Canadian Consulting Engineer

Canada’s 2006 Budget favours infrastructure but promises more accountability

May 3, 2006
By Canadian Consulting Engineer

The Canadian Government's Budget 2006 released on May 2 contained some good news for consulting engineers who are i...

The Canadian Government’s Budget 2006 released on May 2 contained some good news for consulting engineers who are involved in the transportation infrastructure and security sectors.
Finance Minister Jim Flaherty presented the new Conservative Government’s Budget 2006 under the title: “Focusing on Priorities, Canada’s New Government Turning a New Leaf,” in the House of Commons, Ottawa.
Eves recognized that Canada’s national highway system is a “very important national asset” that warrants more investment. The federal government will maintain existing infrastructure programs that it runs in collaboration with provincial and municipal governments, promising that federal support of such programs over the next four years will increase to a total of $5.5 billion. This amount is eight times the average federal annual support during the past 10 years.
The $5.5 billion funding over four years will go to the Highways and Border Infrastructure Fund, Canada’s Pacific Gateway Initiative, the Canada Strategic Infrastructure Fund, the Municipal Rural Infrastructure Fund and a Public Transit Capital Trust.
The government also promises to spend $1.4 billion more over two years on security measures, which includes $10 million on preparing for catastrophes and emergencies and $133 million more to support Canadian Air Transport Security Authority operations. A sum of $95 million will be spent just on enhancing security on passenger rail and urban transit systems.
Aboriginal communities are being given $450 million over two years for improving water supply and housing on reserves as well as social programs. Another $800 million is dedicated for the provinces and territories to immediately address their communities’ affordable housing needs.
While it is increasing spending on infrastructure, the government is at the same time promising that project funding will be held on a tighter rein. The introduction to the budget document stipulates that the government’s core priority is “to improve the accountability and transparency of government operations.” It also said “The government will introduce a new approach to managing overall spending to ensure that government programs focus on results and value for money and are consistent with government priorities and responsibilities. The President of the Treasury Board will identify savings of $1 billion in 2006-07 and 2007-08.”
The budget also reduces the GST rate to 6% effective July 1, 2006 and it gives tax cuts to corporations and individuals. For example, it increases the amount of small business income eligible for the 12% tax rate to $400,000 from $300,000 as of January 1, 2007.


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