Budget Highlights
- Ottawa plans to increase spending by $52.9 billion over the next five years.
- Finance Minister Chrystia Freeland anticipates a $40 billion deficit for this fiscal year.
- The budget includes a significant allocation of $8.5 billion for new housing initiatives.
- Additional major expenditures include a $6 billion Canada Disability Benefit and a $1 billion national school food program.
- Capital gains taxes on wealthy individuals and corporations will be raised to generate an estimated $19 billion in new revenue.
- Debt service costs have risen significantly, now $2 billion higher than earlier projections.
- For the first time, government spending on debt servicing will surpass that on health care this year.
- Freeland’s fourth budget introduces a comprehensive housing program targeting millennials and Generation Z, funded partly through increased taxes on the wealthy and businesses.
Finance Minister Chrystia Freeland has unveiled a new federal budget that includes significant tax increases on wealthy Canadians and corporations to fund a surge in government spending. The budget projects a $40 billion deficit for this fiscal year and outlines $52.9 billion in additional expenditures over the next five years.
Key allocations in the budget include $8.5 billion for housing initiatives, a $6 billion Canada Disability Benefit, and a $1 billion national school food program. To support these expenses, the budget proposes raising the capital gains tax for the wealthy and increasing excise taxes on cigarettes and vaping products, expected to generate an estimated $21.9 billion in new revenue.
The cost of servicing the national debt is a growing concern, now surpassing federal spending on health care. With public debt charges set to increase by $2 billion this year, the total cost is projected to reach $64.3 billion by 2028-29. This increase is attributed to high interest rates maintained by the Bank of Canada to manage inflation.
Despite these challenges, the budget aims to boost economic growth and control the deficit through increased taxes and better-than-expected economic performance. Freeland emphasized the importance of a fair tax system, stating that the budget’s measures are designed to ensure that the wealthiest Canadians contribute more to public finances.
The government’s strategy includes several new revenue-generating measures, such as tightening regulations on bankruptcy fraud and aggressive tax planning. Additionally, the budget promises to enhance the incentives for zero-emission vehicles, implement a new carbon tax rebate for small businesses, and increase student grants.
Other significant investments include a $900 million top-up to the Indigenous infrastructure program and funding boosts for CBC/Radio-Canada and VIA Rail Canada to improve news programming and develop high-frequency rail services in central Canada, respectively.
This budget marks a bold move by the government to tackle pressing social issues through targeted spending and tax reforms, aiming to create a more equitable and prosperous future for all Canadians.