1995 Canadian federal budget
The Canadian federal budget for fiscal year 1995–1996 was presented by Minister of Finance Paul Martin in the House of Commons of Canada on 27 February 1995. Background. The budget is presented in a context of a fast-growing US economy and moderate inflation but a severe increase in interest rates that started in early 1994 dramatically increased public debt charges and in turn reduced budgetary margin for the Liberal government. Taxes. The capital gains exemption is maintained for farming and small businesses Cost recovery initiatives. In order to increase revenues, the budget plans for new  cost recovery and user fees initiatives, notably: These initiatives were to generate $450 millions in annual revenues in 1995–96 and up to $600 millions when fully implemented. Expenditures. Program spending. Administrative measures. The budget announces massive cuts to program expenditures, amounting to 18.9 % by 1997–98. A new "Expenditure Management System" (EMS) was announced prior to the budget announcement on February 15 by Art Eggleton, the President of the Treasury Board. The EMS aimes to implement a new results-based approach to public management and strict cost control. The 2 $ banknote is discontinued and replaced by a 2  $ coin starting in early 1996. Other administrative restructuring is also announced in the budget: Cuts to business subsidies. The most dramatic cuts are related to subsidies to business organizations, with a scheduled cut amounting to 60.4% between 1994–95 and 1997–98. Transfers to provinces. Creation of the Canada Social Transfer. The budget announced major changes to transfers to provinces. Up until 1995, transfers consisted mostly of: The budget announced that the first two programs are to be combined into a single "block transfer" called the Canada Health and Social Transfer (CHST) starting in the fiscal year 1996–97. (In the budget  the CHST is designated as "Canada Social Transfer" (CST) which coincidentally is the name of a successor transfer to the CHST) Other changes. The "Public Utilities Income Tax Transfer Act" (PUITTA) is abolished starting April 1, 1995, providing the federal government with more than $200 millions in annual savings. Legislative history. Most of the content of the budget was included in the Bill C-76 ("An Act to implement certain provisions of the budget tabled in Parliament on February 27, 1995") that was adopted by the House of Commons on 6 June 1995. Most Reform, Bloc, NDP and one of  the two Progressive-conservative MPs voted against the budget. The bill received royal assent on 22 June 1995.