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Amid an Oil Price Collapse…The Harper Government Delivers on its Balanced Budget Promise
Posted Apr 22, 2015
- As promised, the 2015-16 Budget is balanced. The government projects small surpluses through to 2019.
- The economic back drop is challenging as the drop in oil prices is weighing on economic growth and federal revenues. Real GDP growth is now projected to be 2.0% this year, whereas the September Fiscal Update foresaw growth of 2.6% in 2015.
- Budget 2015 had few surprises and felt like a pre-election document, as it delivered some targeted tax relief and reiterated many previously announced tax and spending initiatives.
- The Budget extends accelerated depreciation for eligible investments by manufacturers and reaffirms higher depreciation rates for LNG plants.
- There is also more tax relief for small businesses from a phased-in reduction in the small business income tax rate from 11% to 9%, in four increments starting next January.
- The government confirmed pre-budget speculation by enriching the Tax-Free Savings Account Program; the annual contribution limit rises from $5,500 to $10,000.
- The government is continuing with existing infrastructure funding commitments and is also investing a further $750 million over two years starting in 2017-18, and $1 billion per year thereafter, in a new Public Transit Fund.