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Government of Canada releases Budget 2022
From: Department of Finance Canada
News release
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable.
April 7, 2022 - Ottawa, Ontario - Department of Finance Canada
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable .
Since the depths of the pandemic recession, the government’s focus on jobs—on keeping Canadians employed and on keeping their employers afloat—has ensured Canada’s economy has made a rapid and strong recovery. Canada has seen the best jobs recovery in the G7, having recovered 112 per cent of the jobs lost, and with an unemployment rate that sits at just 5.5 per cent—close to the 5.4 per cent low in 2019 that was Canada’s best in five decades.
In Budget 2022, the government makes targeted and responsible investments to create jobs and prosperity today, and build a stronger economic future for all Canadians. These include:
- Investing in Canadians and Making Life More Affordable: Canadians are the backbone of a strong and growing economy, and measures that support access to housing and a growing workforce are imperative for economic growth. Budget 2022 housing measures include: Putting Canada on the path to double housing construction over the next decade; helping Canadians save for and buy their first home; banning foreign investment that makes housing less affordable for Canadians; and curbing unfair practices that make housing more expensive for Canadians. Budget 2022 also invests in ensuring Canadian workers have the skills they need for the good-paying jobs of today and tomorrow, and will make it easier for the skilled immigrants that our economy needs to make Canada their home. Budget 2022 makes significant further investments in affordable child care, in reducing the backlogs of surgeries and medical procedures in our public health care system, and in advancing reconciliation with Indigenous peoples.
- Investing in Economic Growth and Innovation: The key to Canada’s long-term prosperity is economic growth. Budget 2022 builds off of Budget 2021’s historic investments in early learning and child care—which could increase real GDP by as much as 1.2 per cent over the next two decades—and includes further critical investments to make Canada’s economy both stronger and more innovative. These investments include a new Canada Growth Fund that will attract tens of billions of dollars in private investment in Canadian industries and Canadian jobs, and a new innovation and investment agency that will help drive productivity and growth across our economy. Budget 2022 also includes up to $3.8 billion to implement Canada’s first Critical Minerals Strategy—one that will create thousands of good jobs and capitalize on a growing need for the minerals used in everything from phones to electric cars. Measures also include steps to build more resilient supply chains, to cut taxes for Canada’s growing small businesses, and to drive the creation, and ensure the protection, of Canadian intellectual property.
- Investing in a Clean Economy: Protecting our environment and fighting climate change is the right thing to do for the planet, and it is also the right thing to do for our economy. Through Budget 2022, the government will help Canadians and Canadian businesses benefit from the global transition to a clean economy, including through new incentives for the development of clean technologies and carbon capture, utilization, and storage. In addition to further investments to protect our land, lakes, and oceans, the government will also make it more affordable for Canadians to purchase zero-emission vehicles, build and expand a national network of zero-emission vehicle charging stations, and make new investments in clean energy.
Canada entered the pandemic with the lowest net debt-to-GDP ratio of all G7 countries, an advantage that has since increased relative to other countries. With Budget 2022, Canada will maintain this leading position, while also seeing the second fastest recovery in the G7 by the end of this year. With the federal government having invested eight out of every ten dollars to support Canadians and the Canadian economy during the pandemic, Budget 2022 represents a fiscally responsible approach to economic growth and builds an economy that works for everyone. Crucially, it upholds the government’s fiscal anchor—a declining debt-to-GDP ratio and the unwinding of COVID-19-related deficits, which will ensure that Canada’s finances remain sustainable in the long-term.
“Budget 2022 is about growing our economy, creating good jobs, and building a Canada where nobody gets left behind. Our plan is responsible and considered, and it is going to mean more homes and good-paying jobs for Canadians; cleaner air and cleaner water for our children; and a stronger and more resilient economy for years to come.” The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance
Quick facts
Measures in Budget 2022 to make housing more affordable include:
- Putting Canada on the path to doubling the construction of new homes in the next decade;
- Helping Canadians buy their first home, including by introducing the Tax-Free First Home Savings Account and doubling the First-Time Home Buyers’ Tax Credit; and
- Launching a new Housing Accelerator Fund that will target the creation of 100,000 net new housing units in the next five years.
