An expected change in the proposed Canadian budget - which is expected to bring billions of new government spending to the economy - marks large tax cuts, for everyone.

Jim Flaherty spoke concisely and definitively on the exact deficit for 2009-10, marking it at a sharp $34 billion just as the anonymous staffer reported earlier this week, marking an increase in spending and an estimated decrease of $5.9 billion in lost tax revenue due both to proposed fiscal policy changes and reduced economic performance.

The tax cuts, designed to increase available disposable income for Canadian consumers, include a new Home Renovation Credit, which, for one year between January 27th and February 1st of 2010 entitles consumers to up to $1,350 in tax credit on renovations between $1,000 and $10,000. The economic merit of this is unclear at this point, perhaps an attempted growth of the capital stock.

More significantly, the basic personal exemption will increase to $10,320 retroactive to January 1st - marking an increase of about $700 dollars from the previous $9,600 year’s. Additionally, the upper limit on the 15 per cent tax bracket will increase to $40,726 (from $38,832) and the 22 per cent bracket will rise to $81,452 (from $77,664) - a significant tax break to middle-class earners.

Four billion in cost-share construction funds have also been promised for approved projects beginning in the 2009 and 2010 seasons, in aim to increase corporate investment in infrastructure; Employment Insurance will be extended to offer benefits for 50 weeks, up from the current 45, in effort to support those who are out of work due to contractionary forces and those pesky significant job cuts.

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