2007 Canadian federal budget
Encyclopedia
The Canadian federal budget for the 2007-2008 fiscal year was presented to the Canadian House of Commons
by Finance Minister Jim Flaherty
on March 19, 2007. 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
.
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
in the House of Commons with the support of the Bloc Québécois
. The New Democratic Party
and Liberal Party
voted against it.
Many politicians believe that the changes to equalization
disregard the Atlantic Accord
. There was speculation that some Atlantic government members would vote against the Budget, but only Bill Casey
did, and was subsequently removed from Caucus
.
On June 22, 2007, the Senate passed the budget with a vote of 45-21, with only liberal senators from Atlantic Canada and Saskatchewan
voting against it. Conservative senator Anne Cools
voted against it too, which in turn led to her removal from the Conservative caucus. The bill was given royal assent
by the Governor-General
, Michaëlle Jean
, about two hours after the vote.
These expenditures and cuts have led to some belief that this is pre-election
budget, aimed at enticing voters.
Nova Scotia
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
premier Rodney MacDonald
has stated that this situation is caused the by the few Nova Scotian seats in the Federal Cabinet. This is expected to be a cut of approximately 5 million dollars. Newfoundland and Labrador
premier Danny Williams
criticized the budget as being a "betrayal" and a violation of the terms of the 2005 Atlantic Accord
. Bill Casey
, 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
. He has since been removed from the Conservative caucus.
Parti Québécois
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 before the March 26, 2007 provincial election
.
The Mayor of Toronto, David Miller
, also criticized the budget for its alleged lack of funding for cities.
Canadian House of Commons
The House of Commons of Canada is a component of the Parliament of Canada, along with the Sovereign and the Senate. The House of Commons is a democratically elected body, consisting of 308 members known as Members of Parliament...
by Finance Minister Jim Flaherty
Jim Flaherty
James Michael "Jim" Flaherty, PC, MP is Canada's Minister of Finance and he has also served as Ontario's Minister of Finance. From 1995 until 2005, he was the Member of Provincial Parliament for Whitby—Ajax, and a member of the Progressive Conservative Party caucus...
on March 19, 2007. The federal budget
Canadian federal budget
In Canada, federal budgets are presented annually by the Government of Canada to identify planned government spending, expected government revenue, and forecast economic conditions for the upcoming year....
included $14 billion in new spending and $5.7 billion in tax cuts. This was the second budget of the 39th Canadian Parliament
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 has changed only somewhat due to resignations and by-elections...
.
Since the government held a minority
Minority government
A minority government or a minority cabinet is a cabinet of a parliamentary system formed when a political party or coalition of parties does not have a majority of overall seats in the parliament but is sworn into government to break a Hung Parliament election result. It is also known as a...
, 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
Reading (legislature)
A reading of a bill is a debate on the bill held before the general body of a legislature, as opposed to before a committee or other group. In the Westminster system, there are usually several readings of a bill among the stages it passes through before becoming law as an Act of Parliament...
in the House of Commons with the support of the Bloc Québécois
Bloc Québécois
The Bloc Québécois is a federal political party in Canada devoted to the protection of Quebec's interests in the House of Commons of Canada, and the promotion of Quebec sovereignty. The Bloc was originally a party made of Quebec nationalists who defected from the federal Progressive Conservative...
. The New Democratic Party
New Democratic Party
The New Democratic Party , commonly referred to as the NDP, is a federal social-democratic political party in Canada. The interim leader of the NDP is Nycole Turmel who was appointed to the position due to the illness of Jack Layton, who died on August 22, 2011. The provincial wings of the NDP in...
and Liberal Party
Liberal Party of Canada
The Liberal Party of Canada , colloquially known as the Grits, is the oldest federally registered party in Canada. In the conventional political spectrum, the party sits between the centre and the centre-left. Historically the Liberal Party has positioned itself to the left of the Conservative...
voted against it.
Many politicians believe that the changes to equalization
Equalization payments
Equalization payments are cash payments made in some federal systems of government from the federal government to subnational governments with the objective of offsetting differences in available revenue or in the cost of providing services....
disregard the Atlantic Accord
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....
