OTTAWA - The Harper government is unveiling what is expected to be its last free-spending budget Thursday, with money for infrastructure, businesses and a new lifeline to the atomic energy industry.
While Finance Minister Jim Flaherty will declare the spigot will finally be turned off on March 31, 2011, this year will also see $19 billion in previously-announced stimulus -- and a few surprises.
The Canadian Press has learned that $400 million will go to Atomic Energy of Canada in an effort to reposition the troubled nuclear energy firm to sell its Candu reactors division.
The government said in Wednesday's throne speech that it would invest in clean energy technologies, adding:
"And it will position Canada's nuclear industry to capitalize on the opportunities of the global nuclear renaissance -- beginning with the restructuring of (AECL)."
Both CTV and La Presse have reported that the government will double its contribution to Canadian amateur athletes to $22 million a year in the aftermath of the record 14-gold medal haul during the Vancouver Olympics.
Flaherty is also expected to accede to industry pressure to extend the program that allows firms to write off investments in new machinery and equipment for five years.
Industry representatives have argued that many firms need to modernize, but could not afford to do so during the recession and need more time.
Despite the introduction of the "temporary" measure in 2007 and a strong dollar which makes such purchases less expensive, new capital investments have dropped sharply in the past year.
The program is seen as especially important to manufacturers, the forest industry and the chemical sector. It would also add some meat to the government's key message that firms must become more innovative and competitive.
But new spending that is not already accounted for in the $47 billion in stimulus announced last year as part of Canada's economic action plan will be rare in Thursday's budget, officials say.
With a $56-billion deficit all but in the books, followed by an expected $45-billion shortfall in the 2010-2011 fiscal year, the overriding message of the budget document will be how to pare down spending in the upcoming years, not increase it.
The minister has repeatedly said that his stimulus measures are on a "use it or lose it" basis, meaning that there will be no extensions once they sunset next spring.
Wednesday's throne speech provided the opening salvo in what promises to be a multi-year campaign of thrift -- a freeze on departmental operating budgets and on salaries for MPs and senators.
But more frugality will be needed to balance the books at some future date.
Parliamentary budget officer Kevin Page said in a recent report on aging that Ottawa's revenue stream is diminishing and will be stuck with as much as a $20-billion structural deficit in five years if it does not cut sharply or raise taxes.
The government said again Wednesday, however, that it will not touch the sizable portion of the budget that goes in transfers to provinces and individuals. Nor will it raise taxes.
"Balancing the nation's books will not come at the expense of pensioners," the throne speech declared.
"It will not come by cutting transfer payment for health and education or by raising taxes on hard-working Canadians. Those are simply excuses for a federal government to avoid controlling spending."
Flaherty will be counting on economic growth to raise government revenues, and spending cuts to do the trick.
But Toronto economist Dale Orr has estimated Ottawa will need to limit spending growth to about three per cent a year -- less than half the amount Conservatives under Harper have been hiking spending -- and do it each year for seven years to get near balancing the books.
