Seeking to make us a nation of savers

The Federal Government’s budget was a cautious document, one designed to reflect a country that may need to begin thinking for rainy days that may soon arrive.

With little on the spending side and no particular perks for the populace, other than a new 5,000 dollar savings plan, it will allow Canadians to put five thousand aside for each member of the family tax free. It’s a financial vehicle that the government hopes will inspire Canadians to return to their days of the past as frugal savers.

With an American slowdown on the imminent horizon and some severe troubles in the auto sector in central Canada, the government will provide what were described by some observers as moderate measures, but for the most part it was relatively uninspiring bit of financial tabulating.

The Daily News fixed its gaze on that tantalizing five thousand dollars and explained how it will benefit us all, from the perspective of International Trade Minister David Emerson.

That and a few other opinions from other observers appeared on the front page of the Wednesday paper.

TORIES URGING CANADIANS TO SAVE IN THRIFTY BUDGET '08

Feds make few big ticket spending announcements in this year's budget

By Leanne Ritchie
The Daily News
Wednesday, February 27, 2008
Pages one and three

The Conservative government is hoping Canadians will get on the saving wagon with a new proposal announced in yesterday's federal budget.

Although not big on new spending proposals, the budget includes a new, personal, tax-free savings plan.

"That's a nifty little device that allows every Canadian family, for every individual in the family, to put $5,000 aside for each person and all of the income that accrues to that investment ... accumulates income tax-free," said David Emerson, Minister of International Trade in an exclusive interview with the Prince Rupert Daily News. "And you can take the money out of it any time you want tax-free. It's an incentive to save and a significant vehicle for families that want to make some tax-free savings over time."

Emerson stressed that the budget, titled Responsible Leadership for Uncertain Times, has to be looked at in context of the government's economic statement in the fall and past budgets.

"If you add it all up, you are really looking at tax reductions for Canadians of over $200 million over the next five years. Seventy per cent of that is going to go to individuals and families," said Emerson.

Program spending, which excludes debt-servicing charges, will total $208 billion in 2008-09, up $6.9 billion - or 3.4 per cent - from last year. About $1.5 billion of the spending increase goes to new discretionary initiatives this year. This is combined with last October's $60-billion in corporate and personal income taxes.

Debt repayment, which has stood well above $3 billion annually for a decade, falls to $2.3 billion this year and $1.3 billion in 2009-10. Surpluses are projected at zero, and there's no prudence or contingency funds built in.

While the Bloc Quebecois and the NDP denounced the document and vowed to vote against it, Liberal Leader Stephane Dion quickly killed any lingering suspense over whether the minority government would fall.

"Under the circumstances, I don't see enough in this budget that would justify that we precipitate an election that Canadians do not want for now," Dion said outside the Commons.
Skeena-Bulkley Valley MP Nathan Cullen criticized the budget for failing to get the balance right and attacked Dion for playing puppet to the Conservatives.

"The cost of all government services will be increasingly paid for by individuals and less and less by corporations," said Cullen.

For every $1 that the federal budget is spending on programs, they are handing out $6 in corporate tax cuts, he said.

"They wrote a budget for Bay Street, not Main Street and they were hoping no one will notice," said Cullen.

He noted not one new doctor will be trained because of this budget, not one new child care space created, not one new affordable housing project completed. And he said the Conservatives completely missed boat on the environment. Cullen noted there is $250 million for the oil and gas sector coupled with millions to study nuclear power, and a commission to study carbon trade. But little else.

"I think that is an intellectual mistake, but it's a political mistake as well," said Cullen.
However, Emerson said this budget balances the need for a strong economy and with incentives to move people toward a greener future.

"If you look at the lack of action over the last 13 or 14 years in terms of environmental strategies and approach, this budget has got the investments in science and technology that is environmentally focused, it has a major quarter of a billion investment for carbon capture and storage, it has a major investment for putting the infrastructure in place for a carbon trading system and there are tax incentives for environmentally friendly initiatives," he said.
With files from Canadian Press