Budget Scorecard

CGA-Canada's 2006 Federal Budget Response

CGA-Canada made a number of recommendations to the federal government on priorities going forward in the areas of program spending and competitive tax policy. Here is how Budget 2006 measures up from CGA-Canada’s point of view.

GOVERNMENT SPENDING

SOUND TAX POLICY

COMPETITIVE WORKFORCE

GOVERNMENT SPENDING

	CGA-Canada Proposals		2006 Budget
	Balance the budget and maintain program spending growth at three per cent per annum.		The federal surplus is estimated at $8 billion while program expenses are expected to grow by 5.4 per cent in 2006-07 and 4.1 per cent in 2007-08.
	Commit to reducing the federal debt-to GDP ratio.		The federal government is committed to applying $3 billion to the debt per year. In doing so, the federal government will lower the debt-to-GDP ratio to 25 per cent by 2013-14.
	Maintain a minimum $3 billion yearly contingency fund.		No action taken.
	Reform management culture of the federal civil service to better direct resources to program priorities and to ensure current and future federal spending generate highest program value.		The government is committed to restraining the rate of growth of spending through a new approach to expenditure management focused on results and value for money.

Comment

The federal government should be commended on getting program spending under control.

Grade:

Pass

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SOUND TAX POLICY

	CGA-Canada Proposals		2006 Budget
	Introduce multi-year tax planning.		Budget plans and decisions will operate within a two-year timeframe.
	Expand personal income tax brackets and decrease rates to increase competitiveness of Canadian taxpayers.		A permanent decrease in the personal income tax rate from 16 per cent to 15.5 per cent as of July 1, 2006.
			Increases in the basic personal amount will continue to grow with indexation in addition to a permanent $100 increase in 2007.
			A new Canada Employment Credit – a tax credit on employment income up to $500 effective July 1, 2006. The credit amount will double to $1000 effective January 1, 2007.
	Reduce the corporate tax rate, eliminate the federal capital tax and remove the business capital surtax.		The government will reduce the general corporate income tax rate to 19 per cent from 21 per cent by January 1, 2010.
			Eliminate the corporate surtax for all corporations as of January 1, 2008.
			Eliminate the federal capital tax as of January 1, 2006 - two years ahead of schedule.
	Raise the small business threshold from $300,000 to $400,000.		Increasing the amount of small business income eligible for the 12 per cent tax rate to $400,000 from $300,000 as of January 1, 2007.
			Reduce the current 12 per cent income tax rate applying to qualifying small business income to 11.5 per cent in 2008 and 11 per cent in 2009.

Comment

The new government is to be commended on its far-reaching tax initiatives. Although CGA-Canada would have liked to see deeper cuts in personal income tax rates, the $20 billion of tax cuts presented in the 2006 Budget are a good start to making Canada more competitive with its international partners.

Grade:

Pass

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COMPETITIVE WORKFORCE

	CGA-Canada Proposals		2006 Budget
	Eliminate the requirement for mandatory retirement at age 65. As well, diminish public pension incentives for early retirement.		No action taken.
	Recognize the inherent value immigrants’ training and qualifications can bring to Canada’s workplace. This requires that government and employers combine forces to recruit young immigrants with skills most highly sought by Canadian businesses.		Reduce the Right of Permanent Residence Fee to $490 from $975, effective immediately.
			Over the next two years, it will also provide $307 million to enhance immigration settlement programs and services, and take steps to create a Canadian agency for assessment and recognition of foreign credentials.
	Work with Canadian stakeholders to assess the status and sustainability of defined benefit pension plans and develop reform options for consideration.		The government will strengthen private defined pension plans by proposing four temporary measures to help re-establish full funding of federally regulated defined benefit pension plans in an orderly fashion, with safeguards for promised pension benefits.

Comment

Budget 2006 builds to the future by providing new incentives for students and newcomers to Canada. CGA-Canada believes that this investment will pay dividends in providing Canada a strong and educated work force.

Grade:

Pass

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Budget Scorecard

CGA-Canada's 2006 Federal Budget Response