Finance Minister Chrystia Freeland is postponing a balanced budget indefinitely, instead taking a series of small measures to ease the public’s burden but adding to a rapidly growing debt.
This latest update includes $13.2 billion in new spending over the next six years, a figure that increases to $21 billion when measures included in the spring budget are taken into account.
The lion’s share of the new spending will go towards abolishing GST for the construction of new rental apartments and the construction of affordable housing, measures that have already been announced in recent months.
Starting next year, the cost of debt will exceed $52 billion due to rising interest rates, slightly more than annual spending on health transfers. This will certainly be a burden for Canada, which last year predicted a return to balanced budgets by 2028.
“It is now clear that there is no way to regain balance. Impossible,” said Robert Asselin, a public finance expert and former adviser to the Trudeau government.
However, Wednesday’s statement contains a number of interesting small measures. Here are the ones to remember.
Another tile for AirBnb
Facing a housing crisis of historic proportions, the Trudeau government is helping cities and provinces deal with short-term rental platforms like AirBnB. Starting January 1, cities that have adopted regulations will be able to deny tax deductions related to costs that landlords incur when using these platforms, such as renovation costs. Ottawa will provide cities with $50 million over three years to help enforce their regulations. According to Minister Freeland, these measures could ultimately free up 30,000 housing units.
Calm the banks’ enthusiasm
Ottawa is also tackling a range of bank fees that affect the most disadvantaged people. This is initially about reducing insufficient funds fees – which can sometimes be as high as $50 – but more broadly it is also about making no- or low-fee accounts more accessible to a greater number of people. Additionally, the Financial Consumer Agency of Canada (FCAC) must work with banks to enable a greater number of direct debit transactions, bill payments and online transfers without fees. Finally, Ottawa will give an independent ombudsman the power to resolve complaints against banks.
Travel easier with children
Still aiming to eliminate “unwanted fees,” the government wants to force airlines to allow parents to seat their child under 14 next to them on the plane at no additional cost.
Parental leave due to adoption
In addition to the benefits offered to new parents who decide to adopt a child, Minister Freeland plans to expand employment insurance to include 15 weeks of parental leave, which can be shared by the couple. Ottawa estimates the number of families that could benefit at 1,700, with an estimated total cost of $48 million over the next six years.
Tax exemption for psychotherapy
The federal government wants to abolish the GST on consultations with psychotherapists and counseling therapists. This surprise measure is expected to cost the state treasury $50 million over the next five years.
An investigation into roaming charges
Roaming costs are often the source of many (nasty) surprises for Quebec travelers outside the borders. Ottawa has ordered the Radio-Television and Telecommunications Commission (CRTC) to study the practice and produce a report next year on ways to combat the scourge.
Media support
Chrystia Freeland announces an increase in aid for the crisis-hit media industry by raising the cap on staff deductions from $55,000 to $85,000. Additionally, the tax credit rate will increase from 25% to 35% for four years. These measures will cost $129 million over five years.