1990 Canadian federal budget
The Canadian federal budget for fiscal year 1990–91 was presented to the House of Commons of Canada by finance minister Michael Wilson on 20 February 1990. It was the second budget after the 1988 Canadian federal election.
Taxes
The 1990 budget did not introduce a major tax change, as income taxes were reformed in prior years and the Goods and Service tax was scheduled for implementation on January 1, 1991.Although not part of the 1990 budget, three major tax changes are implemented as of January 1, 1991:
- The individual surtax on high-income is increased to 5% of federal taxes in excess of $12,500 ;
- The Large Corporation Tax introduced in April 1989 is increased to 0.2% of taxable capital over $10 million ;
- A new Refundable Goods and Services Tax Credit of $190 per adult replaces the Refundable Sales Tax Credit.
Expenditures
Expenditure Control Plan
The 1990 budget sets out a control plan for expenditures and was predicted to yield $2.8 billion in savings in fiscal year 1990-1991 and $3.3 billion in fiscal year 1991-1992. This control plan complements the expenditure reductions of December 1989. Most government transfers to individuals, including old age pensions, child allowances, veterans' benefits and unemployment insurance, were not included.5%-growth
Some programs were constrained to a 5%-annual growth until 1992:- Science and Technology ;
- Department of Indian Affairs and Northern Development;Canada Assistance Plan ;
- Defence spending;
- Foreign aid
Programs frozen until 1992
Some programs are frozen altogether:Established Programs Financing ;- Funding to the CBC for acquisition of capital equipment. Previously-announced increases are cancelled;
- Telefilm Canada;
- Export Development Corporation;
- Marine Atlantic.
Budget cuts
- Secretary of State and Multiculturalism and Citizenship;
- National Health and Welfare;
- Social Housing.
Programs Eliminated
- Incentives for exploration of natural resources provided by the Canadian Exploration Incentives Program are eliminated after February 19, 1990. The CEIP was introduced in 1988 to help resource companies raise capital following the market crash of 1987.
- The OSLO Project of development of oil sands in Northeastern Alberta;
- The Polar 8 Project.
Reactions
Opposition
Herb Gray, interim leader of the Official Opposition, rejected many features of the budget, notably the cuts to transfers to provinces and capping of research and science budget. Paul Martin, Liberal MP and candidate to the leadership of the Liberal Party, also rejected the budget as a symbol of the Conservatives' mismanagement of the economy.Audrey McLaughlin, leader of the New Democratic Party held that the budget would not help students or homeless people and decried the lack of environmental measures, despite prior ambitious declarations made by the Prime Minister Brian Mulroney and the Minister of Environment Lucien Bouchard.