Federal Budget 2023 | Prioritizing clean energy and low-income people

(Ottawa) Financial assistance for low-income people burdened by the rising cost of living, the creation of a Canadian dental plan by the end of the year, a bunch of tax credits for doubling clean energy production by 2050 and the promise of better spending control: Finance Minister Chrystia Freeland tabled a budget on Tuesday that is part of the interventionist tradition of the Trudeau government since it came to power.

At a time when the Canadian economy is showing signs of slowing down, Minister Freeland’s third budget is still written in red ink – a $40 billion deficit is projected in fiscal year 2023-2024. Result: the return to a balanced budget remains a distant and uncertain project. The deficit is expected to reach $14 billion in 2027-2028, according to projections by the Department of Finance.

But Minister Freeland argues that this $490 billion budget plan — Ottawa’s spending totaled $347 billion in 2018-19 — is tailor-made to help the country pull through “the most significant economic transformation ever.” since the industrial revolution” which is beginning.

“Our allies and partners around the world, primarily the United States, are investing heavily to build clean economies and the carbon-neutral industries of tomorrow,” Mr.^me Freeland in his speech to the House of Commons, referring to the US 378 billion in investments and tax credits provided under theInflation Reduction Act (IRA) of the Biden administration to accelerate the energy transition, among other things.

Clean energy

Since Canada does not have the same financial arsenal as the United States at its disposal, Minister Freeland is proposing a series of tax credits that could reach $82.7 billion over the next decade to attract investment in the clean energy sector.

Refundable tax credits ranging from 15% to 40% will target projects for clean electricity generation, clean technology manufacturing, clean hydrogen production, and carbon capture, utilization and storage projects , among others.

To become a “clean electricity superpower” and meet demand, which is expected to double by 2050 due in particular to the electrification of transportation, Ottawa is open to the idea of ​​offering refundable tax credits to Crown corporations like Hydro-Quebec and BC Hydro – a first. The Trudeau government also wants to make more profit the Canada Infrastructure Bank to accelerate the energy transition.

“Reimbursement for groceries”

Faced with the rising cost of living, Minister Freeland confirmed that the federal government will provide targeted assistance to those less fortunate. This “grocery rebate” will help 11 million Canadian households. This will take the form of a one-time payment that will be distributed as a GST credit. Under this measure, a single person will be able to obtain up to $234, a couple with two children will be entitled to a maximum of $467 and an elderly person could receive up to $225. “We all know that our vulnerable friends and neighbors are still suffering the consequences of rising prices,” noted Minister Freeland.

Keeping its promise to the NDP, the government will allocate $13 billion over five years from this year – and $4.4 billion per year thereafter – to create Canada’s dental plan. This program, which began to be implemented last fall, will cover uninsured dental care by 2025 for people whose annual household income is less than $90,000.

The federal budget also confirms the increase in health transfers to the provinces by $46 billion over the next decade, as provided for in the agreement reached between Ottawa and the provinces last month.

Also in the area of ​​health, the federal government is moving forward with a 9-8-8 service for suicide prevention, which will receive funding of $158.4 million over three years. And in the aftermath of the reversal of the judgment Roe v. wade in the United States, Ottawa intends to provide $36 million over three years to renew the Sexual and Reproductive Health Fund to support community organizations across the country that facilitate access to abortion.

Ukraine and Chinese interference

As Russia continues its military offensive in Ukraine, Minister Freeland announces in her budget a new $2.45 billion loan to the Ukrainian government to help provide essential services to its people. This loan will be disbursed through the International Monetary Fund. In addition, financial assistance of 115 million dollars is planned for the repair of Kyiv’s electricity network.

Shaken by allegations of Chinese interference in the 2019 and 2021 federal elections, the Trudeau government announces the creation of a National Office Against Foreign Interference, which will report to the Department of Public Safety. This office will cost $13.5 million for the first five years and will have an annual budget of $3.1 million thereafter. In addition, the RCMP is granted $48.9 million over three years to protect at-risk diasporas from harassment and intimidation by authoritarian regimes like China, Russia, and Iran and to launch investigations.

As for the budgetary rigor promised by Minister Freeland, experts are skeptical. “The numbers speak for themselves. Since the 2021 budget, the Trudeau government has committed more than $345 billion in new spending over five years,” commented Robert Asselin, first vice-president of the Business Council and former close collaborator of Justin Trudeau and the former minister. of Finance Bill Morneau.

Being in the minority in the House of Commons, Justin Trudeau’s Liberals will need the support of the NDP to pass this budget. NDP leader Jagmeet Singh has said his party will support him.

They said…

Yes, we are going to support this budget because we are going to expand dental care to include our seniors, children under 18 and people with disabilities.

New Democratic Party leader Jagmeet Singh

That doesn’t make sense! Canadians can no longer foot the bill for this coalition and that is why the Conservative Party will vote against this inflationary budget.

Leader of the Conservative Party of Canada, Pierre Poilievre

The government of Justin Trudeau and Jagmeet Singh is abusing the fiscal imbalance, lapsed credits and an underfunded health care system to fulfill commitments that allow it to stay in power.

Bloc Québécois Leader Yves-François Blanchet