Goodale to unveil budget in March

(February 24, 2004) Federal Finance Minister Ralph Goodale will present his first budget on Tuesday, March 23. Goodale made the announcement today in the House of Commons.

The minister has promised to deliver a balanced budget and to continue the Liberal government’s commitment to reducing the federal debt, now at $511 billion.

Ottawa has earmarked an additional $2 billion in healthcare spending for the provinces. Combined with debt reduction, those two projects could eat up the bulk of the government’s surplus for the fiscal year ending March 31, estimated at around $5 billion.

That means modest spending increases and no new tax cuts in the budget, experts predict.

“I am not expecting any major tax cuts or other significant tax changes,” says Dave Clarke, manager of tax services at Collins Barrow in Ottawa. “However, given the Liberal government’s recent problems and the expectation that there will be a spring or fall election, we may find a few surprises in the budget.”

In pre-budget submissions, Advocis, IFIC and the IDA all called for an increase in RRSP annual contribution limits, to $27,000. However, tax experts don’t expect any further action on that front, considering Ottawa committed to a gradual RRSP limit increase ($18,000 by 2006) in last year’s budget.

Advocis also recommended that the age at which an RRSP must be converted to a RRIF be raised to 71 from 69 and that consideration be given to raising the age to 73.

The IDA asked for an increase in the dividend tax credit and a reduction in the capital gains tax.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com