LAUZON: PROUD TO SUPPORT BUDGET

February 26, 2008

OTTAWA - Canada’s Conservative Government delivered its third consecutive balanced budget this afternoon.

“This is a budget we can all be proud of,” said local Member of Parliament Guy Lauzon. “It is important that we be fiscally prudent in a time when the U.S. economy is in decline. This is a responsible budget that addresses these concerns while delivering for the middle class. I am proud to support it.”

The centre piece of the budget is a $5,000 a year Tax-Free Savings Account (TFSA).Starting in 2009, Canadians aged 18 and older can contribute up to $5,000 annually (from their taxable income) to a TFSA. The investment income, including capital gains, earned in a TFSA will not be taxed – even when withdrawn.

The plan also allows an investor to withdraw funds from the TFSA at any time and for any purpose. The withdrawal amount can then be put back at a later date without reducing contribution room. Additionally, if an investor puts less than $5,000 into a TFSA in a given year, the unused room can be carried forward to future years.

“This plan is the first of its kind in Canadian history,” said Lauzon. “It will strengthen the economy by encouraging Canadians to save.”

To illustrate the benefits of the plan, an individual contributing $200 a month to a TFSA for 20 years, at a 5.5 per cent rate of return, will earn about $11,045 more in savings than if the investment had been made in a taxable savings vehicle (unregistered account).

The fiscal plan also:

• Provides $300 million to help Atomic Energy of Canada to develop Candu nuclear technology and support safe operations at the Chalk River plant;
• Provides $440 million for Research and Development;
• Allows pensioners to income-split for the first time;
• Provides $400 million for 2,500 new front-line police officers.
  

The biggest spending commitment in the budget is the $10.2 billion that will go towards knocking the debt down to $457 billion.

“Since coming to power in 2006, this Government has made fiscal responsibility its top priority,” said Lauzon. “We have paid off countless billions in debt; saving millions in interest payments in the process.”

“At a time of economic uncertainty, Canada can’t afford Stéphane Dion and the $62.5 billion spending promise he’s made in over 89 separate commitments,” said Lauzon. “We need responsible fiscal managers who won’t spend us into deficit.”

The budget also promises $500 million in transit infrastructure as well as $250 million over five years into developing innovative, greener, more fuel-efficient vehicles.

Students will benefit from the following measures under the budget:

• A $350 million grant program in 2009-10, rising to $430 million by 2012-13, that will reach 245,000 college and undergrad students;
• $123 million over four years starting in 2009-10 to update the Canada Student Loans Program;
• Increases to the length of time Registered Education Savings Plans can remain open, from 25 to 35 years;
• The creation of a new $25 million Canada Graduate Scholarship award for top doctoral students.
  

The federal government is also providing $1 billion in tax relief for Canada's ailing manufacturing and processing sector by extending the accelerated capital cost allowance (CCA) for businesses.

“We have seen and heard the need for help in our manufacturing sector and have taken action,” said Lauzon. “The people of SDSG can look forward to seeing the results of our government’s third budget over the course of the next year.”