Federal Finance Minister Jim Flaherty tabled the government’s 2012 Budget in the House of Commons on Thursday, March 29. Entitled, “Economic Action Plan 2012: Jobs, Growth and Long-Term Prosperity”, this was the first Budget presented by a majority government in Canada since 2004, and the first by a Conservative majority government in almost twenty years. The Budget focuses on reducing deficits and moving towards a balanced budget through spending restraint rather than increased taxation. The Minister said that an improved economic outlook should see a return to a balanced budget after 2014-15, leading to a surplus of $3.4 billion in fiscal 2015-16. The projected deficit for the fiscal year 2011-12 is $24.9 billion, about $8.5 billion lower than in 2010-11. The federal debt to GDP ratio of just under 34% for 2011-12 is expected to grow slightly in 2012-13 and then decline to 28.5% by 2016-17. The Minister also predicted real GDP growth of 2.1% in calendar year 2012, rising to 2.4% in 2013 and for a five-year period thereafter.
The Budget proposes no new personal or corporate tax rate changes, nor are there any proposed changes to previously promised tax rate reductions. It does, however, contain a wide array of tax and tariff changes, most of them designed to increase revenue by eliminating perceived abuses.
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