Budget 2023 offers billions for dental care, plus spending cuts and tax hikes to tame deficit
CBC
Finance Minister Chrystia Freeland tabled a federal budget Tuesday projecting a deficit about $10 billion higher than initially forecast — an increase driven by a worsening economy and new spending on initiatives like a national dental care program.
Freeland's fiscal plan projects the deficit will be $40.1 billion in 2023-24 — up from the $30.6 billion she said it would be just last fall.
Freeland's relatively brief 250-page budget is being pitched as a focused plan to address inflation — there will another one-time GST rebate for low-income Canadians — and to position the economy for the future through multi-billion-dollar tax credits to stimulate the clean energy sector.
A faltering economy means Ottawa will collect $5.7 billion less in revenue this fiscal year than it initially projected — a development that blows a big hole in the federal treasury.
To keep a lid on mounting deficits, Freeland is proposing a series of tax increases on the rich and large corporations and cuts to government spending.
All told, Freeland is planning to slash some $15.4 billion in spending over the next five years through "targeted reductions," including an effort to curb the use of "professional services" and management consultants and a reduction in travel expenses.
She's promising to levy a two per cent tax on stock buybacks, to hike the "alternative minimum tax" to make the wealthier pay more and to tax dividends received by financial institutions — three initiatives that are projected to raise $11.6 billion over the next five years.
The budget is also increasing the air travellers security charge by 32.85 per cent to address the sorry state of Canada's airports. That works out to a $34.82 levy on international flights.
Air passengers will be on the hook for some of the costs associated with improving security and baggage screening.
Highlights from the federal budget:
In a speech to MPs after tabling her budget, Freeland said the document maintains Canada's "proud tradition of fiscal responsibility."
With economic growth expected to flatline this year (Ottawa is projecting a 0.3 per cent increase in GDP), Freeland said Ottawa needs to follow an economically prudent path while spending more in some areas.
"By exercising fiscal restraint, we are ensuring that we can continue to invest in Canadians and in the Canadian economy for years to come," she said.
Kevin Page, the former parliamentary budget officer, told CBC News the government clearly has grown "more pessimistic" about Canada's economic outlook since the fall mini-budget.