Finance Minister Chrystia Freeland will unveil the 2022 federal budget on April 7, making it the first budget announcement since the 2021 federal election. What can we expect? Government officials and economists told The Globe and Mail that he was likely to be briefed on the Liberal government’s election spending pledges, as well as new spending pledges inherited through the NDP bid and confidence agreement and an unforeseen increase. costs due to the war in Ukraine. Here is everything we know before Thursday’s announcement.
When will the 2022 federal budget be announced?
Finance Minister Chrystia Freeland will deliver the 2022 federal budget on April 7 at 4 p.m. ET, the government announced during the question period on March 29. This will mark the first budget announcement since the 2021 federal elections.
What will the federal budget cover?
Thursday’s budget is expected to have three main themes: measures to tackle climate change, affordable housing and Canada’s role in the world. The latter is a recent addition that will see Ottawa boost defense spending in response to Russia’s invasion of Ukraine. It will also include money for cyber security to combat foreign misinformation campaigns. The 2022 federal budget will also be an opportunity for the government to outline how it intends to reduce the huge emergency spending associated with the COVID-19 pandemic, while fulfilling the new billions promised by the party’s campaign platform. and recently announced a parliamentary co-operation agreement with the NDP. Other potential elements to look for in a budget:
Housing: The Liberal electoral platform has pledged $ 4 billion to build 100,000 new homes by 2025, with Ottawa giving money directly to municipalities to speed up new housing. It also pledged another $ 2.7 billion to repair and build affordable housing. Climate change: Other big items include $ 9 billion for a range of climate programs and billions for green economy initiatives such as clean technology and investments in zero-emission vehicle construction. Defense: A Scotiabank report that offers a key element in front of the federal budget also expects another $ 12 billion to supplement defense spending. Steven Chase and Patrick Brethur say Canada’s defense spending could see a boost in fulfilling its NATO pledges and protecting Arctic sovereignty. Electric vehicles: The budget will also include about $ 2 billion in a strategy to accelerate the production and processing of critical minerals in Canada needed for the electric vehicle supply chain.
What is the projected deficit of the federal budget for 2022?
In the December budget briefing, Freeland predicted that the size of the federal deficit would fall from $ 327.7 billion in 2020-21 to $ 144.5 billion in 2021-22 and $ 58.4 billion in the financial year. 2022-23 starting on April 1. That was, however, before The war in Ukraine started and the Liberal-SW agreement was announced. Huge spending during the COVID-19 pandemic has almost doubled the federal debt, which is projected to reach $ 1.25 trillion in 2022-2023. Ms Freeland’s budget report in December said the debt-to-GDP ratio would decline slightly over the next five years, reaching 44 percent by 2026-27, despite climbing from 30.7 percent to 47.6 percent. between 2019-20 and 2020-21.
What will Canada’s rising inflation mean for the federal budget?
Canada’s inflation hit a three-decade high in February, up 5.7 percent from last year. This was the highest inflation rate since August 1991 and marked the 11th consecutive month that inflation exceeded the Bank of Canada’s target range of 1 percent to 3 percent. Households feel the pinch on many fronts. Housing costs rose 6.6 percent, the largest annual increase since 1983. Grocery items rose 7.4 percent, the highest rate since 2009. And gas prices jumped 6.9 percent to a only month. Russia’s invasion of Ukraine also fuels economic uncertainty with rising fuel costs and unbridled supply chain issues. Economists say Ottawa is likely to benefit in the short term from stronger-than-expected revenue growth for economic growth, inflation and higher oil prices – due to strong corporate balance sheets and rapid commodity prices – but these gains will be offset by largely from spending on campaign platform commitments and other recent promises. High inflation is also helping government performance in the short term, although expected Bank of Canada interest rate hikes are a source of concern in the long run. Robert Fife, Bill Curry and Steven Chase say Freeland is preparing another federal budget with big spending amid fears of rising inflation. Business executives say the risk of raising more money in an already hot economy could further boost inflation, forcing the Bank of Canada to raise interest rates further. “What we can not afford is another round of new spending being paid off with borrowed money,” said Perrin Beatty, president of the Canadian Chamber of Commerce.
What does the Liberal-NDP agreement mean for the federal budget?
In March 2022, Prime Minister Justin Trindade announced that an agreement had been reached with the NDP to support the Minority Liberal government by 2025 in exchange for parliamentary cooperation and progress on NDP core policies, including a dental care program. pharmaceutical, housing and increased federal transportation to the provinces for health care. A recent Scotiabank report estimates that the Liberal-NDP pact will add another $ 15 billion to $ 20 billion over the three-year deal – and possibly $ 40 billion by 2027. Meanwhile, according to a report released Tuesday by Desjardins economist Radal Bartlett, Parliamentary Budget Officer has estimated that the proposed NDP National Medication Plan will cost more than $ 11 billion a year. The recent agreement between the Liberals and the NDP did not include cost estimates.
How do business leaders feel?
Many Canadian executives and executives are looking for signs that the government is ready to use Thursday’s federal budget to act on economic policy – not just talk about it. James Branchow and Andrew Willis report that top executives are increasingly concerned that Canada is missing an opportunity to prepare for long-term success. They worry that the country is sending the wrong messages, failing to encourage businesses to spend on expansion and losing investment from foreign companies. “Some of the challenges are ideological challenges,” said Royal Bank of Canada CEO Dave McKay. “And what we hope to see in the budget is a shift in ideology from taxation and spending, which does not create sustainable growth, to an incentive for risk-taking, innovation, growth and problem-solving.” “Taxes and expenses for me are like eating Sugar Pops for breakfast. You feel very good for an hour and you feel bad until noon, at the end of the day. And this is what tax-and-spen gives you. It does not give you sustainable prosperity. “
Will Chrystia Freeland continue the tradition of finance ministers buying shoes for budget day?
There is a continuing tradition that the Secretary of the Treasury must wear new shoes when the federal budget is delivered, a practice dating back to the 1950s. In 1955, Walter Edward Harris was the first Secretary of the Treasury to wear new shoes on his day. budget. Mrs. Freeland, the first woman to ever present Canada’s federal budget, continued the tradition during the last budget revelation on April 19, 2021. She wore black leather pumps from the Toronto Zvelle shoe label and chose to unbutton the design on her page. on Twitter.
More references:
Finance Minister Chrystia Freeland to announce the 2022 federal budget on April 7 Chrystia Freeland prepares another federal budget with high spending amid fears of rising inflation Canada could exceed average defense spending with plans to deliver on NATO pledges and protect Arctic sovereignty In the run-up to the 2022 federal budget, corporate Canada wants Ottawa to act on economic policy – not just talk about it Opinion: In the 2022 budget, Chrystia Freeland must tell the Liberals that they can not have everything With quotes from Robert Fife, Bill Curry, Steven Chase, Matt Lundy and Reuters. For subscribers: Receive exclusive political news and analysis by subscribing to Political information.
