Canada's Goodale Delivers 'Responsible' Budget

by Mike Godfrey, Tax-News.com, Washington

25 March 2004

Canadian Finance Minister Ralph Goodale, unveiled no tax surprises whilst delivering the Martin government’s inaugural budget on Tuesday, focusing instead on “financial responsibility.”

"I am presenting a focused budget plan with two clear objectives," Minister Goodale told the House of Commons. "First, to demonstrate unequivocally the principles of financial responsibility and integrity; and second, to begin to give tangible shape to the goals presented in the Speech from the Throne."

Amongst the few tax measures contained in the budget was the Government’s pre-budget pledge to fully rebate the goods and services tax (GST) paid by municipalities, effective February 1, 2004. Goodale announced that this move will provide municipalities with $7 billion in GST relief over the next 10 years.

Other more minor tax measures included an extension of the education tax credit to employees who pursue career-related studies at their own expense.

Additionally, the Finance Minister has given an income tax exemption to Canadian Forces personnel and police serving on high-risk international missions.

Mr Goodale noted that Candada will be the only OECD member to post a third consecutive fiscal surplus in 2004, enabling the government to maintain a $3 billion contingency reserve whilst keeping $1 billion back for “economic prudence” in both 2004-05 and 2005-06.

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