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Here's what to expect in the 2024 federal budget

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Deputy Prime Minister and Finance Minister Chrystia Freeland will be presenting the 2024 federal budget on Tuesday, revealing how the federal Liberal government intends to balance the nearly $40 billion in pre-announced new spending with her vow to remain fiscally prudent.

Amid calls for a concerted focus on boosting Canada's productivity, Freeland has said the full picture of the state of the country's finances will focus on "building more homes, faster, making life more affordable, and creating more good jobs."

Declaring that the country is at a "pivotal moment" that requires urgent investment, the federal government is planning to introduce a bevy of measures in Tuesday's budget to help put a dent in Canada's housing crisis and win back straying millennial and Generation Z voters.

However, the new spending is coming amid concerns over a sizable federal deficit and remaining uncertainty around the degree of provincial and territorial buy-in for some of the bigger-ticket loan offerings the Liberals have previewed as coming in the budget.

Among the tens of billions of dollars pre-promised for health, child care and building 3.9 million new homes, more than $17 billion is loan-based, meaning the money is expected to come back around. Meanwhile, possible further sizeable spends have yet to be announced, such as the initial pharmacare allotment.

New wealth taxes ahead?

How Freeland intends to uphold her fiscal targets outlined in the fall economic statement – maintaining a declining deficit-to-GDP ratio and keeping deficits below one per cent of GDP in 2026-27 and beyond – is going to be one of the key areas of focus for those scrutinizing the federal balance sheet.

While Prime Minister Justin Trudeau has ruled out raising taxes on Canada's middle class, Freeland has so far refused to say whether the budget could include new or higher taxes for wealthier Canadians or corporate Canada. Nor has she shed any light on where additional revenue may be found, whether in deeper cuts or otherwise.

Moreover, the finance minister vowed last week that the deficit will not increase in this budget and the Liberals remain mindful of not knocking the Bank of Canada off its track towards reducing interest rates.

With these factors in mind, economists are largely forecasting that the most likely ways Freeland will look to offset the coming new spending will be to push off earmarked spending into future years and raise taxes.

"Some part of it could also come from higher revenues, increasing taxes on corporations, things like excess profit taxes … or increasing taxes on the wealthiest Canadians," Desjardins' senior director of Canadian economics Randall Bartlett said.

"Whether that's on income from financial assets, or whether that's on personal and increasing the marginal income tax rate."

Trudeau delivered a speech to the Canadian Chamber of Commerce in Ottawa on Monday afternoon, further prepositioning his government's economic vision.

"Millennials and Gen Z now make up the majority of Canada's labour force. They are our economy. Everything that is created, built, served and sold in this country is increasingly being created, built, served and sold by millennials and Gen Z. So, their success is going to be our success, Canada's success," Trudeau said.

Speaking to a crowd that's calling on the government to work with businesses to spur economic growth and not impose new taxes that could deter investors, Trudeau made no mention of any wealth-targeting plans that may be afoot.

"Canada's competitiveness is slipping, and productivity continues to decline. This weak performance leaves Canadians poorer, with fewer opportunities to achieve their personal goals, and it forces them to pay more just to stay where they are," Canadian Chamber president and CEO Perrin Beatty said in a statement preceding the prime minister's address.

"Without much greater growth, we won't be able to maintain our standard of living or provide the services Canadians require."

'Generational fairness' focus

Traditionally, governments have held budget news — save for some pre-tabling leaks — for the day the document is tabled in the House of Commons. However, the federal Liberals deployed a new pre-budget communications strategy this year.

Since late March, Trudeau and members of his cabinet have been selectively teasing out bits and pieces of the federal budget before it is actually unveiled, through a series of near-daily announcements.

With a targeted focus on Canada's younger generations who are feeling squeezed by inflation and as if the deck is stacked against their future prosperity, the overall theme for the 2024 budget is "generational fairness."

Seeking to echo this, on Monday Freeland kept with the pre-budget political tradition of selecting her budget day shoes, a pair of black leather heels from direct-to-consumer Canadian shoe brand Maguire.

Founded by two sisters, the brand has a stated focus on "working to make high-quality fashion footwear fair and accessible." 

New spending announced so far

Here is a recap of all the new spending and major loan commitments as well as announcements about budget-related policy pledges made during this weeks-long pre-budget rollout:

  • March 27: Canadian Renters' Bill of Rights, $15-million Tenant Protection Fund, and renter credit changes. 
  • March 28: $1 billion in loans and $60 million in grants to build or renovate child-care centres, plus $48 million to extend student loan forgiveness for early childhood educators.
  • March 30: Touting plan to rollout the first phase of national pharmacare related to contraceptives and diabetes medication. 
  • April 1: $1 billion over five years to fund a new national school food program for 400K more kids. 
  • April 2: $6-billion Canada Housing Infrastructure Fund, topping up the Housing Accelerator Fund by $400 million. 
  • April 3: $15-billion top-up to the Apartment Construction Loan Program, launching "Canada Builds." 
  • April 4: $1 billion in loans and $470 million in contributions for new rental protection fund to preserve rent prices. 
  • April 5: $600 million in for a series of new homebuilding innovation efforts aimed at scaling-up modular and prefabricated homes. 
  • April 6: $2.4 billion to build capacity in artificial intelligence, largely for computing capabilities and technical infrastructure. 
  • April 8: $8.1 billion over the next five years as part of the long-term defence policy update.
  • April 9: $500 million for a new youth mental health fund to help community organizations provide more care. 
  • April 10: $105 million to double firefighters and search and rescue volunteer tax credits, and $166.2 million for First Nations emergency management.
  • April 11: 30-year mortgage amortizations for first-time homebuyers purchasing new builds, additional RRSP extension. 
  • April 12: A multibillion-dollar package tying in the government's suite of plans meant to solve the housing crisis
  • April 14: A new Secondary Suite Loan Program allowing homeowners to access up to $40,000 in low-interest loans to add secondary suites. 

Political expectations

The incoming budget will also be a key political document. While the federal New Democrats continue to back the Liberals on confidence matters, Conservative Leader Pierre Poilievre has maintained a double-digit lead over the Liberals with his largely economy-focused partisan attacks.

Each taking their turns setting out their expectations for Tuesday's budget tabling – slated for around 4 p.m. ET in the House of Commons – Trudeau's political opponents have a laundry list of measures they'd like to see included.

For Poilievre, his chief demand for some time has been to "fix the budget" and stop inflationary spending that he argues is driving up the average family's interest obligations. In question period on Monday he took aim at certain plans to spend more.

"They have a food program which after eight years has no food, an affordable housing program which has doubled housing costs… When will they realize that after eight years this NDP-Liberal prime minister is not worth the cost?" he asked.

NDP Leader Jagmeet Singh said he wants to see a budget that lowers costs for Canadians and makes "big corporations start paying their fair share."

"Let's take on the corporate greed, which is driving up the cost of living," Singh said, speaking to reporters ahead of question period. "We absolutely believe that the wealthy should pay their fair share. But what we've been focused on … it's large corporations that are exploiting Canadians."

Similarly, Green Party co-leader Elizabeth May called on Trudeau to take "bold steps" to increase revenue and "make wartime level investments to fund the caring society that Canadians deserve."

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