The 2024 federal budget unveils a multifaceted approach aimed at bolstering Canada’s housing supply, supporting social initiatives, and addressing the deficit through increased taxes on the highest earners. Under the banner of “Fairness for Every Generation,” Deputy Prime Minister and Finance Minister Chrystia Freeland outlines a $39.2 billion net-new spending plan, emphasizing tax fairness and fiscal responsibility.
A significant aspect of the budget is the implementation of new taxes targeting Canada’s wealthiest individuals. By increasing taxes on capital gains for high-income earners, the government aims to generate $19.3 billion in revenue over the next five years. This move, while not a wealth tax, focuses on the top 0.13% of earners, with the capital gains inclusion rate set to rise from one-half to two-thirds for individuals with over $250,000 in capital gains annually.
In addition to tax reforms, the budget allocates substantial funding towards addressing Canada’s housing crisis. With a pledge to build 3.9 million homes by 2031, initiatives include a $15 billion top-up for the Apartment Construction Loan Program, $6 billion for a Canada Housing Infrastructure Fund, and $1 billion for a rental protection fund, among others. The aim is to increase housing supply rapidly, thereby making home prices and rents more affordable.
Social safety net efforts feature prominently in the budget, with commitments to launch a national universal pharmacare plan and implement the Canada Disability Benefit. Further initiatives include funding for a national school food program, support for Indigenous communities, and measures to enhance youth mental health services.
The budget also includes provisions to support small businesses and entrepreneurs, including incentives to boost productivity and access to venture capital. Investments in research infrastructure, artificial intelligence, and strategic research are prioritized to foster innovation and talent development.
However, some economists caution that more could be done to promote productivity and economic growth, highlighting the need for a clear plan in these areas.
Overall, the 2024 federal budget signals a concerted effort to address pressing social and economic challenges while maintaining fiscal discipline. With a projected deficit of $39.8 billion in 2024-25, the government aims to strike a balance between stimulating growth and ensuring long-term financial sustainability.