Federal budget: Economic and Fiscal Update and the Second Set of Supplementary Estimates

Last week, the government released its Update of Economic and Fiscal Projections. One main message emerged from the document:  owing to continued weakness in the global economy, downward revisions for economic growth in Canada and considerable economic uncertainty going forward, the government will not return to fiscal balance until 2015-2016, a year later than projected in Budget 2011.

This does not alter the seriousness and resolve of the government to adhere to the Strategic and Operating Review process, through which it aims to identify $4 billion in annual ongoing reductions in expenditures by 2014-2015. At the heart of this process, all federal organizations must identify five and ten-percent funding reduction scenarios (see the CCA’s 2011-12 Federal Budget Analysis for full details of the review process).

The government also announced that it is reducing the maximum potential increase in Employment Insurance premium rates in 2012 to five cents (down from 10 cents) and is extending the Work-Share Program enhancement, which provides an extension of up to 16 weeks for work-sharing agreements.[more]