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Feb 11, 2014

Almost-balanced federal budget unveiled in Ottawa

Flaherty lays out plans for Canada Job Grant, jobs training, foreign workers and more
By With files from the Canadian Press
    
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Federal Finance Minister Jim Flaherty has taken the wraps off a federal budget that is almost, but not quite, balanced. It also contains a number of items of interest for employers and HR professionals.

Jobs grant

The Harper government says it'll move ahead unilaterally with its Canada Job Grant program, if it can't reach an agreement with the provinces by April.

The plan, introduced last year, proposed a $15,000 grant to cover job training for potential employees, with $5,000 each coming from Ottawa, the provinces and businesses.

But it ran into opposition because the feds wanted to pay for it by taking away funding from other provincial job training programs where Flaherty says benefits could not be measured.

The federal budget says the government will move ahead with the program on its own and provide two-thirds of the cost — but it's not promising any extra funds, so that likely means fewer grants will be available in provinces that don't reach a deal by the deadline.

The Tories will also renegotiate the $1.95 billion-a-year Labour Market Development Agreements, as promised, so that job training is matched to the demands of labour markets.

The funds are specifically designed to support workers across Canada who qualify for employment insurance.

Jobs training

A key theme of today's budget is connecting Canadians with available jobs — from aging citizens to new immigrants and those with disabilities — while addressing the skills shortage via beefed-up training programs.

Among the new tools in the Conservatives' skills-training arsenal is the creation of the Canada Apprentice Loan, an expansion of the Canada Student Loans Program.

The fund will provide apprentices in so-called Red Seal trades with access to more than $100 million in interest-free loans every year to help them pay for their training.

At least 26,000 apprentices per year are expected to apply.

Other funding announced today includes a further $75 million over three years to renew a program to assist unemployed older workers and $11.8 million over two years to launch an enhanced job-matching service to help connect Canadians with jobs.

Public servants

Retired government employees are being asked to pay more for health benefits in the latest federal budget.

Flaherty is projecting savings of $7.4 billion over six years by phasing in changes to make retired civil servants pay half the cost of their health benefits — up from the current 25 per cent.

The measure will more than double the cost of annual contributions for individual retirees, to $550 from $261 dollars.

The budget also repeats that the government wants to negotiate changes to disability and sick leave provisions in public service contracts and to ensure compensation is “fair and reasonable.''

Foreign workers

The Harper government says it will reform the temporary foreign worker program to prevent abuse of the program by employers.

The changes, contained in the federal budget, would ban employers from paying temporary foreign workers less than what they would normally pay domestic employees.

The move comes after reports last week that an Alberta company fired Canadian iron workers, only to replace them with cheaper labour from Croatia.

Under the budget proposal, use of the temporary foreign worker program would also be restricted in high-unemployment areas.

Deficit

Flaherty is projecting a $2.9 billion deficit for the fiscal year that starts in April.

But he's also holding onto a $3 billion contingency reserve, which effectively means the budget will be balanced in the 2014-15 fiscal year.

In his new budget today, Flaherty also predicts a surplus for fiscal 2015-16 of $6.4 billion with another $3 billion reserve.

That means the actual surplus could be pushing nearly $10 billion dollars by the time voters go to the polls in the next general election, slated for October next year.

Flaherty says it's been a long road back from the Great Depression but it's important to balance the books so Canada can weather future economic storms.

He also says he knows the books could be balanced in fiscal 2014 but he thinks it's important to keep back an emergency fund and have a ``nice clean'' surplus for the following year.

MP, senator pensions

The Harper government says it'll prevent senators and members of the House of Commons from accruing pension benefits if they've been suspended from either chamber.

The 2014 budget includes a pledge of legislation to enact the prohibition.

The move comes as the government grapples with the Senate expense scandal.

Three former Tory senators — Mike Duffy, Pamela Wallin and Patrick Brazeau — have been accumulating pensionable service under current Senate rules, even after being suspended from the red chamber over questionable expense claims.

It's not clear whether the legislation being promised will be enforced retroactively, once passed into law.

Other highlights

•New tax on cigarettes. Carton of 200 cigarettes will increase by $4, bringing in $700 million. Also effectively ends discount on cigarettes sold at duty-free stores.

•Employment insurance benefits for apprentices

•A “Made in Canada” branding campaign

•Legislation to prohibit unjustified cross-border price discrimination — or trying to eliminate the gap between what Canadians and Americans pay for identical goods

•Lowering credit card acceptance costs for merchants

•Cracking down on payday loan operators

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