Federal budget | Priority to housing construction, military spending and innovation

(Ottawa) Faced with a worsening housing crisis in the country, the Trudeau government is proposing to inject $10 billion over five years to double housing construction over the next decade and improve access to property.

Joel-Denis Bellavance
The Press

In her budget tabled Thursday in the House of Commons, the Minister of Finance, Chrystia Freeland, also announced that Ottawa will put a spoke in the wheel of foreign investors or speculators seeking to take advantage of the real estate overheating and who contribute to the price spike. For the next two years, foreign investors will be banned from buying property in Canada, while hasty resale of homes will be “fairly” taxed.

The war in Ukraine is also forcing the Trudeau government to dip into the higher-than-expected revenue the IRS will pocket to boost military spending by $8 billion over five years while offering Kyiv an additional $1 billion in aid. loans to defend themselves against Russian aggression, in particular to buy arms.

M^me Freeland used his budget to announce a comprehensive review of defense policy to determine “the size and capabilities of the Canadian Armed Forces, their roles and responsibilities.”

Build more housing

But housing construction is the Trudeau government’s top priority in this budget. It aims to transform several regions of the country into a huge construction site. On average, about 200,000 dwellings of all types are built per year. To meet housing needs, Canada must double the annual rate of construction.

The federal government is therefore launching a fund totaling $4 billion over five years to accelerate housing construction and immediately replenishes another $1.5 billion over two years to the existing fund to build affordable housing.

To help Canadians find housing, Ottawa is setting up a tax-free savings account for the purchase of a first home, which can reach $40,000. The tax credit for the purchase of a first property is also doubled to $10,000.

“Over the next 10 years, we will double the number of homes we build. This must become a major national effort, and will require a new spirit of collaboration,” said Minister Freeland, thereby giving a helping hand to the provinces and municipalities for this ambitious project.

In the process, she argued that we had to be realistic. The housing crisis will not go away quickly. “Let me caution: there is no silver bullet that will, once and for all, immediately make every Canadian a homeowner in the neighborhood of their choice,” she said.

Health, inflation and innovation

It should be noted that the budget does not provide for any substantial increase in health transfers, as the provinces have been calling for for several months in order to restore a health network that was sorely tested during the pandemic.

Noting that the global economy is rocked by a period of great uncertainty, M^me Freeland intends to support growth by setting up the Canadian Innovation and Investment Agency, which will have an operating fund of $1 billion over five years. It also proposes to launch “a world-class Canadian growth fund”, the outlines of which have yet to be defined, to stimulate private sector investment.

But its mandate will be clear: the investments must make it possible to reduce greenhouse gas emissions and contribute to the achievement of the country’s climate objectives in 2030, among others. The fund will be capitalized from an initial sum of 15 billion over five years. The goal is to generate three dollars of private capital for every dollar invested.

M^me Freeland also reduces the tax burden on small businesses, which will enjoy a reduced tax rate of 9% on taxable capital up to $50 million instead of $15 million as is the case now.

Special tax for banks and dental care

On the other hand, the Trudeau government is carrying out its election promise to increase the tax burden on banks and insurance companies.

Another important measure, the Trudeau government is moving forward with the creation of a national dental care program for low-income families, as it had promised to do under the agreement reached with the New Democratic Party (NDP), which ensures its political survival in the Commons until 2025.

Thus, it plans to invest $5.3 billion over the next five years to create this program, and $1.7 billion annually thereafter. The scheme will first cover people under 12 in 2022 and will then be extended to under 18s, seniors and people with disabilities in 2023. Full implementation of the scheme is planned for 2025.

Despite this new spending, Minister Freeland maintains that her budget plan is “responsible”.

The Conservative Party has sharply criticized the budget plan. “It’s not a responsible budget – it’s an NDP budget. It is a budget funded by Canadians who are suffering because of inflation. Canadians need a break and today’s NDP-Liberal budget is not giving it to them,” cursed interim Conservative leader Candice Bergen.

The NDP for its part claimed victory. “Canadians want us to work together to improve their quality of life, and that’s exactly what we’ve done,” said New Democratic Party of Canada Leader Jagmeet Singh.

The Bloc Québécois denounced the absence of an increase in health transfers to the provinces. “The health systems are suffocating”, was indignant the head of training, Yves-François Blanchet.