1994 Canadian federal budget

First government spending plan under Paul Martin Budget of the Canadian Federal Government 1994 Canada 1993 Canadian federal budget 1993 1995 Canadian federal budget 1995 22 February 1994 35th Liberal Paul Martin 130.791 billion 167.423 billion $36.632 billionCanada's deficits and surpluses, 1963-2014 http://www.cbc.ca/news2/interactives/canada-deficit/ CBC News CBC/Radio-Canada 25 April 2015 The Canadian federal budget for fiscal year 1994–95 was presented by Minister of Finance Paul Martin in the House of Commons of Canada on 22 February 1994. It was the first federal budget under the premiership of Jean Chrétien. 23 February 1994 La Presse http://numerique.banq.qc.ca/patrimoine/details/52327/2177328 live https://web.archive.org/web/20200623075906/http://numerique.banq.qc.ca/patrimoine/details/52327/2177328 2020-06-23 2020-06-17 numerique.banq.qc.ca Background The budget was tabled only a few months after the 1993 Canadian federal election in which the Liberal Party led by Jean Chrétien received a large majority of the seats in the House of Commons. Paul Martin, Chrétien's main rival in the 1990 Liberal Party leadership election was appointed Minister of Finance. February 8 Prime Ministerial Statement On 8 February 1994, the prime minister Jean Chrétien delivered a surprise prime ministerial statement in the House of Commons to announce a federal action plan on tobacco smuggling:La cartouche à 24 $ La Presse 1994-02-08 fr https://numerique.banq.qc.ca/patrimoine/details/52327/2177241 A1 Therefore, much as we may all regret the necessity of lowering cigarette taxes, we must do so at least until we have put the smuggling networks out of business. Then we will be able to restore the appropriate level of taxation that the situation needs. Jean ChrétienCanada, Parliament House of Commons Debates 133 35th Parliament, 1st Session 1994-02-08 Ottawa 1030 https://www.ourcommons.ca/Content/House/351/Debates/017/han017-e.pdf Excise taxes on tobacco were dramatically reduced, with additional reductions in provinces that agreed to reduce their provincial excise taxes.Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island will all ultimately lower their provincial excise taxes and benefit for a dollar-for-dollar additional reduction in the federal excise taxes on tobacco sold in their province.S.C. 1994, ch. 29 Summary Additional excise taxes were to be imposed on exported tobacco products, along with a surtax on tobacco manufacturing profits.The surtax is designated as the health promotion surtax in the Prime Minister statement.S.C. 1994, ch. 29 Summary Taxes Personal income taxes The budget reduced or repealed several tax incentives:S.C. 1995, ch. 3 Summary The $100,000 lifetime capital gains exemption was repealed; The first $25,000 of employer-provided life insurance was to be considered a taxable benefit; The age tax credit was reduced; Only 50% of meals and entertainment expenses could be deducted (down from 80% pre-budget).Also applicable for corporations. Corporate income taxes The budget also reduced several tax incentives:S.C. 1995, ch. 3 Summary Investment Tax Credits rates were reduced; The Special Investment Tax Credit and the regional component in respect of R&D were eliminated; R&D expenses and the small business deduction calculations were tightened for private corporations; New rules were implemented to limit tax avoidance during divisive corporate reorganizations. GST and other taxes Along with the reduction in the deductibility of meals and entertainment expenses, the proportion of GST that could be claimed on these expenses as an input tax credit was also reduced to 50%.S.C. 1994, ch. 29 Summary Expenditures November 2022The budget reduced planned federal spending by a net $17.0 billion over the three fiscal years from 1994-95 to 1996-97, after new initiatives were funded through reallocations and other savings. Net revenue measures over the same period