Budget won't increase spending: PM

Stephen Harper say program spending for 2011 will nearly be flat, but added the budget will include a long-promised tax credit for kids' art courses.

The government won't be increasing its spending this year, Prime Minister Stephen Harper says.

Speaking to a business crowd in Brampton, Ont., on Thursday, Harper said program spending for 2011 will essentially be flat.

Harper also said the next phase of the government's much-touted Canada's Economic Action Plan will include a tax credit for kids' art courses. The tax credit of up to $500, similar to one already in place for children's sports programs, was promised by Harper during the 2008 election campaign but never implemented.

In an election-style speech, the prime minister repeated a theme from recent speeches that Canada's economy is one of the strongest in the G8, and said the budget will not include a carbon tax or a hike in corporate taxes.

"We didn’t just mail out cheques, or invent brand-new programs or new bureaucracies," Harper said.

"With our provincial and municipal partners we slashed red tape and accelerated thousands of already-planned capital investments from coast to coast to coast."

"So, low business taxes lead to higher growth, lead to more jobs and finally to ... greater wealth."

The opposition Liberals and NDP have said they want a corporate tax rate cut that went into effect Jan. 1 to be reversed. The government may face defeat over its March 22 budget if it does not receive support of one of the opposition parties, which could trigger a federal election.

Harper said the budget won't be balanced by cutting education and health transfers to the provinces.

"Nevertheless, this spending control is real. Program spending this coming year is essentially flat," he said.

Canadians can expect more cash for research, said Harper, who was speaking to the Brampton and Mississauga boards of trade.