Budget 2012 – Canada’s Economic Action Plan

March 29, 2012

Canada is  emerging from the global economic recession. The economy’s strengths provide  an opportunity for the Government to take significant actions today that  will fuel the next wave of job creation and position Canada for a secure  and prosperous future. Economic Action Plan 2012 sets out a comprehensive  agenda to bolster Canada’s fundamental strengths and address the important  challenges confronting the economy over the long term.

Canada faces a  fast-changing global environment, with increasing competition from emerging  market countries and a global economy that remains fragile and uncertain. For  this reason, the Government remains focused on an agenda that will deliver high-quality jobs, economic growth and  sound public finances. Economic Action Plan 2012 will help further unleash the  potential of Canadian businesses and entrepreneurs to innovate and thrive in  the modern economy to the benefit of all Canadians for generations to come.

Since 2006, the  Government has supported the security and prosperity of  Canadians and promoted business  and investment to create jobs. When the global financial and economic crisis  struck, these underlying strengths helped Canada to avoid a deep and  long-lasting recession. The Government’s sound fiscal position prior to the  crisis provided the flexibility to launch the stimulus phase of Canada’s Economic  Action Plan, which was timely, targeted and temporary in order to have maximum  impact. This plan was one of the strongest responses to the global recession  among the Group of Seven (G-7) countries.

Economic output in Canada is now well  above pre-recession levels, and more than 610,000 jobs have been created since  the recovery began in July 2009, the best performance in the G-7.

Canadian    authorities have a strong track record in managing past economic and    financial crises and delivering economic growth.

— Standard & Poor’s, October 25, 2011

Canada cannot rest on this record of  success. There are many challenges and uncertainties still confronting the  economy. The recovery is not complete and too many Canadians are still looking  for work. The global economy remains fragile and any potential setbacks would  have an impact on Canada. Canadian businesses face ever-increasing competition  from emerging fast-growth countries. Our aging population will put pressure on  public finances and social programs.

Economic Action Plan  2012 takes important steps to address these structural challenges and ensure  the sustainability of public finances and social programs for future  generations. International experience shows the  importance of taking action now, rather than delaying. Economic Action Plan  2012 focuses on the drivers of growth and job creation—innovation, investment,  education, skills and communities. Underpinning these actions is the  ongoing commitment to keeping taxes low, which is central to the Government’s  long-term economic plan.

Supporting  Entrepreneurs, Innovators

The global economy is increasingly  competitive. The pace of technological change is creating new opportunities  while making older business practices obsolete. To succeed and thrive in this  environment, Canadian businesses need to innovate and create high-quality jobs.  The Government has a strong record of support for research and development. But  Canada can and must do better to promote innovation. The Government launched an  Expert Panel in 2010 to review federal support for research and development.  Informed by the advice of the Panel, the Government is taking action toward a new  approach to supporting  innovation in Canada.

Economic Action Plan 2012 will:

  • Increase funding for research  and development by small and medium-sized companies.
  • Promote linkages and  collaborations, including funding internships and connecting private sector  innovators to procurement opportunities in the federal government.
  • Refocus the National Research  Council on research that helps Canadian businesses develop innovative products  and services.
  • Enhance access to venture  capital financing by high-growth companies so that they have the capital  they need to create jobs and grow.
  • Streamline and improve the  Scientific Research and Experimental Development tax incentive program, including  shifting from indirect tax incentives to more direct support for  innovative private sector businesses.
  • Support research, education and  training with new funding for universities, granting councils and leading research  institutions, such as Genome Canada.

Responsible  Resource Development

Canada’s resource sector is an asset that  will increasingly contribute to the prosperity of all Canadians. Some $500  billion is expected to be invested in over 500 major economic projects across  Canada over the next 10 years, driven in part by demand from emerging  economies. Today, Canadian businesses in the resource  sector must navigate a maze of overlapping and complex regulatory requirements  and red tape. This leads to delays in investment and job creation that do not  contribute to better environmental outcomes.

An efficient regulatory system provides  effective protection of the interests of Canadians while minimizing the burden  on businesses. It is a vital component of an attractive climate for  investment and jobs. Since 2006, the Government has worked to streamline and  improve regulatory processes. However, more needs to be done.

The Government  is committed to reforming the regulatory system in the resource  sector so that reviews are conducted in a timely and transparent manner, while  safeguarding the environment. This will increase business confidence and  enhance investment and job creation. The Government will continue to  support responsible energy development.

