Canada’s first deficit budget in 12 yrs to stimulate economyJanuary 28th, 2009 - 10:15 am ICT by IANS
Toronto, Jan 28 (IANS) Taking a cue from American President Barack Obama, Canada Tuesday launched “one of the largest building projects” in its history to stimulate the recession-hit economy.Presenting the annual budget, Canadian Finance Minister Jim Flaherty allocated $12 billion for building infrastructure for generating employment.
“We will start construction of roads, bridges, public transit, broadband Internet access, schools and social housing in every region of the country,” the finance minister said, presenting the budget titled “Canada’s Economic Action Plan” in parliament in Ottawa.
The infrastructure package is likely to create 190,000 jobs in 2009 and 2010. The budget also extends tax breaks across the board and cash incentives for the jobless and poor people, taking the annual to $34 billion in 2009.
For one of the best performing economies among G7 nations till the global crisis erupted late last year, this is the first-ever deficit budget in 12 years.
Canada is estimated to post a budget deficit of $30 billion next year, reaching an overall deficit of $80 in the next five year. Economists say the country is likely to revert to surplus budgets only after 2013.
To revive the sagging housing sector - which one of the pillars of the economy along with manufacturing, auto and lumber sectors - the government gave tax breaks for renovation.
The finance minister said, “Our government will spend what is necessary to stimulate our economy, and we will invest what is necessary to protect our future prosperity.
“Making new investments is more challenging in such a time, but it is also more necessary than ever.”
Canada’s economy is expected to shrink by 0.8 per cent this year, pushing the unemployment rate above seven percent.
It will be interesting to see how the three opposition parties, which have joined ranks to bring down the minority government over its economic policies, vote on the budget.
Deepak Obhrai, who as parliamentary secretary is the topmost Indo-Canadian in the current Tory government, said the budget is “a bold multi-year approach to stimulate the economy and protect the country during the current global recession.”
He said, “While Canada is coping with a global economic downturn, our plan will ensure we emerge even stronger as the economy recovers.
“With this plan, Canada will emerge from this global recession with better infrastructure, a more skilled labour force, lower taxes and a more competitive economy.”
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