The Federal Budget: 1) Trudeau says Conservatives’ vote against budget is a vote against ‘fairness; 2) After countrywide pre-budget tour, Liberals reveal Tuesday how they’ll pay for it all
1) Trudeau says Conservatives’ vote against budget is a vote against ‘fairness’
Courtesy of Barrie360.com and Canadian Press
Prime Minister Justin Trudeau addresses caucus during a meeting on Parliament Hill in Ottawa on Wednesday, April 17, 2024.
Prime Minister Justin Trudeau is accusing the Conservatives of siding with “multi-millionaires” and standing against fairness over their decision not to support the federal budget.
The Liberals’ latest spending plan, tabled in the House of Commons on Tuesday, aims to make corporations and rich individuals pay more tax on capital gains.
Conservative Leader Pierre Poilievre called it a “wasteful, inflationary budget” and said his party would vote against it.
On Wednesday morning at a meeting of the Liberal caucus, Trudeau said it isn’t right that multi-millionaires are asked to pay less tax on capital gains than a teacher or electrician pays on their income.
He said the change would not affect 99.87 per cent of the population at all and does not apply to the sale of anyone’s primary residence.
He did not mention the New Democrats or Leader Jagmeet Singh, who hasn’t yet promised to back the budget despite his supply-and-confidence agreement with the Liberals.
The budget contains several NDP priorities, including funding for the first phase of national pharmacare and federal standards for long-term care.
Bloc Québécois Leader Yves-François Blanchet also said his caucus would not support the budget.
That means if the NDP breaks its agreement, the budget will fail, likely triggering an election.
Singh has said he wants to talk to Trudeau about what is missing from the budget, including any windfall taxes on excess profits for corporations.
He also said he believes the Conservatives would cancel important programs if they form government, including national child care and pharmacare.
Conservative housing critic Scott Aitchison said people shouldn’t believe the Liberals’ plan will ever come to fruition because they have promised a housing overhaul before and it never materialized.
“In 2017, Justin Trudeau stood in front of a large building project with lots of hard-working Canadians behind him and promised a life-changing transformational National Housing strategy,” Aitchison said.
“And we see the transformation: house prices have doubled, rent has doubled, mortgage rates have doubled and people can’t afford to put food on their table and pay the rent.”
Aitchison said the solution for housing is that government should get out of the way.
But Trudeau said the Conservatives are the ones trying to stop progress.
“They’re voting against fairness,” he said. “They will be voting against asking the ultra-rich to pay their share. Canadians need responsible leadership right now — leaders who come to them with solutions ready to invest in Canadians ideas.”
The budget increased spending to more than $530 billion for 2024-25, with more than $11 billion in new spending largely focused on housing, student aid and grants, along with pharmacare and finally funding the long-promised disability benefit.
That benefit, at $200 a month, falls well shy of what advocates wanted to see.
The budget is in some ways a Hail Mary effort from the government to appeal to millennials and gen-Z voters, who once strongly backed the Liberals but have increasingly been drifting to the Conservatives as the affordability crisis is hitting them hard.
Trudeau and Finance Minister Chrystia Freeland are billing the budget as a fairness plan for younger Canadians.
The people being asked to pay more are among the ones “who’ve benefited from an economy that seems tipped towards them and away from everyone else, particularly young people,” said Trudeau.
“So we’re asking them to pay their fair share so that younger generations can have the same opportunities that Xers, boomers and other generations had when they were starting out in their lives.”
The capital gains tax is expected to raise $19 billion over five years, by increasing the portion of capital gains that is taxed from 50 per cent to 66 per cent.
The change will apply to all corporations and trusts, along with individuals whose capital gains exceed $250,000 in a year.
