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The Canadian federal budget for the 2007–2008 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 Commo ...
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. Flaherty presented the 2007 budget on March 19, 2007. No income tax or GST cuts were announced but there were tax credits (of up to $310 per child) for some families with children under 18. 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 The 39th Canadian Parliament was in session from April 3, 2006 until September 7, 2008. The membership was set by the 2006 federal election on January 23, 2006, and it changed only somewhat due to resignations and by-elections. The Parliament w ...
. 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 A reading of a bill is a stage of debate on the bill held by a general body of a legislature. In the Westminster system, developed in the United Kingdom, there are generally three readings of a bill as it passes through the stages of becoming, ...
in the House of Commons with the support of the
Bloc Québécois The Bloc Québécois (BQ; , " Quebecer Bloc") is a federal political party in Canada devoted to Quebec nationalism and the promotion of Quebec sovereignty. The Bloc was formed by Members of Parliament (MPs) who defected from the federal Prog ...
. The
New Democratic Party The New Democratic Party (NDP; french: Nouveau Parti démocratique, NPD) is a federal political party in Canada. Widely described as social democratic,The party is widely described as social democratic: * * * * * * * * * * * * ...
and
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 ...
voted against it. The budget passed 174 to 109 in the House of Commons in first reading. It would later pass the second and third readings in June. Many politicians believe that the changes to equalization disregard the
Atlantic Accord The Atlantic Accord is an agreement signed in 1985 between the Government of Canada and the Government of Newfoundland and Labrador to manage offshore oil and gas resources adjacent to Newfoundland and Labrador. The name was also used to describe ...
. There was speculation that some Atlantic government members would vote against the Budget, but only
Bill Casey William D. Casey (born February 19, 1945) is a Canadian politician from Nova Scotia who served as a Member of Parliament (MP) in the House of Commons of Canada. First elected as a Progressive Conservative in 1988, he later sat as Conservative ...
did, and was subsequently removed from
Caucus A caucus is a meeting of supporters or members of a specific political party or movement. The exact definition varies between different countries and political cultures. The term originated in the United States, where it can refer to a meeting ...
. On June 22, 2007, the Senate passed the budget with a vote of 45–21, with only liberal senators from Atlantic Canada and
Saskatchewan Saskatchewan ( ; ) is a Provinces and territories of Canada, province in Western Canada, western Canada, bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, to the northeast by Nunavut, and on t ...
voting against it. Conservative senator
Anne Cools Anne Clare Cools (born August 12, 1943) is a Canadian retired senator and the longest serving member of the Senate of Canada. As a social worker, Cools was a pioneer in the protection of women from domestic violence, running one of the first dome ...
voted against it too, which in turn led to her removal from the Conservative caucus. The bill was given
royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in oth ...
by the
Governor-General Governor-general (plural ''governors-general''), or governor general (plural ''governors general''), is the title of an office-holder. In the context of governors-general and former British colonies, governors-general are appointed as viceroy t ...
,
Michaëlle Jean Michaëlle Jean (; born September 6, 1957) is a Canadian stateswoman and former journalist who served from 2005 to 2010 as governor general of Canada, the 27th since Canadian Confederation. She is the first Haitian Canadian and black person ...
, about two hours after the vote.


Areas of direction

Some of the key items in the budget were: * $39 billion in transfers to provinces for public services and infrastructure * $2000/child tax credit * $9.2 billion in
debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...
reduction * $550 million/year to combat the
welfare trap The welfare trap (or unemployment trap or poverty trap in British English) theory asserts that taxation and welfare systems can jointly contribute to keep people on social insurance because the withdrawal of means-tested benefits that comes wi ...
* Subsidies up to $2000 on low-emissions automobiles and excise tax on fuel-inefficient vehicles increased to 4000 * $1.5 billion in transfers to provinces for projects that combat climate change and air pollution * $400 million to implement national
electronic health record An electronic health record (EHR) is the systematized collection of patient and population electronically stored health information in a digital format. These records can be shared across different health care settings. Records are shared throu ...
s * $612 million to reduce hospital wait times * $300 million for
HPV vaccine Human papillomavirus (HPV) vaccines are vaccines that prevent infection by certain types of human papillomavirus (HPV). Available HPV vaccines protect against either two, four, or nine types of HPV. All HPV vaccines protect against at least HP ...
s * $60 million increase in
Canadian Forces } The Canadian Armed Forces (CAF; french: Forces armées canadiennes, ''FAC'') are the unified military forces of Canada, including sea, land, and air elements referred to as the Royal Canadian Navy, Canadian Army, and Royal Canadian Air Force. ...
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.


Enhancements to registered savings plans

* Increase age limit for RRSPs * $140 million to establish a
Registered Disability Savings Plan A Registered Disability Savings Plan (RDSP; french: Régime enregistré d'épargne invalidité) is a Government of Canada program designed to enable individuals with disabilities, with assistance from family and friends to save for their future fina ...
* Removal of the Registered education savings plan annual contribution limit * Enhancement in the Canada Education Savings Grant


