Several policies regarding interior and domestic issues in Canada were planned and adopted by the Cabinet of Canadian Prime Minister Stephen Harper, after he came to office as the head of a minority government on February 6, 2006. At the beginning of the government's appointment, five policy priorities were identified in the areas of federal accountability, tax reform, crime, child care and health care.

Economic policy

Tax policy

A major policy goal of Stephen Harper was to reduce taxes. During his 10 years in government, Harper reduced income taxes, corporate taxes, and the GST. His cuts were both progressive and regressive.

Goods and services tax On July 1, 2006, the Government of Canada reduced the Goods and services tax by 1 percentage point (to 6%), as promised by the Conservative Party of Canada in the 2006 Canadian federal election campaign. They again lowered it to 5%, effective January 1, 2008. This reduction was included in the Final 2007 Budget Implementation Bill (Bill C-28), which received Royal Assent on December 14, 2007. This change has been estimated to have decreased government revenues by approximately $6 billion. Opponents of these tax decreases cited that sales taxes target those who spend more and therefore such reductions disproportionately benefit Canadians giving those who have the most and spend the most the largest tax decrease. Lost government revenues from these cuts amount to about $13.3 Billion Canadian dollars.

Income taxes During his tenure as prime minister, Stephen Harper reduced income taxes. Looking at raw numbers, most of the benefits of these cuts went to the wealthiest Canadians, yet these changes generally made Canada's tax code more progressive. Lost government revenues from these cuts amount to about $17.1 billion Canadian dollars.

Working income tax benefit

The Working Income Tax Benefit is a refundable tax credit in Canada introduced in the 2007 Canadian federal budget, similar to the Earned Income Tax Credit (EITC) in the United States. It offers tax relief to working low-income individuals and encourages others to enter the workforce.

Corporate taxes Under Stephen Harper, Canada's general corporate taxes reduced from 22% to 15%. Canada's corporate tax rate thus became one of the lowest in the world, and substantially lower than its top marginal tax rate for individuals. At the same time, Canada's small business tax rate reduced from 12% to 11%.

Fiscal imbalance During the 2006 campaign, Stephen Harper promised the provinces, including Quebec and Ontario, to deal with the issue of fiscal imbalance. When the 2006 budget was announced, there was commitment to deal with the matter, but little money was used for it. No funding was used when Finance Minister Jim Flaherty announced a $13 billion surplus. The Bloc Québécois threatened to topple the government if the Tories did not give an additional $3.9 billion to Quebec. Support for the Conservatives in Quebec was up during the 2006 election campaign due to Harper's promise to deal with the matter.

On January 16, 2007, an article in a Montreal newspaper, La Presse, reported that the federal government would give an additional $1.5 billion in transfer payments with another $500 million for post-secondary education and infrastructures.

Several premiers from other provinces criticized the plan. Saskatchewan Finance Minister Andy Thompson asserted that the government was using revenues from the oil industry of the West to gain votes in Quebec.

During the 2007 budget, on March 19, 2007, Flaherty announced an extra $2.3 billion will go to Quebec, while some provinces will get extra money for social policies. In July 2008, a Crown share dispute over oil royalties was resolved with Nova Scotia getting a total of $870 million.

Following a meeting with all premiers after the 2008 election, the federal government removed Newfoundland and Labrador from its list of provinces receiving equalization payments due to revenues from its offshore oil platform Hibernia. In contrast, the federal government added Ontario due to its struggling auto industry and which will receive $347 million while Quebec will receive over $8 billion starting in January 2009.

Response to the Great Recession In 2009, Stephen Harper announced a series of budgetary measures aimed at curtailing the effects of the Great Recession in Canada. These measures were marketed as "Canada's Economic Action Plan". Some of the key items in the Economic Action Plan budget were: $12 billion in new infrastructure stimulus funding for roads, bridges, broadband internet access, electronic health records, laboratories and border crossings across the country, $20 billion in personal income tax relief, $7.8 billion to build quality housing, stimulate construction and enhance energy efficiency, and many other projects. The Economist magazine stated that Canada had come out the recession stronger than any other rich country in the G7.

Financial Services Registered Disability Savings Plan In Budget 2007, Flaherty introduced the Registered Disability Savings Plan (RDSP). The RDSP is a long-term savings plan to help Canadians with disabilities and their families save. The RDSP resembles its other saving counterparts, the RRSP and the RESP, and is meant to ensure a secure future for people with disabilities. The Government assists these families by contributing through grants and bonds that supplement contributions.

Tax-Free Savings Account In Budget 2008, Flaherty introduced the Tax-Free Savings Account (TFSA), a flexible, registered, general-purpose savings vehicle that allows Canadians to earn tax-free investment income to more easily meet lifetime savings needs.

The measure, which came into effect on January 2, 2009, has clear differences with the Registered Retirement Savings Plan (RRSP). There is a tax deduction for contributions to an RRSP, and withdrawals of contributions and investment income are all taxable. In contrast, there are no tax deductions for contributions to a TFSA. Beginning in 2013, contribution room in the TFSA has increased to $5,500 per calendar year. The Canada Revenue Agency describes the difference between the TFSA and an RRSP as follows: "An RRSP is primarily intended for retirement. The TFSA is like an RRSP for everything else in your life."

