The budget did not brought sweeping tax changes but introduced some technical changes for corporations :
The budget allowed for faster depreciation of selected capital property items :
* Creating an election to place eligible property in separate CCA classes when the cost was $1,000 or more to allow immediate deduction for the taxpayer upon disposition of the equipment. That disposition is advantageous for equipment that depreciates fast.
* A new CCA class with a rate of 25 % was made available to patents and licence-to-use patents acquired after 26 April 1993. This measure allowed for faster amortization of patents in the first few years after the acquisition.
The budget also announced that the 25% withholding tax on payments for the use of patents would be repealed. That tax was imposed on Canadian corporations' usage of foreign companies' patents.
Expenditures
The budget planned for $7.5 billions of expenditure cuts over 5 years. Most of the cuts were however announced in the December 1992 Economic Statement and few cuts were contained in the 1993 budget :
The federal government planned to abolish 16,500 more jobs over 5 years ;
$300 millions were withheld from non-allocated reserves ;
Defence spending levels would be frozen to their 1994-95 level ;
The unemployment benefits rate reduction was made permanent: it would remain at 57% even after April 1995 ;
Funding for social housing was frozen at $2 billions yearly and the CMHC would no longer grant 35-year subsidies ;
Growth in funding for research and international aid was capped at 1.5% in 1994-95.
Reactions
The budget was poorly received, and described as "stand pat", "do nothing",, "non-budget" and a "lame duck". Claude Picher, from La Presse, pointed out that the 100-pages long budget was one of the shortest budget ever and strongly criticized its lack of substance, overoptimistic economic forecasts and unimaginative measures. Preceding the budget, Mazankowski had stated that government revenues would decrease compared to 1992 as a result of "slow economic growth, continued high unemployment and low inflation". The Canadian Bond Rating Service downgraded Canada's federal debt rating from AAA to AA+, and the budgetary deficit for the fiscal year was expected to be $32.6 billion. Mazankowski stated that the rating service had based its decision on "erroneous information". The value of the Canadian dollar declined with respect to the United States dollar in the foreign exchange marketthe day after the budget speech, and interest rates "climbed sharply".