Measures in Budget 2022 to fight climate change include:
- More than $3 billion in funding to make zero-emission vehicles more affordable and build a national network of charging stations;
- Significant new investments to protect our land, lakes, and oceans; and
- The creation of the Canada Growth Fund to help attract tens of billions of dollars in private capital towards building a net-zero economy by 2050.
Further significant measures in Budget 2022 include:
- $5.3 billion over five years to provide dental care for Canadians with family incomes of less than $90,000 annually, starting with under 12-years-olds in 2022, expanding to under 18-years-olds, seniors, and persons living with a disability in 2023, and with full implementation by 2025. The program would be restricted to families with an income of less than $90,000 annually, with no co-pays for those under $70,000 annually in income;
- Up to $3.8 billion to implement Canada’s first Critical Minerals Strategy;
- $11 billion in additional funding to continue to support Indigenous children and their families, and help Indigenous communities continue to grow and shape their futures;
- More than $8 billion in new funding to better equip the Canadian Armed Forces, strengthen Canada’s contributions to our core alliances like NATO and NORAD, and reinforce Canada’s cyber security;
- Further support for Ukraine and its people in the face of Russia’s illegal invasion, including up to $1 billion in new loan resources to the Ukrainian government through a new Administered Account for Ukraine at the International Monetary Fund (IMF), and an additional $500 million in military aid;
- A temporary Canada Recovery Dividend, representing a one-time 15 per cent tax on the 2021 taxable income above $1 billion of Canada’s largest banking and life insurers’ groups, to help support Canada’s broader recovery; and
- A permanent 1.5 percentage point increase in the corporate income tax rate of banking and life insurance groups on taxable income above $100 million.
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Budget 2022 A Plan to Grow Our Economy and Make Life More Affordable
The Government of Canada’s plan for targeted and responsible investments to create jobs and prosperity today, and build a stronger economic future for all Canadians.
We are putting Canada on a path to double housing construction over the next decade. Building more housing will require investments, but it will also require changes to the systems that are preventing more housing from being built.
- Budget 2022 proposes to provide $4 billion over five years, starting in 2022-23, to launch a new Housing Accelerator Fund that is flexible to the needs and realities of cities and communities, while providing them support such as an annual per-door incentive or up-front funding for investments in municipal housing planning and delivery processes that will speed up housing development.
- To ensure that more affordable housing can be built quickly, Budget 2022 proposes to provide $1.5 billion over two years, starting in 2022-23, to extend the Rapid Housing Initiative. This new funding is expected to create at least 6,000 new affordable housing units, with at least 25 per cent of funding going towards women-focused housing projects.
- Budget 2022 proposes to introduce a Multigenerational Home Renovation Tax Credit, which would provide up to $7,500 in support for constructing a secondary suite for a senior or an adult with a disability, starting in 2023.
- Budget 2022 proposes to introduce the Tax-Free First Home Savings Account that would give prospective first-time home buyers the ability to save up to $40,000. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home—including investment income—would be non-taxable, like a TFSA. Tax-free in, tax-free out.
- Budget 2022 proposes to double the First-Time Home Buyers’ Tax Credit amount to $10,000, providing up to $1,500 in direct support to home buyers, applying to homes purchased on or after January 1, 2022.
- Budget 2022 proposes to double the qualifying expense limit of the Home Accessibility Tax Credit to $20,000 for the 2022 and subsequent tax years. This will mean a tax credit of up to $3,000—an increase from the previous tax credit of up to $1,500—for important accessibility renovations or alterations.
Anti-flipping & Banning Foreign Investment
Houses should be homes for Canadians to live in.
- To ensure profits from flipping properties are taxed fully and fairly, Budget 2022 proposes to introduce new rules so that any person who sells a property they have held for less than 12 months would be subject to full taxation on their profits as business income, applying to residential properties sold on or after January 1, 2023. Exemptions would apply for Canadians who sell their home due to certain life circumstances, such as a death, disability, the birth of a child, a new job, or a divorce.
