The 2008 C.D. Howe Institute Shadow Federal Budget: Steering Through Turbulence



    TORONTO, Feb. 21 /CNW/ - Solid fiscal planning and a vibrant private
sector will see Canada through near-term turbulence in the economy, according
to the C.D. Howe Institute's Shadow Federal Budget for 2008. As Canada faces
the headwinds of demographic change and worries over weaker economic growth,
the key challenge for 2008 is to ensure that transient economic concerns do
not distract government from critical long-term tasks. The federal
government's core economic goals, therefore, must be to encourage work, smart
investment, and productivity growth to sustain public programs and living
standards, write the authors.
    The 2008 Shadow Budget moves Canada a key step forward by carefully
managing spending and offering tax relief to Canadians who work and invest. A
reinvigorated personal and business tax relief program will improve incentives
and rewards for Canadians' work and saving, and create a more congenial
environment for investment and innovation.
    The Shadow Budget offers a suite of measures to achieve these goals,
including a fiscal plan that limits federal spending growth, instead putting
government's focus on investing in human capital, through an endowed
scholarship program aimed at attracting new talent from abroad. The Shadow
Budget also sets aside funding to facilitate provincial sales tax reform, and
lowers Canada's marginal effective tax burden on capital, through an
accelerated reduction in corporate income taxes to 12 percent by 2013. For
individuals, the Shadow Budget includes an innovative tax pre-paid option for
retirement saving, a dramatic rise in RSP saving room, a refundable dividend
tax credit paid to RPP/RRSP holders of dividend-paying shares, and a capital
gains rollover mechanism to help Canadians reallocate their savings
portfolios.

    For the study, go to: http://www.cdhowe.org/pdf/backgrounder_111.pdf





For further information:

For further information: contact: Finn Poschmann, Director of Research,
or William B.P. Robson, President and CEO, C.D. Howe Institute, (416)
865-1904, cdhowe@cdhowe.org


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