Photo by Chris Campbell
On March 22th, The Honourable Jim Flaherty, Minister of Finance, launched the next phase of Canada’s Economic Action Plan by tabling a new budget plan with low tax to promote jobs and growth.
What is “the Action Plan”
Canada’s Economic Action Plan provides $60 billion over two years to support new jobs and investments in the future. More than 26,000 projects aiming to get Canadians to work across the country have been completed or are underway. They have contributed to a strong labour market recovery: close to 400,000 jobs were created since July 2009. The Economic Action Plan also supports modernized, greener infrastructure, a highly skilled workforce, and a more competitive business environment.
The First Phase
In the first phase of the Action Plan, economic growth is stimulated by reducing tax burden ($6.2 billion), helping the unemployed ($8.2 billion), building infrastructure to create new and better jobs ($14.8 billion), advancing Canada’s knowledge economy ($3.8 billion), supporting industries and communities ($13.3 billion), and improving access to financing while strengthening Canada’s financial system (up to $200 billion).
What Has Been Done
Many measures have been introduced since 2006 and we highlight only the most important of them. Personal income tax reductions were introduced, particularly for Canadians with low and middle incomes, to improve incentives to work, save and invest. The Government also introduced relief measures to help families, students, seniors and pensioners, workers, persons with disabilities, and communities. Workers who most suffered under the global recession have received additional assistance through the Career Transition Assistance program in order to participate in long-term training, and approximately seven thousand summer jobs were created in 2009–10 and 2010–11. There were investments of more than $600 million in green infrastructure. The Knowledge Infrastructure Program of the Action Plan provides $2 billion for university and college projects – repairing, maintenance and construction. Canadian tourism has been given $8 million of support for additional promotional activities. The Extraordinary Financing Framework introduced measures to recover Canada’s financial system.
Comments on the Action Plan
Michael McSweeney, President and CEO of the Cement Association of Canada, said: “It is clear to our members that the Economic Action Plan has played a significant role in assisting Canadian manufacturers weather the recession and has allowed the addition of critical infrastructure in Canada.” On January 4th, 2011, The Wall Street Journal wrote: “Twenty-two years ago we wrote an editorial — ‘North, to Argentina’ — warning Canada that economic prosperity isn’t a birthright but requires sound policies like free trade. Nowadays, that’s a lecture Canada could credibly deliver to Washington on business taxes.”
The Newest Measure
“Our Government will build on the success of our stimulus plan,” said Minister Flaherty. “As the private sector moves ahead as the engine of growth and job creation, our Government will foster the right conditions for long-term economic prosperity, while staying on track to return to balance in the medium term.” He introduced a low-tax plan on March 22nd that will support job creation, investing in innovation, education and training.