Economic Action Plan 2012 will:

  • Commit to bringing forward  legislation to achieve the goal of “one project, one review” in a clearly  defined time period.
  • Make new investments to improve  regulatory reviews, streamline the review process for major economic projects,  support consultation with Aboriginal peoples, and strengthen pipeline and  marine safety.
  • Continue to support the Major  Projects Management Office initiative, which has succeeded in shortening and  streamlining reviews and improving accountability.
  • Ensure the safety and security  of Canadians and the environment as energy resources are developed.

Expanding Trade and Opening New Markets  for Canadian Businesses

Free and open trade has long been a  powerful engine for Canada’s economy. Canadian businesses need access to key export  markets in order to take advantage of new opportunities. Over the past six  years, Canada has concluded free trade agreements with nine countries as well  as foreign investment promotion and protection agreements with ten  countries. Since 2009, Canada has eliminated all tariffs on imported machinery and equipment and  manufacturing inputs to make Canada a tariff-free zone for industrial  manufacturers, the first in the G-20 to do so.

Economic Action Plan 2012 will:

  • Intensify Canada’s pursuit of  new and deeper trading relationships, particularly with large, dynamic and  fast-growing economies.
  • Implement the Action Plan on  Perimeter Security and Economic Competitiveness and the Action Plan on  Regulatory Cooperation, which will facilitate trade and investment flows with  the United States.
  • Provide support to Canadian exporters  by extending the provision of domestic financing by Export Development  Canada.

Investing in Training, Infrastructure and Opportunity

Canada’s well-trained and highly educated workforce represents one of our key  advantages in competing and succeeding in the global economy. Too often,  barriers or disincentives discourage workforce participation. Better utilizing  Canada’s workforce and making Canada’s labour market more adaptable will help  ensure Canada’s long-term economic growth.

Economic Action Plan 2012 will:

  • Make investments to assist more  young people in gaining tangible skills and experience.
  • Extend and expand the  ThirdQuarter project to better connect workers over the age of 50 to potential  employers.
  • Invest to enable more Canadians  with disabilities to obtain work experience with small and medium-sized  businesses.
  • Introduce a number of targeted,  common-sense changes to Employment Insurance (EI) to make it a more efficient  program that promotes job creation, removes disincentives to work, supports  unemployed Canadians and quickly connects people to jobs.
  • Support small and medium-sized  businesses and their workers by making EI premiums more stable and  predictable, with annual increases limited to five cents.
  • Extend the Hiring Credit for  Small Business for one year to help small businesses to defray the costs  of hiring new workers.
  • Promote job creation by  renewing the Canadian Coast Guard Fleet; supporting the involvement of small  and medium-sized enterprises in the National Shipbuilding Procurement Strategy;  investing in transportation infrastructure, including railways and ports; and providing  funding for community public infrastructure facilities.

Expanding Opportunities for Aboriginal Peoples to Fully Participate in the Economy

The Government recognizes the contribution  that Aboriginal peoples can make to the labour force as the youngest and  fastest-growing segment of the nation’s population. Equipping First  Nations people with the skills and opportunities they need to fully participate  in the economy is a priority both for this Government and for First  Nations people.

Economic Action Plan 2012 will:

  • Invest in First Nations  education on reserve, including early literacy programming and other supports  and services to First Nations schools and students.
  • Build and renovate schools on  reserve, providing First Nations youth with better learning environments.
  • Commit to introduce a First  Nation Education Act and work with willing partners to establish the structures  and standards needed to support strong and accountable education systems on  reserve.
  • Improve the incentives of the  on-reserve Income Assistance Program while encouraging those who can work to access  training that will improve their prospects for employment.
  • Renew the Urban Aboriginal  Strategy to improve economic opportunities for Aboriginal peoples living in urban  centres.

Building a Fast and  Flexible Economic Immigration System

Since 2006, the Government has pursued  much-needed reforms to focus Canada’s immigration system on fuelling economic  prosperity for Canada. The Government has placed top priority on attracting  immigrants who have the skills and experience our economy needs.  The Government is committed to making our immigration system truly fast  and flexible in a way that will sustain Canada’s economic growth.