. There was speculation that some Atlantic government members would vote against the Budget, but only Bill Casey
Bill Casey
William D. "Bill" Casey is a Canadian politician. He is a former Member of Parliament in the Canadian House of Commons.-Life and career:...
did, and was subsequently removed from Caucus
Caucus
A caucus is a meeting of supporters or members of a political party or movement, especially in the United States and Canada. As the use of the term has been expanded the exact definition has come to vary among political cultures.-Origin of the term:...
.
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
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
voting against it. Conservative senator Anne Cools
Anne Cools
Anne Clare Cools is a member of the Canadian Senate. Born in Barbados, with her appointment, she became the first Black Canadian to be appointed to Canada's upper house...
voted against it too, which in turn led to her removal from the Conservative caucus. The bill was given royal assent
Royal Assent
The granting of royal assent refers to the method by which any constitutional monarch formally approves and promulgates an act of his or her nation's parliament, thus making it a law...
by the Governor-General
Governor-General
A Governor-General, is a vice-regal person of a monarch in an independent realm or a major colonial circonscription. Depending on the political arrangement of the territory, a Governor General can be a governor of high rank, or a principal governor ranking above "ordinary" governors.- Current uses...
, Michaëlle Jean
Michaëlle Jean
Michaëlle Jean is a Canadian journalist and stateswoman who served as Governor General of Canada, the 27th since Canadian Confederation, from 2005 to 2010....
, about two hours after the vote.
Areas of direction
Some of the key items in the budget are:- $39 billion in transfers to provinces for public services and infrastructure
- $2000/child tax credit
- Increase age limit for RRSPsRegistered Retirement Savings PlanA Registered Retirement Savings Plan or RRSP is a type of Canadian account for holding savings and investment assets. Introduced in 1957, the RRSP's purpose is to promote savings for retirement by employees. It must comply with a variety of restrictions stipulated in the Canadian Income Tax Act...
- $9.2 billion in debtGovernment debtGovernment debt is money owed by a central government. In the US, "government debt" may also refer to the debt of a municipal or local government...
reduction - $550 million/year to combat the welfare trapWelfare trapThe welfare trap 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 with entering low-paid work causes there to be no significant increase in total income...
- $140 million to establish a Registered Disability Savings PlanRegistered Disability Savings PlanA Registered Disability Savings Plan is a Canadian program designed to enable individuals with disabilities to build wealth and receive matching federal bonds and grants. The Federal Minister of Finance commissioned an Expert Panel Report on Financial Security for Children with Severe...
- Subsidies up to $2000 on low-emissions automobilesFuel economy in automobilesFuel usage in automobiles refers to the fuel efficiency relationship between distance traveled by an automobile and the amount of fuel consumed....
and a Gas-guzzlerGas-guzzlerGas-guzzler commonly refers to a vehicle that consumes fuel inefficiently.The term originally came into use in the US when congress established Gas Guzzler Tax provisions in the Energy Tax Act of 1978 to discourage the production and purchase of fuel-inefficient vehicles...
tax up to $4000 - $1.5 billion in transfers to provinces for projects that combat climate changeClimate changeClimate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
and air pollutionAir pollutionAir pollution is the introduction of chemicals, particulate matter, or biological materials that cause harm or discomfort to humans or other living organisms, or cause damage to the natural environment or built environment, into the atmosphere.... - $400 million to implement national electronic health recordElectronic Health RecordAn electronic health record is an evolving concept defined as a systematic collection of electronic health information about individual patients or populations...
s - $612 million to reduce hospital wait times
- $300 million for HPV vaccineHPV vaccineThe human papilloma virus vaccine prevents infection with certain species of human papillomavirus associated with the development of cervical cancer, genital warts, and some less common cancers...
s - $60 million increase in Canadian ForcesCanadian ForcesThe Canadian Forces , officially the Canadian Armed Forces , are the unified armed forces of Canada, as constituted by the National Defence Act, which states: "The Canadian Forces are the armed forces of Her Majesty raised by Canada and consist of one Service called the Canadian Armed Forces."...
wages - $600 million for farmer savings plans
- $400 million to offset agriculture production costs
These expenditures and cuts have led to some belief that this is pre-election
Election
An election is a formal decision-making process by which a population chooses an individual to hold public office. Elections have been the usual mechanism by which modern representative democracy operates since the 17th century. Elections may fill offices in the legislature, sometimes in the...
budget, aimed at enticing voters.
