Details of The Budget
The budget was the eighth balanced budget in a row presented by the Liberal government. It contained minor tax cuts for both businesses and individuals over a five-year period. These cuts, however, were mostly scheduled to begin in the latter years of the five-year period, which meant that the majority of them were unlikely to occur before the next election was held.
The personal income tax cut raises the basic personal exemption to $10,000 from its former level of just over $8,000 over the five-year period. This was projected to result in an average tax savings of $16 for each Canadian in 2006, with the final total reaching $192 at the end of the five-year period. The basic personal exemption is indexed to inflation, so it would likely have risen to roughly $9,000 over the five-year period without the changes.
The budget also contained $12.7 billion for the Department of National Defence over the following five years. However, not all of this money was new funding and, as with most of the budget, it was back-loaded. The total new funding for 2006 was to be $500 million.
Start-up money was provided for Canada's efforts to comply with the Kyoto Accord and for a national child care program. Additional funding was provided for cities, health care, and foreign aid. Some cuts were made. The Air Travel Complaints Commissioner was abolished, and foreign aid to Thailand, Malaysia, and all countries now in the European Union was ended. In total, $11 billion in savings are expected.
Read more about this topic: 2005 Canadian Federal Budget
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