Federal Finance Minister Chrystia Freeland proposes in her budget to seek money from the richest to finance a huge amount of $57.5 billion in new spending over the next six years.
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A new tax on capital gains exceeding the threshold of $250,000 will raise more than $19 billion by 2029. This change will only affect the “0.13% of the richest”, or approximately 40,000 people whose average income is $1.42 million, calculates Ottawa.
“Today, a carpenter or a nurse can pay taxes at a higher marginal rate than a multi-millionaire. It is not fair. This must change. And that will change,” Minister Freeland told the Commons during the housing filing.
Under the theme of “a fair chance for every generation”, the main objective of the 2024 federal budget is to make millennials and Generation Z, a public that is increasingly neglecting them, the heart of their political action.
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Something new despite the striptease
By maintaining the deficit at $40 billion, the minister is keeping Canada away from a reduction in its AAA rating awarded by the rating agencies.
Although the maneuver allows Canada to respect its financial anchors, the federal government has not constrained itself to a “restrictive budget”, according to the tax expert at the University of Sherbrooke, Luc Godbout.
On the contrary: in addition to the announcements on housing made during the weeks of stripteasepre-budget, the minister kept a few little surprises up her sleeve.
In particular, the federal government is proposing a new Canadian disability benefit at a cost of $6.1 billion over the next six years, with the first payments scheduled for 2025.
It also puts on the table a significant increase in scholarships and student loans, totaling $1 billion for the year 2024-2025.
GST is used to pay interest
The increase in federal spending, combined with high interest rates, has contributed to a real explosion in interest costs on the federal debt: this will reach a peak of $54.1 billion in 2024-2025. $.
Only two years ago, for the year 2022-2023, public debt charges were $35 billion. The new amount of $54.1 billion is identical to that generated in revenue by the goods and services tax (GST).
“For the first time in history,” notes Luc Godbout, “the GST is used entirely to pay interest costs. There is not a penny of GST that is used for anything other than paying interest on the debt,” analyzes the expert.