The Federal Liberals dodged a political bullet Wednesday by announcing a budget that appeased opposition parties enough to all but ensure that it will not be voted down in the House of Commons, triggering an early election.

The $42 billion budget, which earned qualified praise from Opposition leader Stephen Harper, was dominated by two items- military spending and tax cuts- both important issues for Harper and his Conservative party.

Finance Minister Ralph Goodale announced a boost of $12.8 billion for the military- the largest in 20 years. The badly needed money will pay for training, equipment, as well as the already-promised 5,000 news troops and 3,000 new reservists.

“This significant investment in our military means that we will be able to better meet our responsibilities abroad and protect our people at home,” Goodale said in his budget address.

Taxpayers were also on the agenda, as both personal and corporate taxes were cut- albeit modestly. By 2009, the personal tax exemption for Canadian incomes will be raised to $10,000, meaning that all Canadians will pay slightly less taxes and that 860,000 of the country’s lowest income earners won’t pay any taxes.

Corporate tax cuts were also cut by 2 per cent.
Despite the ambitious and varied spending of this budget, the federal surplus for 2005-2006 is still $4 billion.

Other spending highlights include $5 billion each for cities and a national daycare program over the next 5 years. $4.7 billion over five years will go towards environmental initiatives, including $1 billion to reduce greenhouse gas emissions and $200 million to boost wind energy. Foreign aid will jump by $3.4 billion over the same time, and $1.6 billion was earmarked for Canadian arts, heritage and amateur sport.

Shortly after the budget was announced, Harper put to rest any suspense as to whether this first minority government in 25 years could get its budget approved by the opposition.

“I’m a lot happier than I thought I would be,” Harper said shortly after the budget was released. “The government is moving in our direction. I don’t see anything in this budget that would warrant two elections in a year.”

The NDP’s Jack Layton said he was concerned about the lack of a concrete plan for implementation of the Kyoto Accord- which was never specifically mentioned in the budget- and Bloc leader Gilles Duceppe said there was “nothing for Quebec.”

But even without their support, the backing of the Conservatives and their 99 seats means the budget is sure to pass when MPs vote on it March 7.

Other reaction was mixed. New Chief of Defense Staff Gen. Rick Hillier called it “a very good day for the men and women in uniform.” While much of the budget spending was staggered over 5 years, Hillier said the military would immediately benefit from its increased funding.

But critics say the government could have cut taxes further.
“Given the size of the federal government surplus, a lot of people might think that Paul Martin is being a little cheap,” said John Williamson of the Canadian Taxpayers Federation.

Goodale summarized the budget, which was balanced for an unprecedented eighth straight time, by saying his focus was on fulfilling promises made by the Liberals.

“And that’s exactly what this budget does,” he said.