Canada’s finance minister ushers in austerity budget

“Finance Minister Jim Flaherty intends to freeze or cut spending on programs, defer capital expenditures and eliminate some corporate-tax exemptions to help close the gap on a $2.1-billion shortfall in revenues for 2013, The Globe and Mail has learned,” John Ibbitson wrote for The Globe and Mail today. Ibbitson continued, “The new tax revenues and spending cuts are a fraction of a discretionary spending envelope that was more than $110-billion last year. But they reflect a revision downward of the Harper government’s economic growth forecast for the year ahead, to 1.6 per cent from an earlier estimate of 2 per cent. How the government plans to absorb the latest cuts while protecting spending priorities and eliminating the deficit by 2015 will be revealed Thursday, when Mr. Flaherty brings down this year’s budget. Long-term spending plans remain unaffected, with a reviving U.S. economy improving the fiscal outlook for the last half of the decade, according to several senior government officials who are not authorized to speak publicly. In an effort to focus attention on the most positive aspects of what is essentially an austerity budget, officials emphasized that the shortfall will not affect its major theme: spurring job creation while adjusting programs in order to better match workers to positions employers are trying to fill.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

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