The federal government’s fall economic statement presented by Deputy Prime Minister and Finance Minister Chrystia Freeland on Tuesday includes billions of dollars in new spending and targeted policy measures aimed at increasing Canada’s housing supply in the years ahead, with the deficit projected to be $40 billion in 2023-24.
Noting Canadians continue to feel the squeeze of inflation and high interest rates in their everyday lives, while increasingly becoming preoccupied about their looming mortgage renewals, Freeland’s fiscal update is focused on responding to two pressing challenges: affordability and accelerating home building, while trying to maintain a degree of fiscal restraint.
As the minority Liberals continue to scale back new spending and try to find billions in savings, Tuesday’s economic check-in on the country’s finances is, as expected, not a major spending package. The more sizeable financial commitments are not set to roll out the door until 2025, the year of the next scheduled federal election.
Continuing to reduce post-pandemic spending, the 2023 fall economic statement outlines $20.8 billion in additional spending over the next six years, beyond what was announced in the 2023 federal budget.
This includes an estimated $15.7 billion in new measures announced Tuesday and will be offset by a projected $2.5 billion in public sector reduction-centric savings, seeing net new spending work out to $13.2 billion, according to finance officials.
And, in an effort to signal ways the Liberals plan to support Canadians without further dipping into their pockets, the 131-page document also includes a series of cost-free policy and legislative pledges, including bringing forward a bill to create a new Department of Housing, Infrastructure and Communities.
Broadly, Freeland has announced Canada will be putting billions into building new homes, increasing the number of construction workers, cracking down on short-term rentals and grocery competition, as well as rolling out anticipated green investment tax credits.
The fiscal update also builds on the 2023 federal budget pledge to find savings within federal departments and agencies to help pay for key programs such as dental care, by announcing an expansion of those refocusing efforts to see $4.8 billion per year as of 2026-27.
Speaking with reporters inside the lockup in advance of tabling the fiscal document in the House of Commons, Freeland sought to make it clear that while the Canadian economy is slowing, the country is in a position of strength.
She said private sector economists now expect Canada to avoid a potential recession as was forecasted as a possibility this time last year. “The foundation of our fall economic statement is our responsible fiscal plan,” Freeland said. “In the face of global inflation, our government has reduced the deficit faster than any country in the G7.”
‘TARGETED’ HOUSING, RENTAL MEASURES
The core new commitments included in the fall economic statement centre on two themes: helping Canadians with affordability concerns, and creating more housing and jobs.
On the housing front, to eventually incentivize building more rental housing, the federal government will be offering up to $15 billion in new loan funding starting in 2025-26. The Liberals are calling this the “Apartment Construction Loan Program” rebranding an existing initiative that has already announced billions behind it.
The government estimates this move will help build more than 30,000 new rental housing units across the country.
The program will see the low-interest loans facilitated through the Canada Mortgage Housing Corporation (CMHC) to allow builders to forge ahead on projects they may have previously shelved.
An additional $1 billion is also being earmarked for a new affordability-focused housing fund that, over three years and starting in 2025-26, will support non-profit, co-op, and public housing builds, aiming for 7,000 new homes by 2028. Alongside this, Freeland is promising $309.3 million in new funding for the “Co-operative Housing Development Program.”
To protect homeowners worried about looming mortgage renegotiations at higher interest rates, Freeland has unveiled a new “Canadian Mortgage Charter” detailing the relief Canadians can expect from banks if they are in financial difficulty.
Under this new charter, the fall economic statement outlines some new expectations Canadians can have of their banks, namely: temporary extensions of the amortization period, waiving certain fees and costs, advanced contact with renewal options, and allowing lump-sum and prepayments.
New homes are constructed in Ottawa on Monday, Aug. 14, 2023. THE CANADIAN PRESS/Sean Kilpatrick
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.
To do this, the government will be changing the equation for property owners by denying income tax deductions on rental expenses incurred to earn short-term rental income for their short-stay properties in regions where short-term rental restrictions are in place, such as Toronto, Montreal, and Vancouver. They will also reject income tax deductions where short-term rental operators are not compliant with the permitting or registration requirements in place.
Set to come into effect Jan. 1, 2024, this policy move is coming with $50 million over three years starting in 2024-25 to help support municipal enforcement of their short-term rental restrictions.
