Highlights of the federal government's fall fiscal update
OTTAWA - Finance Minister Bill Morneau rolled out his fall fiscal update on Wednesday, framing it as the federal government's response to dealing with the competitiveness challenges posed by aggressive moves south of the border. Here are the highlights:
- Overall, new measures over the next five years will cost the federal treasury $17.1 billion, with almost a third of that coming in the 2019-20 fiscal year in order to boost investment in Canada.
- Deficits won't start to decline until 2021-22. In this fiscal year, Ottawa expects to be $18.1 billion in the hole, and the deficit will actually increase a bit next year to $19.6 billion.
- The reason the new costs don't bulk up the deficits even more is because a strong economy has handed Ottawa an extra $22 billion in revenues over the next five years, compared to expectations in the February 2018 budget.
- The debt burden, as measured by the debt-to-GDP ratio, is expected to be 30.9 per cent in this fiscal year, before declining ever so gradually to 28.5 per cent in 2023-24.
- New tax incentives to encourage investment in Canada are worth $14 billion over five years. The measures include allowing manufacturers and the clean-tech industry to write down all capital costs right away.
- Ottawa is putting another $800 million over five years into its strategic innovation fund to buoy up investments across the economy. Of that $800 million, the forestry industry will get $100 million.
- The government is setting up an export diversification strategy that aims to increase sales to countries other than the United States by 50 per cent by 2025.
- Canadian journalism gets a boost through a bundle of tax incentives that Finance Canada estimates are worth $600 million over five years. The measures include tax credits related to hiring and subscriptions. They also allow news outlets to become charities that can take donations.
- A new fund for social finance will allow charities and non-profit groups to finance new ideas. Ottawa will make $755 million available over 10 years in the hope of seeing $2 billion in economic activity and up to 100,000 jobs as a result.
- Regulations, red tape and internal trade anomalies will get an overhaul as Ottawa tries to work with the provinces to streamline and harmonize business requirements across the country.
- Morneau has fish on the brain. The fiscal update gives about $49 million a year to rebuilding wild fish stocks and towards setting up fisheries funds in Quebec and British Columbia.
- Funding for Nutrition North will be enhanced by $13 million per year in order to bring down the cost of food in the North and to lower the costs of traditional hunting and harvesting.
- Avalanche Canada gets a $25-million one-time endowment to bolster its work on avalanche safety.
- The monthly deficit for September 2018 was $1.4 billion, smaller than last year's $3.3 billion. For the fiscal year to date, the federal government is in the black so far, posting a $1.2-billion surplus, compared to a deficit of $6.2 billion for the same April-to-September period last year.