View source for 1993 Canadian federal budget

{{Infobox Government Budget
| title = Budget of the Canadian Federal Government
| year = 1993
| country = Canada
| previous_budget = 1992 Canadian federal budget
| previous_year = 1992
| next_budget = 1994 Canadian federal budget
| next_year = 1994
| image = Canadian federal Budget '93 logo.svg
| imagesize = 200
| caption = 
| presented = 26 April 1993
| passed = 
| parliament = [[34th Canadian Parliament|34th]]
| party = [[Progressive Conservative Party of Canada|Progressive Conservative]]
| minister = [[Don Mazankowski]]
| Total_Revenue = 
| Total_Expenditures = 
| spending = 
| tax_cut = 
| debt_payment = 
| deficit = $38.5 billion<ref>{{cite web|title=Canada's deficits and surpluses, 1963-2014|url=http://www.cbc.ca/news2/interactives/canada-deficit/|website=CBC News|publisher=CBC/Radio-Canada|access-date=25 April 2015}}</ref>
| debt = 
| bill = 
| bill_link = 
| url = 
}}

The '''1993 Canadian budget''' was a [[Canadian federal budget]] for the [[Government of Canada]] presented by [[Minister of Finance (Canada)|Minister of Finance]] [[Don Mazankowski]] in the [[House of Commons of Canada]] on 26 April 1993. It was the fifth budget after the [[1988 Canadian federal election]] and would be the last before the [[1993 Canadian federal election]].

== Background ==
The budget was presented amid [[Early 1990s recession|poor economic conditions]] and [[Canadian public debt|soaring federal deficit]]. Two month earlier, [[Brian Mulroney]] had announced his intention to resign as soon as a new Progressive Conservative leader is elected.

On 18 June 1992 the ''Spending Control Act'' received royal assent. That act provided for a legislated ceiling for federal program spending from 1991–1992 to 1995–1996. Few programs were excluded from the scope of the Act (notably [[Unemployment benefits#Canada|Unemployment insurance]]).<ref>{{harvnb|Budget plan|p=68}}</ref> It is a complement to the [[1990 Canadian federal budget#Expenditure Control Plan|Expenditure Control Plan]] announced in the [[1990 Canadian federal budget|1990 budget]] and extended in [[1991 Canadian federal budget|1991]].

===December 1992 Economic Statement===
On 2 December 1992 [[Minister of Finance (Canada)|Minister of Finance]] [[Don Mazankowski]] tabled an ''Economic and Fiscal Statement'' in the [[House of Commons of Canada]] which:{{sfn|Economic Statement}}
* Extended the Home Buyers' Plan by a year. Introduced in the February 1992 budget, it was warmly received by the public but set to expire on 1 March 1993 ;{{sfn|S.C. 1994, c 8|loc=s 19}}<ref>{{cite news |last1=Girard |first1=Michel |title=Mazankowski et les placements |url=https://numerique.banq.qc.ca/patrimoine/details/52327/2174814 |work=La Presse |date=4 December 1992 |location=Montreal |page=B5 |language=fr}}</ref>
* Created a ''Small Business Employment and Investment Package'' consisting of:
** Exemption of UI premiums for newly created business in their first year of operation ;
** A new 10% investment tax credit for small businesses for investments in machinery and equipment purchased until 31 December 1993 ;
** Another increase in the ceiling for loans under the Small Business Loans Act to $250,000 ;
** A two-year extension to the Small Business Financing Program.
* Another round of expenditure reductions:
** A salary freeze in 1993 and 1994 for public servants (including the Governor General{{sfn|S.C. 1993, c 13|loc=s 9}} and lieutenant governors of the provinces,{{sfn|S.C. 1993, c 13|loc=s 12}} the Prime Minister, Ministers, Parliamentarians{{sfn|S.C. 1993, c 13|loc=s 11}} and the federal judiciary{{sfn|S.C. 1993, c 13|loc=s 10}}) ;
** Reduction in government operating budget of 3% in 1993-94 ;
** A freeze in unemployment benefits achieved by decreasing the benefit rate from 60 to 57% for new beneficiaries between 4 April 1993 and 1 April 1995.{{sfn|S.C. 1993, c 13|loc=s 18}}
** Most grants and subsidies to be cut by 10% (including the [[Public Utilities Income Tax Transfer Act|PUITTA]] transfer to provinces,{{sfn|S.C. 1993, c 13|loc=s 13}} the Green Plan and International Assistance);{{sfn|Economic Statement|p=15}}
** Other programs ([[Old Age Security|OAS]], [[Guaranteed Income Supplement|GIS]], Veterans Allowance, major transfers to provinces...) are not affected.