Lastly on the housing front, with this renewed interest in opening up more housing units to improve supply, and in return bring down costs, the Canadian government says “in the coming months” it will move ahead with plans to improve internal labour mobility to specifically help cut red tape for construction workers.
In an interview Tuesday on CTV News Channel’s Power Play, Freeland said she “disagrees” with the early opposition criticism that the new measures announced in the economic outlook won’t help Canadians in the immediate future.
“I think the point is we have been investing in housing since we formed government,” she said. “We have been taking urgent action this fall with really meaty measures.”
GROCERY, CONSUMER AND CLIMATE STEPS
On grocery store check-out pain, the fiscal update doesn’t include any further cost-of-living rebate-type benefits to immediately put money into Canadians’ pockets.
Instead, the government is pledging to continue with its pre-pledged plans to work with grocery giants to stabilize prices, investigate issues such as “shrinkflation,” and establish a “Grocery Task Force.”
Attached to this is a commitment to further amend the Competition Act and related laws to strengthen the Competition Bureau’s powers to go after bad actors and anti-competitive practices across sectors. This pledge simply builds on pre-existing legislation known as Bill C-56 and incoming NDP-led amendments to it. Also under the category of cost-less commitments, Freeland is re-stating vows to go after “hidden junk fees.”
Prime Minister Justin Trudeau pauses to look at items in an aisle during a visit to a Fruiticana grocery store in Surrey, B.C., on Tuesday, November 14, 2023. THE CANADIAN PRESS/Darryl Dyck
The finance minister vowed Tuesday to come back to Canadians in the next budget – after already referencing the ills of these fees in the 2023 federal budget – on steps it is taking to reduce bank fees, while work at the CRTC and Canadian Transportation agency continues on mobile roaming and airline seating charges.
At the same time, the Financial Consumer Agency of Canada will work with banks on improving Canadians’ low-cost and no-cost bank account options reflective of the uptick in account holders making online bill payments and e-transfers.
Tuesday’s economic package also includes a promise to work with Canadian pension funds “to create an environment that encourages and identifies more opportunities for investments in Canada,” including considering removing the “30 per cent rule” that restricts Canadian pension funds from holding more than 30 per cent of corporation voting shares.
And, while touting the suite of green economy measures are already underway, such as the development of battery manufacturing plans while expanding the eligibility for certain clean investment tax credits, Freeland’s fiscal update also outlines the timeline for the government to deliver on its carbon capture, utilization, and storage investment tax credits, vowing legislation imminently and implementation by the end of 2024.
CHECK-IN ON THE DEFICIT, DOWNSIDE
The fall economic statement projects the federal deficit at $40 billion in 2023-24, relatively on par with the $40.1 billion forecast for that fiscal year, in the spring 2023 federal budget.
Unlike the last fall economic update, Freeland is not forecasting federal coffers will get back to balance at any point in the next six years. Rather, the deficit is set to be higher in each year ahead than was projected in the 2023 federal budget, remaining billions away from Prime Minister Justin Trudeau’s long-broken balanced budget pledge.
The 2022-23 deficit sits at $35.3 billion, which was $7.7 billion lower than forecast. Looking to the years to come, in 2024-25 the fall economic statement projects the deficit will be $38.4 billion, in 2025-26 it is projected to hold steady at $38.3 billion, before declining to $27.1 billion in 2026-27, $23.8 billion in 2027-28, and still at $18.4 billion by 2028-29.
However, when looking to Finance Canada’s “downside scenario” between 2024 and 2026, it is possible the deficit could balloon to $10 billion more than Freeland’s baseline projection.
The downside projections also caution that the unemployment rate could hit seven per cent, if interest rates and weaker global activity lead to a shallow recession.
Further, public debt charges are forecast to rise from $46.5 billion 2023-24 to $60.7 billion in 2028-29.
Despite this, Freeland is striking a tone of optimism about the current state of the economy and its trajectory, noting there are one million more Canadians employed today than before the pandemic, and inflation is gradually coming down.
Statistics Canada reported Tuesday that the inflation rate slowed to 3.1 per cent in October, down from 3.8 per cent in September, bringing it closer to the Bank of Canada’s target.
