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Tories kill pennies, slash spending in fiscal overhaul

March 30, 2012 - News

The Conservatives pinched the penny right out of existence in a budget shake-up meant to clean up Ottawa’s books, halt runaway government spending and clear the way for a hoped-for economic boom fueled by oil and Canadian brainpower.
Prime Minister Stephen Harper’s government used its majority clout to bring in a conservative fiscal blueprint that will scale back future retirement benefits, tie immigration quotas to skills shortages and expand Canada’s free-trade agreements. The business-friendly strategy will also ease environmental hurdles to speed construction of pipelines to put Canadian oil on Asian-bound supertankers.
“Our government is looking ahead not only over the next few years but also over the next generation,” Flaherty told the Commons. “The reforms we present today are substantial, responsible and necessary. They will ensure we are focused on enabling and sustaining Canada’s long-term economic growth.”
Ottawa’s penny pinch is expected to save $11 million a year. Starting this fall, the Mint will stop producing the copper-hued coin that weighs down pockets and purses. Canadians can continue to use pennies as long as they have them. When they don’t, cash purchases will be rounded up or down to the nearest five-cent increment.
Budget highlights
But axing the penny is small change compared to the department-wide cuts to be phased in over three years, starting with this budget – an $115 million hit to the CBC; a $319 million cut to the Canadian International Development Agency; and $165 million to aboriginal affairs.
The renowned Katimavik youth program – saved once in 1986 thanks to a 21-day hunger strike by Senator Jacques Hebert – is gone now, as is the National Round-Table on the Environment and the Economy.
Federal government workers will have to pay more toward their pensions, diplomats will be moving into smaller overseas digs and even Governor Generals will feel the sting of Flaherty’s austerity measures, with their $130,000-plus salaries for the first time becoming taxable.
But Members of Parliament dodged the bullet, putting off adjustments to their much-criticized lucrative pension plan until the next Parliament, probably in 2015.
After scouring government operations for savings, the government will scale back spending by $5.2 billion in the coming 2012-13 fiscal year, leaving Ottawa with a $21-billion deficit on overall spending of $276 billion.
The Harper government said its efforts to end the record budget deficits run up to fight the recession are on track. For the 2011-12 fiscal year that ends Sunday, the budget predicts a $24.9-billion deficit, down from an earlier forecast of a $31-billion deficit.
And the budget predicts the Conservatives will balance Ottawa’s books by 2015, a year earlier than Flaherty predicted only four months ago.
Over three years, the spending reductions announced Thursday will eliminate 19,200 federal government jobs, with most of the cuts being felt in the Ottawa area. But the 498-page budget contained few details on what specific programs or services will feel the affects of the austerity campaign.
Federal officials sought to downplay the magnitude of the cuts, insisting the reductions in the 2012 budget are nothing like the deep cuts imposed by the Liberals in the 1990s.
“We will implement moderate restraint in government spending,” Flaherty said in his budget speech. “We have no need to resort to the drastic cuts being forced upon some other developed countries today,” he said.
Most of the savings will come by “eliminating waste in the internal operations of government, making it leaner and more efficient,” Flaherty said.
But Canadians will be adjusting to the budget measures for months, or perhaps years.
Employment Insurance, which has been widely criticized for not providing sufficient support to jobless workers, is being overhauled. Ottawa is spending $387 million to change how EI benefits are calculated with a view to eliminating “disincentives to accepting all available work prior to applying to the EI program.” The impact will vary from region to region but some workers may find their benefits reduced or harder to obtain, officials said.
Younger Canadians will be forced to wait longer to collect old age security payments, to 67 from 65. The change will be phased in and those aged 54 and older won’t be affected.
The government will also retool the pensions of politicians and public servants, forcing them to contribute more to their retirement plans.
The defence department expects to find savings of $1.1 billion a year through “streamlined” contracting and internal processes, vague language used to describe expected savings in most other departments. However, the Canadian Forces’ strength of regular troops will be maintained at 68,000 and its reserve force at 27,000.
The government hopes to squeeze $687 million in savings from the department of Public Safety, including $195 million from the Royal Canadian Mounted Police and $143 million from the Canada Border Services Agency.
Foreign Affairs is on the hook to reduce its budget by $169 million and expects to find savings by selling off official embassies abroad, reducing its vehicle fleet and extending the duration of its foreign postings to avoid relocation costs.
A top priority in the Conservatives’ economic blueprint is re-energizing the research and development activities by business that lead to “innovative” breakthrough products like Research In Motion’s BlackBerry. The budget earmarks $521 million over two years as part of a sweeping realignment of programs meant to spur cutting edge research and high-tech development to better equip Canada to compete in the knowledge-based global economy.
“The planned measures focus on the drivers of growth, innovation, business investment, people’s education and skills that will fuel the new wave of job education,” Flaherty told the media.
— Torstar News Service

