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Archived - Foreword

In the 42 days since the Budget, the Government has cut red tape and taken extraordinary and unprecedented action to stimulate the Canadian economy and combat the global recession. Taxes are being reduced, Employment Insurance benefits have been extended, the financial system has been strengthened and we will be ready to roll out $12 billion in spending on roads, bridges, green infrastructure and other critical infrastructure starting in April if Budget 2009 is passed by the Senate and receives Royal Assent. This spending will create jobs in the short term while leaving a lasting legacy for Canadians.

Canada Is Weathering the Storm

The world is struggling with the worst economic crisis in generations.

Despite the challenges facing Canada, we are weathering the global economic storm far better than most other countries. Canada was the only Group of Seven (G7) country to have posted positive growth in the second and third quarters of last year. Our financial system is the strongest in the world. The Government's fiscal position remains solid; we entered this recession with a balanced budget.

Despite these strengths, Canada is not immune to this global economic crisis. That is why the Government tabled the earliest budget in history and presented Canadians with Canada's Economic Action Plan. This ambitious multi-year Plan will stimulate the economy and support those Canadians hit hardest by these difficult times.

Extraordinary and Unprecedented Early Action

The Government has been following a consistent plan since the day it took office, and the result of three years of responsible leadership has allowed Canada's economic fundamentals to remain strong despite foreign instability.

We have been making affordable tax reductions, reduced the public debt, kept spending under control and focused on results to protect our gains and ensure our tomorrows.

The Government is delivering $220 billion in tax relief over this and the next five fiscal years to individuals, families and businesses with its actions since 2006. This includes more than $75 billion in tax reductions from reducing the Goods and Services Tax to 5 per cent.

We were ahead of the curve on stimulus. We anticipated the prospect of a weaker global economy in 2007. While the U.S. introduced one-time tax rebates, we put in place broad-based tax reductions sustainable for the future.

Bold steps have been made to improve financial markets in Canada. We have taken steps to improve Canada's regulatory system through more proportionate, principles-based securities regulation, moving toward common securities regulation across provinces. We have been taking steps in improving market governance and enforcement.

We made early changes to Canada's mortgage industry by reducing the maximum term for new government-backed mortgages from 40 years to 35 years and requiring a minimum down payment of 5 per cent for new government-backed mortgages.

We introduced the Tax-Free Savings Account (TFSA), the most significant change to Canada's savings system since the introduction of Registered Retirement Savings Plans in 1957. Starting in 2009, Canadian residents over the age of 18 will be able to contribute up to $5,000 annually to TFSAs. Investment income (including capital gains) and withdrawals will be tax-free.

Canada's Economic Action Plan

Building on these actions, on January 27 we introduced Canada's Economic Action Plan—the earliest budget in Canadian history—to boost the economy now and over the next 24 months.

The Plan has taken extraordinary steps to inject $52 billion into the economy over the next two years, to jumpstart growth and sustain the recovery.

We are acting through all available means to protect our economy and Canadians affected by the downturn: the tax system, the Employment Insurance program, direct spending by federal and provincial governments, lending by Crown corporations and partnerships with the private sector.

In the 42 days since the Budget, we have laid the foundation for Canada's Economic Action Plan. This document sets out a detailed report to Canadians on results achieved and next steps required to complete the implementation of our shared national Plan.

The most important task at hand is passage of the Budget in the Senate and passage of the Estimates in the House of Commons and Senate. This is necessary to ensure that the actions highlighted in this report—building roads and bridges, reducing taxes, supporting Canadians hardest hit by the economic downturn and helping communities and businesses adjust and grow—move forward now when they are needed most.

Canada is a great country. We entered this period of tremendous economic challenge in a position of strength and will emerge even stronger.

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