== Taxes ==
The budget did not bring sweeping tax changes but introduced some technical changes for corporations :
* The budget allowed for '''faster depreciation of selected capital property items''' :
** Creating an election to place eligible property (electronic data processing equipment, photocopiers) in separate [[Capital Cost Allowance|CCA]] classes when the cost was $1,000 or more to allow immediate deduction for the taxpayer upon disposition of the equipment. That disposition is advantageous for equipment that depreciates fast.{{sfn|Budget plan|p=76}}
** A new [[Capital Cost Allowance|CCA]] class with a rate of 25% was made available to patents and licence-to-use patents acquired after 26 April 1993. This measure allowed for faster amortization of patents in the first few years after the acquisition.{{sfn|Budget plan|p=76}}
* The budget also announced that the 25% withholding tax on payments for the use of patents would be repealed. That tax was imposed on Canadian corporations' usage of foreign companies' patents.{{sfn|Budget plan|p=77}}

== Expenditures ==
The budget planned for $7.5 billion of expenditure cuts over 5 years. Most of the cuts were however announced in the December 1992 Economic Statement{{sfn|Economic Statement}} ($5.3 billion) and few cuts were contained in the 1993 budget ($1.2 billion):<ref>{{cite news |last1=Lortie |first1=Marie-Claude |title=Compressions dans le fonctionnement de l'État : très peu de nouveau |url=http://numerique.banq.qc.ca/patrimoine/details/52327/2175630 |access-date=18 June 2020 |publisher=La Presse |date=27 April 1993 |location=Montréal |page=A3 |language=fr}}</ref>
* The federal government planned to abolish 16,500 more jobs over 5 years (the 1992 Economic Statement already introduced a 2-year wage freeze for all public servants, including the [[Prime Minister of Canada|Prime Minister]], [[Cabinet of Canada|cabinet ministers]], [[Member of Parliament (Canada)|MPs]], senators and the federal judiciary) ;
* $300 million were withheld from non-allocated reserves ;
* Defence spending levels would be frozen to their 1994-1995 level ;
* The unemployment benefits rate reduction was made permanent: it would remain at 57% even after April 1995 ;
* Funding for social housing was frozen at $2 billion yearly and the [[Canada Mortgage and Housing Corporation|CMHC]] would no longer grant 35-year subsidies ;
* Growth in funding for research and international aid was capped at 1.5% in 1994–1995.

== Reactions ==
The budget was poorly received, and described as "stand pat",<ref name="McCarthy">{{cite web|url=https://pqasb.pqarchiver.com/thestar/access/518664261.html?FMT=ABS|archive-url=https://archive.today/20130131164301/http://pqasb.pqarchiver.com/thestar/access/518664261.html?FMT=ABS|url-status=dead|archive-date=January 31, 2013|title=Ottawa credit rating hit by budget fears|last=McCarthy|first=Shawn|publisher=[[Toronto Star]]|date=28 April 1993|access-date=2012-11-10}}</ref> "do nothing",<ref name="Beauchesne">{{cite web|url=https://pqasb.pqarchiver.com/thestar/access/512801711.html?FMT=ABS|archive-url=https://archive.today/20130131191809/http://pqasb.pqarchiver.com/thestar/access/512801711.html?FMT=ABS|url-status=dead|archive-date=January 31, 2013|title=Consumer may pay for federal budget Dollar down, interest rates up|last=Beauchesne|first=Eric|publisher=[[The Hamilton Spectator]]|date=28 April 1993|access-date=2012-11-10}}</ref> "non-budget"<ref name="LP">{{cite news |last1=Picher |first1=Claude |title=Le monde selon Maz |url=http://numerique.banq.qc.ca/patrimoine/details/52327/2175630 |access-date=18 June 2020 |publisher=La Presse |date=27 April 1993}}</ref> and a "lame duck".<ref>{{cite web|url=https://pqasb.pqarchiver.com/thestar/access/512804521.html?FMT=ABS|archive-url=https://archive.today/20130131225657/http://pqasb.pqarchiver.com/thestar/access/512804521.html?FMT=ABS|url-status=dead|archive-date=January 31, 2013|title=Federal budget A lame-duck effort|publisher=The Hamilton Spectator|date=27 April 1993|access-date=2012-11-10|ref={{harvid|The Hamilton Spectator}} }}</ref> Claude Picher, from [[La Presse (Canadian newspaper)|La Presse]], pointed out that the 100-pages long budget was one of the shortest budget ever and strongly criticized its lack of substance, overoptimistic economic forecasts and unimaginative measures.<ref name="LP"/>

