Achi news desk-
OTTAWA – The 2024 federal budget will provide “generational fairness” to younger Canadians by raising taxes on those who have already taken advantage of Canada’s economic strengths, Finance Minister Chrystia Freeland said Tuesday as she introduced the document in the House of Commons .
The budget comes as the Liberals watch their once-healthy youth voting base evaporate in favor of the Conservatives, largely as younger Canadians feel the economic deck is stacked against them.
Freeland denied on Tuesday that her latest budget is primarily a political exercise – but she nevertheless acknowledged that it is “harder to establish yourself” for anyone under 40 in Canada than it was for the generations that came from the front
A middle-class income and a good job are no longer enough to feel economically secure, he said.
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“It’s not really fair what they’re struggling with right now,” Freeland told a news conference earlier in the day before her budget speech in the House.
Freeland said the 2024 budget is designed to fix that problem, to “unlock the door to the middle class” for more Canadians. The budget document itself uses the word equity 50 different times.
There is $8.5 billion in new spending over the next five years to build millions of new homes and nearly $2.6 billion to improve student aid and grant programs and open new job opportunities.
“We act today to ensure fairness for all generations,” Freeland said.
Overall, projected budget spending will rise to $535 billion in 2024-25, compared to $497.5 billion in 2023-24. The deficit is projected to be $39.8 billion, compared to $40 billion last year.
There is $11.5 billion in new spending this year and $53 billion over the next five years.
Freeland said she was maintaining the fiscal anchors she set for the government, keeping the deficit below $40 billion and to less than one percent of GDP starting in 2026-27.
Ottawa is paying for some of that with better-than-expected economic growth, but also with targeted changes to the capital gains tax expected to raise more than $19 billion over the next five years.
Currently, Canadians only pay taxes on 50 per cent of the money they make from capital gains, which mainly refers to profits made from the sale of an asset such as stock.
Freeland adjusts that to 66 percent for all capital gains made by corporations and trusts, and for those in excess of $250,000 for individuals.
He said the change should affect 0.13 per cent of Canadians with an average annual income of $1.4 million. She said she knows the tax increase will result in a blowback.
“But before they complain too bitterly, I would like one per cent of Canada—0.1 per cent of Canada—to consider this: what kind of Canada do you want to live in,” she asked in her speech.
The budget includes money for new national dental care and dental care programs, and also includes previously announced spending for a new national school lunch program.
“Do you want to live in a country where you can tell the size of someone’s paycheck by their smile?” asked Freeland.
“Do you want to live in a country where children go to school hungry? Do you want to live in a country where a teenage girl gets pregnant because she doesn’t have the money to buy birth control?”
James Orlando, director of economics at TD, said that while it is true that the budget keeps the government within its fiscal anchors on paper, the new tax hike is not helpful for productivity and said the new spending “is more than we ever thought.”
The budget, he said, is more about thinking ahead to the economy that the government believes Canadians want in the future.
“This is not just spending to boost the economy today, but rather improving the trajectory of the Canadian economy going forward,” he said.
“They would say they are focused on the long-term benefit of their spending right now, not just necessarily having an immediate impact on the Canadian economy.”
Nevertheless, NDP Leader Jagmeet Singh, who has a supply-and-confidence agreement with the Liberals to support them on key votes such as the budget, would not immediately pledge to support the government’s latest spending plan.
The budget embraces multiple NDP ideas, including a protection fund for renters and pharmacare, but fails to go after “corporate greed,” Singh said.
Conservative Leader Pierre Poilievre was less ambivalent.
“Conservatives will vote against this wasteful, inflationary budget that is like pyromaniac sprinkler gas on the inflationary fire they started,” Poilievre said in the House.
“It’s getting too hot and too expensive for Canada, which is why we need a carbon tax election to replace it with a common sense Conservative government.”
This report was first published by The Canadian Press on April 16, 2024.
Mia Rabson, The Canadian Press
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