Federal Budget 2008

Federal Finance Minister Jim Flaherty tabled his third Budget yesterday February 26, 2008. With mostly a modification to existing tax programs, a commitment to reducing the debt and assisting individuals towards planned savings, we would expect that this Budget would not be of significant concern enough to trigger a much anticipated spring election.

While the Minister announced no new tax credits or changes to personal tax rates, the Budget proposes a new "Tax-Free Savings Account" to encourage savings, minor tax relief in the form of adjustments to Registered Education Savings Plans, Medical Expense Credits and Registered Disability Savings Plans.

For Canadian businesses, the Budget offers several measures to support the manufacturing sector, in which real output has declined by 3.4% in the last two years, and to encourage innovation among small and mid-sized businesses. The Budget also includes improvements to the scientific research and experimental development tax incentive program.

The Budget proposes to reduce the debt by $10.2 billion this year, with further reductions of $2.3 billion for 2008/09 and $1.3 billion for 2009/10.

NOTICE

The contents of this report are of a general nature only and are not intended to be a full and complete analysis of the topics discussed. The issues contained herein are not intended to be nor should they be construed as, either the offering or giving of financial advice on any matter.

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