Federal Budget 2012

The Latest

FCM Analysis of Budget 2012

On March 29, the Government of Canada tabled Budget 2012 in Ottawa. The main points of interest to FCM and our members are highlighted below. This analysis by FCM staff will be enhanced and updated as the budget bill moves through Parliament, and as our questions are clarified by officials. Please note that our analysis of the budget confines itself to items related to, or of interest to, municipalities only.

Read our complete analysis.

Key themes of Budget 2012

• As largely expected, the budget delivered a mix of program cuts, regulatory changes and targeted new investments, all designed to support the government's commitment to balance the budget by 2015, and to support job creation and economic growth.
• The most visible, and expected, budget commitment is the change to Old Age Security (OAS) retirement age eligibilities. It is expected that this component of the budget will receive the most scrutiny and attention from the media and opposition parties.
• Almost every department received core funding cuts, mostly in the 8 - 10 per cent range.Details on how these cuts will be achieved will not be released until later in the spring, as part of the regular budget appropriations process.
• Key budget figures:
  
  
  • $5.2 billion per year in savings by 2015
  • Return to budgetary surplus by 2015
  • 19, 200 federal jobs to be cut over three years
  • OAS eligibility age rises to 67 after 2023

Budget highlights for FCM

1. The commitment to have its new long-term infrastructure plan in place before current funding programs end in 2014, means that municipalities can look forward to stable, secure federal infrastructure funding.
2. The $150-million commitment to the new Community Infrastructure Improvement Fund will again see all orders of government working shoulder-to-shoulder to create jobs and invest in communities in a time of global economic uncertainty.
3. The budget fails to deliver on fixing Canada's rental housing market. The federal government must encourage private sector investors to expand Canada's slow-growing rental housing supply. Today's budget misses this opportunity; however, FCM will continue to work to address this growing problem with the government and all parties in the House of Commons.

FCM's priorities for Budget 2012

• See our Pre-Budget Submission

Additional resources

• The Budget Debate (procedure and timetable)
• Department of Finance Canada

Canada's municipal leaders welcome today's commitment by the federal government to continue working with cities and communities to rebuild the local roads, water systems, community centres and public transit that our families, businesses, and economy depend on.

• Statement by FCM president Berry Vrbanovic on the federal government's 2012 budget on behalf of Canada's municipalities

Update from FCM President Berry Vrbanovic on Budget meeting with Finance Minister

On Monday, February 13, I led an FCM delegation that met with Finance Minister Jim Flaherty to talk about municipal priorities for the upcoming federal Budget. During the hour-long meeting, the Minister thanked municipalities for working with the government over the past few years to create jobs and fight the global recession.

We agreed that we should continue building the federal-municipal relationship. The Minister said the government has now put the $2 billion per year permanent Gas Tax Fund into federal legislation, and he has since confirmed this in a letter to FCM.

For Budget 2012, FCM focused on two main priorities: municipal infrastructure funding, and housing and the economy (see below for details). In both areas, we had open and constructive discussions with the Minister.

Municipal Infrastructure Funding - The federal government must commit to have its new long-term infrastructure plan, and a new generation of federal-municipal funding programs, in place before the existing Building Canada Plan expires in 2014. At the meeting, we urged the government to secure its role investing in cities and communities and stressed the importance of the government respecting the municipal budgeting process and minimizing any gaps between local budget planning and the rollout of new federal funding programs.

Housing and the Economy - The federal government must work to remove barriers to investment in the rental housing market to preserve construction jobs and address the shortage of affordable housing. Our recommendations for this priority area are outlined in FCM's recent rental housing report.

We will continue to work with our members to press for a Budget that responds to our cities and communities' needs.

Sincerely,

Berry Vrbanovic