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Five things you need to know about the federal budget

Erwin Perezdetagle, lead hand of coining at the Royal Canadian Mint in Winnipeg, inspects coins as they come off the press in this 2009 file photo.

John Woods/john woods The Globe and Mail

1. The budget sticks to Conservative fundamentals but offers the NDP concessions, though not their full wish list. There's a $300-million bump to the Guaranteed Income Supplement for seniors, but not the $700-million NDP Leader Jack Layton had sought. The ecoEnergy home retrofit rebate is extended, but there's nothing on home heating costs or the Canada Pension Plan. The question remains: Is it enough to win Mr. Layton's support?

2. The government is banking in part on a continued, but modest, recovery to balance the books. The budget presents a mix of small spending plans and finds new cash by closing tax loopholes that will boost plans to lower the deficit. Ending the stimulus spending will see Canada's deficit drop by 25 per cent this year and a further 25 per cent in the coming year. The government projects a return to balanced budgets by 2015-16 by the latest.

3. There are several boutique tax credits for families. The Conservatives stole a Liberal plank in its new family caregiver tax credit. The arts tax credit offers incentives to parents who enrol their children in programs like music lessons and academic tutoring, similar to the sports tax credit. But there's nothing flashy like the Tax Free Savings Account that was introduced three years ago. Most families won't notice any major changes in terms of their personal finances - each credit is worth around a few hundred dollars at most.

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4. While planned corporate tax cuts are still on, the government is closing several corporate tax loopholes that will result in $4.1-billion in savings over 5 years. One of the biggest loopholes targeted, most commonly used by oil and gas companies, allowed firms involved in partnerships to defer profits.

5. The budget signals a new round of cuts across government departments with plans to identify and slash overall program spending by 5 per cent for a permanent $4-billion in annual savings beginning next fiscal year.

Later Tuesday, the three federal opposition parties announced they will all vote against Mr. Flaherty's proposed budget, making it likely that a spring election will be called and that none of the budget's provisions will be enacted.

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