Once again, the Liberals are using their lowest deficit and net debt-to GDP ratios in the G7, and AAA credit rating as their key fiscal markers—with commitments to continuing to reduce the federal debt as a share of the economy over the medium term—though as former Bank of Canada governor Stephen Poloz said Monday, these metrics may be a “minimalist definition of a fiscal anchor.”
Building on these, Freeland has also pledged to maintain a declining deficit-to-GDP ratio in 2024-25 and keep deficits below one per cent of GDP in 2026-27 and future years.
“Building a Canada that delivers on the promise of the greatest country in the world, that work will be our government’s work for these next two years, and beyond,” Freeland said in her House speech.
“Canada is not and has never been broken. We are the imperfect but remarkable creation of generations of Canadians who did their part to build a better country, in good times and in tough times,” Freeland said.
OPPOSITION, MAJOR STAKEHOLDER REACTION
While Freeland’s speech was met with a rousing applause from her Liberal colleagues, the opposition parties and certain stakeholder groups were less enthusiastic about Tuesday’s economic update.
“Mr. Speaker, as we stand here today, and witness the misery that is visible across this country, it’s hard to forget how good things were only eight years ago when this prime minister took office,” said Conservative Leader Pierre Poilievre in his reaction speech in the chamber, going on to offer a laundry list of grievances with this government. “Inflation after hitting 40-year highs is back on the move, the economy is now shrinking, and if you add in per capita terms, it is plummeting.”
Conservative Leader Pierre Poilievre responds after Minister of Finance Chrystia Freeland delivered the 2023 Fall Economic Statement in the House of Commons, Tuesday, November 21, 2023 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
NDP Leader Jagmeet Singh told CTV’s Power Play host Vassy Kapelos it’s “a problem” that many of the new funding announcements will not take effect for at least two years when Canadians need help now, especially on the housing file.
“What we need right now is urgent action. And the urgency that we’re up against is something that I don’t think we’ve ever seen before. People with full-time jobs, people with good jobs that are losing their homes, they can’t afford the rent… Things are so tough and [the Liberals] are not meeting the urgency of what people are going through,” Singh said, while not indicating plans to pull the NDP’s much-needed support for the Liberals.
The Bloc Quebecois, in response to the fall economic statement, accused the federal government of failing to understand the word “emergency.”
In a press release Tuesday, Bloc Leader Yves-Francois Blanchet wrote that while his party will “evaluate the meagre new announcements on their merit,” the financial outlook doesn’t include measures significant enough to address the housing or affordability crises.
The Federation of Canadian Municipalities (FCM) expressed similar reservations about the feasibility of the new housing measures.
“While FCM acknowledges the federal investments in new housing construction announced today, the reality is that we cannot rapidly scale up new housing construction without also investing in the municipal infrastructure that supports it,” said FCM president Scott Pearce in a news release. “We are concerned that the Fall Economic Statement does not reflect the scale of infrastructure investment required to meet the national housing supply gap.”
The Canadian Federation of Independent Business (CFIB) said in a statement it was “deeply disappointed the federal government’s 2023 Fall Economic Statement did not include any measures to help small businesses deal with the current challenges they are facing,” notably pointing to the CFIB’s still unmet call for another Canada Emergency Business Account (CEBA) repayment deadline extension.
Meanwhile, the Chartered Professional Accountants of Canada assessed the fiscal update as exercising “some prudence,” but said in a statement that as CPA Canada members “we would have liked to see plans to balance the budget and implement a host of previously announced tax measures.”
“Canadians struggling with affordability might have been looking for more in this update. However, the reality is that higher federal spending could contribute to inflation. That is exactly what we are trying to fight with higher interest rates, leaving the government walking a very fine line,” said CPA Canada’s chief economist, David-Alexandre Brassard.
Canadian Manufacturers and Exporters said it was pleased to see the timelines provided for the clean economy tax credits, and is encouraging all parties to work with the federal government to implement the suite of new measures “as quickly as possible.”
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.
Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?
Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.
Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.
Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.
Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?
Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.
Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.
Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.
Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?
Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.
Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.
Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.
This report by The Canadian Press was first published Sept. 18, 2024.
ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.
The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.
He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.
The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.
Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”
The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.
Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.
This report by The Canadian Press was first published Sept. 18, 2024.