- To make sure that housing is owned by Canadians instead of foreign investors, Budget 2022 announces the government’s intention to propose restrictions that would prohibit foreign commercial enterprises and people who are not Canadian citizens or permanent residents from acquiring non-recreational, residential property in Canada for a period of two years.
Zero-Emission Vehicles
Budget 2022 proposes a number of measures to reduce emissions from transportation by making zero-emission vehicles more affordable for Canadians and Canadian businesses:
- $1.7 billion over five years to extend the Incentives for Zero-Emission Vehicles program until March 2025 to help more Canadians get behind the wheel of zero-emission vehicles.
- $547.5 million over four years to launch a new purchase incentive program for medium- and heavy-duty ZEVs to help businesses upgrade their fleets.
- Funding to build a national network of electric vehicle charging stations.
Clean Electricity
Budget 2022 proposes:
- $250 million over four years to support pre-development activities of clean electricity projects of national significance, such as inter-provincial electricity transmission projects and Small Modular Reactors. The federal government is already advancing similar work on the Atlantic Loop and Prairie Link projects.
- $600 million over seven years for the Smart Renewables and Electrification Pathways Program to support additional renewable electricity and grid modernization projects.
- $25 million to establish Regional Strategic Initiatives to work with provinces, territories, and relevant stakeholders to develop net-zero energy plans.
Oceans and Freshwater
- An additional $2.0 billion over nine years, with $78.7 million in remaining amortization, and $136.4 million per year ongoing, to renew and expand the Oceans Protection Plan.
- $43.5 million over five years and $8.7 million ongoing to create a new Canada Water Agency, which will be stood-up in 2022.
- $19.6 million in 2022-23 to sustain the Freshwater Action Plan.
- $25.0 million over five years to support the Experimental Lakes Area.
- $44.9 million over five years and $9 million ongoing to support the Great Lakes Fishery Commission.
Clean Technology
- Budget 2022 announces that the Department of Finance Canada will engage with experts to establish an investment tax credit of up to 30 per cent, focused on net-zero technologies, battery storage solutions, and clean hydrogen. The design details of the investment tax credit will be provided in the 2022 fall economic and fiscal update.
Jobs and Growth
Tradespeople.
- Budget 2022 proposes to introduce a Labour Mobility Deduction, which would provide tax recognition on up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices. This measure would apply to the 2022 and subsequent taxation years.
- Budget 2022 proposes to provide $84.2 million over four years to double funding for the Union Training and Innovation Program, which would each year help 3,500 apprentices from underrepresented groups—including women, newcomers, persons with disabilities, Indigenous peoples, and Black and racialized Canadians—begin and succeed in careers in the skilled trades through mentorship, career services, and job-matching.
Canada Growth Fund
Budget 2022 proposes to establish the Canada Growth Fund to attract substantial private sector investment to help meet important national economic policy goals. The fund will be initially capitalized at $15 billion over the next five years, and will target three dollars of private capital for every one dollar that it invests.
- To reduce emissions and contribute to achieving Canada’s climate goals.
- To diversify our economy and bolster our exports by investing in the growth of low-carbon industries and new technologies across new and traditional sectors of Canada’s industrial base.
- To support the restructuring of critical supply chains in areas important to Canada’s future prosperity—including our natural resources sector.
Small Business Tax Cuts
Small businesses currently benefit from a reduced federal tax rate of 9 per cent on their first $500,000 of taxable income, compared to a general federal corporate tax rate of 15 per cent. A business no longer has access to this lower rate once its level of capital employed in Canada reaches $15 million. However, phasing out access to the lower tax rate too quickly—and then requiring a small business to pay more in tax—can discourage some businesses from continuing to grow and create jobs.
- Budget 2022 proposes to phase out access to the small business tax rate more gradually, with access to be fully phased out when taxable capital reaches $50 million, rather than at $15 million.
This measure would apply to taxation years that begin on or after April 7, 2022.
Affordability
Budget 2022 investments.
