Economic Action Plan (Canada)

Economic Action Plan (Canada)
Name	Economic Action Plan (Canada)
Caption	Budget 2009 emblem associated with the initiative
Date	2009–2015
Jurisdiction	Canada
Minister	Jim Flaherty
Introduced by	Stephen Harper
Status	Implemented

Economic Action Plan (Canada) The Economic Action Plan was a series of federal fiscal packages announced by Stephen Harper and administered by Jim Flaherty and successive cabinets between 2009 and 2015 designed to respond to the Global financial crisis of 2007–2008, stimulate Canadian economic activity, and direct funding toward infrastructure, tax measures, and transfers. The initiative intersected with federal budgeting processes, provincial agreements such as with Ontario and Quebec, and national institutions including the Bank of Canada, the Canada Revenue Agency, and Crown corporations like Canada Mortgage and Housing Corporation. The plan influenced parliamentary debates in the House of Commons of Canada and provincial legislatures, and shaped policy interactions with international counterparts such as the International Monetary Fund and the G20.

Background and Purpose

The plan was introduced amid the Great Recession after shocks to Toronto Stock Exchange valuations and declines in sectors tied to Alberta's energy exports; it drew on fiscal responses comparable to measures in the United States, United Kingdom, and Germany. It aimed to stabilize employment influenced by layoffs in Toronto's financial services, manufacturing contractions in Ontario's automotive clusters linked to companies such as General Motors and Ford Motor Company of Canada, and commodity price volatility affecting firms like Suncor Energy and Canadian Natural Resources Limited. The framework referenced precedents including the Canada's Economic Action Plan of 1993 debates and fiscal rules used by the Organisation for Economic Co-operation and Development and responded to analyses from think tanks such as the Fraser Institute and the C.D. Howe Institute.

Key Initiatives and Measures

Measures included infrastructure funding delivered through programs administered with provinces and municipalities such as City of Vancouver and City of Toronto, tax cuts and credits coordinated with the Canada Revenue Agency, and targeted transfers for sectors including construction firms, transit authorities, and cultural institutions like the National Gallery of Canada. The plan featured the First-Time Home Buyer Incentive-style supports, although distinct from later programs, and investments in public works that involved contractors including PCL Constructors and EllisDon. It expanded measures for skills training in partnership with provincial bodies like Ontario Ministry of Training, Colleges and Universities and labour organizations such as the Canadian Labour Congress, while also delivering stimulus to resource projects involving companies like Hydro-Québec and pipeline proponents engaged with the National Energy Board. The package included tax measures affecting corporations such as Bombardier, incentives for research tied to the National Research Council and grants to post-secondary institutions like University of Toronto and McGill University.

Legislative and Budgetary Implementation

Legislation implementing the measures moved through the Parliament of Canada via annual budgets and supplementary estimates introduced by Department of Finance ministers and debated in committees including the Standing Committee on Finance. Budget bills associated with the plan were enacted under minority and majority parliaments and required coordination with provincial finance ministers such as those from Alberta, British Columbia, and Manitoba. Fiscal reporting relied on the Public Accounts of Canada and audits by the Office of the Auditor General of Canada, while transfers used mechanisms established under statutes like the Excise Tax Act and amendments impacting agencies such as Export Development Canada.

Economic Impact and Outcomes

Analyses by the Bank of Canada, the International Monetary Fund, and economists at universities including University of British Columbia and Queen's University linked the plan to a reduction in unemployment trends compared against projections during the Great Recession, and to short-term boosts in construction activity in metropolitan regions such as Montréal and Calgary. Metrics from Statistics Canada documented changes in GDP growth, employment in sectors including manufacturing and services, and household consumption patterns affecting retailers like Hudson's Bay Company. Fiscal impacts included changes in deficit trajectories and federal debt-to-GDP ratios tracked against benchmarks used by credit rating agencies such as Moody's Investors Service and Standard & Poor's.

Political Reception and Criticism

Reception varied across parties including the Liberal Party of Canada, the New Democratic Party, and the Bloc Québécois, with opposition critics citing concerns raised by academics at institutions such as University of Ottawa and policy groups like the Canadian Centre for Policy Alternatives. Critics argued about spending priorities relative to long-term fiscal sustainability debated in editorials in outlets such as the Globe and Mail and the Toronto Star, and raised issues concerning procurement transparency involving contractors under scrutiny similar to cases examined by the Federal Court of Canada. Supporters pointed to infrastructure outcomes and tax relief, echoing endorsements from business groups such as the Canadian Chamber of Commerce.

Regional and Sectoral Effects

Regional outcomes diverged: stimulus allocations to Atlantic Canada provinces targeted port and community projects, while investments in Saskatchewan and Alberta interacted with resource sectors dominated by firms like Cenovus Energy and agricultural supply chains linked to the Canadian Wheat Board era debates. Urban transit funding affected metropolitan transit agencies including Société de transport de Montréal and Toronto Transit Commission, while cultural funding influenced institutions such as the Canada Council for the Arts and the National Film Board of Canada. Sectoral effects encompassed construction, aerospace linked to Bombardier Aerospace, energy projects subject to review by the National Energy Board, and financial services regulated by the Office of the Superintendent of Financial Institutions.

Category:Canadian federal budgets