- Focus on Public Policy and Regulation: Federal Budget 2014
- February 14, 2014
- Law Firm: Dentons Canada LLP - Toronto Office
Federal Finance Minister Jim Flaherty tabled the Conservative government’s tenth full budget on February 11, 2014. Entitled The Road to Balance: Creating Jobs and Opportunities, the budget outlined the government’s continued efforts to return to surplus in time for the next federal election while announcing several modest consumer friendly, infrastructure, and jobs training measures aimed at stimulating jobs and growth. Budget measures are meant to complement objectives set forth in the Economic Action Plan of 2009. In that respect, Budget 2014 represents the conclusion of a multi-year plan to balance federal books.
Modest announcements fit thematically within the framework of fostering a competitive business environment (i.e. no new business taxes), encouraging trade and innovation, and promoting competitive advantage in areas like the financial services sector, resource development, and mining forestry and agriculture (i.e. tax credits).
Updated Budget 2014 figures showcase a $2.9 billion deficit and an expected surplus of $6.4 billion in 2015-16. Targets will be achieved by controlling government expenditures while many new initiatives will be paid for largely by a significant increase in tobacco taxes and duty rates.
The most newsworthy items for infrastructure investment included multi-year funding for: improvements to highways, bridges and dams located in national parks and historic canals ($391.5 million), repair and maintenance of bridges in the Greater Montreal Area including the Champlain Bridge ($378 million), construction of a new bridge over the St. Lawrence ($165 million), and targeted investments for maintenance and repair of federally owned ports and craft harbours (total of $73 million).
As promised in the recent federal Speech from the Throne, the government has pledged monies to extend and enhance broadband high-speed internet access for rural and Northern communities ($305 million over five years). Other noteworthy consumer measures include: capping wholesale domestic wireless roaming rates while strengthening the ability of regulators to impose fines on violators, eliminating the practice of pay-to-pay billing, and yet-unannounced legislation to tackle cross-border price discrimination to reduce the gap between consumer prices in Canada and the United States.
Training, Jobs, and Growth
As unemployment in Canada sits at around seven percent, some attention has been paid to jobs training and job creation schemes. Notable highlights include: expanding the Canada Student Loans Program with the creation of the Canada Apprentice Loan (helping apprentices registered in Red Seal trades with the cost of training), assisting unemployed older workers by renewing and expanding the Targeted Initiative for Older Workers program (multi-year $75 million), launching an ongoing enhanced job-matching service ($11.8 million over two years and $3.3 million per year thereafter), and the alignment of training with labour market needs through the Canada Job Grant (a source of contention with the provinces about who will pay and administer the program persists).
Overall, Budget 2014 is more ‘continuity’ than ‘change.’ The document contains very few large-scale announcements and is relatively prudent and restrained with respect to spending. From a political perspective, it is a largely “no new news” plan that leaves the Conservative government on course to face the Canadian electorate in 2015 with a balanced federal budget and some targeted campaign promises, including further income tax reductions for middle class families. Furthermore, 2014-2015 will feature many high profile government initiatives which take place outside the House of Commons and require less legislative activity. These include: pipeline projects (such as the Keystone XL and Northern Gateway), international trade negotiations (Canada-Korea FTA and Trans-Pacific Partnership), and the tabling of a Canadian climate plan in the early part of calendar year 2015, in the run-up to the creation of a successor to the Kyoto Protocol. The government will work hard to ensure victories in traditionally perceived areas of strength like trade and improve upon its perceived lack of credibility on issues such as climate change.