1979 Canadian federal budget


The 1979 Canadian federal budget was presented by Minister of Finance John Crosbie in the House of Commons of Canada on 11 December 1979. It was the first and only Canadian federal budget presented under the premiership of Joe Clark. The budget was never adopted, as the government was defeated in a vote of confidence on a budget subamendment on December 13, 1979.

Budget measures

Despite having campaigned on tax cuts during the 1979 Canadian federal election, Joe Clark's first budget contained several measures that departed from that. The budget included an 18-cent per gallon tax increase on gasoline, a 10 percent tax increase tobacco products, and a corporate surtax amounting to 1 percent of their income taxes. Farmers, Fishermen, and public urban transit were to receive a 10 percent gasoline tax rebate.
The Gasoline tax was implemented at midnight between December 11 and December 12, the night the budget was announced. This led many Canadians to rush to the gas stations to buy "cheap gas" before the gas tax came into effect at midnight that night. However, when the government fell on December 13, the gas tax was rolled back, along with other budgetary measures that were provisionally implemented.

Legislative history

The day following the presentation of the budget, the Liberals and the New democrats vowed to do everything they could to bring down the government. The Social Credit Party also announced that they would not support the budget. Before the no-confidence vote, Joe Clark entered negotiations with Socred leader Fabien Roy to obtain their support for the budget. Clark offered to double the energy tax credit proposed in the bill, but to no avail. Roy believed Joe Clark had come to him too late to obtain their support for the budget, and thus left too little time for negotiations. The government was ultimately defeated 139 to 133 on a confidence vote of an NDP motion proposed by Bob Rae condemning the budget.

Aftermath

Following the fall of the government, Pierre Elliot Trudeau decided to walk back his resignation from the leadership of the Liberal Party. Trudeau ended up defeating Joe Clark and in the 1980 Canadian federal election as the Liberals were swept back in power with a majority government.