Corrected: Canada budget to help home renovations: report

Tue Jan 27, 2009 6:31am EST
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Corrects currency conversion in 6th paragraph

(Reuters) - Canada's federal budget on Tuesday will include incentives for home renovations and a promise of relief for credit-card borrowers as well as tax breaks for middle- and lower-income Canadians, the Globe and Mail reported.

Canada's Finance Minister Jim Flaherty plans modest but permanent tax breaks for people in middle- and lower-income tax brackets, with one senior official saying the cuts will apply to those earning up to C$80,000 a year, the paper said.

Money will also be provided for home renovations, although it is unclear how much the program will be worth, the paper said.

Flaherty will outline his concerns about the lack of a uniform grace period for the payment of credit-card bills and insufficient disclosure of the terms consumers are signing up for when using them, including interest rates, according to the paper.

The government will await responses from card companies, the paper said, adding that sources said it expects it will ultimately have to regulate.

This week's budget will usher in the country's first fiscal deficit in a decade. A government official leaked to reporters on Thursday that deficits over the next two fiscal years would total C$64 billion ($52 billion).

Prime Minister Stephen Harper signaled on Saturday for the first time that the budget will contain permanent tax cuts, not just short-term reductions to lift the sagging economy.

($1=$1.22 Canadian)

(Reporting by Ajay Kamalakaran in Bangalore; editing by Stephen Nisbet)