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Canada to tighten federal budget

(Xinhua)
Updated: 2011-05-26 15:57

OTTAWA - Canada will tighten its federal budget,including cutting government subsidies to political parties, Canadian Finance Minister Jim Flaherty said Wednesday.

Flaherty said the budget, to be published on June 6, will resemble the federal spending plan that was introduced in March, which was not passed into law because the government fell apart soon afterwards.

However, Prime Minister Stephen Harper's Conservatives staged a comeback by forming a majority government on May 2.

"While minor tweaks and adjustments will be presented, this will almost exclusively restate all the same commitments made two months ago in the budget, along with some platform commitments," Flaherty said in the foyer of the House of Commons.

Under the present party financing system, major political parties get 2 Canadian dollars ($2.04) per year for each vote they won in the previous election.

The subsidy was introduced in 2004, along with a ban on large donations from individuals, corporations and trade unions.

New Democratic Party leader Jack Layton, whose party stands to lose 8 million Canadian dollars ($8.16 million) per year in subsidies, reacted angrily to the Conservative plan, saying it "opens the door for big money to come back into politics."

"We think that's wrong," Layton told reporters Wednesday, adding political parties will now have to tailor their policies towards major donors.

"I think that our democracy is better served if ideas have equal opportunity in the competition for Canadians' consideration, and that's what public financing is designed to do," he said.

Bob Rae, who was named interim leader of the Liberal Party Wednesday, said public subsidies are an "important feature of our democratic life."

"Even majority governments can't be oblivious to public opinion," Rae said. "Public opinion counts for a lot, and that's where this battle has to take place."

The Canadian government will also make major cuts in the country's bureaucracy, with 4 billion Canadian dollars ($4.08 billion) in spending cuts this year and 8 billion next year ($8.16 billion) in an effort to balance the national budget in the 2014-2015 fiscal year.

Flaherty said Canadians showed their support for the Conservatives' financial plan when voters gave the Conservatives a majority of parliamentary seats in the May 2 general election, after two minority governments.

"We thank Canadians for their trust. We are working to meet our commitments to them," he said. "Basically this is the March 22 (budget) with a couple of additions from the (election) platform," he said, adding the budget included the phasing out of political subsidies.

Flaherty said Canada needs to stay the course with a prudent low tax plan for families.