The Federal Government needs to balance next year’s budget regardless of the reducing oil prices. In this sense, the budget projections need to take into account the low oil prices because the price of crude oil has an effect on the country’s fiscal situation. In most cases, a reduction in oil prices tends to lower corporate tax revenues emanating from oil companies. On the other hand, consumers are in a position to benefit from lower oil prices. When balancing the budget, the Federal Government needs to avoid raising taxes and instead, implement a proper plan (Rigaud & Arsenault, 2013).
There is also need to consider the effects of growth slowdown on the fiscal plan. In addition, spending cuts are necessary to keep the country from accruing deficits. Furthermore, there is a need for the country to reduce its flexibility in a way that does not undermine the commitment to develop a balanced budget. In the past five years, the Government has engaged in minimizing the federal budget deficit. This in turn, has helped to reduce the expectations of citizens. On the other hand, the unemployment rate has also reduced compared to 2009; however, there is still a slow growth of the middle-class citizens. In this sense, there is a need for a Federal Budget that establishes a proper plan that can raise the living standards of citizens. Such a budget should work towards closing gaps related to tax loopholes and introduce progressive taxes. For instance, the progressive taxes should target citizens considered as the highest income earners in Canada. Such a change can contribute significantly towards alleviating poverty and improving living standards (Rigaud & Arsenault, 2013).
A balanced Federal Budget should play a role in creating employment opportunities. The strategy in creating employment needs to consider the global changes that affect the employment segment. Currently, the Federal Government has a focus on resource extraction; however, this affects the economy negatively in terms of value added jobs. On the other hand, since the country relies largely on non-renewable energy, the budget should consider the investment in renewable energy sources. Investment in both social and physical infrastructure is also a critical factor to consider when preparing the budget. A balanced budget also needs to play a role in minimizing inequality in terms of resolving the existing social divisions in the country. For instance, the lower income bracket is dominated by women, immigrants and racialized communities which need to change as a way of reducing poverty levels in the country. In essence, implementing a balanced budget is important in transforming the fiscal relationship that exists between the disadvantaged and the Federal Government. New funding measures are also necessary to improve the living standards of the disadvantaged communities (Henderson, 2011).
Therefore, for the Federal Budget to be balanced next year there is a need for a focus to support job creation and economic growth. There is also need to consider providing support to families and communities. For example, the budget should consider improving food security for Canadian families. There is also a need to extend tax relief to cover health care to promote different services offered by healthcare professionals. In addition, policymakers should implement tax reforms in a way that does not affect federal revenues. In essence, a sound fiscal policy to implement involves cutting spending and reducing taxes considered to be the most harmful to the economy. In addition, a balanced budget plays a role in ensuring that citizens can afford their needs. For instance, the Government should engage in efficient spending on the implemented programs. Aligning the wages of corporations with those of federal institutions is also necessary (Rigaud & Arsenault, 2013).
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