The global economy is emerging from the deepest and most synchronized financial and economic crisis since the Great Depression.
Having learned from the mistakes of the 1930s, governments and central banks responded to the downturn with unprecedented fiscal and monetary stimulus. With a strong fiscal situation and a sound banking system, Canada was able to act boldly and effectively to protect jobs and to minimize the impact of the recession on Canadians.
Canada’s economic performance during the recovery stands out among advanced countries. Canada has posted the strongest employment growth in the Group of Seven (G–7) since mid–2009, and more Canadians are working today than before the recession. Moreover, Canada’s fiscal situation remains among the strongest in the industrialized world. As the global economy continues to improve, Canada stands poised for success.
However, as recent world events show, there remains considerable risk and uncertainty in the global economy, and at home too many Canadians still remain out of work. For these reasons, the Government remains focused on the economy.
The Government will build on the achievements of Canada’s Economic Action Plan with a new phase designed to secure the recovery and to improve the well-being of Canadians over the long term. To this end, Budget 2011 supports job creation and continues to lay the foundation for sustainable economic growth.
Canada’s Economic Action Plan was designed to fight the effects of the global recession by providing significant stimulus to safeguard jobs and protect families, while making important productive investments to contribute to Canada’s long-term economic prosperity. By ensuring that stimulus spending was concentrated over a two‑year period, the Government was able to run short-term deficits without jeopardizing Canada’s long‑term fiscal advantage.
Canada’s Economic Action Plan is working. In the first year of implementation alone, almost $32 billion in stimulus spending and tax relief was delivered, and the Government remains on track to deliver a further $28 billion in support for the recovery.
These investments have been effective in shielding Canadians from the worst of the global recession. Over 28,500 projects have been completed or are underway, generating significant employment in local communities and contributing to the creation of about 540,000 jobs across Canada since July 2009.
Even though the vast majority of initiatives announced in Budget 2009 ended as planned on March 31, 2011, projects completed as part of the Economic Action Plan will continue to benefit Canadians. By supporting productive investments in infrastructure, a more highly skilled labour force and a competitive business environment, Canada’s Economic Action Plan will make lasting contributions to economic growth and prosperity.
While the Economic Action Plan has been successful in getting Canadians back to work, the global economic recovery remains fragile. For this reason, measures to foster long‑term growth and support job creation continue to be the Government’s top priority.
The Government will build on the success of the stimulus plan. As the private sector moves ahead as the engine of growth and job creation, the Government will return its focus toward sustainable actions that create the right conditions for long-term economic prosperity.
The Next Phase of Canada’s Economic Action Plan—A Low-Tax Plan for Jobs and Growth will invest in the key drivers of economic growth—innovation, investment, education and training—and will seek to foster an environment in which all Canadians contribute to and benefit from a stronger economy. In doing so, the Government will reinforce Canada’s comparative advantages.
The Government will build on the sustainable low-tax environment and growth-friendly policies put in place since 2006. The focus of the Next Phase of Canada’s Economic Action Plan will be supporting job creation, supporting families and communities, investing in innovation, education and training, and preserving Canada’s fiscal advantage.
Supporting Job Creation by helping businesses and entrepreneurs succeed, keeping taxes low, investing in projects of national importance, and maintaining Canada’s brand as one of the best places to invest. Budget 2011 advances these priorities by:
Supporting Families and Communities so that all Canadians enjoy a high standard of living and our communities stay vibrant and safe. Budget 2011 invests in these goals by:
Investing in Innovation, Education and Training to promote research in leading-edge technologies and to provide Canadians with the opportunity and incentives to acquire the skills needed for jobs in today’s labour market. Budget 2011 makes important progress on these priorities by:
Preserving Canada’s Fiscal Advantage in order to be able to invest in the priorities of Canadians, to keep Canada’s economy growing strongly, and to maintain low interest rates. Budget 2011 advances these objectives by:
The deficit in 2012–13 is projected to be cut by almost two-thirds from its level in 2009–10. The deficit is projected to continue to decline to $0.3 billion in 2014–15. It is expected that there will be a surplus of $4.2 billion in 2015–16.
In addition, the Government is moving forward with a comprehensive review of direct program spending to be completed in 2011–12. The Strategic and Operating Review will build on the first cycle of strategic reviews to support the return to balanced budgets by 2014–15, and provide fiscal room to continue paying down debt and investing in the priorities of Canadians, including lowering taxes for families. The review will focus on improving the efficiency and effectiveness of government operations and programs to ensure value for taxpayer money.
As shown in Table 1.1, without including any targeted savings from the Strategic and Operating Review, the Government is projected to return to balanced budgets by 2015–16. The Government remains committed to balancing the budget one year earlier, by 2014–15. It will achieve this by reducing expenses through the Strategic and Operating Review. The budgetary savings associated with the Strategic and Operating Review will be reflected in the Government’s fiscal projections once these actions are determined and implemented in Budget 2012.
|(billions of dollars)|
|Balance including measures
in Budget 2011
|Balance including measures
in this update of Budget 2011
|Strategic and Operating
Review targeted savings
|Balance including measures in
this update of Budget 2011
and the expected savings from
the Strategic and Operating
|Note: Totals may not add due to rounding.|
Going forward, the Government will maintain its focus on the priorities set out in the Next Phase of Canada’s Economic Action Plan. The cornerstone of this plan will be returning to balanced budgets.
By focusing on sustainable investments in Canada’s long-term prosperity, the Government will seek to increase the well-being of all Canadians, while preserving the public services and culture that define us as a nation.