March 18, 2013 – The C.D. Howe Institute’s 2013 Shadow Budget, released today, protects Canada from near-term economic and fiscal risks by accelerating the federal government’s planned return to budget surpluses, and promoting reforms that will boost longer-term economic growth. In “Prudence and Opportunity: A Shadow Federal Budget for 2013,” authors Alexandre Laurin and William Robson show how Ottawa can achieve budget surplus by 2014/15, a year ahead of plan, through further belt-tightening in the government’s own operations, while reshaping federal finances to support work, saving, investment, and international trade.
A key focus of the Shadow Budget is further control of Ottawa’s operating costs. It proposes to reduce the number of federal employees from planned levels, and limit mounting compensation costs per employee by containing taxpayers’ contributions to pension and other under-funded post-retirement benefits. It would also trim net subsidies to Crown corporations and “tax expenditures” – programs delivered through the tax system.
The Shadow Budget also proposes reforms that have low or zero net costs and will boost Canada’s economic dynamism. Among them:
- a revenue-neutral one-percentage point shift from personal-income to consumption taxation, which will promote income growth and help provincial finances;
- a global strategy for lower across-the-board tariffs on imports to benefit consumers and make Canadian businesses more competitive; and,
- measures to help Canadians save and improve their prospects for secure retirement.
“By building on Canada’s recent relative success, this Shadow Budget will protect Canadians from the risks of excessive government borrowing, and promote the private prosperity and public programs that ensure Canadians’ economic future,” said William Robson.
Click here for the full report.
For more information contact: Alexandre Laurin, Associate Director of Research, or William Robson, President and CEO, C.D. Howe Institute; 416-865-1904; e-mail: cdhowe@cdhowe.org