Economic Action Plan 2012 will:

  • Realign the Temporary Foreign  Worker Program to better meet labour market demands.
  • Support further improvements to  foreign credential recognition and identify the next set of target  occupations beyond 2012.
  • Move to an increasingly fast  and flexible immigration system where priority focus is on meeting Canada’s  labour market needs.
  • Return applications and fees to  certain federal skilled worker applicants who have been waiting for  processing to be completed.

Sustainable Social Programs and Secure Retirement

In order to ensure the sustainability of  our social programs and fiscal position for generations to come, steps  are required to prepare today for the demographic pressures that the  Canadian economy will face over the longer term. Canadians are living longer  and healthier lives. Many older workers wish to work longer and increase their retirement  income.

The Government has already taken steps to ensure  sound public finances by setting a future growth path for transfers to the  provinces and territories. The growth path will provide predictable, fair  and sustainable funding in support of the provision of health care, education  and other services for all Canadians.

Economic Action Plan 2012 will:

  • Gradually increase the age of  eligibility for Old Age Security (OAS) and Guaranteed Income Supplement  benefits from 65 to 67. This change will start in April 2023, with full  implementation by January 2029, and will not affect anyone who is 54 years  of age or older as of March 31, 2012.
  • Improve flexibility and choice  by allowing Canadians the option of deferring take-up of their OAS benefits to  a later time and receiving higher annual benefits.
  • Ensure that pension plans for  public servants and Parliamentarians are sustainable, fair and financially  responsible.
  • Support the retirement income  system with Pooled Registered Pension Plans that provide an accessible,  large-scale and low-cost pension option to employers, employees and the  self-employed.

Responsible Expenditure Management

Canadians  expect value for money from their government. Over the past year, the  Government conducted a comprehensive review of approximately $75 billion of  direct program spending by federal departments and agencies. The review  identified a number of opportunities to enhance the efficiency and  effectiveness of government operations, programs and services that will  result in cost savings for the Canadian taxpayer. This will support the  Government’s commitment to return to balanced budgets over the medium term. The  Government is on track to meet its commitment to balance the budget without  cutting transfers to Canadians or to provinces.

Fiscal policy is appropriately shifting    toward consolidation in the aftermath of the effective stimulus program. The    federal government is leading the initial fiscal effort, as spending is    gradually being brought to pre-crisis levels as a share of GDP.

— International Monetary Fund           November 23, 2011

Reflecting Canada’s strong economic  and fiscal fundamentals, Canada will undertake expenditure reductions that are  modest compared to those being pursued by many countries around the world.  These targeted reductions clearly contrast with the Program Review undertaken  in Canada in the mid-1990s, when transfers for health care, education and  social spending were cut.

Economic Action Plan 2012 will:

  • Achieve ongoing savings of $5.2 billion,  6.9 per cent of the review base of approximately $75 billion. This represents  less than 2.0 per cent of expected federal program spending in  2016–17, or under 0.2 per cent of Canada’s gross domestic product (GDP) in  that same year.

The Plan to Return to Balanced Budgets

Canadians  know the importance of living within their means and expect the Government to  do the same. That is why the Government is committed to managing public  finances in a sustainable and responsible manner. The Government’s responsible  financial management put Canada in a position of strength when it came time to  combat the global recession. From 2006 to 2008, the Government paid down over  $37 billion in debt, significantly contributing to Canada’s low net debt  position. This enabled the Government to quickly implement the stimulus phase  of Canada’s Economic Action Plan without leaving the country in a vulnerable  fiscal position, like many European countries.

Balancing the budget and reducing debt cuts  interest costs, helps to keep interest rates low and instills confidence in  Canada’s economy, allowing families and businesses to plan for the  future. It will also ensure the sustainability of Canada’s social programs for  future generations.

The Government is on track to return to balanced budgets over the medium term

Budgetary Balance After Economic Action Plan 2012 Measures

Source: Department of Finance.

 

Economic Action Plan  2012 is a plan for jobs, growth and long-term prosperity. By making choices  now, the Government is taking the necessary steps to reinforce the fundamental  strength and promise of the Canadian economy in order to sustain economic  growth, create the high-quality jobs of tomorrow, preserve social programs and  sound public finances, and deliver continued prosperity for generations to  come.