Making life more affordable is one of the government’s primary goals in Budget 2022. Budget 2022 includes measures that will help bring down the cost of living that include:
- $5.3 billion to provide dental care for Canadians with family incomes of less than $90,000 annually, starting with under 12 years-olds in 2022, expanding to under 18 years-olds, seniors and persons living with a disability in 2023, with full implementation by 2025.
- Doubling support provided through the First Time Home Buyers’ Tax Credit from $750 to $1,500.
- Introducing a Multigenerational Home Renovation Tax Credit, which provides up to $7,500 in support for constructing a secondary suite.
- $475 million in 2022-23 to provide a one-time, $500 payment to those facing housing affordability challenge.
Investments since 2015
Since 2015, the government has delivered real improvements to make Canadians’ lives more affordable, including:
- Making an historic investment of $30 billion over five years to build a Canada-wide early learning and child care system in collaboration with provinces, territories, and Indigenous partners. By the end of 2022, child care fees will have been reduced by an average of 50 per cent, and by 2025-26, the average child care fee for all regulated child care spaces across Canada will be $10 a day.
- Introducing the Canada Child Benefit, which will provide up to $6,833 per child to Canadian families this year, and has helped 435,000 children out of poverty since 2015.
- Expanding the Canada Workers Benefit to support an estimated one million additional Canadians, which could mean $1,000 more per year for a full-time, minimum-wage worker.
- Increasing the federal minimum wage to $15.55 per hour.
- Implementing a ten per cent increase to the maximum GIS benefit for single seniors, and reversing the announced increase to the eligibility for OAS and GIS back to age 65 from 67.
- Providing ten days of paid sick leave for all federally regulated private sector employees.
- Increasing Climate Action Incentive payments, which puts more money in the pockets of eight out of every ten people in the provinces where the federal system applies, and means a family of four will receive, for 2022-2023, $745 in Ontario, $832 in Manitoba, $1,101 in Saskatchewan and $1,079 in Alberta.
- Making post-secondary education more affordable by waiving interest on Canada Student Loans until March 2023 and enhancing repayment assistance to ensure that no person making $40,000 or less will need to make payments on their federal student loans going forward.
Jobs and Growth in Canada
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Budget 2022 Address
"Canada has a proud tradition of fiscal responsibility. It is my duty to maintain it—and I will. So now is the time for us to focus—with smart investments and a clarity of purpose—on growing our economy and on making life more affordable for Canadians." The Honourable Chrystia Freeland, P.C., M.P. Deputy Prime Minister and Minister of Finance
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- Canadian Federal Budget 2022
Canada's Deputy Prime Minister and Finance Minister, Chrystia Freeland, delivered the 2022 Federal budget in the House of Commons on April 7, 2022.
This year's budget focused on three pillars: people, a green transition and innovation in order to stimulate the economy and make life more affordable for Canadians. With unprecedented economic and social challenges, our economy faces significant inflationary pressures, housing needs, supply chain issues, labour shortages and protectionism in key export markets.
Our team of leading KPMG professionals help make sense of the complex and ever-changing Canadian landscape by exploring the implications of key federal budget initiatives, priority investments and proposed tax measures. Our goal is to share insights on the potential economic and societal impacts of these changes. The analysis is aimed at assisting business leaders to understand, prepare and navigate the proposed changes anticipated in the weeks and months ahead.
Stay tuned here for more information.
Three pillars
This year, the federal budget was broken down into three pillars. Navigate below to explore key measures and insights from each pillar.
Broadening economic participation and making life affordable
Climate measures for a competitive and sustainable tomorrow
Rewarding innovation to support Canadian solutions and ingenuity
Watch the Federal Budget 2022 webcast
The morning after the budget was delivered on April 7, 2022 KPMG hosted our annual Federal Budget 2022 webcast on Friday, April 8, 2022. This important webcast provided a timely summary of tax changes presented in the budget and explain how they may affect you and your business.
First impressions and highlights from KPMG's National Tax Centre
KPMG's National Tax Centre has prepared a special edition of TaxNewsFlash-Canada summarizing the announced tax changes.
