Canada’s federal government introduced its first budget since the 2021 election on Thursday. With billions in new spending and revenue, as well as a significantly boosted bottom line from inflation and higher commodity prices, here are five key things to know about Canada’s new fiscal blueprint.
1. Deficit: $52.8 billion
The deficit for the new fiscal year is down from 113.8 billion in 2021-22, and a whopping deficit of more than $300 billion after the spending-surge of the pandemic in 2020-21.
2. Debt: $1.2 trillion
Having skyrocketed due to high spending through the pandemic, the federal debt now stands at $1.2 trillion. That’s 45.1 per cent of Canada’s GDP this year. And while the raw debt is projected to grow to $1.3 trillion in five years, the economy is expected to grow so that the debt-to-GDP ratio — the “fiscal guardrail” the Liberal government cites — is expected to drop to 41.5 per cent.
3. New spending: $56.6 billion
The budget proposes a range of new spending until 2026-27, from $10.2 billion on housing to $12.4 billion on climate action, $5.3 billion on a new dental care program and more than $8 billion on national defence.
4. New tax revenues: $16.5 billion
The government expects it can reap billions from higher taxes on financial institutions, even as the new surtax on big banks and insurance companies is half the level the Liberals promised in the last federal election.
5. The big windfall: $90.6 billion
That’s the extra money booked into this budget that the government didn’t expect in its last fiscal update less than four months ago. The money flowing into federal coffers includes $24 billion in the fiscal year that just ended, as well as the five years after that, and comes from inflation and high commodity prices for oil, grains and fertilizer—impacts of strained global supply chains and the war in Ukraine.
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