PwC Federal Budget instant reaction: Staying the course - continued stimulus,
job creation and focus on a balanced budget

TORONTO, March 4 /CNW/ - PwC tax specialists commented today:

The actions announced today by the Federal Government in Year 2 of Canada's Economic Action Plan aim to stay the course of economic recovery with a budget geared towards the continuation of the stimulus package, job creation and balancing the budget. Improving Canada's international competitive position will assist the economic recovery.

Notable actions include:

    
    -  Continuation of the stimulus package: $19 billion in new federal
       stimulus to create and maintain jobs; temporary measures will be wound
       down as planned.
    -  Reduced barriers for businesses: making Canada a tariff-free zone for
       manufacturers - a savings of $300 million to Canadian business.
    -  Other key measures include: encouraging investments in energy projects
       and clean energy generation, further strengthening of the financial
       sector by moving forward toward a Canadian securities regulator and
       reducing red tape and compliance costs for Canadian businesses.
    -  Spending restraint through targeted measures: a proposal of
       $17.6 billion in savings over five years.
    -  Review of government overhead administrative functions and overhead
       costs.
    -  Extension of the Mineral Exploration and Tax Credit (METC) to March
       31, 2011.
    -  Launch of a new Small and Medium-Sized Enterprise Innovation
       Commercialization Program with $40 million over two years.
    

The budget continues with the promised changes of reduction to corporate and personal tax rates. The Federal Government will not raise taxes and will not cut major transfers to persons and other levels of government.

A PwC Budget Flash with additional Budget highlights has been issued today, followed by a detailed Budget Memo later this evening. For more information and detailed commentary on the Budget please contact, Kiran Chauhan, [email protected], 416-947-8983 or visit www.pwc.com/ca/budget.

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For further information: Kiran Chauhan, [phone], [email protected]