What Canada’s Budget 2004 means for consulting engineers

Finance Minister Ralph Goodale delivered the federal government’s 2004 Budget in the House of Commons in Ottawa yesterday (March 23). It was entitled “New Agenda for Achievement.”

Regarding the general economic outlook, Goodale said; “Private sector economists expect the Canadian economy to grow by an average of 2.7 per cent in 2004, significantly better than last year but still well below the 3.5 per cent forecast at the time of the 2003 budget.
“There are two main risks to the Canadian economic outlook:
— the uncertainty surrounding the economic impact of the rapid rise of the Canadian dollar.
— the sustainability of the U.S. economic recovery.”

Following are spending highlights that will particularly affect engineering companies.

Infrastructure/engineering-related:
— $7 billion in GST/HST relief for municipalities of all sizes over the next 10 years.
— Acceleration of the $1-billion Municipal Rural Infrastructure Fund, with spending over the next 5 years instead of 10.
— Funding of $4 billion over 10 years to clean up contaminated sites.
— New funding ($1 billion over 7 years) to support the development and commercialization of new environmental technologies, reflecting the sale of Petro-Canada.
— New funding of $270 million set aside to enhance access to venture capital financing for companies turning promising research into new products and services.
— Commitment of a further $605 million to address security issues.

General business items:
— Acceleration by one year, from 2006 to 2005, of the increase in the small business deduction limit to $300,000.
— Increase in the capital cost allowance rate for computer equipment to 45 per cent from 30 per cent, and in the rate for broadband, Internet and other data network infrastructure equipment to 30 per cent from 20 per cent.

In his introduction, Goodale indicated the principles that had guided the government’s plan: “At the core of this budget is the recognition that to achieve our goal of better lives for all Canadians, our social and economic policies must be mutually reinforcing. Quite simply, there can be no strong economy without a secure society, and no secure society without a strong economy to support it. And underlying this must be the prudence of balanced budgets that comes with living within our means.”

For the full budget document, visit www.fin.gc.ca