In the first opportunity to deliver a budget from the right in more than a decade, the Harper government signalled a shift to — but not a wholesale adoption of — more conservative principles.

The new federal budget promises a slew of tax cuts, for both individuals and corporations. Total tax relief for individuals is valued at almost $20 billion over the next two years.

Taxpayers of all income levels are receiving cuts of some sort, including lowering the lowest personal rate, increasing the basic personal amount and introducing a tax credit on employment income. This budget offers something for everyone on the tax side, from seniors to students to working Canadians, says Jamie Golombek, vice president of taxation and estate planning at Toronto-based AIM Funds Management Inc.

However, the overall income tax reductions are more modest than those proposed by the previous administration. Although the personal income tax relief may be lower than the Liberals promised, the new government is also following through on its election promise to cut the GST by 1%.

In some sense these two directions are at odds. Shifting the tax burden from income to consumption is generally considered more favourable to productivity, as it gives the taxpayer greater control over their finances and more incentive to work. By cutting taxes on both ends, the government is, to some extent, sending mixed messages about its vision.

The GST cut was a prominent election promise, and it may not represent the government’s abiding philosophy. The sense that the GST cut was more of an election plum than an ideological commitment is reflected in the fact that the personal income tax cuts delivered today are so extensive (an estimated $12.3 billion over the next two years, compared with the $8.7 billion cost for the GST reduction), and it is also offering up a slew of corporate tax cuts.

On the corporate side, the general corporate tax rate is being reduced, the corporate surtax is to be eliminated and the federal capital tax is being scrapped two years earlier than planned. Small business is getting a bit of tax relief too. All these cuts are designed to make companies more competitive, in the hope that this trickles down to workers.

On the spending side, the government is also pushing more money into the hands of individuals. For example, the Universal Child Care Benefit will provide all families with $100 per month for each child under age 6. It is also offering up a tax credit for the purchase of monthly public transit passes. These sorts of initiatives give individuals some discretion over how to direct their spending, leaving more room for the market to provide solutions. It is also doing things such as opening up the mortgage insurance market to greater competition.

That’s not to say that there’s no top-down spending. For example, it is devoting $250 million to support the creation of new child care spaces. And, it is spending on the sorts of things that governments traditionally do best, such as provide security and build infrastructure.

While this is by no means a passionately ideological budget, it does give hints of a change in direction — a shift towards conservatism.