Trudeau eyes boost to housing in new budget as firms worry about tax hikes

Finance Minister Chrystia Freeland’s upcoming budget is likely to put significant money toward boosting Canada’s housing supply, according to people familiar with the plans, adding pressure on the government to find more revenue.

Freeland and Prime Minister Justin Trudeau have been trying for months to quell rising public frustration over the high cost of homes, announcing plans to give billions to cities in return for changes that accelerate construction, among other moves. The government is working on other housing-affordability policies in advance of Freeland’s April 16 budget, the people said, speaking on condition they not be identified.

The government may also have to commit more money for industrial subsidies, defense, university research and drug plans in that document. New measures to raise revenue are likely if Freeland is to stick to her promise to keep deficits from growing — unless she cuts spending in other areas. That has some in Canada’s business community concerned the government will introduce corporate tax increases to fill the gap.

In November, the government projected annual deficits about $40 billion (US$29.6 billion) between 2023 and 2026 — but the country’s fiscal watchdog has already raised doubts it will meet this year’s target.