There's little doubt that Finance Minister Ralph Goodale's first budget on Tuesday afternoon will be a precursor to a spring election call. But there are plenty of signs that this one will be anything but a typical pre-election budget.

Usually, budgets that come down in election years are stuffed with income tax breaks, new spending programs, and other pre-election goodies. But those hallmarks will be largely absent from Tuesday's document, as Goodale tries to steer a course of fiscal restraint with just a few new spending priorities.

Beef farmers and the beef industry will be among the budget's few winners. They'll get a billion-dollar bail-out to compensate them for the devastation caused by the mad cow crisis.

Ralph Goodale
Ralph Goodale

Prime Minister Paul Martin was in Alberta Monday to announce more details of the package, which represents the biggest single new spending item in the budget.

The money will come from this year's surplus. The surplus will also be tapped for about $500 million for a new public health agency that would help Canada deal with medical emergencies like SARS.

The military has been looking a big infusion of cash. But it looks as if Canada's armed forces will have to wait at least another year. The only new money earmarked for the military is expected to be $50 million to pay for Canada's troops in Haiti and $200 million for the mission in Afghanistan.

Sources say the Martin government will not inject more money into the armed forces until the foreign policy and defence review is completed. That won't happen until after the expected spring election.

The budget will also flesh out plans first announced in February's throne speech to give the country's cities a full rebate on the GST they pay for goods and services. That will be worth about $600 million in the 2004-2005 fiscal year and $7 billion over the next decade.

Among the other items expected in the budget:

  • $3.5 billion over 10 years to clean up contaminated federal sites (also mentioned in the throne speech);

  • More money to support technology aimed at reducing greenhouse gases;

  • More help for students. This would include new money for skills training, bigger grants for low-income university and college students, as well as making it easier for students from middle-income families to qualify for loans. Some reports say learning bonds, which would help low-income families save for post-secondary education, might be re-introduced (they were mentioned in last fall's throne speech);

  • More support for innovation and research to bring promising discoveries to market;

  • A change in corporate tax rules to allow for speedier write-offs of major capital investments.
The surplus for the 2003-2004 fiscal year ending March 31 is expected to come in at $7 billion. (It stood at $5.2 billion as of the end of December, thanks to large corporate tax payments that came in that month.)

Two billion dollars of that has already been promised for increased health care transfers to the provinces. The budget is expected to allocate another $2 billion to pay down the debt.

Analysts say the budget's back-to-basics restraint reflects, in part, the economic uncertainty caused by such things as a volatile Canadian dollar.

But this is still a pre-election document and therefore even more political than usual. Because the sponsorship scandal is still fresh in the public's mind, the budget will attempt to reassure an angry electorate that the Liberals are responsible stewards of the public purse.

Budget coverage will start Tuesday at 4 p.m. ET on CBC Radio One, the main CBC television network, and on CBC Newsworld.

CBC.ca will post complete budget coverage, analysis, reaction, video and audio content, as well as the actual budget documents, also beginning at 4 p.m. ET.