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How much stimulus is the Government providing to the economy and how much longer will it last?
Canada’s Economic Action Plan is a two-year plan providing significant support to the economy in response to the largest synchronized global recession since the Great Depression of the 1930s.
For the current fiscal year, the plan has provided $28 billion in federal stimulus, augmented by more than $8 billion in stimulus from provinces, territories, municipalities and other partners for a total stimulus of $37 billion.
Year 2 of the Action Plan delivers $19 billion in federal stimulus spending, augmented by $6 billion in stimulus from provinces, territories, municipalities and other partners for a total of $25 billion.Over 90 per cent of Year 2 funding is committed and ready to be delivered. This includes:
What is the impact of the Economic Action Plan on jobs?
Canada’s Economic Action Plan, including provincial and territorial actions, is expected to create or maintain 220,000 jobs by the end of 2010.
The Action Plan is on track.
The estimated impacts on employment do not include the impact of the work-sharing program on preserving jobs. Over 160,000 Canadians are benefiting from this program.
Overall, the EAP has contributed to the creation of over 135,000 jobs since July 2009 across the country.
What is the Government doing to improve Canada’s productivity?
The Government’s economic plan, Advantage Canada, is designed to improve productivity and provide sustained economic prosperity for the long term.
Advantage Canada is centred on building five key strategic advantages for Canada:
Since 2006, the Government has made significant progress in implementing elements of Advantage Canada:
Is the Economic Action Plan working?
Canada’s Economic Action Plan is working.
Canada has fared better than all other G7 countries during the global recession.
Recent economic developments suggest that the Economic Action Plan has helped stabilize the domestic economy and has supported the resumption of economic growth.
How does the Government intend to return to balanced budgets?
Budget 2010 outlines a three-point plan for returning to budgetary balance once the economy has recovered.
The Government will not raise taxes. The Government will not cut major transfers to persons and other levels of government.
As a result of the planned wind-down in the Economic Action Plan and the spending growth restraint measures in this budget, the deficit is projected to fall by almost half to $27.6 billion in 2011–12, and by two-thirds to $17.5 billion by 2012–13.
The debt-to-GDP (gross domestic product) ratio is expected to increase to a peak of 35.4 per cent in 2010–11 and then fall to 35.2 per cent in 2011–12 and 31.9 per cent by 2014–15.
Program spending as a share of GDP is expected to decline from 15.6 per cent in 2009–10 to 13.2 per cent in 2014–15.
How have low- and middle-income Canadians benefited from the Government’s tax relief?
Actions taken by the Government since 2006 are providing significant tax relief to individuals, totalling almost $160 billion over 2008–09 and the following five fiscal years.
Low- and middle-income Canadians particularly benefit from the Government’s personal income tax reductions.
Due to measures taken since 2006, more than one million Canadians have been removed from the tax rolls in 2010.
In 2010, over 30 per cent of the personal income tax relief provided by the Government will go to Canadians with incomes under $40,970, and close to 45 per cent will go to those with incomes between $40,970 and $81,941. In total, Canadians with incomes under $81,941 are receiving more than three-quarters of this tax relief as shown in the graph below.
Note: Bar totals may not add due to rounding.
(1) Budgets 2006, 2007, 2008, 2009, the 2006 Tax Fairness Plan and the 2007, 2008 and 2009 Economic Statements (not including GST reduction).
(2) Individual taxable income.
How have families benefited from tax relief and other support provided by the Government?
The Government has implemented numerous measures to recognize the daily expenses incurred by Canadian families. These include:
Families are major beneficiaries of the general tax relief implemented by this Government, including personal tax cuts, such as reducing the lowest personal income tax rate from 16 to 15 per cent and increases to the basic personal amount and rate thresholds, and the two-percentage-point reduction in the GST.
In total, as a result of measures introduced since 2006, this Government is providing almost $160 billion in tax relief to individuals over 2008–09 and the following five fiscal years.What is the Government doing to help provinces and territories?
Provinces and territories can continue to count on long-term, growing support from this Government.
In 2010–11, major federal transfers to provinces and territories will total an all-time high of nearly $53.6 billion, an increase of $2.1 billion over 2009–10.
In 2010–11, this support includes an additional:
In addition, $525 million will be provided through one-time payments to ensure provinces are protected from any decline in their total transfers (CHT, CST and Equalization) in 2010–11 in recognition of the short-term challenges being faced by provinces as we emerge from the global recession.
What is the Government doing to support health care?
In 2010–11, the Government’s support to provinces and territories for health care is at an all-time high and it will continue to grow.
The Government provides support through cash transfers, direct spending and tax measures.
In 2010–11, cash support to provinces and territories for health includes $25 billion:
In 2010–11, direct spending and tax measures for health will be close to $10 billion:
The Economic Action Plan provides $500 million for Canada Health Infoway to enhance the safety, quality and efficiency of the health care system and create thousands of sustainable knowledge-based jobs throughout Canada.
In addition, Budget 2010 provides additional support for Aboriginal health with a $285-million over-two-year investment to improve Aboriginal health outcomes for five key areas: the Aboriginal Diabetes Initiative, the Aboriginal Youth Suicide Prevention Strategy, maternal and child health programs, the Aboriginal Health Human Resource Initiative and the Aboriginal Health Transition Fund.
What is the Government doing to support innovation?
