Flaherty: Canadian Budget Rescheduled For June 6
Friday May 27 2011 | 07:02 AM

After a general election derailed the first attempt to pass the 2011 Budget, the recently re-elected Canadian government is set to reintroduce the tax and spending proposals next month, Finance Minister Jim Flaherty has announced.

Following weeks of speculation, Finance Minister Jim Flaherty has announced that he will re-submit his "Next Phase of Canada’s Economic Action Plan: A Low-Tax Plan for Jobs and Growth" to parliament on June 6.

Flaherty has stated that the new Budget will stick to the commitments made in the original document presented on March 22, which received a decidedly mixed response. It was hailed by many in the business community as a plan designed to promote Canadian competitiveness, and drive economic recovery. Indeed, the Canadian Institute of Chartered Accountants praised it for having struck "the right balance by keeping Canada competitive and demonstrating prudent fiscal management".

On the other hand, the government's decision to press on with planned corporate tax cuts was used as ammunition by opposition parties, whose criticism of the government had been steadily mounting in the weeks leading up to the Budget announcement. Moreover, while the vote of no confidence passed against Stephen Harper's administration meant the Budget did not make it to a vote, each of the three main parliamentary opposition parties voiced their rejection of its measures.

However, the election returned Harper's Conservatives with a majority, the first such administration in seven years. It is expected that this majority will play to the party's advantage as they attempt to steer the Budget through parliament for a second time. According to Flaherty, the Next Phase will keep taxes low, make targeted investments to support jobs and growth, maintain growing transfer payments for crucial services, control government spending and eliminate the deficit.

Among the measures announced on March 22 were the creation of a temporary Hiring Credit for Small Businesses, to encourage additional hiring in the sector, and the extension of the accelerated capital cost allowance rate for investment in processing machinery and equipment, for two years. These formed a key part of the Conservative party platform during the election, but what is less clear, however, is the extent to which the Budget will make room for the series of small tax breaks and incentives announced during the election campaign. These include the establishment of a one year employment insurance tax break for small businesses, and the introduction of a new family tax cut allowing families with children to share up to CAD50,000 of their household income, for federal tax purposes.

Making the announcement, Flaherty said: “A little over two months ago, our government introduced Budget 2011—the Next Phase of Canada’s Economic Action Plan: A Low-Tax Plan for Jobs and Growth—a plan that will continue to ensure Canada remains at the forefront of economic growth and job creation". On election day, Canadians strongly endorsed our focus on the economy, jobs and the next phase of our plan. We thank Canadians for their trust, and they can be assured that we will meet our commitments to them."

“The budget will also show that we are on track to eliminate the deficit and return to balance. We restate our commitment to Canadians to ensure the spending of taxpayers’ money is as efficient as possible and this will be accomplished through the Strategic and Operating Review. Once completed, this will achieve CAD4bn (USD4.08bn) in annual savings and allow the government to return to balance by 2014–15, one year earlier than previously planned. As I stated two months ago, the savings from the review will not be recorded in Budget 2011, but will be reported on and recorded in Budget 2012 when the review is completed.”