2014 federal budget announced

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The 2014 federal budget was tabled on Tuesday by Finance minister Jim Flaherty. The budget included little in the way of new announcements and aimed to return the government to a surplus position in budget 2015.

The budget, called Economic Action Plan 2014, includes no new taxes on Canadian families or businesses and projects that the deficit will decline to $2.9 billion in 2014–15, after taking into account a $3 billion annual adjustment for risk. A surplus of $6.4 billion is expected in 2015–16, again after taking into account a $3 billion annual adjustment for risk.

The budget focuses on three areas, supporting jobs and growth, supporting families and communities and balancing the budget.

Supporting jobs and growth:

Launching the Canada Job Grant and an enhanced Job Matching Service to help connect Canadians with available jobs.

Introducing a new Canada Apprentice Loan to help registered apprentices in Red Seal trades with the cost of training.

Investing to reform the on-reserve education system, in partnership with First Nations, through the First Nations Control of First Nations Education Act.

Investing in programs to help older workers and persons with disabilities access the labour market.

Creating thousands of new paid internships for young Canadians entering the job market.

Making a major investment of $500 million in automotive sector support, investments in Canada’s forestry and mining sectors, and much more.

Providing $1.5 billion over the next decade for the Canada First Research Excellence Fund for post-secondary research.

Supporting families and communities:

Standing up for consumers by encouraging competition and lower prices in the telecommunications market and introducing legislation to prohibit unjustified cross-border price discrimination.

Eliminating the practice of pay-to-pay billing.

Increasing the Adoption Expense Tax Credit to help make adoption more affordable for Canadian families. 

Expanding tax relief for health care by exempting acupuncturists’ and naturopathic doctors’ professional services from the Goods and Services Tax/Harmonized Sales Tax.

Strengthening food safety for Canadian families with major new investments of $390 million.

Investing more than $300 million to bring faster broadband internet to rural and Northern Canada.

Protecting Canadians from the impact of natural disasters with $200 million to establish a National Disaster Mitigation Program.

Creating a new Search and Rescue Volunteers Tax Credit, to recognize the important role played by search and rescue volunteers who put themselves at risk while contributing to the safety and security of Canadians.

Expanding the Funeral and Burial Program so modern day veterans have access to a dignified funeral and burial.

Balancing the budget:

Advancing the Government’s commitment to control direct program spending with proposals to ensure that overall public service employee compensation is reasonable and affordable.

Working with Crown corporations to implement 50:50 employee pension plan cost sharing, and to increase the retirement age for new hires.

Response

CFIB, the organization that represented Canadian small business owners, seemed overall happy with the budget, especially efforts to eliminate the deficit, reduce credit card processing fees for merchants and consumers and cut the cost of the public service. “Small business owners know that today’s deficits are tomorrow’s taxes, so they are pleased the government’s commitment to a balanced budget in 2015 remains solid,” said CFIB president Dan Kelly.

The organization noted several small business friendly changes in the 2014 budget, including:

• Committing to help in reducing credit card processing fees for merchants and improving the code of conduct.

• Confirming freezes in both Employment Insurance and Canada Pension Plan rates.

• Accepting CFIB’s recommendations to cut red tape by allowing more small firms to remit source deductions less frequently.

• New approaches to workplace training, loans for apprentices and internships in small business.

• Further actions to restrain public sector compensation, reform sick leave provisions and reduce the cost to taxpayers of government retiree benefits.

The Canadian Taxpayers Federation was happy overall with the budget as well. They applauded the numerous spending cuts (total spending is budgeted to fall by $1.3 billion from year previous). The possibility could create tax cuts in 2015. “We’re pleased and encouraged that Stephen Harper and Jim Flaherty are on track to keep their election promise and balance the budget in 2014-15,” said CTF Federal Director Gregory Thomas

However, it wasn’t all positive. The CTF slammed $500 million in additional spending on the Automobile Innovation Fund. “Taxpayers shouldn’t be giving millions to pad the bottom lines of these global auto makers,” said Candice Malcolm, CTF Ontario Director. “Chrysler, Ford, GM, Toyota, Honda and others should all fund their R&D from the billions they book in profits.”

The Federation of Canadian Municipalities had mixed review of the budget.  “Municipalities were looking to today’s budget to see real measures to address the growing housing crisis facing Canada’s families, communities, and economy. Unfortunately, Budget 2014 fell short of that goal, failing to include any targets, timelines or a commitment to a long-term housing plan,” said Claude Dauphin, President of the Federation of Canadian Municipalities (FCM). They worry that a total of $1.5 billion dollars for social housing will be lost over the next five years as a result of expiring federal investments.  

They did note a couple of positive aspects to the budget, including dedicating resources to extending broadband internet to rural, northern and remote areas as well as recognizing the importance of core infrastructure to securing the economy.