1995 Canadian federal budget

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.^[6]

The $2 banknote is discontinued and replaced by a $2 coin starting in early 1996.

Other administrative restructuring is also announced in the budget:^[7]

• Integration of the Canadian Coast Guard into Fisheries and Oceans Canada;
• Clarification of responsibilities pertaining to freshwater and marine areas between Fisheries and Oceans Canada and Transport Canada;
• Elimination of 73 agencies, restructuring of another 47 (by merger or streamlined operations) and abolition of 665 Governor-in-Council positions.^[a]

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.^[8][9]

• Effective August 1, 1995 the annual subsidy of $560 millions to the railway companies is eliminated;^[10]
  • The federal government budgeted a $1.6 billion one-time payment as compensation for land owner whose land values are affected by the abolition of freight subsidies.
• Subsidies for Atlantic region freight are abolished starting on July 1, 1995;
• Dairy and other agricultural subsidies are to be reduced by 30% over 2 years;
• Subsidies to cultural industries are to be reduced, including an-8% reduction in the postal subsidies for Canadian books and magazines.
• Industry Canada is scheduled to terminate 44 of its 54 business subsidies programs.^[4]

The budget announced major changes to transfers to provinces. Up until 1995, transfers consisted mostly of:

• Established Programs Financing (EPF) a block transfer established in 1977 to fund post-secondary education and healthcare.
• Canada Assistance Plan (CAP) a cost-sharing program to fund social services and social assistance.
• The Equalization program which was renewed unchanged for five years prior to the 1995 budget.

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)^[b] 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.^[11]

The Public Utilities Income Tax Transfer Act (PUITTA) is suspended after April 1, 1995^[12] and the PUITTA is repealed on March 31, 1999, providing the federal government with more than $200 million in annual savings.^[13]

The budget announced the privatization efforts were to continue with multiple state-owned corporations to be sold to the private sector.^[c]

Many other federal departments and agencies were to operate on a more commercial basis.^[15]

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. Reform, Bloc, NDP and one of the two Progressive-conservative (Elsie Wayne) MPs voted against the budget while Gilles Bernier (the only independent MP elected in 1993) and Jag Bhaduria (formerly part of the Liberal caucus), voted in favor like. One Liberal MP (Warren Allmand) voted against the budget, protesting budget cuts and was shortly thereafter relieved of his position as chair of the House of Commons Standing Committee on Justice.^[16] The bill received royal assent on 22 June 1995.