Canadian Gov't Delivers $535B Budget With Emphasis On Affordable Housing

The government of Prime Minister Justin Trudeau gave Canadians its new CAN$535 billion ($387 billion) federal budget Tuesday, with an emphasis on measures to ease the housing crisis and new taxes on the rich.

Revenues versus expenses means Canada will accrue a $39.8 billion deficit in 2024-2025.

The red ink includes $52.9 billion in new spending over five years ($11.5 billion this year), but the government will also raise a projected $19 billion in revenue from a new capital gains tax on the rich and some corporations. Another $2.9 billion will be earned by such measures as excise taxes on cigarettes and vaping products.

Included in the 416-page budget is $10.7 billion for defense, $9.1 billion for Indigenous communities and $8.5 billion in new spending for housing, a top priority, as rents and prices for residential homes are skyrocketing, which critics say was made worse by the government's enormous increase in immigration numbers. The government estimated that spending will result in 3.9 million new homes constructed by 2031.

The new budget saddles the top earners and some corporations with tax hikes. But some economists had warned that those taxes could boomerang by hurting productivity and further stymieing economic growth, which the Bank of Canada has called an "emergency," the Globe and Mail newspaper reported.

Former Bank of Canada Governor David Dodge told CTV News that the government's tax approach was wrong and he predicted the budget would be the worst in decades, "pointing us in the wrong direction as to how we go about raising the incomes of Canadians."

And as if to accentuate the dire costs of living, credit bureau Equifax Canada reported data that showed half of Canadians were living paycheck-to-paycheck, CTV News reported.

Canada now has a debt of more than $1.4 trillion, and with interest rates high, $46.5 billion in 2023 went to service the debt, handcuffing the government's ability to cut taxes for low- and middle-income Canadians when the cost of living has risen dramatically thanks to housing costs and food. -