Chrystia Freeland abandons budget balance plan, adding $50 billion in debt | National Post - Ryan Tumilty:
March 28, 2023 - "Finance Minister Chrystia Freeland has abandoned the Liberal government’s pledge to return the federal budget to balance, instead committing to years of further deficits as she made bigger spending plans to transform the economy to use less carbon. Freeland unveiled the 2023 budget Tuesday afternoon. Last fall, she predicted that after years of sky-high, pandemic-driven deficits, the government would finally return to balance, gradually reducing deficits until moving into a $4.5 billion surplus in 2027. That previous projection has been dropped and replaced with a $14-billion deficit.
"Across all of the next five years, the deficits are also larger than previously estimated, with the government ending this coming year $43 billion in the red compared to an estimated $36.4 billion just a few months ago. In total, Canada’s debt will climb by over $50 billion in the years ahead. Freeland also dropped previous Liberal promises to keep the debt-to-GDP ratio declining as a 'fiscal anchor,' as it rises this year to 43 per cent..... "
"Over the next five years, the government will spend an additional $22 billion on health care as part of a deal with the provinces announced last month. They’re also adding roughly $7 billion in that time to pay for an expanded dental care program, part of the confidence and supply agreement with the NDP. The government is also providing an extra GST credit for low-income Canadians, at a cost of $2.5 billion, to help with the rising cost of groceries, as inflation continues to surge....
"Beyond the new spending, the government is offering major tax credits to companies promising lower-carbon technologies. A senior government official estimated the value of the credits at roughly $80 billion over the next decade, with $25 billion going toward clean electricity generation alone.... The tax credits are Canada’s answer to the U.S. Inflation Reduction Act, a legislative suite of proposals that the government had feared would suck in almost all new investment in green projects for initiatives like nuclear and hydrogen....
"Freeland said even with that additional spending, Canada still has a lower debt-to-GDP ratio than any other G7 nation....
"The budget also promises to cut back on federal government travel and on contracting for outside consultants. It also asks departments for an across-the-board three per cent reduction in spending. If implemented, those reductions are estimated to save $15 billion. Freeland said the spending reductions won’t come with any layoffs or hiring freezes.
"NDP Leader Jagmeet Singh swiftly confirmed his party will support the budget, ending any speculation about whether the minority Liberals will fall. He said his party is pleased to have pushed for and created the new dental care program....
"Conservative leader Pierre Poilievre was quick to denounce the budget he said the Liberals are simply adding to the burden Canadian families face.... He said the Liberals have essentially caved to the NDP and it is driving up costs to the government."
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