Ottawa, January 27, 2009
The Honourable Jim Flaherty, Minister of Finance, today tabled a comprehensive budget plan to stimulate economic growth, restore confidence and support Canadians and their families during a synchronized global recession.
"Budget 2009 is Canada’s economic action plan," said Minister Flaherty. "It builds on our position of strength. It provides temporary and effective economic stimulus to help Canadian families and businesses deal with short-term challenges. Our investments will build Canada’s long-term capacity, so that when the global recession eases, we emerge even stronger."
Canada’s Economic Action Plan will provide almost $30 billion in support to the Canadian economy this year. In total, this is equivalent to 1.9 per cent of our total economy.
The plan will stimulate the economy through:
Immediate Action to Build Infrastructure
Expanding and accelerating the recent historic federal investment in infrastructure with almost $12 billion in new infrastructure stimulus funding for roads, bridges, broadband internet access, electronic health records, laboratories and border crossings across the country. This will support economic growth and employment this year and next while also bolstering Canada’s long-run productive capacity.
Action to Reduce Taxes and Freeze EI Rates
Providing $20 billion in personal income tax relief that will benefit Canadians over 2008‑09 and the next five fiscal years as well as continued low Employment Insurance rates.
Action to Stimulate Housing Construction
Providing $7.8 billion to build quality housing, stimulate construction and enhance energy efficiency. Measures include a renovation tax credit providing an estimated 4.6 million Canadian families up to $1,350 each, funding for energy retrofits, investments for social housing to support low-income Canadians, seniors, persons with disabilities and Aboriginal Canadians, and low-cost loans to municipalities.
Action to Improve Access to Financing and Strengthen Canada’s Financial System
Providing up to $200 billion through the Extraordinary Financing Framework to improve access to financing for consumers and allow businesses to obtain the financing they need to invest, grow and create new jobs.
Canada’s Economic Action Plan will protect Canadians hit hardest by the global recession with:
Action to Help Canadians
Providing $8.3 billion for the Canada Skills and Transition Strategy, which includes extra support for Canadians most affected by the economic downturn, including enhancements to Employment Insurance and more funding for skills and training.
Action to Support Businesses and Communities
Protecting jobs and supporting sectoral adjustments during this extraordinary crisis with $7.5 billion in extra support for sectors, regions and communities. This includes targeted support for the auto, forestry and manufacturing sectors, as well as funding for clean energy.
When combined with the ongoing benefits of the tax reductions in the 2007 Economic Statement, the Economic Action Plan in this budget is estimated to boost real GDP by 2.5 per cent and create or maintain about 265,000 jobs by the end of 2010.
"We are not acting alone," said Minister Flaherty. "These actions fulfill Canada’s commitments to its global partners at the G20 leaders' summit to provide timely stimulus to domestic demand, while maintaining long-run fiscal sustainability.
"With this stimulus plan, Canada will emerge from this recession with a more modern and greener infrastructure, a more skilled labour force, lower taxes and a more competitive economy."
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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Canada’s Economic Action Plan
Canada’s Economic Action Plan is a balanced stimulus plan that includes massive investments in infrastructure, tax relief and transfers, and other new initiatives.
Stimulus measures in Budget 2009 will provide almost $30 billion in support to the Canadian economy this year, an amount equivalent to 1.9 per cent of our total economy (real GDP).
Many of these investments are partnerships with provinces, territories and municipalities. Over the next two years, the total stimulus to the Canadian economy, including stimulus from other levels of government, will surpass $50 billion — an amount equal to 3.2 per cent of real GDP.
|(millions of dollars—cash basis)|
|Action to Help Canadians and Stimulate Spending||5,880||6,945||12,825|
|Action to Stimulate Housing Construction||5,365||2,395||7,760|
|Immediate Action to Build Infrastructure||6,224||5,605||11,829|
|Action to Support Businesses and Communities||5,272||2,255||7,527|
|Total federal stimulus||22,742||17,200||39,942|
|Total stimulus (with leverage)||29,298||22,316||51,613|
|As a share of GDP (%)|
|Total federal stimulus||1.5||1.1||2.5|
|Total stimulus (with leverage)||1.9||1.4||3.2|
|Notes: Totals may not add due to rounding. These cost estimates reflect projected cash expenditures over the next two years. The budgetary impact is somewhat smaller because some of these expenditures relate to construction and renovation costs of federal assets (for which only depreciation is recorded on a budgetary basis) and loans to third parties (where there is a budgetary impact only in the event that there is a risk of loss).|
Fulfilling our Global Responsibilities
Canada’s Economic Action Plan fulfills Canada's commitments at the recent G-20 Special Leaders Summit to provide timely stimulus to domestic demand, while also maintaining long-run fiscal sustainability. Indeed, it surpasses the International Monetary Fund suggestion that countries in a position to do so should inject fiscal stimulus of 2 per cent of GDP to reduce the effects of a damaging global recession.