Reception

The Liberals and the New Democrats announced shortly following the presentation of the budget that they would not support in its current form.
Nova Scotia Nova Scotia ( ; ; ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. Nova Scotia is Latin for "New Scotland". Most of the population are native Eng ...
n 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 Nova Scotia ( ; ; ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. Nova Scotia is Latin for "New Scotland". Most of the population are native Eng ...
premier
Rodney MacDonald Rodney Joseph MacDonald (born January 2, 1972) is a Canadian politician, educator and musician who served as the 26th premier of Nova Scotia from 2006 to 2009 and as MLA for the riding of Inverness in the Nova Scotia House of Assembly from 1999 ...
has stated that this situation is caused by the few Nova Scotian seats in the Federal Cabinet. This is expected to be a cut of approximately 5 million dollars. Premier MacDonald later urged all his province's MPs to vote against the budget after a letter Flaherty that was published in a Nova Scotia newspaper. 9 of the 11 MPs voted against it in the third reading. After the 2007 passed, the government started to work on a comprise with Nova Scotia to settle the dispute.
Newfoundland and Labrador Newfoundland and Labrador (; french: Terre-Neuve-et-Labrador; frequently abbreviated as NL) is the easternmost province of Canada, in the country's Atlantic region. The province comprises the island of Newfoundland and the continental region ...
premier Danny Williams criticized the budget as being a "betrayal" and a violation of the terms of the 2005
Atlantic Accord The Atlantic Accord is an agreement signed in 1985 between the Government of Canada and the Government of Newfoundland and Labrador to manage offshore oil and gas resources adjacent to Newfoundland and Labrador. The name was also used to describe ...
.
Bill Casey William D. Casey (born February 19, 1945) is a Canadian politician from Nova Scotia who served as a Member of Parliament (MP) in the House of Commons of Canada. First elected as a Progressive Conservative in 1988, he later sat as Conservative ...
, 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 The Atlantic Accord is an agreement signed in 1985 between the Government of Canada and the Government of Newfoundland and Labrador to manage offshore oil and gas resources adjacent to Newfoundland and Labrador. The name was also used to describe ...
. He has since been removed from the Conservative caucus. Quebec Premier
Jean Charest John James "Jean" Charest (; born June 24, 1958) is a Canadian lawyer and former politician who served as the 29th premier of Quebec from 2003 to 2012 and the fifth deputy prime minister of Canada in 1993. Charest was elected to the House o ...
had applauded the budget, as his province would receive over $2 billion in additional equalization payment.
Parti Québécois The Parti Québécois (; ; PQ) is a sovereignist and social democratic provincial political party in Quebec, Canada. The PQ advocates national sovereignty for Quebec involving independence of the province of Quebec from Canada and establis ...
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 The Quebec Liberal Party (QLP; french: Parti libéral du Québec, PLQ) is a provincial political party in Quebec. It has been independent of the federal Liberal Party of Canada since 1955. The QLP has always been associated with the colour red; ...
before the March 26, 2007 provincial election.
Saskatchewan Saskatchewan ( ; ) is a Provinces and territories of Canada, province in Western Canada, western Canada, bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, to the northeast by Nunavut, and on t ...
Premier
Lorne Calvert Lorne Albert Calvert (born December 24, 1952) was the 13th premier of Saskatchewan, from 2001 to 2007. Calvert served as leader of the Saskatchewan New Democratic Party from 2001 to June 6, 2009, when he was succeeded by Dwain Lingenfelter. Ea ...
argued that his province will receive no new money and alleged that the Conservatives were favouring Ontario and Quebec at the expense of other provinces, which MP Maurice Vellacott has disputed. Other premiers including New Brunswick's Shawn Graham, British Columbia's
Gordon Campbell Gordon Muir Campbell, (born January 12, 1948) is a retired Canadian diplomat and politician who was the 35th mayor of Vancouver from 1986 to 1993 and the 34th premier of British Columbia from 2001 to 2011. He was the leader of the British Co ...
had some reservations. However, Ontario Premier Dalton McGuinty said that the budget represented "real progress" for his province. The
Mayor of Toronto The mayor of Toronto is the head of Toronto City Council and chief executive officer of the municipal government. The mayor is elected alongside city council every four years on the fourth Monday of October; there are no term limits. While in ...
, David Miller, also criticized the budget for its alleged lack of funding for cities. Many Ontario-based and Western-Canadian columnists have supported Flaherty's budget, citing figures that indicate that the per capital income in Newfoundland and Nova Scotia has improved significantly, at the expense of Ontario, and that allowing the Maritime provinces to keep both equalization payments and resource revenues would hurt Ontario even more


October 2007 economic statement

On October 30, 2007, the Conservatives tabled an economic statement (similar to a mini-budget) and announced various tax cuts and exemptions. Overall, the government proposed a total of $60 billion in tax cuts over five years, including $14 billion in corporate tax cuts by 2012 (or a drop of 33%), a 1% drop of the GST to 5%, an increase of the basic personal tax exemption to $10,100 per year by 2009. The stated goal of the corporate tax cuts was to set Canadian corporate tax rates as the lowest in the G7, although this would require the provinces do matching tax cuts. The lowest personal tax rate will be reduced from 15.5% to 15%, effective January 1, 2007 back to the same level as when the Conservatives were elected in 2006. Economists said that with the large surpluses the federal government accumulated as well as high tax levels, there was another room for significant tax cuts. The opposition parties criticized the mini-budget as the NDP leader Jack Layton mentioned that the budget did little for impoverished Canadians, and that big corporations such as oil companies and major banks will receive hefty tax breaks. The Liberals were critical of the GST cut as being not an efficient tax-relief but did praise the corporate tax cuts. The mini-budget, a confidence motion did pass 127–76 but without support of any opposition party as the Liberals abstained from voting as they did with the Fall 2007 Throne Speech. During the Throne Speech in October 2007, Harper also addressed issues surrounding the economy because of difficulties in the manufacturing and forest sectors due to the loss of numerous jobs at several companies including the three major automakers in the United States and several small to large forest companies over the past few years. On January 10, 2008, the government announced a $1 billion relief fund for single-industry communities that were hit hard by recent closures particularly in the forest and manufacturing industries but also the fishing sector.


References


CBC's report on the budget.


See also

* Domestic policy of the Harper government {{DEFAULTSORT:2007 Canadian Federal Budget Canadian budgets Federal budget 2007 in Canadian law 2007 government budgets