Today, Deputy Prime Minister and Minister of Finance, Chrystia Freeland, tabled the 2022 Federal Budget entitled “A Plan to Grow Our Economy and Make Life More Affordable”. The budget proposes $60 billion in new spending over the next 5 years; however, with new revenue measures that is estimated to be a net increase of $29 billion. The 2021-22 projected deficit is down to $113.8 billion from an estimate of $144.5 billion during the Fall Fiscal Update. The government projects the deficit to continuously decrease to $8.4 billion by fiscal year 2026-27.
With the recent Supply and Confidence Agreement between the NDP and governing Liberals, the budget is expected to easily pass in Parliament and give the government some stability. Therefore, it is not considered an “election budget” per se.
Some highlights of the 2022 Budget include:
- Double construction of new homes in the next decade.
- Help Canadians purchase their first home by introducing the Tax-Free First Home Savings Account and doubling the First-Time Home Buyers’ Tax Credit.
- Launch a Housing Accelerator Fund that will aim to create 100,000 new housing units in next 5 years.
Climate Change Measures:
- Dedicate over $3 billion in funding to make zero-emission vehicles more affordable and build a national network of charging stations.
- Create a Canada Growth Fund to help attract billions of dollars in private capital to build a net-zero economy by 2050.
- Invest in protecting land and water.
Additional Significant Measures:
- Spend $5.3 billion over 5 years to provide dental care for families with incomes under $90,000 annually, beginning with children under 12-years-old in 2022. This will expand to under 18-years-olds, seniors and persons living with disability in 2023, with full implementation by 2025.
- Invest $3.8 billion to implement Canada’s first Critical Minerals Strategy.
- Allocate $11 billion to continue to support Indigenous children and their families and support Indigenous communities in continuing to grow.
- Spend over $8 billion in new funding for the Canadian Armed Forces focused on strengthening contributions to NATO (North Atlantic Treaty Organization) and NORAD (North American Aerospace Defense Command) and shoring up cyber security.
- Increase support for Ukraine in its conflict with Russia with up to $1 billion in new loan resources through a new Administered Account for Ukraine at the International Monetary Fund (IMF), and additional $500 million in military aid.
- Introduce a temporary Canada Recovery Dividend, representing a one-time 15% tax on the 2021 taxable income above $1 billion of Canada’s largest banks and life insurance companies.
- Make a permanent 1.5 percentage point increase in the corporate income tax rate for banks and life insurance companies on taxable income over $100 million.
- Implement a Carbon Capture Storage and Utilization Tax Credit of up to 60%.
We’re Here to Help
For information and insights about what the 2022 Federal Budget means for Canada’s political landscape, please contact:
Brian Gilbertson – Senior Strategy Advisor