Canada's Deputy Prime Minister and Finance Minister Chrystia Freeland delivered Canada's 2022 federal budget earlier today, April 7, 2022
Chrystia Freeland delivered Canada's 2022 federal budget earlier today, April 7, 2022
Canada's Deputy Prime Minister and Finance Minister Chrystia Freeland delivered Canada's 2022 federal budget on April 7, 2022
Chrystia Freeland delivered Canada's 2022 federal budget on April 7, 2022
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Taxes, incentives, supports all top of mind in a new KPMG in Canada survey of medium-sized companies
Taxes, incentives, supports all top of mind in a new KPMG in Canada survey
Canada's Deputy Prime Minister and Finance Minister Chrystia Freeland will deliver Canada’s 2022 federal budget on April 7, 2022
Chrystia Freeland will deliver Canada’s 2022 federal budget on April 7, 2022
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What the 2022 federal budget says about Canada’s commitment to a green recovery
Post-Doctoral Research Fellow, Peter B. Gustavson School of Business, University of Victoria
Associate Professor, Peter B. Gustavson School of Business, University of Victoria
Assistant Professor, School of Public Administration, University of Victoria
Disclosure statement
Kevin Andrew's post-doctoral fellowship is funded by the Pacific Institute for Climate Solutions.
Basma Majerbi receives funding from Social Sciences and Humanity Research Council (SSHRC) of Canada and the Pacific Institute for Climate Solutions (PICS).
Ekaterina Rhodes receives funding from the Social Sciences and Humanities Research Council of Canada and the Swedish Research Council. She is also a President of the Canadian Society for Ecological Economics.
University of Victoria provides funding as a member of The Conversation CA-FR.
University of Victoria provides funding as a member of The Conversation CA.
View all partners
Every year, the federal budget outlines government spending priorities and sources of revenue for the coming year. While COVID-related spending dominated the previous two budgets , the 2022 budget comes amid new geopolitical uncertainties, including the war in Ukraine, ongoing socio-economic challenges in the wake of the pandemic, rising inflation, housing affordability, supply chain disruptions and increased pressure for accelerated climate action.
The federal government’s recently announced 2030 Emissions Reduction Plan , which aims to reduce greenhouse gas emissions to 40 to 45 per cent below 2005 levels by 2030 , is expected to cost $9.1 billion in new investments, not including the cost of the investment tax credit for carbon capture and storage.
In our recent study , we find that Canada emerged as a leader among its G20 peers in terms of green fiscal stimulus spending and policies. Green fiscal stimulus aims to spur economic growth and create jobs while reducing emissions.
As we look at the 2022 budget released on April 7, we ask whether Canada will continue building on its green recovery commitment, as Chrystia Freeland promised to do when she took over the finance portfolio in August 2020. Today’s budget included over $12 billion in investments in lowering emissions over the next five years. These include electric vehicle infrastructure investments and purchase incentives , an expansion of the Low Carbon Economy Fund and a new tax credit for carbon capture, utilization and storage.
Budget 2022 is an opportunity for Canada to continue its leadership in green fiscal policy. It marks a critical juncture with Canada’s 2030 emissions reduction goals looming.
Canada emerges as a green stimulus leader
At the onset of the COVID-19 induced recession, academics , environmental advocates and multilateral institutions renewed their calls for a green fiscal response and to “build back better.”
Our research analyzed more than 900 policies enacted by G20 nations from early 2020 until December 2021 using a novel dataset — the Energy Policy Tracker. Canada accounts for 286 of these policies, adding up to $113 billion (US$85 billion) and including both federal and provincial measures.
In the fight against the COVID-19 pandemic, Canada has emerged as a green recovery leader with the highest spending per capita on policies aimed at reducing emissions. Yet Canada, like other countries, also committed large amounts on policies supporting fossil fuels, called brown stimulus.
We constructed a Green Energy Policy Index (GEPI) that allows us to rank countries based on both green and brown stimulus measures using a more granular classification of policies that are low carbon, fossil conditional or fossil unconditional.