Opposition
The Liberals and the New Democrats announced shortly following the presentation of the budget that they will not support in its current form.Nova Scotia
Nova Scotia
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
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
Nova Scotia is one of Canada's three Maritime provinces and is the most populous province in Atlantic Canada. The name of the province is Latin for "New Scotland," but "Nova Scotia" is the recognized, English-language name of the province. The provincial capital is Halifax. Nova Scotia is the...
premier Rodney MacDonald
Rodney MacDonald
Rodney Joseph MacDonald 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 to 2009....
has stated that this situation is caused the by the few Nova Scotian seats in the Federal Cabinet. This is expected to be a cut of approximately 5 million dollars. Newfoundland and Labrador
Newfoundland and Labrador
Newfoundland and Labrador is the easternmost province of Canada. Situated in the country's Atlantic region, it incorporates the island of Newfoundland and mainland Labrador with a combined area of . As of April 2011, the province's estimated population is 508,400...
premier Danny Williams
Danny Williams (politician)
Daniel E. "Danny" Williams, QC, MHA is a Canadian politician, businessman and lawyer who served as the ninth Premier of Newfoundland and Labrador between November 6, 2003, and December 3, 2010. Williams was born and raised in St. John's, Newfoundland and Labrador...
criticized the budget as being a "betrayal" and a violation of the terms of the 2005 Atlantic Accord
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....
. Bill Casey
Bill Casey
William D. "Bill" Casey is a Canadian politician. He is a former Member of Parliament in the Canadian House of Commons.-Life and career:...
, Conservative Member of Parliament for Cumberland—Colchester—Musquodoboit Valley
Cumberland—Colchester—Musquodoboit Valley
Cumberland—Colchester–Musquodoboit Valley is a federal electoral district in Nova Scotia, Canada, that has been represented in the Canadian House of Commons since 2004...
, 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
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....
. He has since been removed from the Conservative caucus.
Parti Québécois
Parti Québécois
The Parti Québécois is a centre-left political party that advocates national sovereignty for the province of Quebec and secession from Canada. The Party traditionally has support from the labour movement. Unlike many other social-democratic parties, its ties with the labour movement are informal...
leader Andre Boisclair
André Boisclair
André Boisclair is a politician in Quebec, Canada. He was the leader of the Parti Québécois, a social democratic and separatist party in Quebec....
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 before the March 26, 2007 provincial election
Quebec general election, 2007
The Quebec general election of 2007 was held in the Canadian province of Quebec on March 26, 2007 to elect members of the 38th National Assembly of Quebec. The Quebec Liberal Party led by Jean Charest managed to win a plurality of seats, but were reduced to a minority government, Quebec's first in...
.
The Mayor of Toronto, David Miller
David Miller (Canadian politician)
David Raymond Miller is a Canadian politician. He was the 63rd Mayor of Toronto and the second since the 1998 amalgamation. He was elected to the position in 2003 for a three-year term and re-elected in 2006 for a four-year term...
, also criticized the budget for its alleged lack of funding for cities.
See also
- 2004 Canadian federal budget2004 Canadian federal budgetThe Canadian federal budget of 2004 was a budget for the Government of Canada. It was read in the Canadian House of Commons on March 23, 2004 by Finance Minister Ralph Goodale of the governing Liberal Party...
- 2005 Canadian federal budget2005 Canadian federal budgetThe 2005 Canadian federal budget was the budget of the Government of Canada for the 2005-2006 fiscal year. It was presented on February 23, 2005, by Finance Minister Ralph Goodale. It was the first federal budget presented by a minority government in Canada since the budget presented by the...
- 2006 Canadian federal budget2006 Canadian federal budgetThe Canadian federal budget for fiscal year 2006-2007 was presented to the Canadian House of Commons by Finance Minister Jim Flaherty on May 2, 2006...
- Domestic policy of the Harper governmentDomestic policy of the Harper governmentSeveral policies regarding interior and domestic issues in Canada were planned and adopted by the Canadian Cabinet, chaired by Prime Minister Stephen Harper, following the January 23, 2006 election of the Conservative Party to a minority of seats in the House of Commons, such as social and...