Five highlights from the economic update

The economic update presented Tuesday by the Trudeau government proposes a series of measures, in addition to those to stimulate housing construction. Here is an overview of the choices made by Ottawa.

Rising deficits

The slowdown in the Canadian economy and rising interest rates are weighing down the federal government’s finances. Result: deficits will be higher over the next four years. The shortfall will be higher on average by $10 billion per year than what was forecast in Finance Minister Chrystia Freeland’s last budget, tabled in March.

Slight decline in digital services tax

Minister Freeland has decided to put a little water in her wine regarding the imposition of a tax on digital services in Canada after multiple warnings made by the Biden administration in Washington. Ottawa still plans to table a bill in the coming weeks to impose such a tax on digital giants like Google, Meta and Amazon. But the date of entry into force now remains vague. Previously, it was claimed that this tax would come into force on 1^er January 2024.

Cost of life

The economic update proposes a series of measures to eliminate sources of irritation for consumers. The government intends in particular to modify the Competition law to ensure the right to repair devices, tackle certain unwanted fees such as those charged by airlines for placing children under 14 next to the adult accompanying them and eliminate the sales tax on products and services for psychotherapy and counseling. A measure which will cost 50 million over five years, according to estimates from the Ministry of Finance.

No respite for SMEs

Despite the pressure, the terms and conditions for reimbursement of the Canadian Emergency Business Account are not changing. These interest-free loans granted during the COVID-19 pandemic total 49 billion. Small businesses were entitled to a maximum of $60,000. The Federation of Chambers of Commerce of Quebec would have liked the government to extend the reimbursement deadline to January 2025 to obtain a partial write-off of $20,000. The deadline remains January 18, 2024.

15 weeks for adoptive parents

A new employment insurance benefit will be offered to parents who adopt a child. They will be allowed 15 weeks to allow them to complete the adoption process, prepare to welcome their child into their home and build a bond with them. The government estimates that 1,700 families will be able to benefit from it annually. The cost of this measure is estimated at 48.1 million until 2028-2029 and 12.6 million per year thereafter.