February 29, 2008
Conservatives tighten belts for tough economic times ahead Harris: budget prudent
Prince George Free Press
The 2008-09 federal budget is a prudent balance for uncertain economic times, according to Cariboo-Prince George MP Dick Harris.
The budget, presented by Minister of Finance Jim Flaherty on Tuesday, includes just under $1.5 billion in new program spending and tax reductions. The 2008-09 budget includes $208.1 billion in program spending, $2.3 billion in dept repayment and $31.5 billion in debt servicing costs.
The government is anticipating to put $10.2 billion into debt repayment at the end of the 2007-8 fiscal year.
“Our economy is being impacted by the downturn of the U.S. economy. Because they are our biggest trading partner, we could feel a large effect,” Harris said. “It’s easy for a government when the cash is rolling in, but the real test of government is when you’re facing uncertain or tough times. We put money into areas of priority.”
Economic forecasts predict Canada’s gross domestic product (GDP) will grow 1. 7 per cent in 2008 and 2.4 per cent in 2009. Those forecasts are down from 2.4 per cent in 2008 and 2.7 per cent in 2009, as was predicted in the fall.
The tax initiatives announced in the 2007 Economic Statement will result in $12 billion in tax savings to individuals and business this year.
In terms of additional tax savings this year, Harris said, residents will now be able to put up to $5,000 per year into a Tax-Free Savings Account. Capital gains and interest earned on that account will never be taxed and the money can be withdrawn at any time, unlike an RRSP.
“Up until now, all the interest they made was taxable,” Harris said. “Whether it’s young people saving for that first car or a couple saving for their first home… every Canadian will be effected.”
Under the budget, seniors would be allowed to earn $3,500 before their wages are clawed back by the Guaranteed Income Supplement program -áinstead of $500 currently.
“We’ve announced a scholarship plan that will provide funding for 100,000 more students than the old Millennium Fund did,” Harris added.
College of New Caledonia Students’ Association chairman Valentine Crawford hailed the $350 million initiative as a major step forward for students.
“Finally Canada is no longer one of the few Western industrialized nations without a national system of grants,” Crawford said in a press release. “By implementing a national system of grants, the government is responding to a long-standing need of northern students and their families to reduce student debt.”
The average student debt load in B.C. has grown from $18,500 to $27,000 since 2001.
Mayor Colin Kinsley hailed the government for making the $2 billion Gas Tax Fund a permanent measure. The fund is used to provide municipalities money for infrastructure projects.
In addition, Kinsley said the $400 million investment to hire 2,500 new police officers nationally could benefit the city.
Harris said the $200 million of pine beetle funding announced in 2006-07 will be, “stretched over three years, because the initial roll-out didn’t happen as quickly as anticipated.”
“There is a lot of money unspent in the initial $200 million from 2006-07,” Harris added. “Prime Minister Stephen Harper… has committed the $1 billion over 10 years is safe and guaranteed.”
Taxes in Canada are the lowest they’ve been since the days of John Diefenbaker in the 1950s and 1960s, Prince George-Peace River MP Jay Hill said.
“We think we’ve brought forward a responsible, prudent budget to shepherd our economy through trying times,” Hill said. “I encourage Canadians to look at the last two budgets we’ve put forward. That’s the record we’ll be running on in the next election -áwhenever that is.”
Hill said the timing of the next election will likely be up to the opposition parties – particularly the Liberals.
“The reality is I don’t think that anyone can figure out what (Liberal leader) Stephan Dion is doing,” Hill said.
Over the last few weeks, Dion has waffled so many times on whether they would support the budget no one knows what they will do, he said.
NDP MP Nathan Cullen, from Skeena-Bulkley Valley, said the budget doesn’t do enough for the environment, First Nations, health care and resource-dependent communities.
“I’m very glad we got the billion dollars out for resource-dependent communities – but we saw that as a down payment, not the full amount,” Cullen said. “There is no money for affordable housing. (And) the government has completely abandoned its wait time guarantees at hospitals.”
The tax cuts put in place last year limit what the government can do, he said.
“The government has said the cupboard is bare. (But) they’ve already handcuffed themselves, intentionally. We’re heading into some really tough times -áit wasn’t the time to spend over $10 billion paying down the debt.”
Instead of spending $300 million to subsidize the nuclear energy sector, Canada should be investing in environmentally sustainable technology, he added.
The government’s $66 million commitment to develop new emission standards over two years is a stalling tactic, Cullen added.