Economic Developments and Prospects

  • The global economic recovery remains fragile. The European sovereign  debt and banking crisis continues to weigh on global growth.
  • The Canadian economy has remained resilient despite external  weakness, reflecting sustained growth in the domestic economy.
  • Canada has had the strongest economic growth over the recession and  recovery among Group of Seven (G-7) countries. This reflects our solid economic  fundamentals and the timely support of the stimulus phase of Canada’s Economic  Action Plan.
  • 610,000 more Canadians are working now than in July 2009,  the strongest job growth among G-7 countries over the recovery.  This continues the strong performance that has resulted in over  1.1 million new jobs created since the beginning of 2006.
  • However, the fragile global economic environment will continue  to be reflected in modest growth in Canada over the near term.
  • The Department of Finance conducted a survey of private sector  economists in early March 2012. On March 5, economists met with the Minister of  Finance to discuss the economic forecast as well as the risks associated with  the outlook.
  • Private sector economists expect real gross domestic product (GDP)  growth of 2.1 per cent in 2012 and 2.4 per cent in 2013, broadly  unchanged from the November 2011 Update of Economic and Fiscal  Projections.
  • Economists also expect the level of nominal GDP—the broadest single  measure of the tax base—to be above the level anticipated over the forecast  period at the time of the November Update.
  • Private sector economists agreed that near-term risks to the outlook  have slightly moderated since the November Update, but continue to see global  economic uncertainty as the key downside risk—in particular the potential  for wider contagion of the sovereign debt and banking crisis in Europe.
  • To reflect the downside risks surrounding the global economic  outlook, the Government is adjusting the private sector forecast for nominal  GDP downward by $20 billion in each year of the 2012–2016 forecast period.

Supporting Jobs and Growth

Supporting Entrepreneurs, Innovators and  World-Class Research

Creating  Value-Added Jobs Through Innovation

The Government is committed to a  new approach to supporting innovation that focuses resources on  private sector needs. Economic Action Plan 2012 proposes:

  • $400 million to help increase private sector investments in  early-stage risk capital, and to support the creation of large-scale venture  capital funds led by the private sector.
  • $100 million to the Business Development Bank of  Canada to support its venture capital activities.
  • $110 million per year to the National Research Council to double support  to companies through the Industrial Research Assistance Program.
  • $14 million over two years to double the Industrial Research  and Development Internship program.
  • $12 million per year to make the Business-Led  Networks of Centres of Excellence program permanent.
  • $105 million over two years to support forestry innovation and  market development.
  • $95 million over three years, starting in 2013–14, and $40 million  per year thereafter to make the Canadian Innovation Commercialization  Program permanent and to add a military procurement component.
  • $67 million in 2012–13 as the National Research Council refocuses on  business-led, industry-relevant research.
  • Streamlining and improving the Scientific Research  and Experimental Development tax incentive program.

Support for  Research, Education and Training

The Government is committed to providing  additional resources to support advanced research at universities and  other leading research institutions. Economic Action Plan 2012 proposes:

  • $37 million annually starting in 2012–13 to the granting councils to  enhance their support for industry-academic research partnerships.
  • $60 million for Genome Canada to launch a new applied research  competition in the area of human health, and to sustain the Science and Technology  Centres until 2014–15.
  • $6.5 million over three years for a research project at  McMaster University to evaluate team-based approaches to health care delivery.
  • $17 million over two years to further advance the development of  alternatives to existing isotope production technologies.
  • $10 million over two years to the Canadian Institute for  Advanced Research to link Canadians to global research networks.
  • $500 million over five years, starting in 2014–15, to the  Canada Foundation for Innovation to support advanced research infrastructure.
  • $40 million over two years to support CANARIE’s operation of  Canada’s ultra-high speed research network.
  • $23 million over two years to Natural Resources Canada to enhance  satellite data reception capacity.

Improving  Conditions for Business Investment

Responsible  Resource Development

The Government  is committed to improving the review process for major economic projects to  accelerate investment and job creation. Economic Action Plan 2012 proposes:

  • System-wide legislative improvements to the review process for major  economic projects to achieve the goal of “one project, one review” in a clearly  defined time period for major economic projects.
  • $165 million over two years for responsible resource development  that creates jobs while protecting the environment.

Investing in Our Natural Resources

The Government is supporting the  development of Canada’s natural resource industries. Economic Action Plan 2012  proposes:

  • Support for junior mineral exploration by extending the temporary 15-per-cent  Mineral Exploration Tax Credit for flow-through share investors for an  additional year.
  • Actions to improve access to modern, reliable seismic data for  offshore resource development.
  • $12.3 million over two years to continue to assess diamonds in  the North.

