The federal budget was unveiled this afternoon (March 4), and contains Finance Minister Jim Flaherty’s plans to continue stimulus measures, while vowing to return to a balanced budget as soon as possible.

The throne speech was delivered yesterday (March 3) and the budget today after federal politicians took a two-month break. The governing Conservatives prorogued Parliament in December.

The projected deficit is $53.8 billion for 2009-10, but the federal government plans to trim that to $1.8 billion by 2014-15.

"We have (taken) extraordinary measures to protect the Canadian economy," Flaherty said in the House of Commons. "Like virtually all other countries, we needed to run a substantial deficit to do so. But unlike other countries, we are in a position to ensure our deficit will be temporary."

On top of the $37 billion in economic stimulus funding spent last year, the new budget outlines the specifics of the additional $19 billion that is to be spent this year.

At the same time, Flaherty has promised to curb spending by capping foreign aid, limiting the increase of the Defense Department’s budget, and freezing the budgets of government departments.

Check back to NorthernLife.ca for local reaction to the budget.

Budget highlights, as they appear on the Ministry of Finance website:

Year Two of Economic Action Plan:

First, it confirms $19 billion in new federal stimulus under Year 2 of Canada’s Economic Action Plan to create and protect jobs. This new stimulus will be complemented by $6 billion from provinces, territories, municipalities and other partners. The new stimulus for 2010–11 includes:

• $3.2 billion in personal income tax relief.
• Over $4 billion in additional benefits, training opportunities and Employment Insurance premium relief to help unemployed Canadians.
• $7.7 billion in infrastructure stimulus to create jobs.
• $1.9 billion to create the economy of tomorrow.
• $2.2 billion to support industries and communities.

Jobs and Economy:

Second, Budget 2010 invests in a limited number of new, targeted initiatives to build jobs and growth for the economy of tomorrow, harness Canadian innovation, and make Canada a destination of choice for new business investment. Measures include:

• Over $100 million to protect jobs by extending the maximum length for work-sharing agreements.
• $108 million to support young workers through internships and skills development to help them find jobs and to support Aboriginal students.
• Over $600 million to help develop and attract talented people, to strengthen our capacity for world-leading research and development, and to improve the commercialization of research.
• Making Canada a tariff-free zone for manufacturers, by eliminating all remaining tariffs on machinery and equipment and goods imported for further manufacturing in Canada.
• Establishing a Red Tape Reduction Commission to reduce paperwork for businesses.
• Measures to support investment in clean energy generation.

Returning to Balanced Budget:

Third, Budget 2010 outlines a three-point plan for returning to budget balance once the economy has recovered.

• First, the Government will follow through with the exit strategy built into the Economic Action Plan. Temporary measures in the Action Plan will be wound down as planned.
• Second, the Government will restrain spending through targeted reductions. Towards achieving this objective, Budget 2010 proposes $17.6 billion in savings over five years.
• Third, the Government will undertake a comprehensive review of government administrative functions and overhead costs to identify additional savings and improve service delivery.

The Government will not raise taxes or cut major transfers for health care, education and pensioners.

As a result of the expiration of the Economic Action Plan and the measures in this budget, the deficit is projected to decline by almost half over the next two years to $27.6 billion in 2011–12, and by two-thirds to $17.5 billion in 2012–13. In 2014–15, the deficit is projected to be $1.8 billion.