The Canadian government’s fall economic update coming Tuesday will include new money to increase housing supply, as well as tax reforms targeting short-term rentals, CTV News has confirmed.
The fall economic statement will include opening up $15 billion in 10-year low-interest loans to build 30,000 more rental housing units across Canada, according to senior government sources speaking to CTV News on a not-for-attribution basis ahead of Finance Minister Chrystia Freeland’s fiscal presentation.
The money will go from the Canada Mortgage Housing Corporation (CMHC) to builders to push ahead projects currently on the shelf, to increase the country’s housing supply, an aim the source framed as “disinflationary.” The timeline for rollout on this forthcoming pledge remains to be revealed.
Freeland will also be moving forward with a policy measure she first signalled was on the horizon last month: cracking down on short-term rentals such as AirBnb and Vrbo properties, in order to expand the long-term rental supply nationwide.
According to senior government sources, the federal government will be changing the equation for property owners by no longer allowing them to claim income tax deductions on rental expenses for their short-stay properties in regions where short-term rental restrictions are in place.
Set to come in to effect Jan. 1, 2024, one of the sources said, as an example, under this regulation change a short-term rental that earns $120,000 in income with $120,000 in expenses would now have to pay $33,000 in federal taxes.
While Housing Minister Sean Fraser wouldn’t speak to the measures being announced Tuesday, he said the federal government estimates there are likely “tens of thousands” of short-term rentals that could be made available as family homes.
Fraser also spoke to the advantageous policy levers the federal government has, including passing on its low borrowing rate to help projects along and in return bring down the cost of housing. “Every measure that we advance helps,” he said.
In addition to these sneak preview pledges sources have shared, the update is expected to include a $1-billion affordability-focused housing fund and new mortgage guidance.
It has also been reported that Tuesday’s presentation will include an update on pre-committed clean technology measures. Beyond that, it remains to be seen how substantial a fiscal snapshot this will be.
‘A VERY CHALLENGING PICTURE’
Given the Liberals’ recent focus on finding federal savings and economists warning of a slowing economy, the annual economic presentation is not expected to be a big-spending package or a “mini-budget” as it can often be framed, rather a checkpoint on Canada’s finances and the current government’s plans to create jobs and grow the economy.
One source described the document that will be tabled by Freeland after markets close on Tuesday as a “very focused” and “slim” document, meant to be a continuation of the Liberals’ current focuses and reflective of the need to make choices about where to spend.
Freeland’s update — including government spending since the spring federal budget, the overall Canadian economic outlook, and key financial projections — comes at a dire time politically for the Liberals.
It’s likely the federal cabinet will be looking to Tuesday’s “FES” to help turn the tide and convince Canadians that the minority Liberals are accurately attuned to their economic concerns and the best-placed political party to respond to their cost-of-living constraints.
A recent survey from Nanos Research found that most Canadians aren’t feeling positive about their finances, with 48.8 per cent of respondents saying they feel personally worse off financially and 51.8 per cent consider the economy to be weaker now than one year ago.
Though, with Freeland speaking increasingly about this being a time to show fiscal restraint — something Prime Minister Justin Trudeau recently suggested his government has always done — it remains to be seen how much new money the Liberals can responsibly roll out through this update without further exacerbating inflation and hindering the Bank of Canada’s interest rate efforts.
“We continue to deliver investments in Canadians, while remaining responsible fiscally and have all the way through. And that’s more of what I’m excited to share next week with the fall economic update, a demonstration that we know how to continue to be fiscally responsible while we make the investments that are going to grow the economy and support Canadians,” Trudeau told reporters last week.
As of the 2023 federal budget, the government had plans for continued deficit spending targeted at Canadians’ pocketbooks, public health care and the clean economy. In the months since, the Liberals have put a fresh focus on the housing crisis and the cost of groceries.
It’s possible Freeland will look to stitch in a series of policy-based changes rather than new money announcements into Tuesday’s update as the way to signal to Canadians their plans to support them through the current economically uncertain times, while likely continuing to point to Canada having the lowest debt-to-GDP ratio in the G7 as a key metric.
“Every new announcement the government makes in terms of investing new money in the economy is by nature, inflationary,” said Robert Asselin, senior vice-president of policy at the Business Council of Canada. Between 2015 and 2017, Asselin was the policy and budget director for then-federal finance minister Bill Morneau.
Noting that the economy is receding, with the prospect of a recession being considered, he said the priority should be on bringing inflation down in order to stabilize the current levels of uncertainty.
“We have debt servicing costs that are much higher than they were just a few months ago, which means that every dollar the government spends servicing the debt, does less to fund anything else,” Asselin said. “So going into the update, this is a very challenging picture for the government.”
OPPOSITION EXPECTATIONS
Ahead of the update, opposition parties have put in the window the policy measures they’d like to see included.
NDP Leader Jagmeet Singh wants the statement to focus on housing and food costs.
“We want to see investments to make housing more affordable, not just any old housing. We need homes that are affordable,” Singh said last week. “We also need action to bring down the price of groceries.”
For months, Conservative Leader Pierre Poilievre has been calling on Freeland to put an end to Liberal “inflationary spending” and present a plan to get the federal budget back to balance, something the last budget projected wouldn’t be happening before 2028 at the earliest.
Speaking to what specifically he wants to see out of Tuesday’s fiscal update, Poilievre has said he wants the Liberals to squash plans to increase the carbon tax, bring down interest rates and inflation by balancing the budget and adopt his proposal to “build homes, not bureaucracy.”
He restated these calls during a press conference on Parliament Hill Monday morning.
“Tomorrow we’ll see more of the same inflationary spending, housing photo-ops and promises and glitzy deficits,” Poilievre predicted.
As of the mega March economic update, the federal deficit was projected to be $40.1 billion in 2023-24, nearly $10 billion more than forecast in the previous fall’s economic snapshot. In a financial statement published last month, the 2022-23 deficit was $35.3 billion, $7.7 billion lower than forecast.
With files from CTV News’ Chief Political Correspondent Vassy Kapelos
OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.
The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.
Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.
If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.
Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.
“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.
“Trudeau has let you down and does not deserve another chance.”
Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.
The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.
Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.
“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.
At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.
Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.
“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.
Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.
Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.
“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.
“I support the interests of Quebecers, if those interests are also good for Canadians.”
A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.
The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.
The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.
If the Liberals can’t deliver on those two things, they will fall, Blanchet said.
“This is what we call power,” he said.
Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.
“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.
“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”
This report by The Canadian Press was first published Sept. 19, 2024.
OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.
Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.
She sidestepped a question about the message it sends to have him leave the federal Liberal fold.
“That is a decision that he made independently, and I wish him well,” she said.
Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.
The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.
Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.
“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.
The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.
Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.
On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.
He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.
“I was defending the priorities of the government, and I did it in a very loyal way,” he said.
“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”
Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.
He said that will “avoid a costly byelection a few weeks, or months, before a general election.”
The next federal election must be held by October 2025.
Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.
Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.
Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.
As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”
Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.
This report by The Canadian Press was first published Sept. 19, 2024.
— With files from Nojoud Al Mallees and Dylan Robertson