totalled $3.4 billion, which the budget document presented as five dollars of spending cuts for every dollar of deficit reduction on the revenue side. Total program spending was projected to remain at about $122.5 billion in each of the three years.22 February 1994 The Budget in Brief https://budget.canada.ca/archives/1994-brf-eng.pdf Budget.canada.ca Transfers to provinces The budget announced the freezing of Canada Assistance Plan (CAP) payments to their 1994-95 levels after March 31, 1995. Unlike the 1990 restrictions, all provinces (including those receiving equalization payments) were affected by the cap. The Reform Party (then the third party by number of seats in the House) supported reductions to the CAP while criticizing that the cutbacks were not matched by amendments to health national standards to give more freedom to provinces in adjusting the services they provide.Canada, Parliament House of Commons Debates 35th Parliament, 1st Session 2 1994-05-31 Supply and Services Canada Ottawa 4632 https://www.ourcommons.ca/DocumentViewer/en/35-1/house/sitting-75/hansard#4680 The government described the freeze as a two-year period of predictability and modest growth in social security transfers while reform was pursued with the provinces, and projected savings of at least $1.5 billion in 1996-97. Aftermath Legislative history Budget Implementation Act, 1994 The main provisions of the budget were included in the Budget Implementation Act, 1994 which was adopted in third reading by the House of Commons on 31 May 1994 and received royal assent on 15 June 1994.S.C. 1994, ch. 18Debates of the House of Commons – May 31, 1994 Votes followed party lines with the notable exception of independent Québec MP Gilles Bernier (Beauce) voting in favor. + House of Commons vote on the Budget Implementation Act, 1994House of Commons Debates, 35th Parliament, 1st Session, vol. 2, p. 4679.Party Yea Nay AbstentionAbsentLiberals 136 0 8 33Bloc Québécois 0 43 8 3Reform 0 40 0 12New Democratic 0 8 0 1 Progressive Conservative 0 0 0 2Independents 1 0 0 0Total 137 91 16 49 Other bills Income tax measures were implemented through Bill C-59, which was read a third time and passed on 21 February 1995 in a 129–64 voteCanada, Parliament House of Commons Debates 133 35th Parliament, 1st Session 1995-02-21 Ottawa https://www.ourcommons.ca/documentviewer/en/35-1/house/sitting-157/hansard#9930 and received royal assent on 26 March 1995.S.C. 1995, ch. 3 Changes announced in the 8 February Statement and the reduction of the GST input tax credits claimable on meal and entertainment expenses were legislated through Bill C-35, which received royal assent on 23 June 1994.S.C. 1994, ch. 29 + Third reading vote on Bill C-59Party Yea Nay AbstentionAbsentLiberals 129 0 17 31Bloc Québécois 0 25 17 11Reform 0 33 0 19New Democratic 0 6 0 3 Progressive Conservative 0 0 0 2Independents 0 0 0 2Total 129 64 34 68 Notes and references Notes References Budget documents Budget Speech https://budget.canada.ca/archives/1994-sd-eng.pdf 22 February 1994 3 November 2024 Ottawa en Budget Speech Budget Plan https://budget.canada.ca/archives/1994-plan-eng.pdf 22 February 1994 3 November 2024 Ottawa en Budget Plan Budget in Brief https://budget.canada.ca/archives/1994-brf-eng.pdf 22 February 1994 3 November 2024 Ottawa en Budget in Brief Enacted legislations https://www.parl.ca/Content/Bills/351/Government/c-17/c-17_4/c-17_4.pdf Budget Implementation Act, 1994 S.C. 1994 18 S.C. 1994, ch. 18 https://www.parl.ca/Content/Bills/351/Government/c-32/c-32_4/c-32_4.pdf An Act to amend the Excise Tax Act, the Excise Act and the Income Tax Act S.C. 1994 29 S.C. 1994, ch. 29 https://www.parl.ca/Content/Bills/351/Government/c-59/c-59_4/c-59_4.pdf An Act to amend the Income Tax Act and the Income Tax Application Rules S.C. 1995 3 S.C. 1995, ch. 3 1994 Canada Category:1994 in Canadian politics Budget, 1994 Budget, 1994 Budget, 1994 Category:February 1994 in Canada