Utoo Radio and Other News Sources - April 16, 2024 - 

HIGHLIGHTS:

• Ottawa to spend $52.9 billion more than planned over the next five years.
• Finance Minister Chrystia Freeland projects Ottawa will post a $40 billion deficit this fiscal year.
• The budget includes $8.5 billion in new spending for housing.
• Other big-ticket budget items include a $6 billion Canada Disability Benefit and a $1 billion national school food program.
• Freeland will hike capital gain taxes paid by the rich and corporations to collect an estimated $19 billion in new revenue.
• The cost to service the growing national debt has increased substantially — it's now about $2 billion more than it was projected to be just a few months ago.
• The government will spend more on servicing its debt than on health care this year.

Finance Minister Chrystia Freeland's fourth budget aims to deliver a housing program for millennials and Generation Z voters, with a multi-billion dollar commitment to be paid for in part with a tax hike on the rich and corporate Canada.

The budget calls for about $52.9 billion in new spending over the next five years, a significant jump over what Ottawa had said it would spend in the fall economic statement released just a few months ago. To offset some of that new spending, Freeland is pitching policy changes that will generate roughly $21.9 billion in new revenue over the next five years. This money is to come in part from higher capital gains taxes and a hike to excise taxes on cigarettes and vaping products.

The government is making Canada's tax system more fair by ensuring that the very wealthiest pay their fair share.

The dirty secret of the housing crisis is homeowners like high prices, and the result is a projected budget deficit of about $40 billion in the 2024-25 fiscal year. While the government is spending more overall, it says that better-than-expected economic growth and higher taxes will keep the deficit under control.

The government must meet the net debt-to-GDP ratio in the years ahead to retain Canada's triple-A credit rating. Debt charges soar as the cost to finance Canada's growing debt pile has more than doubled over the last nine years to $1.4 trillion.

With interest rates at a 20-year high, Ottawa's cost to borrow has spiked from $20.3 billion in 2020-21 to $54.1 billion in 2024-25. Carrying the debt is expected to cost the federal treasury $64.3 billion in 2028-29, more than double what Ottawa sends to the provinces through equalization payments.

The Canadian government's 2024 budget includes targeted tax hikes that aim to generate $21.9 billion in new revenue over the next five years. The largest windfall will come from an increase in the capital gains inclusion rate. Under the current regime, only 50% of capital gains are taxable.

With this new budget, the "inclusion rate" will increase from one-half to two-thirds on capital gains above $250,000 per year for individuals and on all capital gains realized by corporations and trusts. New Democratic Party Leader Jagmeet Singh has been pushing for higher taxes on the wealthy, but the move is likely to be attacked by business-friendly groups as an attack on the people and businesses that create jobs.

The NDP, the government's partner in the supply-and-confidence agreement, likely will welcome the change, as party leader Jagmeet Singh has said the wealthy and big corporations should shoulder more of the country's tax burden. According to government data, only 0.13 per cent of Canadians are expected to pay more in personal income tax on their capital gains as a result of this change.