Current Temperature

1.

October 26, 2020 October 26, 2020

Fiscal belt-tightening punctuates 2014 federal budget

Posted on February 27, 2014 by Vauxhall Advance

The 2014 federal budget announced earlier this month contains another bevy of fiscal belt-tightening measures designed to rein in the country’s deficit, but new expenditures have been frozen to a slow drip.

Driving for a balanced budget in next year’s pivotal election year, this is the fourth consecutive year in which Finance Minister Jim Flaherty has instituted a round of economic efficiencies designed to limit spending. Closing in on balance, the budget includes a $2.9 billion deficit and a $3 billion contingency fund.

“I would say it’s steady as she goes,” said Medicine Hat MP LaVar Payne. “It’s positive that we’re slowly reducing the deficit, and then we’ll be able to tackle the national debt.

“As everyone knows, you can’t continue to borrow money, and not start paying back on your mortgage. That’s what we’re trying to do for Canadians, and that’s what Canadians really want us to do is make sure we get our budget balanced. We’ve gone a long way towards that.”

Smokers will see the excise duty on tobacco rise by $4 per carton of 200 cigarettes, amounting to a rough increase of $0.50 per pack. This essentially ends the discount on cigarettes sold at duty-free stores, raising taxes there by $6 per carton. The increase in tax revenue is forecasted to bring in $645 million in 2014-2015.

Excise taxes on tobacco will be tied to the Consumer Price Index automatically adjusted every five years.

“I have no problem with that, because I don’t smoke,” said Payne. “It’s one of those consumption taxes that hopefully will discourage people from smoking, particularly young kids. So I don’t have a problem with that.”

Low income veterans and their families saw another $108 million put into a fund to help cover funeral costs, and veterans released from the military for medical reasons will get a hiring priority for public service jobs.

Adoptive families will get a higher tax credit for adoption costs, world-class amateur athletes will get a break on their available RRSP room, and search and rescue volunteers will get a tax credit similar to the one extended to volunteer firefighters in 2011.

The government also plans to bring in legislation to deal with unjustified cross-border price discrimination that sees Canadians pay more for identical goods.

“I’m not exactly sure how that is going to work, because there are obviously differences in prices between some goods,” said Payne. “Part of that certainly is going to be a difference in the value of the Canadian dollar versus the U.S. dollar.

“I know, for example, in the past people have really complained about the price of a book. If you buy a book in the U.S. is might be $9, while in Canada it might be $12. I think that’s the kind of thing that they’re looking at. I think that’s a positive idea, and be able to look at that and see if there is some discrimination based on Canada versus the U.S. In essence, we’re in a North American market, and we shouldn’t be seeing those kinds of major price differences.”

For students with cars who are seeking Canada Student Loans, the value of their vehicles will no longer affect their ‘needs assessment’.

Federal public servants will also be forced to pick up more than half the costs of their health care plan, up from one quarter, and raising annual payments for a retired individual to $550 from $261.

Taxpayers will no longer have to apply for a GST-HST credit on their tax return, with the Canada Revenue Agency now making the calculation automatically.

Despite some provincial backlash, Payne championed the government’s approach to skills training and the funds that have been allocated for that purpose.

“There’s a couple things that were really positive, and that’s the money that we’re putting into training. There’s been some controversy with the provinces over the money in our Canada fund for training, but as a former human resources manager, companies know best what people they need — they know better than the government by a long shot.

“So investing money with the companies, and having them invest in the training and skills that their employees need, I think that’s the right direction to go.”

Total revenues are forecast at $276.3 billion, with expenditures ringing in at $279.2 billion. New spending in the budget tops just $700 million, with spending cuts coming in at some $2 billion, resulting in total government spending actually falling in 2014-2015, down from $1.3 billion from the 2013-2014 fiscal year.

“This is projected to rise to $286.9 billion for the 2015-2016 election year.

On the small business front, Payne outlined some inclusions that should help business owners cope with challenging circumstances.

“We’re not raising EI premiums, I think that’s positive, because if you look at employment overall, it’s small business that is employing the people that’s creating the jobs.

“If you look at our record — and it continues to grow — we’re at over a million jobs that we’ve recovered since the recession.

“Looking at the bright side, when you compare Canada to any of the other countries in the G-7, we come out on top.”

Leave a Reply

Get More Vauxhall Advance
Log In To Comment Latest Paper Subscribe