Low-carbon policies support the energy transition by increasing energy efficiency, lowering energy demand or supporting renewable energy. Examples include investments in transit , home retrofit programs that increase energy efficiency and investments in renewable energy and grid modernization projects .
Fossil-conditional policies support the fossil-fuel sector, but include conditions aimed at reducing emissions. One example is fuel switching, such as transitioning coal power plants to natural gas. A more controversial example is the program that provides up to $1.72 billion to some provinces and the industry-funded Alberta Orphan Well Association to support the cleanup of orphan and inactive wells . Some pandemic-related support for the aviation industry is classified as fossil conditional because recipients of the bailouts must follow climate-risk disclosure guidelines.
Fossil-unconditional policies support the fossil fuel sector with no conditions to aid the low-carbon transition. There are limited federal examples of such policies in our dataset. However, there is considerable provincial variation in fossil unconditional policies. One prominent example is the Alberta government’s $1.5 billion equity investment in the Keystone XL pipeline.
Taking into account the combination of all these measures, Canada ranks fourth among the G20.
The effectiveness of green stimulus
Global efforts to implement green stimulus measures emerged in the wake of the 2008-09 financial crisis. Such measures, aimed at stimulating a greener economic recovery, accounted for less than nine per cent of the total fiscal stimulus package in Canada, way below the G20 average of about 17 per cent.
Even among countries with large green fiscal stimulus packages, such as South Korea , these measures did not lead to reductions in emissions, likely because they were not backed up with meaningful long-term investments, carbon pricing or regulatory measures. Global emissions rebounded quickly .
Whether the pandemic-related green fiscal stimulus will be more effective is subject to future research. Our GEPI index can help answer that question in future studies. However, past country experiences from the global financial crisis highlight that green fiscal stimulus policies are complementary to carbon pricing and climate regulations .
Read more: The climate emergency warrants a strong mandate on zero-emission vehicles from the federal government
An independent assessment of Canada’s recent emissions reduction plan suggests that over two-thirds of projected emissions reductions are attributed to the carbon tax and flexible regulations. Canada’s commitment to increase the carbon tax to $170 per tonne of carbon dioxide by 2030 put the country in the right direction, consistent with major climate scenario models , including work by the Bank of Canada , although more aggressive carbon pricing will be required beyond 2030 if we are to ensure a smooth transition to net zero by 2050.
Green spending in the federal budget
The new budget announced more than $12 billion in new green spending and other incentives that will make it more affordable for Canadians to adopt clean technologies over the next five years. This signals that Canada is continuing to build on its leadership in stimulating a green economic recovery. Note that spending levels are returning to normal as the economy recovers. For context, the data covered in our paper included over $60 billion in energy-related federal spending during 2020 and 2021 alone.
Today’s budget also introduced the $15 billion Canada Growth Fund , which has reducing emissions as one of its aims and more details on the highly anticipated investment tax credit for carbon capture, utilization and storage (CCUS) , which is costed at $2.6 billion over the next five years. Lastly, the government announced a Critical Minerals Strategy aimed at developing the raw inputs required to meet increased demand for batteries.
Overall, the ability of these measures to help Canada achieve its 2030 emissions reduction goal will depend on two key factors. First, the government must implement previously announced complementary regulatory policies, such as the Clean Fuel Standard , quickly and maintain the rise in the carbon price. Second, these measures cannot be undone by future governments.
A clear path for climate policy is needed to encourage private sector investments and accelerate the low carbon transition of the Canadian financial system. This is vital since today’s budget estimates that Canada will require between $125 and $140 billion of annual investment to 2050 to meet our net-zero target.
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5 takeaways from Canada’s 2022 budget
“The word ‘uncertainty’ is a big piece of our thinking,” a senior official acknowledged of the federal government's planning.
Canadian Finance Minister Chrystia Freeland speaks to the press in Washington, D.C. | Toya Sarno Jordan/Getty Images
By Zi-Ann Lum , Andy Blatchford and Sue Allan
04/07/2022 05:32 PM EDT
OTTAWA, Ont. — Canada’s era of pandemic spending is over.