2) After countrywide pre-budget tour, Liberals reveal Tuesday how they’ll pay for it all
Courtesy of Barrie360.com and Canadian Press
April 14, 2024
Finance Minister Chrystia Freeland has promised Canadians will not see the deficit increase in the federal budget Tuesday, which means all eyes will be on the Liberals’ plan to pay for their agenda and whether it includes new taxes on the wealthy. Freeland, centre, Minister of Health Mark Holland, left, and Mental Health and Addictions Minister Ya’ara Saks, right, participate in a news conference at the National Press Theatre in Ottawa on Tuesday, April 9, 2024. THE CANADIAN PRESS/ Patrick Doyle
With Finance Minister Chrystia Freeland promising to keep the federal deficit from ballooning in Tuesday’s federal budget, all eyes will be on the Liberals’ plan to pay for their agenda — and whether that could include new taxes on the wealthy.
During a news conference Thursday, Freeland gave a direct response to a reporter’s question on whether Canadians can expect to see this year’s deficit increase.
“No,” she said.
The finance minister reiterated that her government plans to honour the fiscal guardrails it pledged in the fall, including the promise to keep the federal deficit capped at $40.1 billion for the 2023-24 fiscal year.
But a slew of announcements ahead of the federal budget, including billions for housing and national defence, are raising a big question: How will the Liberals make the math work?
Politically, the Liberal government can’t afford to layer more spending onto the deficit, because of the risk it could keep inflation and interest rates higher for longer.
A slowing economy also means the federal government has less fiscal room to finance new initiatives.
There’s increasing suspicion that the Liberals’ solution to that dilemma will be to create new taxes targeted at corporations and the wealthy.
Freeland has ruled out raising taxes on the middle class in the upcoming federal budget — but won’t say if others are in for the same treatment.
Higher taxes on corporations would spark intense backlash from the business community and financial sector.
The Business Council of Canada has warned against raising corporate tax rates, arguing it would be bad for business investment at a time when the country is struggling with labour productivity.
“It would be pretty bad economic policy in my opinion,” said Robert Asselin, the council’s senior vice-president of policy and a former budget director for the Liberals.
But Tyler Meredith, a former head of economic strategy and planning for Freeland, said no one should be surprised if the federal government increases taxes, given all of the demands they face to spend more.
Meredith said that even as they demand the budget not include new spending, stakeholders have pushed for more dollars towards defence and corporate subsidies to enable the green transition.
“Well, if you do all those things, that’s a lot of money,” Meredith said, noting the government has other expensive priorities, such as pharmacare and dental care.
“And at some point, if we want at the same time … a credible fiscal track, something has to give. And people shouldn’t be surprised by that.”
Canadians have gotten a decent preview of the federal budget over the last three weeks as Prime Minister Justin Trudeau and his team embarked on an unconventional countrywide tour to sell their policies.
The Liberal government pledged billions of dollars for housing, national defence, a national school food program and loans to expand child-care centres.
And just days ahead of the budget, the Liberals unveiled their full plan to tackle the housing crisis.
On Friday, Trudeau called it “the most comprehensive and ambitious housing plan ever seen in Canada,” promising it will build nearly 3.9 million homes by 2031.
The government’s pre-budget strategy has helped the Liberals appear to drive the political agenda again after struggling for months to rebut the Conservatives’ narrative on cost-of-living issues.
The newly revealed housing plan earned the governing Liberals praise from industry groups, municipalities and the man who inspired much of the plan: Mike Moffatt.
Moffatt, a prominent housing expert and senior director of policy and innovation at the Smart Prosperity Institute, applauded the breadth of the plan.
“This is easily the most comprehensive housing plan I’ve seen in my lifetime,” Moffatt said.
Whether it earns the Liberals any favour with a disgruntled electorate is yet to be seen, as the federal Conservatives hold on to a double-digit lead they’ve maintained since the summer.
The incumbent government is fighting an uphill battle against a growing belief among voters that the federal Liberals are to blame for the country’s economic woes.
As the Liberals renew their focus on affordability ahead of the budget, Conservatives and New Democrats are telling Canadians that the Trudeau government can’t be trusted to deliver results.
Despite the challenging political reality the minority Liberals face, Meredith said they still have time to turn things around.
He has counselled fellow Liberals to stay focused on the long game.
“That being said, I think the key things that we have to watch for is whether or not people are actually opening their minds and paying attention,” Meredith said.
“It’s very hard to change (the) dynamics if people aren’t listening. And that’s really what I would be watching for … anecdotally over the course of the next six months.”