Calling it their “Economic Action Plan,” the federal Conservatives presented a budget that will provide almost $30 billion — or 1.9% of gross domestic product — to support the Canadian economy during the next fiscal year. The plan aims to create or maintain 190,000 Canadian jobs over two years.

The five-part plan calls for:

> improving access to financing and strengthening the financial system;

> helping Canadians and stimulating spending;

> stimulating housing construction;

> building infrastructure; and

> supporting businesses and communities.

Within those broad categories, the feds have included a number of tidbits. For example, in enhancing the scope of the Canada Deposit Insurance Corp. to promote financial stability, the budget proposes designating tax-free savings accounts (TFSAs) as a separate category of deposits insurable by CDIC.

Under the “Extraordinary Financing Framework” (EFF), the budget will provide $200 billion to Canadian consumers and businesses to improve access to credit. That will include:

> The Insured Mortgage Purchase Program (IMPP) will buy another $50 billion in insured mortgage pools in the first half of the fiscal year, ended March 31, 2010, adding to the $75 billion of purchases already authorized. The total size of the program will now be
$125 billion. The budget says the competitive auction process used to purchase the mortgages will ensure that the rate of return on the purchased mortgages will exceed the government’s cost of borrowing.

> $13 billion in incremental financing is allocated to federal Crown corporations, the Export Development Canada and the Business Development Bank of Canada to extend additional financing to Canadian businesses and allow the Canada Mortgage and Housing Corp. to support low-cost loans to municipalities. At least $5 billion of this financing will be delivered through the Business Credit Availability Program, which calls for enhanced co-operation between government agencies and financial institutions.

> an increase of $300 million a year in lending under the Canada Small Business Financing Program by boosting the maximum eligible loan amount for loans made after March 31.

> $12 billion will be allocated to a new Canadian Secured Credit Facility to purchase term asset-backed securities backed by loans and leases on vehicles and equipment.

> Extending to Dec. 31, from April 30, the period for issuing guaranteed instruments under the Canadian Lenders Assurance Facility (CLAF), announced in November 2008. CLAF provides Canada’s deposit-taking financial institutions with a guarantee on their term debt, similar to those offered to banks in other countries.

> The creation of the Canadian Life Insurers Assurance Facility, modelled on the CLAF to ensure that life insurers are not put at a competitive disadvantage relative to foreign insurers that benefit from guarantee programs provided by their home governments.

Under the heading of helping Canadians and stimulating spending, the budget proposes extending the benefits of employment insurance and providing $8.3 billion for its skills and transition strategy. It also plans personal income tax relief for low- and middle-income Canadians by increasing the personal income tax brackets.

To stimulate housing construction, some $7.8 billion will go to measures such as a Home Renovation Tax Credit (providing up to $1,350 in tax relief), up to $750 in tax relief for first-time homebuyers, funding for energy retrofits, investments for social housing to support low-income Canadians, seniors, persons with disabilities and Aboriginal Canadians, and low-cost loans to municipalities.

On the infrastructure front, the feds are promising $12 billion in funding over two years — including “shovel-ready” projects that can start this upcoming construction season.

Another $7.5 billion will go to support sectors, regions and communities, including auto, forestry, manufacturing and clean energy.

IE