News
February 27, 2008
Highlights of the 2008 Federal Budget
- The Federal Gas Tax has been made permanent which provides predictability in funding. The City of Hamilton anticipates approximately $30-32 million annually, when the program is fully evolved.
- $500 million to support capital investments in public transit. Funding will paid into a trust, upon the passing of legislation, for only those beneficiaries that have made public commitments before March 31, 2008. The City has yet to determine how the funds will flow to eligible municipalities. If based on population, or ridership and population, Hamilton may be eligible for $7 - 8 million in one-time funding.
- $400 million for provinces and territories to recruit 2,500 new police officers. This is extremely encouraging for Canadian municipalities, especially older urban centres such as Hamilton.
- $1 billion to support struggling manufacturers with three extra years of accelerated capital cost allowance for new machinery and equipment.
- $350 million for a new Canada Student Grant Program starting in 2009.
- $270 million more over two years for aboriginal programs, including cash to improve drinking water.
- $250 million over five years for an Automotive Innovation Fund to support strategic, large-scale research and development projects in the automotive sector in developing innovative, greener and more fuel-efficient vehicles.
- $250 million for research into carbon capture and storage to help reduce greenhouse gases.
- $140 million for Genome Canada to help build on Canada's knowledge and people advantage in genomics.
- $122 million over two years to overhaul the federal prison system.
- $100 million in extra funds for the Afghan reconstruction and development mission.
- $90 million new dolalrs to extend to 2012 the Targeted Initiative for Older Workers to help older works stay in the workforce.
- $80 million more per year to Canada's three university granting councils for research in support of industrial innovation, health priorities and social and economic development in the North.
- $72 million over two years to farm programs and to improve access to $3.3 billion in potential cash advances to Canadian farmers.
- $22 million over tow years for innovation and to provide greater regulatory certainty in the aquaculture industry.
- $15 million more per year to the Indirect Costs of Research program.
- $10 million over two years to Natural Resources Canada to promote Canada's forestry sector in international markets as a model of environmental innovation and sustainability.
Personal Budget Impacts
- Canadians can contribute up to $5,000 a year to a Tax-Free Savings Account starting in 2009
- Proposed changes to withdrawal options for federally regulated pension plans: (1)Those 55 or older can move $22,500 to a tax deferred savings vehicle; (2) Those 55 or older will be entitled to a one time conversion of 50% of LIF holdings to a tax deferred savings vehicle, and (3) All individuals facing hardship will be entitled to unlock up to $22,500.
- Child Tax Credit of $306 per child in 2008
- Text book credit for students of $65 per month
- Eliminating the annual contribution limit to the RESP
- Increasing the maximum annual RESP grant from $400 to $500
- Exempting scholarships and bursaries from taxation
Other Initiatives/Impacts
- New electronic passports to be introduced by 2011, valid for 10 years.
- Establishment of PPP Canada Inc. to support public-private partnerships. Program parameters of the P3 fund have yet to be defined.
- Enhancing Export Development Canada's guarantee programs to support the automotive and manufacturing sectors.
- Two per cent annual increase in military spending starting in 2011-12.
- Commitment to double foreign aid to $5 billion by 2010-11.
Overview of Federal Finances
- Government program spending (excluding debt payments) projected to increase by $6.9 billion to $208.1 billion in 2008-09, with program costs jumping by 3.4 per cent.
- Total revenue projected to hit $241.9 billion in 2008-09, leaving a surplus of $2.3 billion, all of which goes to debt reduction.
- Economic growth forecast at 1.7 per cent in 2008, down from a projected 2.6 per cent for 2007.
- Federal debt at $454.8 billion in 2008-09, down $2.3 billion from 2007-08.
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