The Conservative Government led by Stephen Harper is about to table a new budget. After avoiding being toppled by a coalition government made up of the Liberal, NDP and Bloc Quebecois, the Conservative Government will be tabling a new budget on January 27, 2009.
Hints of what is in the budget have gradually been leaked, including details that would see Canada run a $64 Billion deficit in the next two years. Anticipated spending is to include support for the struggling auto and forest industriesm, while a “hinted” tax cut for middle-class Canadians is also being proposed.
The proposed tax cut in the 2009 budget is being criticized by the opposition parties. The Conservatives have indicated that tax cuts would help save families money that can be then spent to stimulate the economy, while opposition critics say that hesitant consumers will bank the money and it will do the opposite. They also question such cuts when Canada is poised to run major deficits in the next two years, making many wonder where the extra revenue will come from to make up the deficit.
When the Conservatives took office, Canada was showing major surplus after major surplus. The anticipated deficit will be the first for Canada after 12-years of surpluses, leaving many to question the fiscal policy that the Harper Government had introduced in its short time in power.
With over $2 billion to be poured into social housing programs, $1.5 billion for retraining, and $1 billion for the forest sector, critics are left wondering if the targeted areas will have any effect to pull Canada out of the recession. Many have indicated that the proposed spending won’t stimulate the economy, but will put Canada back into a poor fiscal position for years to come.
Canada’s 2009 budget will be delivered on January 27, 2009.
