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2005 Canadian federal budget

The 2005 Canadian federal budget was the budget of the Government of Canada for the 2005–2006 fiscal year. It was presented on February 23, 2005, by Finance Minister Ralph Goodale. It was the first Canadian federal budget presented by a minority government since the budget of the Joe Clark Progressive Conservative government in 1979, which was defeated by the opposition parties.

Presented

February 23, 2005

June 28, 2005

38th

Liberal

Ralph Goodale

C$222.2 billion[1]

C$209 billion[1]

C$175.2 billion[1]

C$33.8 billion[1]

C$13.2 billion[1]‡

C$481.5 billion[1]

The Budget Plan 2005

Having fewer than half the seats in the House of Commons of Canada meant that the governing Liberal Party of Canada had to win the support of members of other parties for the 2005 budget to pass. Without that support, the budget would have been defeated, and new elections would likely have been called.


In the 2005–06 fiscal year, the government had a large surplus of expected revenues over expenses, making the government able to fund a wide array of new initiatives. The budget bill (C-43) received Royal Assent on June 28, 2005. In order to gain the necessary support of the New Democratic Party (NDP) the budget was amended (Bill C-48) and given assent three weeks later following considerable debate.

Increase of the basic personal exemption: The personal income tax cut raises the basic to $10,000 from its former level of just over $8,000 over the five-year period. This was projected to result in an average tax savings of $16 for each Canadian in 2006, with the final total reaching $192 at the end of the five-year period. The basic personal exemption is indexed to inflation, so it would likely have risen to roughly $9,000 over the five-year period without the changes.[2][3]

personal exemption

Increase in and RRSP limits : increase of limits by $1,000 each year between 2006 and 2009 for the RPP, of $1,500 in 2006 and $1,000 each year between 2007 and 2010 for the RRSP. Indexation on average wage growth to start in 2009 for RPPs and 2010 for RRSPs[4][5]

RPP

Creation of the  : creation of a 16% non-refundable tax credit for adoption expenses for adoption of child under 18. Eligible fees include notably fees paid to an adoption agency, legal and administrative fees, reasonable travel and living expenses. The maximum tax credit is set at $1,600 for 2005[a] to be indexed in taxation years after 2005 ;[6]

Adoption Expense Tax Credit

More expenses are made eligible to the Medical Expenses Tax Credit.

[7]

The criticized the lack of funding for post-secondary education and the increase in the defence budget ;

University student federation of Quebec

Quebec's Hospitals Association and the Federation of Medical Specialists of Québec criticized the budget on the grounds that it did not address and increase health transfers despite the promises made by the federal government in the September 2004 Health Accord.

fiscal imbalance

Canadian federal spending, 2004

Department of Finance – Budget 2005 speech text

Transcript of Parliamentary proceedings surrounding second reading of Bills C-43 and C-48

CBC News Indepth – 2005 Budget