The Government has designed its Economic Action Plan to concentrate new spending in 2009-10 and 2011-12, when the economy is expected to be weakest. In order to ensure that the government's fiscal position remains structurally sound, stimulus spending is temporary. It is projected that the overwhelming majority of new spending ends in 2011-12.

As a result, while the economic slowdown and the Action Plan to mitigate it will result in a modest rise in the debt ratio over the next three years, the Government's Plan also ensures that the debt-to-GDP ratio will return to a declining trend by 2011-12.

The research agenda on productivity and its drivers will continue, as productivity will become the main source of living standards improvements in years to come. Research output will be shared with other government stakeholders working on population aging and is likely to be presented in academic forums.

• Continuing to reduce personal income taxes to make the tax system fairer and to attract and retain highly skilled workers, who are key to Canada's future economic competitiveness.
• Further improving Canada's business tax competitiveness by:
  • Encouraging the harmonization of the remaining provincial retail sales taxes with the GST.
  • Seeking the collaboration of provinces to reach a 25 per cent combined federal-provincial statutory corporate income tax rate.

The Department will also continue to publish its annual Tax Expenditures and Evaluation Report in which tax measures are benchmarked and evaluated.

Budget 2007 put the Canada Social Transfer on a long-term, predictable, growing path ensuring stable funding for social programs:

• funding framework legislated through 2013-14;
• cash levels increased for 2007-08 and 2008-09;
• automatic 3 percent escalator applies as of 2009-10;
• cash allocated on an equal per capita basis;
• notional allocations provided for social programs, post-secondary education and programs for children to increase transparency of federal support.

In 2007-08, the Department prepared and implemented required legislative and regulatory changes, reflecting Budget 2007 commitments. The Department worked with provinces and territories to ensure smooth implementation of the changes.

Budget 2009 proposes changes to the Canada Health Transfer (CHT) to ensure fairness for all provinces. Pending passage of the Budget Implementation Act, 2009 officials will work with the provinces and territories to ensure smooth implementation of these changes.

In 2009-10, the Department will focus on providing timely, accurate payments to provinces and territories. Communications activities will continue in 2009-10 to improve awareness and understanding of the program.

Budget 2007 implemented a strengthened Equalization program to reduce fiscal disparities that reflects the following:

• a formula-based, simplified program;
• a higher, 10-province standard;
• legislated through 2013-14.

Budget 2007 also returned TFF to a formula-based approach that recognizes the different circumstances in each of the three territories, and provides improved incentives to encourage territorial economic development. The TFF program is also legislated through 2013-14.

In 2007-08, the Department prepared and implemented required legislative and regulatory changes, reflecting Budget 2007 commitments and the recommendations of the Expert Panel on Equalization and TFF. Further, the Department worked with provinces and territories to ensure smooth implementation of the changes.

Pending passage of the Budget Implementation Act 2009, in 2009-10, additional changes will be made to the Equalization program to ensure sustainability and fairness. Specifically, Budget 2009 proposes to:

• legislate the program to grow in line with the economy;
• set a new fiscal capacity cap to ensure that receiving provinces will continue to get a fair net fiscal benefit from their resources;
• establish a floor level consistent with the growth in the program to protect provinces against reductions in overall Equalization; and
• provide transition payments for 2009-10 to ensure that the payments to provinces qualifying for Equalization in 2009-10 are no lower than the amounts they received in the previous year.

The Department will prepare the required regulatory changes and once the Budget Implementation Act, 2009 receives Royal Assent, official will work with the provinces to ensure smooth implementation of these changes.

In 2009-10 the Department will also focus on providing timely, accurate payments to provinces and territories. Communications activities will continue in 2009-10 to improve awareness and understanding of the programs. 

The Department of Finance will support FPT Ministers in concluding their statutory review in 2009 and in implementing in a timely manner any decisions that may come out of the review by:

• undertaking analysis of contribution rates, benefits and plan finances with the provinces, Human Resources and Social Development Canada, and the Chief Actuary of the CPP; and
• providing advice to Ministers on potential changes.

The Department will work to enact the modifications announced in Budget 2007 and Budget 2008 to broaden the eligibility criteria of the accelerated capital cost allowance for clean energy generation equipment (Class 43.1/43.2). In addition, the Department will continue to review potential tax measures that could encourage investment in environmentally-friendly investment. As noted in Budget 2009, the Department will consult with stakeholders to identify specific assets used in carbon capture and storage with a view to providing accelerated capital cost allowance (CCA) in respect of such investments.

Continue to divert pulverized paper into horse litter which eventually is composted.

Ensure that at least sixty percent (60%) of Acquisition Card Holders will have received green procurement training by May 2009.