1995 Canadian federal budget

Second government spending plan under Paul Martin Budget of the Canadian Federal Government 1995 Canada 1994 Canadian federal budget 1994 1996 Canadian federal budget 1996 Logo_of_the_1995_Canadian_federal_budget.png 250 27 February 1995 35th Liberal Paul Martin 140.257 billion 170.263 billion $30.006 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 1995–96 was presented by Minister of Finance Paul Martin in the House of Commons of Canada on 27 February 1995. 28 February 1995 La Presse http://numerique.banq.qc.ca/patrimoine/details/52327/2179419 live https://web.archive.org/web/20200626015722/http://numerique.banq.qc.ca/patrimoine/details/52327/2179419 2020-06-26 2020-06-17 numerique.banq.qc.ca Background The budget is presented in a context of a fast-growing US economy and moderate inflation but a severe increase in interest rates that started in early 1994 dramatically increased public debt charges and in turn reduced budgetary margin for the Liberal government.Budget plan 17–20 Taxes The capital gains exemption is maintained for farming and small businesses.Le Cours Rudy Un voeu des entreprises sera exaucé : moins de subventions aux entreprises https://numerique.banq.qc.ca/patrimoine/details/52327/2179419 1 November 2020 La Presse 28 February 1995 A4 Cost recovery initiatives In order to increase revenues, the budget plans for new cost recovery and user fees initiatives, notably: A new immigration fee of $975 per adult; Increased fees for citizenship; Increase in the interest rate charged by Revenue Canada for late payments on taxes, CPP and EI contributions; Increased cost recovery for the provision of consular and trade development services; Introduction of fees for commercial products provided by Environment Canada. These initiatives were to generate $450 million in annual revenues in 1995–96 and up to $600 million when fully implemented.Budget plan 37–39 Expenditures Program spending Administrative measures The budget announces massive cuts to program expenditures, amounting to 18.9% by 1997–98. A new Expenditure Management System (EMS) was announced prior to the budget announcement on February 15 by Art Eggleton, the President of the Treasury Board. The EMS aimes to implement a new results-based approach to public management and strict cost control.Budget plan 37 The $2 banknote is discontinued and replaced by a $2 coin starting in early 1996. Other administrative restructuring is also announced in the budget:Budget plan 39–40 Integration of the Canadian Coast Guard into Fisheries and Oceans Canada; Clarification of responsibilities pertaining to freshwater and marine areas between Fisheries and Oceans Canada and Transport Canada; Elimination of 73 agencies, restructuring of another 47 (by merger or streamlined operations) and abolition of 665 Governor-in-Council positions.i.e. positions appointed by an order in Council. Cuts to business subsidies The most dramatic cuts are related to subsidies to business organizations, with a scheduled cut amounting to 60.4% between 1994–95 and 1997–98.Budget plan 41–46Le Cours Rudy Moins de dépenses, moins de fonctionnaire https://numerique.banq.qc.ca/patrimoine/details/52327/2179419 1 November 2020 La Presse 28 February 1995 A3 Effective August 1, 1995 the annual subsidy of $560 millions to the railway companies is eliminated;Budget plan 42–43 The federal government budgeted a $1.6 billion one-time payment as compensation for land owner whose land values are affected by the abolition of freight subsidies. Subsidies for Atlantic region freight are abolished starting on July 1, 1995; Dairy and other agricultural subsidies are to be reduced by 30% over 2 years; Subsidies to cultural industries are to be reduced, including an-8% reduction in the postal subsidies for Canadian books and magazines. Industry Canada is scheduled to terminate 44 of its 54 business subsidies programs. Transfers to provinces Creation of the Canada Social Transfer The budget announced major changes to transfers to provinces. Up until 1995, transfers consisted mostly of: Established Programs Financing (EPF) a block transfer established in 1977 to fund post-secondary education and healthcare. Canada Assistance Plan (CAP) a cost-sharing program to fund social services and social assistance. The Equalization program which was renewed unchanged for five years prior to the 1995 budget. The budget announced that the first two programs are to be combined into a single block transfer called the Canada Health and Social Transfer (CHST)Called the Canada Social Transfer in budget documents. starting in the fiscal year 1996–97. In the budget the CHST is designated as Canada Social Transfer (CST) which coincidentally is the name of a successor transfer to the CHST.Budget plan 51–54 Other changes The Public Utilities Income Tax Transfer Act (PUITTA) is suspended after April 1, 1995Budget Implementation Act, 1995 s. 63 and the PUITTA is repealed on March 31, 1999, providing the federal government with more than $200 million in annual savings.Budget plan 48–49 Privatization The budget announced the privatization efforts were to continue with multiple state-owned corporations to be sold to the private sector.The budget lists notably : Petro-Canada, Canadian National, the Air Navigation System (ANS) within Transport Canada and the Canada Communication Group.Budget Facts 19 Many other federal departments and agencies were to operate on a more commercial basis.Budget Facts 20 Legislative history Most of the content of the budget was included in the Bill C-76 (An Act to implement certain provisions of the budget tabled in Parliament on February 27, 1995) that was adopted by the House of Commons on 6 June 1995. Reform, Bloc, NDP and one of the two Progressive-conservative (Elsie Wayne) MPs voted against the budget while Gilles Bernier (the only independent MP elected in 1993) and Jag Bhaduria (formerly part of the Liberal caucus), voted in favor like. One Liberal MP (Warren Allmand) voted against the budget, protesting budget cuts and was shortly thereafter relieved of his position as chair of the House of Commons Standing Committee on Justice.Journals of the House of Commons for June 6, 1995 The bill received royal assent on 22 June 1995. + House of Commons vote on the Budget Implementation Act, 1995House of Commons Debates, 35th Parliament, 1st Session, vol. 11, pp. 13348-13349.Party Yea Nay AbstentionAbsentLiberals 140 1 13 23Bloc Québécois 0 37 14 2Reform 0 40 0 12New Democratic 0 6 0 3 Progressive Conservative 0 1 0 1Independents 1 0 0 0Total 141 85 27 42 References Notes References Official documents Budget documents Budget plan: including supplementary information and Notices of Ways and Means Motions 27 February 1995 Government of Canada Ottawa 0660155672 3 November 2022 https://budget.canada.ca/archives/budget95/binb/budget1995-eng.pdf Budget plan Budget Facts http://fin.gc.ca/budget95/fact/facts.pdf https://web.archive.org/web/20170612210731/http://fin.gc.ca/budget95/fact/facts.pdf 2017-06-12 27 February 1995 Government of Canada Ottawa Budget Facts Budget Speech Budget in Brief Enacted legislations Budget Implementation Act, 1995 An Act to implement certain provisions of the budget tabled in Parliament on February 27, 1995 S.C. 1995 17 https://www.parl.ca/LegisInfo/BillDetails.aspx?Language=E&billId=2328382 Budget Implementation Act, 1995 1995 Canada Category:1995 in Canadian politics Budget, 1995 Budget, 1995 Budget, 1995 Category:February 1995 in North America