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April 27, 2005

Agreement in principle?

Martin to Dip Into Reserve to Buy Support:

Prime Minister Paul Martin will dip into reserves to pay for increased spending under an agreement in principle reached on Tuesday to gain support in Parliament from the New Democratic Party. Martin announced that he would boost spending over the next two years by C$4.6 billion. This would come from the C$9 billion in contingency and prudence reserves that have been built into the budget for the next two years, Martin spokesman Scott Reid said.


Flashback two months:

The 2005 budget maintains the annual $3-billion Contingency Reserve. It also includes an additional amount for economic prudence to provide greater assurance that the balanced budget targets will be met. If not needed, the amounts set aside for economic prudence will be released to fund government priorities. The Contingency Reserve—if not needed to deal with unforeseen circumstances—will go each and every year to reduce the federal debt (accumulated deficit).


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