Freeland is presenting her fourth federal budget – this time with a tight focus on housing – CBS.ca Achi-News

Achi news desk-

Finance Minister Chrystia Freeland will present her fourth federal budget today, setting out the government’s plan to spend billions of dollars on housing to improve supply – a plan the Liberals also hope will boost their prospects. with a critical group of voters.

Unlike past budgets, which mostly saved their announcements for the budget day itself, this one has had piecemeal publicity. Freeland, Prime Minister Justin Trudeau, Housing Minister Sean Fraser and other cabinet ministers have been touring the country for weeks, releasing details of key budget measures.

It is part of a plan to introduce voters to new programs that might otherwise have been buried in today’s news of a budget document that is expected to be physically larger than in recent years.

Freeland will present the budget around 4 pm ET. CBCNews.ca will carry his comments in the House of Commons live.

Ottawa has announced about $38 billion in new financial commitments – including $17 billion in loan-based programs – before releasing the budget.

How the federal government plans to pay for all that new spending is not yet clear. Sources have told Radio-Canada that the budget will impose a tax increase on the wealthiest taxpayers – one that senior Liberal sources say will affect less than 1 per cent of Canadians.

Some of the proposed new spending is earmarked for future fiscal years – a move that will give Ottawa some financial breathing room.

The economy is also slightly stronger than Ottawa originally predicted, which could mean higher revenue to offset some of the proposed new spending.

Polls continue to suggest the government is voting underwater with house-hunting voters – particularly those in the millennial and Generation Z cohorts.

In response, Freeland has freed up money to send more cash to municipalities through the housing accelerator fund, build more homes on underutilized public land, cut checks for new water and solid waste infrastructure in growing communities, offering tens of billions of dollars in loans to stimulate new rental construction and secondary apartments, and helping non-profits acquire existing rental homes and keep them affordable.

• What do you want to see included in today’s federal budget announcement? Let us know in an email to [email protected].

The government’s 28-page housing plan, unveiled last week, promises to maintain the already well-subscribed tax-free savings account, extend mortgage amortization terms and increase the RRSP withdrawal limit for some home buyers first, among other measures.

It is a stunning array of new commitments meant to blunt the attacks of critics such as Conservative Leader Pierre Poilievre, who has made housing the centerpiece of his policy playbook.

Speaking to the Canadian Chamber of Commerce on Monday, Trudeau said millennials and members of Generation Z, the people who now make up the majority of the country’s workforce, need a helping hand as they grapple with a “cost of living crisis. “

“This is a resilient group but … they now feel that middle class stability is out of reach,” he said. “We need to meet this moment. Our country cannot succeed unless young people succeed.”

Freeland has also announced a $500-million fund for youth mental health, $2.4 billion for artificial intelligence, $8.1 billion in new defense spending and $1 billion to expand school lunch programs.

“We recognize that there is an urgent need today to invest in Canada and Canadians, and we specifically recognize that we are really a critical moment for young Canadians, for millennials, for Gen Z,” said Freeland the last week.

It is a long-standing tradition in Canada for the finance minister to buy a new pair of shoes before budget day.

On Monday, Freeland chose a pair of black pumps from Maguire, a Montreal company owned by millennial women — a nod to the people the government hopes to reach with its latest spending plan.

Although the budget is expected to boost spending, Freeland has said it will not increase the $40 billion deficit predicted last year. Today, the public will learn what the government’s projected deficit and debt levels are and how it plans to keep the country on a sustainable fiscal path.

The Trudeau government has run a deficit every year since it was elected.

It posted even bigger deficits during the COVID-19 pandemic as it scrambled to shore up an economy on the ropes during an unprecedented global health crisis.

On the Liberal government’s watch, the national debt has more than doubled to $1.2 trillion.

Now, with interest rates at a 20-year high, the cost to carry that debt has increased from $20.3 billion in 2020-21 to $46.5 billion, according to Freeland’s fall economic statement.

That’s almost double the amount Ottawa spends on the military. And debt service charges can be expected to march even higher in the coming years.

As stagnant economic growth and high inflation add to government spending pressures, Ottawa faces some tough choices.

Freeland’s preferred fiscal “guardrail” has changed over the years.

In the fall economic statement, Freeland said Ottawa would keep the deficit at about one per cent of gross domestic product (GDP) – basically one per cent of the size of the national economy – and reduce the debt ratio- i-GDP.

A document on Tuesday will reveal whether Ottawa has kept that promise. The government’s decision to cut or “reprofile” some spending – with an estimated savings of about $2.25 billion a year – has helped, but there may be more to do.

Canada is flirting with a downgrade, RBC warns

In a recent report, RBC Royal Bank warned that Canada is facing a potential ratings agency downgrade – which would be a bad development for the government and everyone else who borrows money in this country.

Canada is one of a select few countries with a AAA credit rating on its sovereign debt.

RBC said “Canada is at greater risk of being downgraded than other top-tier peers” as Ottawa piles on more spending to tackle the housing crisis.

“While deeper deficits and associated higher sovereign borrowing costs may feel like a distant problem to many Canadians, the impact has the potential to trickle down to most households and businesses,” said economist Rachel Battaglia in the RBC report.

Experts expect the government to increase taxes.

Last week Freeland ruled out a middle class tax hike – but this government’s definition of “middle class” has never been clear.

“I’m pretty confident they’ll raise revenue because they’ve squeezed themselves on their fiscal position and they’re continuing to commit to spending that’s not sustainable,” said Robert Asselin, senior vice-president of policy at the Canadian Business Council and advisor to Bill Morneau when he was finance minister.

The budget is expected to target wealthy Canadians

Many experts have been predicting tax measures targeting wealthy Canadians or large corporations, or both.

“The problem for [the government] either a tax on large corporations or a wealth tax sounds very good, but in practice they are terrible. They don’t work,” Asselin said.

“Let’s be honest. They have to raise taxes. I don’t think that’s a big secret. But can they do it in a thoughtful, provocative way?” said James Thorne, chief capital market strategist at Wellington Altus Private Wealth.

“If you do that on the high income people, they’re going to move their money offshore.”

Speaking to reporters on Parliament Hill on Monday, NDP Leader Jagmeet Singh said he expects the government – his party’s partner in the confidence and supply agreement – to “take on corporate greed.”

“The rich should pay,” he said, adding that big business should also shoulder the burden.

“We don’t want to see any pressure being put on working people. We don’t want tax increases on working class people. We want to see big corporations start paying their fair share. “

At a conference in Ottawa last week, Poilievre – who has mocked Trudeau and his government as “not worth the cost” – said his party will fight tooth and nail against any tax increases.

“We believe that a dollar in the hands of a person who earned it is always more powerful than in the hands of a politician who taxed it,” he said.

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