Flaherty's measure was supported by many organizations, including the C.D. Howe Institute, which stated: "This tax policy gem is very good news for Canadians, and Mr. Flaherty and his government deserve credit for a novel program."

Canada's Global Markets Action Plan

In 2013, Harper's government launched the Global Markets Action Plan to generate employment opportunities for Canadians by expanding Canadian businesses and investment in other countries in a highly competitive global environment.

Small and Medium-sized Enterprises (SMEs) In March 2015, Harper permitted a $50 million financial assistance over a period of five years to facilitate the Canadian small and medium-sized enterprises (SMEs) on market research and participating trade missions; the funding would help approximately 500 to 1000 entrepreneurs in Canada yearly to reach their full export capacity.

Trade Commissioner Service Harper extended another $42 million over five years to enhance the Canadian Trade Commissioner Service, with $9.2 million per year thereafter. The funding would facilitate the expanded trade services: Canada opened four new trade offices in China, bringing the total number of offices there to 15, with more than 100 trade commissioners; and it strengthened its support network in India, where there are eight offices and nearly 50 trade commissioners. There were more than 25 trade commissioners being trained placing in number of business associations in order to gain better understanding of the Canadian exports.

Abolition of the penny

On March 29, 2012, the Harper government announced in its budget that it would withdraw the penny from circulation in the fall of 2012, citing the 1.6 cent cost to produce it. The final penny was minted at the RCM's Winnipeg, Manitoba, plant on the morning of May 4, 2012, and was later entrusted to the Bank of Canada Museum in Ottawa. Existing pennies will remain legal tender indefinitely; however, pennies were withdrawn from circulation on February 4, 2013. On February 4, 2013, the Mint began melting down the estimated 35billion pennies that were in circulation.

Fiscal management Prior to Stephen Harper taking office in November 2006, during the last two years of the premiership of Paul Martin, the Canadian economy was experiencing steady growth and there were large fiscal surpluses$1.4 billion in FY 2004-2005 (0.1% of GDP) and $13.2 billion in FY 2005-2006 (0.9% GDP). Harper became Prime Minister in the fall of 2006, and in FY 2006–2007, the Harper government posted a fiscal surplus of $13.9 billion. In FY 2007-2008 the surplus was $9.6 billion (0.6% GDP). During the period that included the 2008 financial crisis and the Great Recession affecting global economies, Harper's government reported five straight budgetary deficits$55.6 billion in FY 2009-2010 (-3.6% GDP), $33.4 billion in FY 2010–2011, $18.4 billion in FY 2012–2013, and $5.2 billion in FY 2013–2014.

The CPC's 2012 budget included a plan to return to a balanced budget. In their last year in office, a number of factors complicated efforts to succeed in reducing the deficit in order to achieve a balanced budget by April 2015. Against the backdrop of a volatile national economy in Canada caused by a steep decline in global oil prices during the winter of 2014–2015, as of January 15, 2015, CPC Finance Minister, Joe Oliver, announced that the presentation of the federal budget for FY 2015–2016 to the House of Commons of Canada, the last budget in Harper's premiership, would be postponed. In his announcement, Oliver pledged a balanced budget and a potential surplus of approximately $1.6 billion. The previous prediction reported in the CPC's spring 2014 finance release, showed that the federal government "was on track for a $7.5-billion surplus 11 months into 2015-16." The federal fiscal year runs from April 1 to March 31 and Justin Trudeau replaced Harper as Prime Minister in October 2015. The Annual Financial Report 2015-2016 under the new government adjusted this projected surplus to a deficit of $1.0 billion by the end of March 2016.

The FY2015-2016 deficit was retroactively adjusted to $2.9 billion to reflect significant changes made in the methodology used by the Auditor General of Canada to accounts for the Government's unfunded pension obligations which affected both the size of the deficit and the percentages of GDP reported. A May 2018 C. D. Howe Institute report, said that prior to these changes in accounting practices, the burden to taxpayers had been understated.

In 2008, debt-to-GDP ratio was 28% with a total federal debt of $458 billion. In 2010, Canada, which had a debt-to-GDP ratio of 77%, was the lowest of all the G7 economies with the United States at 98% and Japan at 227%. Canada's total federal debt continued to increase after the 2008 financial crisis. The debt-to-GDP ratio, increased to 33% in 2013, and then began a slight decline.

Federal Budgets

Of the nine budgets presented to the Canadian Parliament under Stephen Harper, six reported a deficit. 2006 Canadian federal budget 2007 Canadian federal budget 2008 Canadian federal budget 2009 Canadian federal budget 2010 Canadian federal budget 2011 Canadian federal budget (presented in March 2011 and again in June). 2012 Canadian federal budget 2013 Canadian federal budget 2014 Canadian federal budget 2015 Canadian federal budget

Public service