In the face of the worsening of the (Ottawa) country’s housing crisis, the Trudeau government has decided to inject $ 10 billion over five years to double housing construction and improve access to assets over the next decade. I am proposing.
Posted at 4:08 pm
Treasury Minister Chrystia Freeland said in a budget submitted in the House of Representatives Thursday, the handle of foreign investors and speculators that Ottawa is trying to profit from overheating of real estate and contributing to rising prices. Announced that it will hold. For the next two years, foreign investors will be banned from buying real estate in Canada and rush resale of homes will be taxed “fairly”.
Main budget measures
- 10 billion to promote homeownership and double home construction over the next 10 years
- $ 3 billion to make zero-emission vehicles more affordable and establish a nationwide network of charging stations
- $ 5.3 billion over five years to provide dental care to Canadians with annual household income of less than $ 90,000
- $ 8 billion to purchase Canadian military equipment, strengthen Canada’s contribution to major allies (NATO and NORAD), and enhance Canada’s cybersecurity
- Imposing “temporary dividends for Canada’s recovery” on the largest banks and life insurers. This is a 15% one-time tax on all taxable income in excess of $ 1 billion in 2021.
- Permanently raise the corporate tax rate on taxable income of major banks and life insurance companies by 1.5 percentage points above the $ 100 million threshold
The war in Ukraine has also forced the Tordo government to immerse itself in higher-than-expected income, and the IRS has put it in its pocket to increase military spending by $ 8 billion over five years, and a defensive loan to Kieu. Will provide an additional $ 1 billion in aid in the form of a Russian invasion, especially for the purchase of weapons.
The Minister also used her budget to determine “the size and capabilities of the Canadian Army, its roles and responsibilities” and “contribute to the resources needed to ensure the safety of Canadians and businesses around the world.” increase. “”
“Ukraine invasion […] As with all democracy in the world, we reminded us that our own peaceful democracy depends on our ability to protect ourselves. The dictator of the world should not confuse our civilization with pacifism. We know that freedom is not freedom, and peace is guaranteed only by our will to protect it, “said Minister Freeland.
Build more homes
However, the construction of new homes is the Trudeau government’s top priority in this federal budget. It aims to transform some parts of the country into huge construction sites. On average, about 200,000 new homes of all types are built annually. To meet housing needs, Canada needs to double the annual rate of new construction.
Therefore, the federal government has launched a total of $ 4 billion in five years to accelerate housing construction, and immediately replenishes existing funds with an additional $ 1.5 billion in two years to build affordable homes. To do.
To help Canadians find a home, Ottawa has opened a tax-exempt account to buy their first home. This can reach $ 40,000. The tax credit for the first home purchase will also double to $ 10,000.
“In the next decade, we will double the number of homes we build. This will have to be a major national effort and will require a new spirit of cooperation,” said Minister Freeland. States, thereby reaching out to state and local governments for this ambitious project.
Similarly, she insists that we must be realistic. The housing crisis will not be resolved soon, “Be careful. There is no silver bullet that makes all Canadians homeowners in their neighborhood,” she said.
Health, inflation, innovation
It should be noted that the budget does not provide a substantial increase in health transfers, as the state has asked for months to restore a poorly tested health network during a pandemic.
Inflation is currently at its highest level in 40 years, but the Trudeau government does not intend to imitate Quebec. Quebec lives on the latest budget by sending a $ 500 check to all citizens who earn less than $ 100,000. Ottawa also issues a $ 500 check, but only for those who have difficulty accessing affordable homes.
Minister Freeland points out that the global economy is swaying in an era of great uncertainty and will support growth by establishing the Canada Innovation Investment Authority, which will provide 1 billion working capital over five years. He also proposes to launch a “World-Class Canada Growth Fund” to stimulate private sector investment, the outline of which has not yet been defined.
But its mission is clear. The investment must be able to reduce greenhouse gas emissions and, among other things, contribute to the achievement of the country’s climate goals in 2030. The fund will be capitalized from an initial total of $ 15 billion over five years. The goal is to generate $ 3 in private capital for every $ 1 invested.
“We are lagging behind in terms of economic productivity. […] This is a well-known and insidious Canadian problem. It’s time for Canada to work on it, “the minister admitted.
Also, to strengthen the COVID-19 pandemic and the supply chain hit by the war in Ukraine, the federal government will invest $ 603 million over five years to increase the resilience and efficiency of the project. ..
Minister Freeland will also reduce the tax burden on small businesses. This will reduce the tax rate by 9% on taxable capital of up to $ 50 million instead of the current $ 15 million.
Special taxes for banks and dentistry
Meanwhile, the Trudeau administration is implementing an election pledge to increase the tax burden on banks and insurance companies. Result: The budget imposes a temporary Canadian recovery dividend of 15% on taxable income in excess of $ 1 billion in the 2021 tax year for banks and insurers. And from now on, their general federal tax rate will increase from 15% to 16.5% of income, exceeding the $ 100 million threshold.
As another important step, the Trudeau government, based on an agreement with the NDP, has promised to guarantee political survival in the Commons by 2025, and is moving forward with the creation of a national dental care program for low-income households. I am.
Therefore, we plan to invest $ 5.3 billion over the next five years and $ 1.7 billion annually thereafter to create this program. The system will initially target people under the age of 12 in 2022 and will be extended to those under the age of 18 and the elderly and disabled in 2023. Full implementation of this system is planned for 2025. The program is limited to families with an annual income of: People with an annual income of less than $ 90,000 and an annual income of less than $ 70,000 do not have to pay their own expenses.
This program will be more limited in Quebec. In Quebec, dental treatment for children under the age of 10 and recipients of last resort financial assistance is already provided by Régie del’assurance maladie.
Despite this new spending, Minister Freeland claims that her budget plan is “responsible.” The 2021-22 deficit, which ended on March 31, was $ 113 billion, about $ 31 billion less than expected in the December economic statement. This year’s deficit has dropped to $ 52.8 billion, about $ 6 billion less than expected six months ago. Had it not been for new spending, it would have been $ 14 billion less.
Debt proposals for GDP should continue to decline. According to Treasury calculations, it should drop from 46.5% this year to 39.5% within five years, reducing the deficit to just $ 8.4 billion.