March 5, 2010

WILLIAM CONWAY

Budget 2010

Budget includes $7.7 billion in infrastructure stimulus funding

Government won't extend March 31, 2011 deadline for projects

VINCE VERSACE

staff writer

OTTAWA

The 2010 federal budget charts a path for job growth by staying the course mapped out by the Conservatives’ stimulus plan while limiting government spending, Canada’s finance minister says.

“Our government is taking a more responsible approach,” Jim Flaherty said in unveiling the budget in Ottawa March 4. “Just as we will implement our stimulus package as promised, we will also end it as promised. We will also increase restraint on government spending.”

The core of Budget 2010 centres on building on Canada’s economic recovery through $19-billion of funding in the second year of the Canada’s Economic Action Plan, including $7.7 billion in infrastructure stimulus funding and $3.2 billion in personal income-tax relief.

Ottawa says government salaries, administration and overhead spending will all be frozen to help reach its target of $17.6 billion in savings over the next five years.

The government says it will not move from its March 31, 2011 deadline for stimulus projects to be completed. There was no mention of how similar funding could be provided beyond the deadline.

The Canadian Construction Association had hoped to see new language to assist projects that may just come short of completion before the deadline.

Among the specific new infrastructure funding announced in the budget:

• $10 million over three years to Transport Canada to help support legal, financial and technical work for the Windsor- Detroit border crossing.
• $50.5 million over two years to the Jacques Cartier and Champlain Bridges Inc. for capital expenditures on bridges in the Greater Montreal area.
• $175 million over two years to renew Marine Atlantic’s fleet and shore facilities to improve links between Newfoundland and mainland Canada

The Employment Insurance premium rate will remain frozen at $1.73 cents per $100 of insurable employee earnings to the end of 2010, with no indication of what will occur in 2011.

Groups such as the Canadian Federation of Independent Business (CFIB) and CCA are concerned that if rates are allowed to rise, this could trigger the maximum allowable increase under current legislation of 21 cents per $100 for employers, hiking employer contribution from $2.42 per $100 to $2.63.

The government will extend its First Nations Water and Wastewater Action Plan for two more years and will conduct a review of its current approach to First Nations infrastructure funding. Every year the government invests about $1 billion in First Nations infrastructure.

Ottawa has also created a Vehicle and Equipment Financing Partnership as part of its Business Credit Availability Program. The partnership will receive a $500 million in funding to expand financing options for small and medium-sized finance and leasing companies, “increasing the availability of credit at market rates for dealers and users of vehicle and equipment.”

A Red Tape Commission was also announced to help reduce compliance burdens and unnecessary regulation. The CFIB estimates that Canadian businesses spend more than $30 billion a year to comply with regulations.

Print | Email | Comment