Archived - Budget 2011

Preface (June 6, 2011)

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Updates to Budget 2011

On March 22, 2011, the Government tabled Budget 2011, the Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth, in the House of Commons. However, that budget was not adopted prior to the dissolution of Parliament on March 26, 2011.

On May 2, 2011, Canadians expressed their support for the Government’s prudent low-tax plan to protect and create jobs, secure Canada’s recovery from the global economic recession and improve the well-being of Canadians over the long term. As a result, this update of Budget 2011 includes all of the measures that were previously announced on March 22. In addition:

• A provision has been made in 2011–12 for $2.2 billion in support of the conclusion of a satisfactory agreement between Canada and Quebec on sales tax harmonization, consistent with the Government’s commitment in this regard; and
• The Government is announcing the phase-out of quarterly allowances for political parties.

This update of Budget 2011 also takes into account the latest information available on the economy and the Government’s fiscal situation:

• Following a meeting between the Minister of Finance and leading private sector economists on May 31, it was agreed that the economic outlook used in March continues to be a reasonable basis for fiscal planning in this update of Budget 2011.
• The fiscal outlook has been updated to reflect fiscal developments since March. The deficit projection has been revised down by $4.3 billion in 2010–11 as a result of a downward revision to 2010–11 expenses, including an additional reprofiling of Canada’s Economic Action Plan funding largely related to the extension of the completion deadline for four infrastructure programs. This reprofiling also contributes to the slight increase of $0.5 billion in the 2011–12 deficit projection.

After accounting for these new measures and adjustments, the projected budgetary deficit has fallen from $40.5 billion to $36.2 billion in 2010–11 and has increased from $29.6 billion to $32.3 billion in 2011–12, for a cumulative reduction of $1.6 billion in the projected deficit over those two years. The budgetary balance for the remaining years of the forecast period is largely unchanged.

As a result, this update of Budget 2011 shows that the Government remains on track to eliminate the federal deficit. The updated fiscal forecast projects that the federal government will be in surplus by 2015–16.

The Government remains committed to balancing the budget one year earlier, by 2014–15. It will do this by reducing expenses through the Strategic and Operating Review (Table 1). The budget savings associated with the Strategic and Operating Review will be reflected in the Government’s fiscal projections once these actions are determined and implemented in Budget 2012.

Note to Reader:

All updates to the Budget 2011 text are highlighted in blue. Updates to the tables and charts are indicated in the notes to each table and chart. Finally, a box at the start of each chapter identifies the main updates to that chapter.

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