Insights by the Honourable Joe Jordan, Senior Associate & Alyson Fair, Senior Consultant
The 2024 version of Budget Day in Canada capped off a three-week stretch that saw Finance Minister Chrystia Freeland, Prime Minister Justin Trudeau, Housing Minister Sean Fraser and other cabinet ministers pre-releasing details of key budget measures targeted at Millennials and Gen-Z – focused on housing and “generational fairness”. A National Housing Strategy, increased access to child care, youth mental health, defence spending, the growth of AI and school lunch programs were boosted today with further announcements that continued to focus on investment tax credits for a clean economy and safer communities.
Budget 2024 included more than $52.9 billion in new financial commitments — including $17 billion in loan-based programs – to be offset by a targeted increase to the capital gains tax for corporations and high earners, expected to generate $19 billion in additional tax revenue.
The hefty, 416-page document proposes:
- An increase in the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024.
- Up to $5 billion in Indigenous equity loans guarantees to participate in natural resource development and energy projects in their territories.
- A new disability benefit will provide $7.5 billion over the next seven years to help supplement people living with disabilities.
- Adding $607.9 million over two years to top-up the Incentives for Zero-Emission Vehicles program.
- A refundable carbon tax credit for SMEs – an estimated 600,000 businesses with 499 or fewer employees – from returning the fuel charge from 2019-20 through 2023-24.
- CSIS with $655.7 million over eight years, starting this fiscal year, to enhance its intelligence capabilities and its presence in Toronto.
From the desk of the Honourable Joe Jordan, Senior Associate
The presentation of a federal budget consists of two key components. The first is the itemized list of actions that the government proposes to be taken, usually a mix of new programs and amended regulations, along with program funding envelope adjustments, additions, and deletions. The second component is the actual budget speech itself, where the Finance Minister provides the rationale for the proposed changes along with a healthy dose of political spin.
Despite announcing a significant amount of the policy content over the last three weeks, there were still some surprises including adjustments to the tax structure to shift the onus from middle class to top earners.
The themes of the document included a detailed overview of affordable housing strategies, a potentially key ballot box issue in the next election, social spending to level the playing field for all Canadians, policies to address the high cost of living, investments to grow the Canadian economy, actions to ensure safe and healthy communities, support for Indigenous Peoples, protecting Canadians, defending democracy, and improving tax fairness.
In terms of the political objectives, facing some sobering poll numbers, the Government seems to be focused on differentiating itself from the Official Opposition by reinforcing the need for an interventionist strategy and an increased role for government in general.
So now the partisan air war commences. The government has positioned the new and augmented policy suites as a step toward greater fairness across Canadian generations, while the Official Opposition views it as simply an additional $43 billion in unnecessary and ineffective government spending.
Finally, it is important to not lose sight of the fact that any vote on a budget is a clear indication of whether the House has confidence in the government, meaning a loss on a budget vote would, in all likelihood, trigger an election. However, I think that the NDP will have no issue supporting this document, ensuring that the Liberal government survives into the next year.
BASIC BLACK – As per tradition, the finance minister donned a new pair of shoes for her big day. Despite the multi-coloured offerings, Freeland chose a pair of black pumps from Maguire’s of Montreal. Team Bluesky wants to know why the shoes and ankle boots worn by sisters and co-founders, Romy and Myriam Belzile-Maguire, weren’t up for selection.
FOOTWEAR FACTS – The House of Commons “X” (but we prefer Twitter) account also joined in with a shoe fun. The Brief chose the traditional loafer but it seems that comfy sneakers were leading in the polls just before the budget was tabled.
TOO HOT TO HANDLE
Following the finance minister’s speech, Opposition Leader Pierre Poilievre told the House of Commons that the “Conservatives will vote against this wasteful, inflationary budget that is like a pyromaniac spraying gas on the inflationary fire that he lit.”
If you haven’t see our posts already, be sure to check out our “X” and LinkedIn accounts for more thoughts from Team Bluesky on today’s budget. Here is some of what you can expect.
