in the RRSP for any reason.

As usual, the Conservatives play a deeper game.
 
The tax structure of the new savings account is reversed from that of a RRSP. You don't get deductions putting money into it but also don't pay tax on money you take out of it. This means any investment gains will be tax free.  With a RRSP you save tax today and pay tax when you withdraw money which means your taxed on your contributions and any investment gains.

It's kinda like three No's: (1) No tax savings today, (2) No tax on gains, (3) No tax tomorrow.

There are other advantages like since it's not income when withdrawn it doesn't reduce some government benefits keyed off income.

Scroll down a page or so for the details. Tax-Free Savings Account—A Savings Plan for All Canadians
 
DBA said:
The tax structure of the new savings account is reversed from that of a RRSP. You don't get deductions putting money into it but also don't pay tax on money you take out of it. This means any investment gains will be tax free.  With a RRSP you save tax today and pay tax when you withdraw money which means your taxed on your contributions and any investment gains.
This is similar in concept to the Roth IRA in the US.
 
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