Finance Minister Chrystia Freeland tabled the government’s latest budget Thursday, revealing C$31.2 billion in new spending — a fraction of the C$101.4-billion document released last year.
Inflation is raising the cost of living around the world, Freeland said in the House of Commons.
“Snarled supply chains have driven prices higher at the checkout counter,” she said. “Buying a house is out of reach for far too many Canadians. And now, [Vladimir] Putin’s barbaric war is making food and gas even more expensive.”
Here are five takeaways from Freeland’s budget:
Uncertainty is certain.
During her budget speech, Freeland called Feb. 24 a day of infamy that has transformed the world. “When Putin opened fire on the people of Ukraine, he also turned his guns on the unprecedented prosperity that the world’s democracies had worked so diligently to build over more than 76 years,” she said.
The budget devotes pages to war and its potential spillovers. “The Canadian economy is less exposed to the economic fallout than other regions (e.g. Europe),” the document says. “On the other hand, ” it adds, there’s a long list of vulnerabilities: sanctions, disrupted global trade, tighter financial conditions and additional pressure on supply chains.
The finance department includes a worst-case scenario that features rising inflation and higher energy bills, supply shortages and a sharp slowdown in global growth.
“The heightened level of uncertainty, along with the deterioration of the global economic outlook, is also affecting investor and business confidence globally,” the budget states.
Affordability is everything.
Rising inflation has shimmied affordability to the top of the government’s priority list.
A suite of housing measures take top billing in the government’s budget, reflecting Canadians’ anxieties about the cost of living. They include new programs to support more rent-to-own projects; a new multi-generational home renovation tax credit to help families build secondary suites; and a promise to increase housing stock by doubling the rate of new builds over the next decade.
The budget must be approved by Parliament. Strategic policies baked into the budget are sure to lock in the support of opposition New Democrats, whose votes are needed to avoid a snap election.
One of those policies is a C$5.3 billion promise to provide dental care for Canadians with annual household incomes less than C$90,000, starting with children this year. It’s a promise that satisfies one of the conditions of a historic deal between the Liberals and NDP to keep Prime Minister Justin Trudeau’s federal minority government in place until 2025.
It’s time to let good times roll — for now.
A stronger-than-expected recovery from the pandemic and a surge in energy prices have given Freeland a lot more cash to work with. But there’s a concern inside the government that it’s not going to last.
The boost to commodity prices, driven in large part by Russia’s war, has helped the resource-rich country’s bottom line. But Freeland’s budget warns that the steep climb in prices risks hurting households and further disrupting the global trade of goods and services.
And while Canada’s growth profile looks encouraging in the near term, it’s not looking good over the medium-term, a senior government official advised in a background briefing. The official flagged recent OECD numbers on longer-run, per-capita growth potential that placed Canada dead last among the group’s economies.
“It’s a very big issue — and it has big and complicated roots and no single budget is going to solve it,” the official said.
The official said there are three global factors at play amid all the other unknowns — China’s ambitions, widening protectionism and the fallout of the war. The speed and “simultaneity” of their emergence is whipping up the most worry, the official said.
“The word ‘uncertainty’ is a big piece of our thinking, the government’s thinking, in the formulation of this budget,” the official said.
The Trudeau government used the extra fiscal space to reduce Canada’s deficits and to only introduce small investments. Canada is holding its budgetary firepower.
The budget projects a 2021-2022 deficit of C$113.8 billion, or 4.6 percent of Canada’s GDP, which is down from the C$144.5-billion estimate in December.
For 2022-2023, the federal shortfall is on track to shrink to C$52.8 billion, or two percent of GDP.
Covid is in the rearview mirror, probably.
“We bent but we did not break,” Freeland told MPs as she tabled her budget documents in the House. Note the past tense. The finance minister’s speech and her 280-page budget mostly treat Covid-19 like something Canada is done with.
But Omicron’s BA.2 is now the dominant variant in many Canadian communities and growing fast. The head of Ontario’s scientific advisory table estimates there are between 100,000 and 120,000 new cases each day in the province.
It’s hard to track active cases and there are eight “N/A” provinces and territories on the federal “current situation” map . At least anecdotally, everyone knows someone who has Covid.
