Finance Minister Chrystia Freeland will table her fourth federal budget today, laying 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 crucial group of voters.
Unlike past budgets, which mostly saved their announcements for budget day itself, this one has been publicized piecemeal. 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’s part of a plan to pitch voters on new programs that otherwise might have been buried in today’s news coverage of a budget document that’s expected to be physically bigger than in years’ past.
Freeland will table the budget around 4 p.m. ET. CBCNews.ca will carry her remarks in the House of Commons live.
Ottawa has announced roughly $38 billion in new financial commitments — including $17 billion in loan-based programs — before the budget’s release.
How the federal government intends to pay for all that new spending isn’t clear yet. Sources have told Radio-Canada that the budget will impose a tax increase on the richest taxpayers — one that senior Liberal sources say will affect less than 1 per cent of Canadians.
Some of the planned new spending is earmarked for future fiscal years — a manoeuvre that will give Ottawa some fiscal breathing room.
The economy is also marginally stronger than Ottawa initially projected, which could mean higher revenue to offset some of the planned new spending.
Finance Minister Chrystia Freeland (left), Prime Minister Justin Trudeau and Housing Minister Sean Fraser (right) have been on a weeks-long tour releasing details of the budget in advance. (Nathan Denette/Canadian Press)
Polls continue to suggest the government is polling underwater with house-hunting voters — particularly those in the millennial and Generation Z cohorts.
What do you want to see included in today’s federal budget announcement? Let us know in an email to ask@cbc.ca.
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 first-home buyers, among other measures.
It’s a dizzying array of new commitments meant to blunt the attacks of critics like Conservative Leader Pierre Poilievre, who has made housing the centrepiece 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 a majority of the country’s workforce, need a hand up as they grapple with “a cost of living crisis.”
“This is a resilient group but … they now feel like middle class stability is out of reach,” he said. “We need to meet this moment. Our country cannot succeed unless young people succeed.”
Freeland unveils new measures for first-time homebuyers
Deputy Prime Minister Chrystia Freeland announced new measures on Thursday aimed at lessening the financial strain on first-time homebuyers, including 30-year amortization rates on insured mortgages for newly built homes.
“We recognize that there is an urgent need today to invest in Canada and Canadians, and we recognize in particular that we’re at really a pivotal moment for young Canadians, for millennials, for Gen Z,” Freeland said last week.
It’s a longstanding Canadian tradition for the finance minister to purchase a new pair of shoes before budget day.
On Monday, Freeland chose a pair of black pumps from Maguire, a Montreal-based firm owned by millennial women — a nod to the people the government is hoping to reach with its latest spending plan.
Minister of Finance Chrystia Freeland tries on a pair of shoes from direct-to-consumer footwear company Maguire during a pre-budget photo op in her office in Ottawa, on Monday, April 15, 2024. (Justin Tang/Canadian Press)
While the budget is expected to boost spending, Freeland has said it won’t increase the $40 billion deficit forecast 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 track.
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 spiked from $20.3 billion in 2020-21 to $46.5 billion, according to Freeland’s fall economic statement.
That’s nearly double the amount Ottawa spends on the military. And debt service charges can be expected to march even higher in the years ahead.
Tax increase expected in federal budget
Political watchers say Ottawa has no choice but to raise taxes in the upcoming federal budget to offset billions of dollars of new spending, but who will be getting the increase remains to be seen.
As economic growth stagnates and high inflation adds to the government’s 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) — essentially one per cent of the size of the national economy — and lower the debt-to-GDP ratio.
Tuesday’s document will reveal if Ottawa has kept that promise. The government’s decision to cut or “reprofile” some spending — with estimated savings of about $2.25 billion a year — has helped, but there may be more to do.
Canada flirting with a rating downgrade, RBC warns
In a recent report, RBC Royal Bank warned that Canada faces a possible 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 the select few countries with a AAA credit rating on its sovereign debt.
RBC said “Canada is at a greater risk of a downgrade than other top-rated peers” as Ottawa piles on more spending to tackle the housing crisis.
“Even though deeper deficits and higher associated sovereign borrowing costs may feel like a distant problem for many Canadians, the impact has the potential to trickle down to most households and businesses,” economist Rachel Battaglia said in the RBC report.
Experts are expecting the government to increase taxes.
Freeland last week ruled out a middle-class tax hike — but this government’s definition of “middle class” has never been clear.
“I’m pretty confident they will raise revenues because they’ve squeezed themselves on their fiscal situation and they continue to commit to spending that is not sustainable,” said Robert Asselin, senior vice president of policy at the Business Council of Canada and an adviser to Bill Morneau when he was finance minister.
Budget 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] is either a surtax on big corporations or a wealth tax sounds very good, but in practice they’re terrible. They don’t work,” said Asselin.
“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 for Wellington Altus Private Wealth.
“If you do it on the high-income people, they’re just going to move their money offshore.”
Speaking to reporters on Parliament Hill 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.”
New Democratic Party Leader Jagmeet Singh says he wants to see the budget’s tax measures aimed squarely at ‘the wealthy’ and ‘big corporations.’ (Adrian Wyld/The Canadian Press)
“The wealthy should pay,” he said, adding that big business should also shoulder the burden.
“We do not want to see any pressure 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.
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
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