Expanding Trade and Opening New Markets for Canadian Businesses

The Government is taking action to  improve Canadians’ standard of living by growing international trade and  creating export opportunities for Canadian businesses. Economic Action Plan  2012 proposes:

  • Intensifying Canada’s pursuit of new and deeper international trade  and investment relationships, including updating the Government’s Global  Commerce Strategy.
  • Implementing the Action Plan on Perimeter Security and Economic  Competitiveness and the Action Plan on Regulatory Cooperation, which will  facilitate trade and investment flows with the United States.
  • Providing support to Canadian businesses through tariff and tax  measures, along with the extended provision of domestic financing  by Export Development Canada.
  • Increasing travellers’ exemptions to modernize existing  rules and facilitate border processes for Canadians bringing  goods home from abroad.

Keeping Taxes Low for Job-Creating Businesses

The Government has reduced business  taxes and is committed to keeping taxes low. The Government has also taken  action to enhance the neutrality of the tax system to support growth and encourage  investment to flow to its most productive uses. Economic Action Plan 2012  proposes:

  • Enhancing the neutrality of the tax system and further rationalizing  inefficient fossil fuel subsidies by phasing out tax preferences for resource  industries.

Improving Economic Conditions for Farmers  and Fishermen

The Government is improving economic  conditions for farmers and fishermen. Economic Action Plan 2012 proposes:

  • $44 million over two years to transition the Canadian Grain  Commission to a sustainable funding model.
  • $10.5 million in 2012–13 to support key fisheries science  activities.

Strengthening Business Competitiveness

The Government is taking action to  improve the competitive position of job-creating Canadian businesses.  Economic Action Plan 2012 proposes:

  • Reducing red tape through the “One-for-One” Rule and implementing  the Canada-United States Action Plan on Regulatory Cooperation.
  • Reducing the tax compliance burden for businesses.
  • Eliminating foreign investment restrictions for certain  telecommunications companies.

Further Developing Canada’s Financial  Sector Advantage

The Government is proposing new  initiatives that will further ensure that our financial system remains strong  and that it benefits all Canadians. Economic Action Plan 2012 proposes:

  • Introducing legislative amendments to support central clearing of  standardized over-the-counter derivative transactions, and to reinforce  Canada’s financial stability framework.
  • The Government will introduce enhancements to the governance and  oversight framework for Canada Mortgage and Housing Corporation, and is moving  forward with a legislative framework for covered bonds.

 

Investing in Training,  Infrastructure and Opportunity

Supporting  Job Creation, Small Business and Skills Training

The Government is  committed to supporting job creation by small businesses and opportunities for  under-represented groups in the workforce. Economic Action Plan 2012 proposes:

  • Investing $205 million to extend the temporary  Hiring Credit for Small Business for one year.
  • Providing an additional $50 million over two  years to the Youth Employment Strategy to assist more young people in gaining  tangible skills and experience.
  • Providing $6 million over three years to  extend and expand the ThirdQuarter project to key centres across the  country.
  • Improving labour market opportunities for  Canadians with disabilities by investing $30 million over three years in  the Opportunities Fund and by creating a panel on labour market  opportunities for persons with disabilities.
  • Promoting the involvement of small and  medium-sized enterprises in shipbuilding projects.

Improving the Employment Insurance Program

The Government is  committed to making targeted, common-sense changes to make Employment  Insurance (EI) a more efficient program that is focused on job creation  and opportunities. Economic Action Plan 2012 proposes:

  • Limiting EI premium rate increases to 5 cents  each year until the EI Operating Account is balanced.
  • Providing $21 million over two years to enhance  the content and timeliness of the job and labour market information that is  provided to Canadians who are searching for employment.
  • Investing $74 million over two years to ensure  that EI claimants benefit from accepting work.
  • Investing $387 million over two years to  align the calculation of EI benefit amounts with local labour  market conditions.

Expanding  Opportunities for Aboriginal Peoples to Fully Participate in the Economy

The Government is  committed to expanding opportunities for Aboriginal peoples to fully  participate in the labour market. Economic Action Plan 2012 proposes:

  • Providing $275 million over three years to  support First Nations education and build and renovate schools on reserve.
  • Committing to work with willing partners toward  passage of legislation that will establish the structures and standards to  support strong and accountable education systems on reserve.
  • Announcing the Government’s commitment to  improve the incentives in the on-reserve Income Assistance Program while  encouraging those who can work to access training so they are better equipped  for employment.
  • Providing $33.5 million in 2012–13 to extend  the Atlantic Integrated Commercial Fisheries Initiative and the Pacific  Integrated Commercial Fisheries Initiative.
  • Providing $27 million over two years to renew  the Urban Aboriginal Strategy.

