Ottawa,
February 26, 2008
2008-021
Budget
2008: Responsible Leadership for Uncertain Times
Building
on the Government's 2007 Economic Statement, the Honourable Jim Flaherty,
Minister of Finance, today tabled a balanced, focused and prudent budget
to strengthen Canada amidst global economic uncertainty. Budget 2008
continues reducing debt and taxes, focuses government spending, and
provides additional support for sectors of the economy that are struggling
in this period of uncertainty.
In
fact, this year alone the Government is injecting $21 billion of stimulus
into the Canadian economy. As a share of the economy, this is
significantly greater than the stimulus package offered by the U.S.
"Our
Government is meeting the challenge of global economic uncertainty with a
plan that is real, a plan that is responsible, a plan that is
working," said Minister Flaherty. "In the weeks to come,
Canadians will see $2.9 billion in retroactive personal tax relief that
was announced in the fall. We didn't wait, we acted and Canadians can see
the results."
Budget
2008 also provides the most important federally driven personal finance
innovation since the introduction of the Registered Retirement Savings
Plan (RRSP):
the Tax-Free Savings Account. This flexible, registered,
general-purpose account will allow Canadians to watch their
savings-including interest
income,
dividend payments and capital gains-grow tax-free.
"The
Tax-Free Savings Account is the first of its kind in Canadian
history," said Minister Flaherty. "It will provide all
Canadians with a powerful incentive to save. An RRSP is primarily
intended for retirement, but the Tax-Free Savings Account is like an
RRSP
for everything else in your life."
Budget
2008 also demonstrates responsible leadership by:
§
Reducing
debt. Since
taking office, the Government has reduced the federal debt by more
than $37 billion, including $10.2 billion this fiscal year. The
Government's aggressive debt reduction has resulted in ongoing interest
savings of $2 billion per year. Under the Tax Back Guarantee, the benefits
of debt reduction are passed on to Canadians in the form of lower
personal
income taxes.
§
Strengthening
Canada's tax advantage. Since
taking office, the Government has delivered almost $200 billion in
tax relief over this and the next five years. Budget 2008 extends
accelerated capital cost allowance treatment for the manufacturing and
processing sector by three years on a declining basis-this will provide
these businesses with an additional $1 billion in tax relief.
§
Investing
in the country's manufacturing heartland.
In
February 2008, Parliament passed the Government's $1-billion Community
Development Trust to support communities and workers. Budget 2008 builds
on this investment
by providing $250 million for an Automotive Innovation Fund to help
Canada's automotive sector adapt to the challenges of the future.
§
Investing
in the priorities of Canadians. Budget
2008 is providing $400 million to hire 2,500 new front-line police
officers over the next five years. Budget 2008 also supports the
reduction of greenhouse gas emissions and will improve the safety systems
for food, consumer and health products.
"We
have come to a fork in the road," said Minister Flaherty. "Some
would have us go down the path to higher spending, higher interest
payments and higher taxes. That approach is misguided. Our Government is
taking the path that requires focus, prudence and discipline."
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