The federal budget includes $60-billion in new spending over the next five years to build the economy and a projected deficit at the end of the fiscal year at $113.8-billion. That’s down from the $144.5-billion estimated in the last fiscal update. Next year’s deficit is estimated at $52.8-billion , down to $8.4-billion by 2026-27. The Finance Minister began her review of the budget by talking about the effects of the pandemic on Canada’s economy. Chrystia Freeland pointed out that Canada has gained 112 per cent of the jobs lost during the pandemic.
Affordable housing is an issue that takes centre stage in the federal budget. The government is proposing making it illegal for foreigners to buy any residential properties in Canada for two years.
That includes condos, apartments and single family homes. Foreigners buying their primary home in Canada will be exempt, as will permanent residents, foreign workers and students.
The budget includes implementing a Tax-Free First Home Savings Account which would allow Canadians under 40 to save up to $40,000 towards a first home. Other housing highlights include $4-billion for municipalities to update zoning and permit systems to speed up the construction of residential properties, $1.5-billion set aside for loans and funding for co-op housing, and $1-billion for affordable housing units. Freeland adds that the government will double the First Time Home Buyers’ Tax Credit from $750 to $1,500, and for those who want to add to their homes, introduced in the budget is a Multigenerational Home Renovation Tax Credit of up to $7,500 to support construction of a secondary suite.
The NDP had asked for dental care in the budget as one of its requests for voting with the Liberals, and to that end, $5.3-billion over five years is proposed, to provide that service for Canadians with family incomes less than $90,000 annually. It begins this year with children under 12, then will expand to under 18, seniors and people living with a disability next year, and will be fully implemented by 2025.
The budget includes an increase in defence spending by $8-billion, on the heels of Russia’s attack on Ukraine which is now in its second month. However, this will not meet Canada’s commitment to NATO to spend two per cent of its GDP on defence. It’s the first fiscal update since Russia’s invasion of Ukraine.