Building  a Fast and Flexible Economic Immigration System

The Government is  committed to transitioning to a faster and more flexible economic immigration  system. Economic Action Plan 2012 proposes:

  • Announcing the Government’s intention to better  align the Temporary Foreign Worker Program with labour market demands and to  ensure that businesses look to the domestic labour force before accessing the  Temporary Foreign Worker Program.
  • Signalling the Government’s intention to  support further improvements to foreign credential recognition and to work with  provinces and territories to identify the next set of target occupations  for inclusion, beyond 2012, under the Pan-Canadian Framework for the  Assessment and Recognition of Foreign Qualifications.
  • Proposing to return applications and refund up  to $130 million in fees paid by certain federal skilled worker applicants who  applied under previous criteria established prior to February 27, 2008.

Strengthening  Canada’s Public Infrastructure

The Government is  building on recent actions to modernize Canada’s public infrastructure.  Economic Action Plan 2012 proposes:

  • $150 million over two years for a new Community  Infrastructure Improvement Fund to support repairs and improvements to existing  community facilities.
  • Amendments to the Yukon Act, the Northwest  Territories Act and the Nunavut Act to create new regulations that  will ensure consistent treatment of borrowing across the three territories  and with their Public Accounts.
  • $105 million in 2012–13 on a cash basis to  support VIA Rail Canada’s operations and capital projects.
  • $27.3 million over two years to support the  divestiture of regional ports and the continued operation and maintenance of  federally owned ports.
  • $5.2 billion over the next 11 years on a cash  basis to renew the Canadian Coast Guard fleet.
  • $101 million over the next five years on a cash  basis to restore and modernize the Esquimalt Graving Dock.

Supporting Families and Communities

Protecting the Health and Safety of  Canadians

The Government is committed to promoting  safe communities and protecting the health of individual Canadians. Economic  Action Plan 2012 proposes:

  • Expanding health-related tax relief under the Goods and Services  Tax/Harmonized Sales Tax (GST/HST) and income tax systems to better meet the  health care needs of Canadians.
  • $51.2 million over the next two years to strengthen Canada’s food  safety system.
  • Financial support for employers of Canada’s military reservists to  offset costs incurred when part-time reservists sign up for full-time duty.
  • Announcing enhanced support for the Victims Fund in the  coming months.

Investing in  Communities

The Government is committed to preserving  Canada’s diverse cultural treasures and improving the quality of life in  communities across the country. Economic Action Plan 2012 proposes:

  • Announcing the Government’s intent to explore with interested First Nations  the option of moving forward with legislation that would allow private property  ownership within current reserve boundaries.
  • Providing $330.8 million over two years to build and renovate on-reserve  water infrastructure and support the development of a long-term strategy to  improve water quality in First Nations communities.
  • Providing $11.9 million in 2012–13 to support shelter services  and violence prevention programming on reserves.
  • Continuing to explore social finance instruments as a way to further  encourage the development of government-community partnerships.
  • Supporting major exhibitions at Canadian museums and  galleries by modernizing the Canada Travelling Exhibitions  Indemnification Program.
  • Continuing support to ParticipACTION  and Le Grand défi Pierre Lavoie.
  • Providing up to $99.2 million  over three years to assist the provinces and territories with the cost of  permanent flood mitigation measures undertaken for the 2011 floods.

Supporting Families

The Government is committed to expanding  government support for families, students, seniors and pensioners, and persons  with disabilities. Economic Action Plan 2012 proposes:

  • Providing $1.4 million annually to ensure that Wage Earner  Protection Program applicants receive the benefits they are entitled to when  they need them.
  • Requiring federally regulated private sector employers to insure,  on a go-forward basis, any long-term disability plans they offer to  their employees.
  • Helping Canadians with severe disabilities and their families  by improving the Registered Disability Savings Plan.