The Government recognizes that research and development is an important driver of long-term economic growth, and that discoveries stemming from research help improve the quality of life of Canadians. Canada ranks first among the G7 countries in terms of expenditures on research and development in the higher education sector as a share of the economy. In Advantage Canada, its long-term economic plan, the Government committed to maintaining this global leadership position.
Through Budgets 2006, 2007, and 2008, the Government provided an additional $2.2 billion in new funding for science and technology initiatives between 2005–06 and 2009–10. Canada’s Economic Action Plan built on these investments by providing an unprecedented $4.9 billion in additional funding for research infrastructure, research, highly skilled people and commercialization. Budget 2010 continues this momentum by providing additional funding to support world-class research and researchers, including:
In order to maximize the Government’s recent investments in science and technology, we need a strong private-sector commitment to research and development and innovation.
Budget 2010 indicates that the Government will review all federal support for research and development to improve its contribution to innovation and economic opportunities for business. This review will inform future decisions regarding federal support for research and development.How is the Government helping Canadian workers affected by this recession?
The Economic Action Plan is helping workers and their families by strengthening benefits and enhancing the availability of training while the economy moves into a fragile recovery. Under the Action Plan, $1.5 billion will be available to strengthen benefits for Canadian workers in 2010–11, including:
The Economic Action Plan is also providing an additional $965 million in 2010–11 to enhance training opportunities for all Canadian workers, including:
Budget 2010 invests nearly $180 million in 2010–11 for targeted measures to further support job creation while the economy and labour market continues its tentative recovery, including:
What does Budget 2010 do for the environment?
Budget 2010 includes new measures totalling more than $190 million to support a cleaner and more sustainable environment, and help meet Canada’s climate change objectives. For example, the Budget provides:
These new resources build on the important ongoing investments initiated under Canada’s Economic Action Plan to help make our economy more sustainable and strengthen Canada’s position as a clean energy superpower. These include:
In 2009, the Government also provided $1 billion over three years to support the Pulp and Paper Green Transformation Program. This program provides incentive for pulp and paper mills to reduce greenhouse gas emissions, and become leaders in the production of renewable energy from biomass.
What is the Government doing to help seniors?
Budget 2010 provides $10 million over two years to increase funding for the New Horizons for Seniors Program. The enhanced funding will support projects that focus on volunteering among seniors and raising awareness of financial abuse of seniors.
This builds on other investments since 2006, which include:
In addition, as a result of measures taken by this Government, seniors and pensioners are receiving over $2.3 billion in targeted tax relief for the 2010–11 fiscal year. In particular:
In recognition of the exceptional deterioration in market conditions in 2008 and its impact on retirees’ savings, the required minimum withdrawal amount for RRIFs was reduced by 25 per cent for 2008, providing $200 million in tax relief to seniors.
Seniors also benefit from general personal tax cuts, such as reducing the lowest personal income tax rate from 16 to 15 per cent, increases to the basic personal amount and rate thresholds, and the two-percentage-point reduction in the GST.
In total, as a result of measures introduced since 2006, this Government is providing almost $160 billion in tax relief to individuals over 2008–09 and the following five fiscal years.
What is the Government doing to help persons with disabilities?
The Government is committed to helping persons with disabilities and their families, to support their full participation in Canada’s social and economic life.
Budget 2010 proposes a number of actions:
This builds on the significant investments made by this Government to assist persons with disabilities.
Budget 2009 provided a one-time federal investment of $1 billion over two years to address the backlog in demand for renovation and energy retrofits of social housing, including renovations that support persons with disabilities. These investments should improve the access persons with disabilities have to social housing. Budget 2009 also invested an additional $75 million over two years in the Affordable Housing Initiative for the construction of new housing units for persons with disabilities.
Budget 2009 enhanced tax relief provided by the Working Income Tax Benefit (WITB) by $580 million for the 2009 and subsequent taxation years, including an increase in the WITB supplement for persons eligible for the Disability Tax Credit. The supplement currently provides up to $462.50 in additional WITB payments.
Budget 2008 introduced new GST/HST exemptions for various medical/assistive devices and training to help individuals cope with disabilities or disorders.
In addition, eligibility for the Medical Expense Tax Credit was expanded to recognize various medical and disability-related expenses.
Budget 2007 included a number of initiatives to support Canadians with disabilities:
Budget 2006 increased the maximum annual Child Disability Benefit (CDB) and extended the eligibility for the CDB to middle- and higher-income families. Budget 2006 also increased the maximum amount of the Refundable Medical Expense Supplement.
In addition, the Government provides support for Canadians with disabilities through the Employment Insurance Sickness Benefit, the Canada Pension Plan - Disability Benefit and the Veterans’ disability pensions and awards, programs that assist people with disabilities to integrate into the labour market. The Government also provides a number of tax measures recognizing that persons with disabilities face extra disability-related expenses that reduce their ability to pay tax.What is the Government doing for Aboriginal Canadians?
Budget 2010 provides $908 million over the next two years to assist Aboriginal Canadians and their communities. This includes:
In 2009, Canada’s Economic Action Plan provided $1.4 billion over two years for investments in Aboriginal skills and training, housing and infrastructure.
This builds on significant investments since 2006, which include:
What is the Government doing to support youth?
The Government recognizes the important of high quality education and skills training for young Canadians. A number of programs are already in place to help youth get an education, acquire skills and get a job:
Budget 2010 provides further investments to support young people looking to gain skills and experience: