Achi news desk-
Canadians will learn Tuesday about all the federal Liberal government’s new spending plans — and how they plan to pay for them — when Deputy Prime Minister and Finance Minister Chrystia Freeland presents the 2024 federal budget.
Pledging not to grow the deficit while maintaining other fiscal guardrails, heading into budget day there are strong signs to help fund what has been a week-long blitz resulting in nearly $40 billion in promised measures, the Liberals will unveil new or higher taxes. to wealthier Canadians or corporate Canadians.
Commenting on the prospect of some sort of individual wealth tax, and or excess profits taxes in today’s budget, former Bank of Canada governor David Dodge said the fiscal document was “probably the worst” in decades and ” pointing us in the wrong direction ,” when it comes to economic growth.
However, Prime Minister Justin Trudeau was adamant Monday, speaking to a business crowd about what lies ahead, that his government feels now is the time to invest in housing, job growth, and other affordability measures that fuels the minds of many pined-down millennials. and Generation Z.
“Millennials and Gen Z now make up the majority of Canada’s workforce. They are our economy … They now feel that middle class stability is out of reach. We need to meet this moment, because it cannot be allowed for that to happen,” said Trudeau.
The Liberals have ruled out rising taxes on the middle class, and have declared that they are conscious of not knocking the Bank of Canada off its path towards lowering interest rates.
The fall economic statement forecast the deficit for 2023-24 to be $40 billion, falling slightly in 2024-25 to $38.4 billion, and then holding steady at $38.3 billion in 2025-26.
What have the Liberals promised?
When deciding on a forecast for Canadians of large portions of what will be in today’s budget, the prime minister and members of his cabinet have selectively teased bits and pieces through a series of almost daily announcements since the end of March, with a focus on to target on “generational equity. .”
Almost half of the tens of billions of dollars pledged in advance for housing, health, and child care are loan-based and will require provincial support.
The biggest element that was pre-announced was a raft of housing measures that were stitched into a “new plan to solve the housing crisis,” which was revealed on Friday.
Promising to build 3.9 million homes by 2031, the housing strategy includes a host of measures and billions of dollars to build more homes and make them easier to own or rent.
Among the biggest ticket housing commitments:
- A $15 billion Supplement to the Home Construction Loan Program;
- $6 billion for the Canada Housing Infrastructure Fund;
- $1 billion in loans and $470 million in contributions for a new rent protection fund; a
- Add $400 million to the Housing Accelerator Fund, along with $600 million for a series of new housing innovation efforts aimed at increasing modular and prefab homes.
In terms of policy, this package also promises:
- Enact “public lands for homes” and industrial house building strategies;
- Launch of Canada’s Tenants Bill of Rights and Tenant Protection Fund;
- Allowing 30-year mortgage amortizations for first-time home buyers buying new builds; a
- Allowing homeowners to add secondary rooms, among other revisions to renter and RRSP limits.
In terms of boosting social program spending, the Liberals have also promised:
- $1 billion over five years to fund a new national school meal program intended to provide meals to 400,000 more children;
- $500 million for a new youth mental health fund to help community organizations provide more care; a
- $1 billion in loans and $60 million in grants to build or renovate child care centers, as well as $48 million to extend student loan forgiveness to early childhood educators.
In terms of defense and national intelligence, the budget will include:
- $8.1 billion over the next five years as part of the long-term defense policy update intended to increase military spending to 1.76 percent of GDP by 2030; a
- $2.4 billion to build capacity in artificial intelligence, primarily for computing capabilities and technical infrastructure.
The upcoming budget will also be a key political document.
The deliberate focus on younger Canadians with this budget is a sign that the Liberals are looking to win back the swing voters who helped elect them, while wooing other moderate supporters with pledges to spend wisely.
Conservative Leader Pierre Poilievre has maintained a double-digit poll lead over the Liberals with his partisan attacks focused mainly on the economy, and his efforts to stop the NDP from continuing to support the minority government on confidence votes .
Once the budget is tabled – a key confidence issue – expect the debate around it and the accompanying implementing legislation to take top billing.
