Little new spending in almost-balanced federal budget

Federal Finance Minister Jim Flaherty has delivered what he happily calls a "boring'' budget, one that's nearly balanced.

The projected deficit this year is $2.9 billion, but the Conservatives have set aside a three-billion-dollar contingency fund and Flahery says the books are looking good.

He says federal finances are "not quite there yet,'' and he would rather be cautious in his forecast.

The budget is largely devoid of significant new money, but it's loaded with low-cost promises to deal with consumer and other issues ahead of a coming election next year.

The plan includes new spending of just $700 million compared with nearly two-billion in cuts, and warns of plans to rein in the cost of compensating public servants.

It delays $3.1 billion in planned military spending, increases taxes on tobacco products, offers modest help to the families of veterans, and includes measures to improve infrastructure and extend rural Internet access.

Some highlights:

• The budget is close to balanced, with a $2.9-billion deficit and a $3-billion contingency fund.

• Flaherty forecasts revenues of $276.3 billion and expenditures of $279.2 billion.

• The government makes clear it will balance the budget next year by cutting program spending and reining in public service compensation costs.

• $237 million over two years to repair and maintain federal bridges in the Greater Montreal Area, including the Champlain, Jacques-Cartier and Mercier bridges.

• $305 million over five years to extend and enhance broadband high-speed internet access for rural and Northern communities.

• The budget proposes to make retired federal public servants pay half the costs of their health-care plan, up from a quarter now. This would raise annual payments for a retired individual to $550 from $261.

• Adopting families will get a bigger tax break for expenses.

• Higher excise taxes on tobacco will raise the price of a carton of 200 cigarettes by $4 and essentially end the discount on smokes sold at duty-free stores, by raising taxes there by $6 a carton. The increase will reap government $685 million in 2014-15.

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

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

• Charities will be allowed to use computers to run their lotteries, offering major administrative savings.

• World-class amateur athletes will get a break when it comes to calculating their available RRSP room.

• Search and rescue volunteers will get a tax credit similar to the one extended to volunteer firefighters in 2011.

• Taxpayers will no longer have to apply for a GST-HST credit on their tax return. The Canada Revenue Agency will make the calculation automatically.

 

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