Budget 2005 - Delivering on Commitments

Budget 2005 was tabled in the House of Commons on February 23, 2005, by Finance Minister Ralph Goodale.

• The Liberal government’s 2005 Budget represents Canada’s eighth consecutive balanced budget – the longest unbroken string of surpluses since Confederation.  And we expect it to continue.
  
  
• Because of the government’s decade-long commitment to sound fiscal management, Canada has an economic record that is unmatched by any of the G7 nations.
  
  
• With this budget, the Government of Canada is building on our past achievements to ensure a promising future based on promises kept and commitments delivered.
  
  
• Budget 2005 will ensure Canada:
  
  
  • Maintains sound fiscal management;
    
    
  • Has secure social foundations;
    
    
  • Achieves a productive and growing economy;
    
    
  • Moves towards a green economy and sustainable communities; and,
    
    
  • Meets its global responsibilities.
  
  
• Some of the budget highlights include:
  
  
  • Sound Fiscal Management: All Budget measures will be undertaken within a framework of balanced budgets – this year and for the next five years. We will continue to set aside annual Contingency Reserve of $3 billion and build a transparent measure of economic prudence.
    
    
  • Expenditure Review: The government is committed to making sure every dollar spent is a dollar well spent.  To that end, the Cabinet Committee on Expenditure Review has scrutinized every line of government spending, finding $11 billion of the $12 billion in savings it was mandated to find.  Every penny will be re-invested in federal programs and services that are high priorities for Canadians.
    
    
  • Health Care:  In September 2004, First Ministers signed a 10-year Plan to Strengthen Health Care, which will provide $41.3 billion over 10 years.  Budget 2005 builds on this with $805 million over five years in new direct federal health investments, such as health human resources, healthy living and chronic disease prevention, pandemic influenza preparedness, drug safety, and Environmental health.
    
    
  • Early Learning and Childcare: Budget 2005 follows through on the Liberal government’s pledge to build the foundations of an Early Learning and Child Care initiative across the country with $5 billion in new investments.
    
    
  • Seniors: A $2.7 billion increase over five years to the Guaranteed Income Supplement benefits for low-income seniors and a $15 million increase to the New Horizons for Seniors program addressing the needs of seniors.
    
    
  • Immigration: $298 million over five years will be provided to make services more responsive to the needs of immigrants, and enhance settlement and integration programs to help newcomers to Canada become fully contributing members of the workforce more quickly.
    
    
  • Environment: Over $5 billion in investments over the next five years to preserve our natural environment and address climate change.
    
    
  • Tax Relief:  Tax reductions for individuals – especially low- and modest-income Canadians.  It will also promote economic growth by making Canada’s tax system more efficient and competitive. It does this by:
    • Increasing to $10,000 the amount of income that all Canadians may earn without paying federal income tax. This will remove 860,000 taxpayers, including 240,000 seniors, from the tax rolls;
      
      
    • Increasing to $22,000 the annual RRSP contribution limits;
      
      
    • Eliminating the Foreign Content Rule, which limited foreign pension investments to 30 percent; and
      
      
    • Eliminating the corporate surtax and reducing to 19 percent from 21 percent the general corporate income tax rate, thereby maintaining our tax rate advantage relative to the U.S..
    
    
  • Innovative Economy: Significant strategic investments in building a highly skilled and adaptable workforce, a world-class research environment, stronger regional economies, a fair and competitive tax system and more efficient and effective markets.
    
    
  • International: An increase of $3.4 billion over the next 5 years for international assistance to ensure that Canada continues to meet its global responsibilities, including aid to Africa, debt-relief initiatives for the world’s poorest countries and support for immediate humanitarian responses, such as the Tsunami relief package.
    
    
  • Defence: Over $12 billion in new money for defence – the largest increase in the last 20 years.  This includes funding for new troops and new reserves, operational sustainability, and the acquisition of new equipment.