Read More at SouthAsianFocus.ca

Tories kill pennies, slash spending in fiscal overhaul

March 30, 2012 - News

The Conservatives pinched the penny right out of existence in a budget shake-up meant to clean up Ottawa’s books, halt runaway government spending and clear the way for a hoped-for economic boom fueled by oil and Canadian brainpower.
Prime Minister Stephen Harper’s government used its majority clout to bring in a conservative fiscal blueprint that will scale back future retirement benefits, tie immigration quotas to skills shortages and expand Canada’s free-trade agreements. The business-friendly strategy will also ease environmental hurdles to speed construction of pipelines to put Canadian oil on Asian-bound supertankers.
“Our government is looking ahead not only over the next few years but also over the next generation,” Flaherty told the Commons. “The reforms we present today are substantial, responsible and necessary. They will ensure we are focused on enabling and sustaining Canada’s long-term economic growth.”
Ottawa’s penny pinch is expected to save $11 million a year. Starting this fall, the Mint will stop producing the copper-hued coin that weighs down pockets and purses. Canadians can continue to use pennies as long as they have them. When they don’t, cash purchases will be rounded up or down to the nearest five-cent increment.
Budget highlights
But axing the penny is small change compared to the department-wide cuts to be phased in over three years, starting with this budget – an $115 million hit to the CBC; a $319 million cut to the Canadian International Development Agency; and $165 million to aboriginal affairs.
The renowned Katimavik youth program – saved once in 1986 thanks to a 21-day hunger strike by Senator Jacques Hebert – is gone now, as is the National Round-Table on the Environment and the Economy.
Federal government workers will have to pay more toward their pensions, diplomats will be moving into smaller overseas digs and even Governor Generals will feel the sting of Flaherty’s austerity measures, with their $130,000-plus salaries for the first time becoming taxable.
But Members of Parliament dodged the bullet, putting off adjustments to their much-criticized lucrative pension plan until the next Parliament, probably in 2015.
After scouring government operations for savings, the government will scale back spending by $5.2 billion in the coming 2012-13 fiscal year, leaving Ottawa with a $21-billion deficit on overall spending of $276 billion.
The Harper government said its efforts to end the record budget deficits run up to fight the recession are on track. For the 2011-12 fiscal year that ends Sunday, the budget predicts a $24.9-billion deficit, down from an earlier forecast of a $31-billion deficit.
And the budget predicts the Conservatives will balance Ottawa’s books by 2015, a year earlier than Flaherty predicted only four months ago.
Over three years, the spending reductions announced Thursday will eliminate 19,200 federal government jobs, with most of the cuts being felt in the Ottawa area. But the 498-page budget contained few details on what specific programs or services will feel the affects of the austerity campaign.
Federal officials sought to downplay the magnitude of the cuts, insisting the reductions in the 2012 budget are nothing like the deep cuts imposed by the Liberals in the 1990s.
“We will implement moderate restraint in government spending,” Flaherty said in his budget speech. “We have no need to resort to the drastic cuts being forced upon some other developed countries today,” he said.
Most of the savings will come by “eliminating waste in the internal operations of government, making it leaner and more efficient,” Flaherty said.
But Canadians will be adjusting to the budget measures for months, or perhaps years.
Employment Insurance, which has been widely criticized for not providing sufficient support to jobless workers, is being overhauled. Ottawa is spending $387 million to change how EI benefits are calculated with a view to eliminating “disincentives to accepting all available work prior to applying to the EI program.” The impact will vary from region to region but some workers may find their benefits reduced or harder to obtain, officials said.
Younger Canadians will be forced to wait longer to collect old age security payments, to 67 from 65. The change will be phased in and those aged 54 and older won’t be affected.
The government will also retool the pensions of politicians and public servants, forcing them to contribute more to their retirement plans.
The defence department expects to find savings of $1.1 billion a year through “streamlined” contracting and internal processes, vague language used to describe expected savings in most other departments. However, the Canadian Forces’ strength of regular troops will be maintained at 68,000 and its reserve force at 27,000.
The government hopes to squeeze $687 million in savings from the department of Public Safety, including $195 million from the Royal Canadian Mounted Police and $143 million from the Canada Border Services Agency.
Foreign Affairs is on the hook to reduce its budget by $169 million and expects to find savings by selling off official embassies abroad, reducing its vehicle fleet and extending the duration of its foreign postings to avoid relocation costs.
A top priority in the Conservatives’ economic blueprint is re-energizing the research and development activities by business that lead to “innovative” breakthrough products like Research In Motion’s BlackBerry. The budget earmarks $521 million over two years as part of a sweeping realignment of programs meant to spur cutting edge research and high-tech development to better equip Canada to compete in the knowledge-based global economy.
“The planned measures focus on the drivers of growth, innovation, business investment, people’s education and skills that will fuel the new wave of job education,” Flaherty told the media.
— Torstar News Service

Read More at SouthAsianFocus.ca