The
Canadian federal budget
In Canada, federal budgets are presented annually by the Government of Canada to identify planned government spending and expected government revenue, and to forecast economic conditions for the upcoming year. They are usually released in Februa ...
for the 2008-2009 fiscal year was presented to the
House of Commons of Canada
The House of Commons of Canada (french: Chambre des communes du Canada) is the lower house of the Parliament of Canada. Together with the Crown and the Senate of Canada, they comprise the bicameral legislature of Canada.
The House of Common ...
by
Finance Minister
A finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation.
A finance minister's portfolio has a large variety of names around the world, such as "treasury", " ...
Jim Flaherty
James Michael Flaherty (December 30, 1949 – April 10, 2014) was a Canadian politician who served as the federal minister of finance from 2006 to 2014 under Conservative Prime Minister Stephen Harper.
First elected to the Legislative Assembly ...
on February 26, 2008.
The budget included a
surplus of $10.2 billion to be applied to pay down
federal debt
A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
, and the introduction of the
Tax-Free Savings Account
A tax-free savings account (TFSA, french: links=no, Compte d'épargne libre d'impôt, CELI) is an account available in Canada that provides tax benefits for saving. Investment income, including capital gains and dividends, earned in a TFSA is n ...
(TFSA). The government announced there would be little to no new tax breaks as major tax cuts took place in the economic update during the fall of 2007 in anticipation of economic slowdowns in 2008. It was to be the last budget of the Conservative government's first term in office.
The budget was deemed ordinary and uncontroversial by the press. The
Liberal party
The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left.
__TOC__ Active liberal parties
This is a li ...
had pledged not to push for an election in the spring of 2008, and so guaranteed their support for the budget. The
Bloc Québécois
The Bloc Québécois (BQ; , "Québécois people, Quebecer Voting bloc, Bloc") is a list of federal political parties in Canada, federal political party in Canada devoted to Quebec nationalism and the promotion of Quebec sovereignty movement, Que ...
had submitted a long list of budgetary demands to be met, which effectively eliminated them from budget negotiations. They voted against the budget.
Highlights
The 2008 budget was tabled on February 26, 2008. No new tax cuts were announced in the budget, but Finance Minister Jim Flaherty announced the creation of a new
Tax-Free Savings Account
A tax-free savings account (TFSA, french: links=no, Compte d'épargne libre d'impôt, CELI) is an account available in Canada that provides tax benefits for saving. Investment income, including capital gains and dividends, earned in a TFSA is n ...
, into which an individual can deposit up to $5,000 a year. Flaherty said that it is the "single most important savings vehicle since the introduction of the RRSP". The TFSA was touted as a badly needed addition to the Canadian tax system as it did not make sense for low income earners and seniors to make use of existing savings programs with tax incentives, such as RRSPs. In contrast, the TFSA could be used by such demographics to enjoy savings with tax benefits.
Funding was also announced for public transit, infrastructures, hiring new police officers, the reconstruction of Afghanistan, a new Student Grant Program (replacing the Millennium Scholarship Fund) and for the manufacturing sectors. In addition, the government announced the creation of a new independent crown corporation to administer the Employment Insurance System while gas tax rebate fund to the cities was made permanent. 10.2 billion dollars will be spent on the payment of the national debt.
Reception
As did in the past, the 2008 Conservative budget was met with mixed reactions. Liberal leader
Stéphane Dion
Stéphane Maurice Dion (born 28 September 1955) is a Canadian diplomat, academic and former politician who has been the Canadian ambassador to France and Monaco since 2022 and special envoy to the European Union since 2017. Dion was Leader of ...
, while criticizing the budget as modest and being "one mile wide" and "one inch deep", said that the party will support the budget due to measures announced surrounding the manufacturing sector as well as environment due to avoiding a spring election. Both the
Bloc Québécois
The Bloc Québécois (BQ; , "Québécois people, Quebecer Voting bloc, Bloc") is a list of federal political parties in Canada, federal political party in Canada devoted to Quebec nationalism and the promotion of Quebec sovereignty movement, Que ...
and the NDP announced that they were voting against the budget.
The NDP argued that the budget failed to address the need for average workers while the winners were banks, polluting industries and the well-off. Social programs got one-time commitments while corporate tax cuts were granted for many years. They further mentioned that tax cuts for big business were larger than new spending by a ratio of 6 to 1
The Bloc criticized insufficient funding for the forestry sector the lack of major announcements for the province of Quebec.
Ontario
Ministry of Finance (Ontario), Finance Minister Dwight Duncan
Dwight Duncan (born 3 January 1959) is a former politician in Ontario, Canada. He was a Liberal member of the Legislative Assembly of Ontario from 1995 to 2013 who represented ridings of Windsor—Walkerville, Windsor—St. Clair and Windso ...
believed that the budget came short in regards to the manufacturing sector and claimed that it was a "missed opportunity for Ontario and Ottawa to work together during a tough economic period".
Buzz Hargrove
Basil Eldon "Buzz" Hargrove, (born March 8, 1944) is a Canadian labour leader and the former National President of the Canadian Auto Workers. He is currently serving as a Distinguished Visiting Professor at Toronto Metropolitan University's Ted R ...
from the
Canadian Auto Workers Union argued that the budget was a step in the wrong direction for the auto industry as well.
