Ottawa, May 13, 2005
2005-035

Archived - Minister of Finance Outlines Fiscal Impact of Recent Government of Canada Initiatives

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Minister of Finance Ralph Goodale today released an accounting of the fiscal impact of all Government of Canada initiatives announced since the budget was tabled on February 23, 2005. These total $9 billion over five years.

"There is no doubt that we remain on track to achieve balanced budgets or better each and every year and to reduce the federal debt as a share of the economy to 25 per cent by 2014-15, as indicated in the last budget," said Minister Goodale. "This commitment is backed by $28.5 billion in contingency reserves and economic prudence over the next five years."

The initiatives announced in recent weeks, some of which overlap and some of which were funded in Budget 2005, are as follows:

  • $4.5 billion over the next two years related to initiatives in Bill C-48 for post-secondary education and training, affordable housing, the environment and foreign aid.
  • $5.7 billion for a number of shared initiatives with the Province of Ontario over the next five years. Some of these initiatives are covered by Bill C-48 or by funds set aside in Budget 2005.
  • $350 million in lower airport rents until 2009-10. Over the lifespan of the rental agreements (most of which have remaining terms of about 50 years), Canadian airports will pay $8 billion less.
  • $618 million over the next five years for other initiatives outlined in the table below.

The total cost of the above measures is $11.2 billion. However, $2.2 billion of this amount was funded in Budget 2005 or represents the overlap between Bill C-48 and the Ontario agreement. As a result, the net fiscal cost of these measures is $9.0 billion.

Measures outlined in Bill C-48 will be funded from any budgetary surplus that exceeds $2 billion in this fiscal year and the next. Other new spending commitments will be funded through the use of economic prudence, where appropriate, as well as the reallocation from existing programs, or increased revenues should they materialize.

The table below provides a detailed breakdown of the fiscal impact of these measures over the next five years.

In releasing this information, Mr. Goodale said, "It is important that Canadians have an accurate understanding of the impact of recent decisions on the financial position of the Government of Canada."

___________________________________
For further information, media may contact:

Pat Breton
Press Secretary
Office of the Minister of Finance
(613) 996-7861

David Gamble
Public Affairs and Operations Division
(613) 996-8080

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Initiatives Announced Since the 2005 Budget


  2005-06 2006-07 2007-08 2008-09 2009-10 Total

($ millions)

Bill C-48
Post-Secondary Education and Training 750 750 1,500
Affordable Housing 800 800 1,600
Environment and Energy Efficiency for 
  Low-Income Housing
450 450 900
Foreign Aid 250 250 500

Total 2,250 2,250       4,500
Canada-Ontario Agreement
Higher Education 200 200 350 400 400 1,550
Housing and Infrastructure 150 150 100 100 100 600
Cities 149 149 298
Labour Market Development Agreement 
  and Immigration
80 300 400 560 634 1,974
Climate Change 40 140 158 200 538
Corporate Tax and Meat Inspection 10 80 350 250 100 790

Total 589 919 1,340 1,468 1,434 5,750
Airport Rents Reduction 48 72 97 132 349
Other
Wage Earner Protection Program 32 32 32 32 32 160
Canadian Museum for Human Rights 10 10 10 20 20 70
Prince Rupert Port Upgrade 10 20 30
Global Centre for Pluralism 30 30
International Fishing Governance 6 7 7 20
Quebec City 400th Anniversary Celebrations 11 34 45 19 110
Measures to Aid Darfur 120 78 198

Total 219 181 94 71 52 618
Total 3,058 3,399 1,506 1,636 1,618 11,217
Less
Funding Included in 2005 Budget (130) (171) (231) (277) (348) (1,157)
Overlap With Bill C-48* (499) (499) - - - (998)

Total (629) (670) (231) (277) (348) (2,155)
Net Fiscal Cost of New Initiatives** 2,429 2,728 1,275 1,359 1,270 9,062

* Measures for post-secondary education, housing and cities.
** Funding for agricultural sector of $1 billion and for mountain pine beetle of $100 million (funded in the 2005 budget) accounted for in 2004-05. 
Note: The financial support for C Series commercial aircraft program of up to $350 million was provided for in the 2005 budget.