Federal budget tight on spending
Posted February 11, 2014 4:28 pm.
This article is more than 5 years old.
OTTAWA (NEWS1130) – The Conservative government has delivered a boa constrictor budget, putting the squeeze on spending to slay the deficit.
Finance Minister Jim Flaherty’s 10th federal budget all but balances the books in fiscal 2014, leaving only a 2.9 billion shortfall with a three-billion-dollar reserve.
He’s forecasting a surplus of $6.4-billion for next year, just in time for the next election.
Flaherty is putting off $3.1-billion in planned military equipment purchases over the next three years.
He is also bringing in higher tobacco taxes worth nearly $700-million in 2014-15 and plans to save $7.4-billion over six years by getting retired public servants to pay more for health benefits.
The Conservatives are also trying to appease angry veterans by topping up the Last Post funeral fund, expanding the eligibility criteria to cover the burial of impoverished ex-soldiers from modern conflicts like Afghanistan.
Other initiatives aimed at consumers include a promise of $305-million over five years to expand rural and northern broadband Internet service and another $10-million for snowmobile trails.
There are also a host of non-budgetary measures that carry no cost, including a promise to crack down on unjustified cross border price differences for the same goods.
When totalled up, it’s all done on the cheap with actual new spending totalling $700-million against cuts that top $2-billion.
The net result is that total government spending, including debt servicing charges, actually falls slightly in 2014-15, to $279.2-billion.
Some highlights of the federal budget:
– Deficit forecast at $2.9-billion in 2014-15 with a $3 billion contingency fund. Surplus of $6.4-billion expected in 2015-16 with 3-billion dollar contingency fund.
– Revenues for 2014-15 forecast at $276.3-billion with expenditures of $279.2-billion.
– Deficit to be eliminated by raising tobacco taxes, reining in public service compensation costs and deferring military procurement programs.
– Proposes to make retired federal public servants pay half the costs of their health-care plan, up from current 25 per cent. This would raise annual payments for a retired individual to $550 from $261 and save the government an estimated $7.4-billion over six years.
– Higher excise taxes on tobacco will raise the price of a carton of 200 cigarettes by four dollars and essentially end the discount on smokes sold at duty-free stores, by raising taxes there by six-dollars a carton. The increase will reap government $685-million in 2014-15.
– Excise taxes on tobacco will be tied to the Consumer Price Index and automatically adjusted every five years.
– Legislation promised to deal with unjustified cross-border price discrimination that sees Canadians pay more for the same goods.
– Adoption expense tax credit increased to $15-thousand from about $12-thousand.
– World-class amateur athletes will get a break when it comes to calculating their available RRSP room.
– Search and rescue volunteers will get a tax credit similar to the one extended to volunteer firefighters in 2011.
– Taxpayers will no longer have to apply for a GST-HST credit on their tax return. The Canada Revenue Agency will make the calculation automatically.
– Acupuncture and naturopath services exempted from the GST or HST.
– Invests $305-million over five years to bring faster broadband internet to rural and Northern Canada.
– provides $108-million retroactive to 2013-14 to expand the military’s funeral and burial benefits to modern day veterans of modest means.
– deficit declines to $2.9-billion in 2014-15 with a $3 billion contingency fund. Surplus of $6.4 billion expected in 2015-16 with a 3-billion dollar contingency fund.
