Canada: Stay-the-course budget unveiled for 2017

Canada’s new federal budget for 2017 was revealed towards the end of March, with a focus on growing exports and tax reforms while falling back on a pledge to reduce the budget deficit. The budget reflects the uncertainty surrounding Trump policies and allows the Canadian government a degree of flexibility should US policy affect Canadian competitiveness or trade.

The goals behind the budget, titled, ‘Building a Strong Middle Class’, are explained by Bill Morneau, the Canadian Finance Minister: “Budget 2017 is about jobs. It’s about creating good middle class jobs today, while preparing Canadians for the jobs of tomorrow. The next step in our plan for Canada’s economy is making the smart, responsible investments we need to be innovative and competitive.” Measures include tax increases for the wealthy, closing tax loopholes, and a plan to boost goods and services exports by 30% in the next 8 years.

Canada’s budget also sets out measures to help safeguard the economy from unexpected changes, with reserves now set at $3 billion a year, although the move will increase the projected deficit to $28.5 billion for 2017-18. This means that the budget does not address one of the government’s previous goals of reducing the debt-to-GDP ratio.

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