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
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.
