Canadian Budget Slated For May 2

by Mike Godfrey, Tax-News.com, Washington

26 April 2006

Federal Minister of Finance, James Flaherty will table the Harper government’s first budget on May 2, 2006.

"With this budget we will be turning over a new leaf in Canada, building on the vision set out in the Speech from the Throne," said Minister Flaherty.

In the throne speech delivered by Governor General Michaelle Jean in the Senate in Ottawa earlier in the month, the newly-elected Conservative government of Stephen Harper reiterated its commitment to cutting tax during its term in office. This includes an immediate 1% cut in goods and services tax to 6% with a further 1% reduction coming sometime during the course of the government's mandate.

"We intend to deliver real benefits for Canadian families and Canadian businesses from coast to coast to coast," declared Flaherty.

"Canadians have chosen change. They want a government that treats their tax dollars with respect. That means making responsible choices, being accountable and delivering on the priorities we proposed to Canadians," he added.

However, the Conservatives have had to temper their tax-cutting ambitions somewhat since taking office, and the Harper government has stressed the need to remain "fiscally responsible".

Speaking to reporters last month, Flaherty admitted that the government will find it "challenging" to follow through on an election pledge to eliminate capital gains tax on profits that are reinvested after six months, and later revealed that the government will be "taking some time" to mull the initiative.

With just 125 of the 308 seats in the House of Commons, the Conservatives will also need the support of at least one other party to ensure that the budget passes.

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