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Canadian federal budget, 2005

From Biocrawler, the free encyclopedia.

The 2005 Canadian budget was the budget of the Government of Canada for the 2005-2006 fiscal year. It presented on February 23, 2005 by Finance Minister Ralph Goodale. It was the first federal budget presented by a minority government in Canada since the budget presented by the minority government led by Joe Clark in 1979. The defeat of that budget led to an election in which Clark's Progressive Conservative Party of Canada was defeated.

Having fewer than half the seats in the Canadian House of Commons meant that the governing Liberal Party of Canada had to win the support of members of other parties for the 2005 budget to pass. Without that support, the budget would be defeated, and new elections would likely be called.

The government is facing a large surplus of expected revenues over expenses, meaning that the government would be able to fund a wide array of new initiatives.

The budget was the eighth balanced budget in a row presented by the Liberal government. The budget contained minor tax cuts for both businesses and individuals over the next five years. These cuts, however, would mostly come in the latter years of the five-year period, which means that the majority of them would likely not occur before a new election is held.

The personal income tax cut offered will raise the basic personal exemption to $10,000 from its present level of just over $8,000 over the next five years. This will mean an average tax savings of $16 for each Canadian in 2006 with the final total reaching $192 several years down the road. However, the basic personal exemption is already indexed to inflation and, therefore, would be scheduled to rise to roughly $9,000 over the next several years in any case.

The budget also contained $12.7 billion for the Department of National Defence over the next five years. However, not all of this money is new funding and, as with most of the budget, it is back-loaded. The total new funding for 2006 will 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.

The budget, as expected, displeased the Bloc Québécois who were demanding an overhaul to employment insurance and the elimination of the fiscal imbalance. The Bloc voted against the budget.

The Conservative Party, the largest opposition party, surprised many by announcing that it would support the budget immediately after it was read in the House of Commons. Party leader Stephen Harper described it as "better than expected", and described its focus on tax cuts and defence spending as being in line with Conservative policy. It is highly unusual for the official opposition to vote in favour of the government's budget. However, Harper later changed his position on the budget, and his party launched the largest abstention in Canadian history.

The New Democratic Party initially voted against the budget. Leader Jack Layton was critical of the corporate tax cuts and the limited new funding for social programs.

When the budget came to its second reading, with the Conservatives rallied against it after new revelations in the Gomery Inquiry, the NDP struck a deal with the Liberals for a reduction of the foreseen corporate tax cuts and $4,6 billion in spending on social programs. The additional bill to implement these measures was dubbed the "NDP budget."

On May 17, Conservative MP Belinda Stronach crossed the floor to the Liberals, giving them a crucial extra vote. Two Conservative MPs from Newfoundland and Labrador, Loyola Hearn and Norman Doyle, were also pressured by their constituents -- and by provincial premier Danny Williams -- to vote in favour of the budget, as it included the provisions of the government's recent Atlantic Accords.

As the seats of the Liberals and the NDP (and Carolyn Parrish, who supported the budget) equalled those of the Conservatives and the Bloc, the fate of the government then hung on the voting choices of two independent MPs: David Kilgour and Chuck Cadman. The Conservatives eventually announced that they would vote in favour of the main budget bill, but would vote against the second bill containing the NDP amendments.

On May 19, votes were held for second reading of Bill C-43 (the main budget) and Bill C-48 (the amendment). The main budget bill passed on a vote of 250 to 54, with only the Bloc Québécois voting against. The second bill received a vote of 152 Yea and 152 Nay. The Conservatives and Bloc Québécois voted against second reading, while the Liberals and NDP voted in favour. Conservative MP Darrel Stinson was unable to attend the vote due to cancer surgery, so Liberal MP Peter Adams agreed to sit out as a courtesy. Independent MP David Kilgour voted against the budget, while Carolyn Parrish and Chuck Cadman voted in favour. In the event of a tied vote, the Speaker is required to cast the tie-breaking vote. According to Parliamentary procedure, the Speaker is required to vote, whenever possible, for the continuation of debate. Thus, the Speaker voted in favour of second reading, "to allow the House time for further debate so that it can make its own decision at some future time."

On June 14, a series of 16 votes were held pertaining to the budget. As many as 15 were considered non-confidence votes and could have triggered an election if one was lost. With several opposition members absent the government won each vote, virtually guaranteeing that Canadians would not have an election this summer. [1] (http://www.cbc.ca/story/canada/national/2005/06/14/confidence050614.html)

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