The budget’s two key areas of focus are a new, though modest, investment vehicle for resident Canadians, and a continued commitment to debt reduction.
But what the government giveth, it also taketh away, sort of. Gone, for example, is the rebate for eco-minded car-buyers. And changes to the accelerated capital cost allowance tax scheme for business fell well short of what its supporters were looking for.
Two new crown corporations — one aimed at infrastructure building and another at the Employment Insurance program — have also been announced. The intentions are noble, but only time will tell if they will live up to their mandates or become just another bureaucratic black hole notable for the occasional scandal and accusations of ineffectiveness.
While the new Tax-Free Savings Account appears to be a development everyone can agree on, even this is not without its criticisms for lacking some key features of its cousin, the RRSP. Nevertheless, the Investment Industry Association of Canada says it’s a good deal for the middle class.
That leaves the bulk of Canada mollified, if not overjoyed. And for business? Not much for embattled industries such as manufacturing. Instead, business will largely have to settle for a federal debt reduction strategy that should improve capital markets in the long-term. By shrinking the government’s footprint, more money will be available for private investment and economic growth.
Read on for our take on these and other aspects of Budget 2008.