Quebec Finance Minister Monique Jerome-Forget also criticized the budget by saying that it does not reflect the priorities for Quebec including the province's forest sector and post-secondary education. The Minister did praised however the permanency of gas tax rebate for the municipalities.
Canadian Taxpayers Federation
The Canadian Taxpayers Federation (CTF; french: Fédération canadienne des contribuables, link=no) is a federally incorporated, non-profit organization in Canada. It claimed 30,517 donors and 215,009 supporters in 2018–19. Voting membership, ...
director
John Williamson mentioned and applauded that the registered savings plan was "very good" for the middle class. Economist Andrew Jackson, from the
Canadian Labour Congress
The Canadian Labour Congress, or CLC (french: Congrès du travail du Canada, link=no or ) is a national trade union centre, the central labour body in Canada to which most Canadian labour unions are affiliated.
History Formation
The CLC was ...
, mentioned however that the plan will give little to the average worker while Don Scott, a taxation specialist, added that the program may incite some investors to contribute less to their
RRSP. The creation of the new savings account also had positive reviews from several Canadian newspapers including
Le Devoir
''Le Devoir'' (, "Duty") is a French-language newspaper published in Montreal and distributed in Quebec and throughout Canada. It was founded by journalist and politician Henri Bourassa in 1910.
''Le Devoir'' is one of few independent large-c ...
,
La Presse,
The Globe and Mail
''The Globe and Mail'' is a Canadian newspaper printed in five cities in western and central Canada. With a weekly readership of approximately 2 million in 2015, it is Canada's most widely read newspaper on weekdays and Saturdays, although it ...
and the
National Post
The ''National Post'' is a Canadian English-language broadsheet newspaper available in several cities in central and western Canada. The paper is the flagship publication of Postmedia Network and is published Mondays through Saturdays, with ...
. Aaron Freeman, policy director for the Environmental Defence, criticized the government for having no clear direction on the environment making reference to the suspension after 2008 of the tax-rebate program on fuel-efficient vehicles but praised the funding for transit and for the protection of consumers from toxins in products.
McTeague private member bill
Liberal
MP Dan McTeague
Daniel P. McTeague, (born October 16, 1962) is a Canadian businessman and former politician. McTeague served for eighteen years as Member of Parliament for the Ontario riding of Pickering—Scarborough East.
Background
Fluently bilingual, McTe ...
tabled a
Private Member's Bill
A private member's bill is a bill (proposed law) introduced into a legislature by a legislator who is not acting on behalf of the executive branch. The designation "private member's bill" is used in most Westminster system jurisdictions, in whi ...
that would give parents substantial tax breaks for saving education money; taxpayers who deposited $5,000 into a RESP for their children's post-secondary education would earn a $5,000 tax deduction, similar to the deduction allowed for contributions to a
RRSP. Under the
Tax-Free Savings Account
A tax-free savings account (TFSA, french: links=no, Compte d'épargne libre d'impôt, CELI) is an account available in Canada that provides tax benefits for saving. Investment income, including capital gains and dividends, earned in a TFSA is n ...
, introduced in Conservative Finance Minister
Jim Flaherty
James Michael Flaherty (December 30, 1949 – April 10, 2014) was a Canadian politician who served as the federal minister of finance from 2006 to 2014 under Conservative Prime Minister Stephen Harper.
First elected to the Legislative Assembly ...
's
2008 budget, there was no deduction for annual contributions.
Though McTeague's bill passed through the
House of Commons of Canada
The House of Commons of Canada (french: Chambre des communes du Canada) is the lower house of the Parliament of Canada. Together with the Crown and the Senate of Canada, they comprise the bicameral legislature of Canada.
The House of Common ...
on March 5, 2008, after
Speaker of the House
The speaker of a deliberative assembly, especially a legislative body, is its presiding officer, or the chair. The title was first used in 1377 in England.
Usage
The title was first recorded in 1377 to describe the role of Thomas de Hungerf ...
, Liberal
Peter Milliken
Peter Andrew Stewart Milliken (born November 12, 1946) is a Canadian lawyer and politician. He was a member of the House of Commons of Canada from 1988 until his retirement in 2011 and served as Speaker of the House for 10 years beginning in 20 ...
, approved the bill for debate, it is constitutionally decreed that any money measure that does not have ''royal recommendation'', that is, if it doesn't originate from
the Crown
The Crown is the state in all its aspects within the jurisprudence of the Commonwealth realms and their subdivisions (such as the Crown Dependencies, overseas territories, provinces, or states). Legally ill-defined, the term has different ...
, is to be considered unlawful.
[Reynolds, Neil; ''The Globe and Mail'': MP's ruse defeated; God save the Queen; March 19, 2008](_blank)
/ref> So, any private member's money bill must be regarded as a Motion of Confidence. Flaherty served notice to the House of Commons on March 11 that he would introduce a motion to nullify the bill by including a provision to do so in legislation implementing the federal budget, which is automatically a confidence motion. The RESP bill was the first time since 1840 that the Commons had attempted to force a change to the government's budget.
References
External links
Department of Finance Canada - Budget 2008
Budget Speech
Budget Plan
Canadian budgets
Federal budget
2008 in Canadian law
2008 government budgets
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