Budget 2012April 26, 2012
Last month, the federal government delivered Budget 2012, which advances our plan for jobs and growth in Canada. To date, our Economic Action Plan has helped navigate Canada through the worst of the global recession, resulting in a national economy that has consistently expanded for the last two and half years.
However, the global recovery remains fragile, and many Canadians are still looking for work. That is why we developed a budget that meets two broad objectives: creating jobs and economic growth, and reducing the federal deficit.
Budget 2012 invests $50 million over the next two years for the Youth Employment Strategy to help young Canadians gain work skills and experience, and connect them with high-demand job areas. To support small business job creation, we are extending the Hiring Credit for Small Business to encourage new employee hiring. This temporary credit will benefit about 536,000 employers and reduce 2012 payroll costs by about $205 million.
We are also reducing red tape by implementing the ‘one-for-one’ rule, and developing a Red Tape Reduction action plan to reduce unnecessary regulations and allow small businesses to focus on growth.
Finally, we are strengthening support for families and communities in Ontario by investing a record federal transfer of $19.2 billion in Ontario hospitals, schools, and other critical services.
The government is also taking steps to reduce the federal deficit and return to balanced budgets without raising taxes. We are reducing departmental spending by $5.2 billion, representing 6.9% of $75.3 billion in departmental spending. We are also reducing the federal workforce by 4.8%, or approximately 19,200 employees. About one-third of reduction will be achieved through attrition.
In addition, we are bringing public service pensions and the pensions of MPs and Senators in line with those of the private sector, with changes coming within a year. As a result of these measures, we are on track to eliminate the deficit over the next three years, and by 2016 our debt-to-GDP ratio will be 28.5%, the lowest level of federal debt in decades.