“Canada has come roaring back,” Freeland said Thursday — a callback to a stock line the government has repeated since the outset of the pandemic.
The 2022 budget does contain a couple of passing references about the resurgence of Covid-19 in China “and other regions supply chains.”
The government has also earmarked C$20 million over five years for the study of the long-term impacts of Covid-19, but most other programs are winding down from C$17.7 billion in pandemic support in the last year to C$400 million for 2022-2023.
Climate policy is economic policy.
Massive amounts of money are at stake in the energy-transition era and the budget acknowledges what Canada is missing: capital.
Investments are needed to cut greenhouse gas emissions and Environment Minister Steven Guilbeault has shifted his language in recent weeks by putting more emphasis on how cutthroat global competition will be in a transition to greener energy sources.
A senior government official used Canada’s rich critical mineral deposits as an example for how natural resources can be harnessed to fuel an economy recovering from the pandemic.
The official, who was not authorized to speak publicly on the matter, said a subset of Canada’s critical minerals sector is currently valued up to C$340 billion. “The question is are we going to emerge from it a poorer country or a more prosperous country,” they said.
For Canada, a major oil-producing G-7 country, one of the biggest challenges for government is designing aggressive climate policies without wiping out its own oil and gas sector.
The budget revealed new details of an investment tax credit for carbon capture, utilization and storage designed to compete with the similar U.S. 45Q tax credit offered stateside.
A finance official told POLITICO that they expect the Canadian credit to be more generous than 45Q. One of the major differences in the two tax credits is that the Canadian one gives money at the front end of the project; whereas the American 45Q offers a tax credit for every metric ton of carbon that’s captured and sequestered at the back end of a project.
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“Budget 2022 is about growing our economy, creating good jobs, and building a Canada where nobody gets left behind. Our plan is responsible and considered, and it is going to mean more homes and good-paying jobs for Canadians; cleaner air and cleaner water for our children; and a stronger and more resilient economy for years to come.”
Budget 2022 A Plan to Grow Our Economy and Make Life More Affordable The Government of Canada’s plan for targeted and responsible investments to create jobs and prosperity today, and build a stronger economic future for all Canadians.
8 March 2022. 1 min read. Canada's Deputy Prime Minister and Finance Minister, Chrystia Freeland, delivered the 2022 Federal budget in the House of Commons on April 7, 2022. This year's budget focused on three pillars: people, a green transition and innovation in order to stimulate the economy and make life more affordable for Canadians.
Write a paper about Canadian Budget 2022. What are the highlights of this budget 2022. Any schemes introduced, how it is going to impact the economic goals of Canada? Expert Answer On April 7, 2022, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, delivered the 2022 Federal Budget: A Plan to Grow O …
2022-23 Projection—$52.8 billion; National debt. Federal debt as a percentage of GDP— 46.5% (projected to be 45.1% in March 2023) Budget measures summary. The budget contained many announcements of new spending initiatives. Housing affordability was a primary theme with $10 billion announced to be spent over the next five years.
THE CANADIAN PRESS/Justin Tang. What the 2022 federal budget says about Canada’s commitment to a green recovery ... the data covered in our paper included over $60 billion in energy-related ...
Budget Summaries Budget 2022 Insights Budget 2022 Insights Making sense of what's next Find up-to-date detailed analysis of the 2022 Canadian federal and provincial budgets. Budget 2022 Ontario Economic and Fiscal Update 2022 15 Nov 2022 Budget 2022 What does Bill C-32 mean for you, your trust, or your business? 10 Nov 2022
The budget projects a 2021-2022 deficit of C$113.8 billion, or 4.6 percent of Canada’s GDP, which is down from the C$144.5-billion estimate in December. For 2022-2023, the federal shortfall...
The budget's main goal is to reduce Canada's debt-to-GDP ratio, mostly through a review of all government spending. Our ability to spend is not infinite. The time for extraordinary COVID support is over. — Chrystia Freeland, Budget 2022: Address by the Deputy Prime Minister and Minister of Finance