Protecting Canada’s  Natural Environment and Wildlife

The Government is committed to  preserving Canada’s natural beauty. Economic Action Plan 2012 proposes:

  • $50 million over two years to protect wildlife species at risk.
  • The creation of Canada’s first national near-urban park in the Rouge  Valley in Ontario.
  • Expanding the eligibility for the accelerated capital cost  allowance for clean energy generation equipment to include a broader range of  bioenergy equipment.

Sustainable Social Programs and a Secure Retirement

  • The Government is taking the necessary steps to ensure that Canada’s  social programs remain sustainable over the long term.
  • The Government has already set the future growth path of transfers  to provinces and territories that will provide sustainable, predictable and  record funding in support of health care, education and other services  for Canadians.
  • To ensure that Old Age Security (OAS) remains sustainable and  reflects demographic realities, the Government will adjust the age of eligibility  requirement for OAS, which will begin to be implemented in 2023 and will  be fully implemented in 2029.
  • To improve flexibility and choice, starting on July 1, 2013,  the Government will allow for the voluntary deferral of the OAS  pension, for up to five years, allowing Canadians the option of deferring take-up  of their OAS pension to a later time and receiving a higher annual pension.
  • The Government is improving the integrity and fairness of the tax  system by closing tax loopholes that allow some businesses and individuals to  avoid paying their fair share of tax.
  • The Government is introducing measures to ensure that charities devote  their resources primarily to charitable, rather than political, activities, and  to enhance public transparency and accountability in this area.

Responsible Management to Return to Balanced Budgets

  • In Budget  2011, the Government reiterated its commitment to generate ongoing savings  from operating efficiencies and improving productivity by announcing a review  of departmental spending. The results of this review are presented in  this budget.
  • Canada’s economic and fiscal fundamentals are strong. The scale  of Canada’s efforts to reduce the deficit is modest compared to  the expenditure restraint efforts being pursued by many countries  around the world and relative to that undertaken in Canada in the mid-1990s,  which included reduced transfers to provinces for health care and  education.
  • The Government’s economic management strikes the right  balance between supporting economic growth and job creation  and returning to budget balance over the medium term.
  • That is why the Government remains committed to returning  to balanced budgets at an appropriate pace as the economy continues to  recover from the global economic crisis.
  • The Government’s plan to return to balanced budgets over  the medium term is on track.
  • Measures initiated in Budget 2010 and Budget 2011 to restrain growth  in federal spending have proven to be highly successful, contributing to a  projected return to budgetary balance over the medium term, while ensuring  continued and growing funding for the programs and services that are a priority  for Canadians.
  • The Government is not reducing transfers to persons, including those  for seniors, children and the unemployed, or transfers to other levels of  government in support of health care and social services.
  • The results of the Government’s review of departmental spending will  yield savings of $5.2 billion on an ongoing basis. The planned reduction  in spending represents less than 2.0 per cent of federal program spending  in 2016–17, or 0.2 per cent of Canada’s gross domestic product (GDP) in that  same year.

Fiscal Outlook

  • The Government’s plan for returning to balanced budgets over  the medium term is on track.
  • The deficit in 2011–12 is projected to be $8.5 billion lower than  it was in 2010–11, and it is projected to decrease by an additional $3.8 billion  in 2012–13. The deficit is projected to continue to decline to $1.3 billion  in 2014–15.
  • Over the forecast period, the budgetary balance is projected to  improve by a total of $39.6 billion compared to the November 2011 Update of  Economic and Fiscal Projections, reflecting both the improved economic outlook  and the Government’s strong fiscal management.
  • As a share of gross domestic product (GDP),  program expenses are projected to decline from 14.7 per cent in 2010–11  to 12.7 per cent in 2016–17, which represents a return to  pre-recession spending ratios.
  • The federal debt is projected to decline to 28.5 per cent of GDP  in 2016–17, in line with its pre-recession level.
  • Canada expects to achieve, well ahead of schedule, its Group of  Twenty (G-20) commitments to halve deficits by 2013 and stabilize or reduce  total government debt-to-GDP ratios by 2016, as agreed to by G-20 leaders at  their summit in Toronto in June 2010.
  • Canada continues to hold a significant fiscal advantage over other G-7 countries.  The International Monetary Fund projects that by 2016, Canada’s total  government net debt-to-GDP ratio will remain at about one-third of the G-7  average and more than 20 percentage points of GDP below that of Germany, the G-7  country with the next-lowest ratio.

 

For more visit Government of Canada web site:  Budget 2012 – Canada’s Economic Action Plan