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Archived - Budget 2011
Chapter 4: The Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth (June 6, 2011)
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- There have been no updates to the measures in this chapter relative to Budget 2011.
- Chapter 4.2 has been updated to indicate that the Government will ask the House of Commons Standing Committee on Finance to undertake a study of charitable donation incentives in the first session of this Parliament, consistent with Motion 559 that was adopted by the House of Commons on March 2, 2011 in the previous Parliament.
- In Chapter 4.3, the description of enhancements to the Canada Student Loans and Grants programs has been updated to reflect the expected implementation by provinces and territories.
- Other changes are limited to editorial adjustments to the text.
Introduction
Canada’s Economic Action Plan has been effective in creating and maintaining jobs and protecting the well-being of Canadians. Canada has now more than fully recouped all of the employment and output losses that occurred as a result of the recession. Moreover, the private sector is once again the engine of growth and job creation, allowing the Government to wind down stimulus and focus on long-term priorities.
The Government will build on the success of the Economic Action Plan. The Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth helps lay the foundation for long-term prosperity by supporting key drivers of economic growth—innovation, business investment, families, communities, education and training—in a responsible manner that preserves Canada’s fiscal advantage.
The Government is building on a strong economic record. Since 2006, the Government has reduced taxes, tariffs and red tape to improve incentives for investment and innovation. It has fostered innovation by making substantial investments in research and development, and has taken action to encourage education and skills development. The Government’s actions include major tax reductions, historic investments in infrastructure, a more streamlined regulatory environment and targeted measures to safeguard financial stability. It has reduced the welfare wall and created opportunities for more Canadians to participate in the labour force, while maintaining a strong record of fiscal management.
These policy actions have garnered widespread international recognition. For example, The Economist magazine’s Economist Intelligence Unit recently ranked Canada as the best place in the Group of Seven (G-7) to do business for the next five years.
On fiscal stabilization, the government appropriately charts a course to fiscal balance over the medium term. This would put net debt-to-GDP ratio on a downward trajectory from already low levels, maintaining Canada’s standing as [having] the strongest fiscal position in the G-7.
— International Monetary Fund,
Canada: 2010 Article IV Consultation,
December 2010
In an increasingly competitive global environment, to remain a leader on the world stage, Canada needs to maintain its low-tax plan that leaves more money in the hands of families and stimulates the investment, innovation and economic growth that ultimately create more high-wage jobs for Canadians. It needs to encourage growth and innovation through investments in research and education, streamlined regulations and free trade agreements with advanced and emerging economies. It needs to support families and communities to ensure that all Canadians benefit from the opportunities and wealth that long-term growth creates. And Canada needs to remain focused on maintaining its strong fiscal management and sound financial system to foster the long-term economic growth that will provide all Canadians with the opportunity to contribute to our continued prosperity.
To that end, the Next Phase of Canada’s Economic Action Plan will take steps to advance the Government’s long-term objective of building a stronger economy that generates high-wage jobs.
The Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth is centered on four strategic areas:
- Supporting Job Creation: Creating the right environment for businesses and entrepreneurs to invest in Canada and succeed in the global economy, leading to higher rates of productivity growth, more and better-paying jobs for Canadians, and a higher standard of living.
- Supporting Families and Communities: Ensuring that all Canadians can enjoy a high quality of life and benefit from the opportunities that long-term growth creates.
- Investing in Innovation, Education and Training: Promoting the research and development that will give Canadian firms a competitive advantage in global markets and providing Canadians with the opportunity and incentives to acquire the education and skills needed for increasingly complex, high-wage jobs.
- Preserving Canada’s Fiscal Advantage: Maintaining a strong environment for growth by ensuring the Government will return to fiscal balance in the medium term, providing confidence and certainty to Canadians and Canadian businesses.
By focusing on the drivers of growth, the Next Phase of the Economic Action Plan will help individuals, entrepreneurs and businesses create the wealth Canada needs to invest in health care, infrastructure and other services that promote vibrant communities and maintain our high quality of life. Budget 2011 introduces a number of targeted measures to support these objectives.