Preceding the budget, Mazankowski had stated that government revenues would decrease compared to 1992 as a result of "slow economic growth, continued high unemployment and low inflation".<ref>{{cite web|url=https://pqasb.pqarchiver.com/thestar/access/518651861.html?FMT=ABS|archive-url=https://archive.today/20130131174908/http://pqasb.pqarchiver.com/thestar/access/518651861.html?FMT=ABS|url-status=dead|archive-date=January 31, 2013|title=Ottawa set to impose tough spending cuts|last=Ferguson|first=Jonathan|publisher=Toronto Star|date=26 April 1993|access-date=2012-11-10}}</ref>

The [[Canadian Bond Rating Service]] downgraded Canada's federal debt rating from AAA to AA+,<ref name="McCarthy"/> and the budgetary deficit for the [[fiscal year]] was expected to be $32.6 billion. Mazankowski stated that the rating service had based its decision on "erroneous information".<ref name="McCarthy"/>

The value of the [[Canadian dollar]] declined with respect to the [[United States dollar]] in the [[foreign exchange market]] the day after the budget speech,<ref name="McCarthy"/> and interest rates "climbed sharply".<ref name="Beauchesne"/><!-- find actual values -->

==Aftermath==
===Legislative history===
The budget was implemented through multiple bills:
* The spending cuts announcements of the December 1992 Economic Statement and the 1993 Budget were included in the ''Government Expenditure Restraint Act, 1993 No. 2'' which received royal assent on 2 April 1993{{sfn|S.C. 1993, c 13}};
* Tax measures for both the December 1992 Statement and the April 1993 budget would not be voted until after the [[1993 Canadian federal election]]. 
** A bill was tabled in June 1993 during the [[34th Canadian Parliament]] but had not been adopted by the time the Parliament was dissolved;
** Bill C-9 was tabled during the first session of the [[35th Canadian Parliament]] and received royal assent on 12 May 1994 after passing third reading on 19 April 1994. 
** The bill was adopted on division as no party in the House of Commons were keen to reject tax measures announced by a previous government and that had been in effect, for some of them, for more than a year.{{sfn|S.C. 1994, c 8}}<ref>{{cite book |author1=Canada, Parliament |title=House of Commons Debates|volume=III |series=35th Parliament, 1st Session |date=1994-04-19 |publisher=Supply and Services Canada |location=Ottawa |pages=3194-3201|url=https://parl.canadiana.ca/view/oop.debates_HOC3501_03/534}}</ref>

==Notes and references==
===Notes===
{{notelist}}

===References===
{{Reflist}}

====Budget documents====
{{refbegin}}
* {{cite book 
|title=Economic and Fiscal Statement 
|date=2 December 1992 
|location=Ottawa 
|url=http://publications.gc.ca/collections/collection_2016/fin/F1-36-1992-eng.pdf 
|access-date=18 June 2020
|ref={{harvid|Economic Statement}}
}}
* {{cite book 
|title=The Budget 1993 
|date=26 April 1993 
|location=Ottawa 
|url=https://www.budget.canada.ca/archives/1993-plan-eng.pdf
|ref={{harvid|Budget plan}}
}}
* {{cite book 
|title=The Budget in Brief
|date=26 April 1993 
|location=Ottawa 
|url=https://www.budget.canada.ca/archives/1993-brf-eng.pdf
}}
{{refend}}

====Draft and enacted legislation====
{{refbegin}}
* {{wikicite| reference = {{Cite canlaw|short title =An Act to amend the Income Tax Act|abbr =S.C.|year =1994|chapter =8|section =|subsection =|part =|division =|subdivision =|schedule =|link =https://www.parl.ca/Content/Bills/351/Government/c-9/c-9_4/c-9_4.pdf|linkloc =|wikilink =|type =|amended1 =|amended2=|amended3 =|amended4 =|amended5 =|regtitle =|regnumber =}} | ref = {{harvid|S.C. 1994, c 8}}}}
* {{wikicite| reference = {{Cite canlaw|short title=Spending Control Act|abbr=S.C.|year=1992|chapter=19|link=https://laws-lois.justice.gc.ca/eng/acts/S-15.4/page-1.html}}| ref = {{harvid|Spending Control Act}}}}
* {{wikicite| reference = {{Cite canlaw|short title=Government Expenditure Restraint Act, 1993 No. 2|year=1993|chapter=13|abbr=S.C.|link=https://www.collectionscanada.gc.ca/obj/001060/f2/1990/cgc_p3-0_v016_n001_t000_000_19930510_p00000.pdf#page=159}}| ref = {{harvid|S.C. 1993, c 13}}}}
{{refend}}

{{Canada federal budget}}

{{DEFAULTSORT:Canadian federal budget, 1993}}
[[Category:Canadian budgets|1993]]
[[Category:1993 government budgets]]
[[Category:1993 in Canadian politics]]
[[Category:34th Canadian Parliament|Budget, 1993]]
[[Category:Brian Mulroney|Budget, 1993]]