Trudeau ramps up spending in race to keep up with U.S. subsidies
BNN Bloomberg
Prime Minister Justin Trudeau’s government is pumping billions of dollars into clean energy subsidies and health care, despite a gloomy forecast of slow economic growth and weaker tax revenue.
The federal budget released Tuesday aims to jump-start an energy transition that will, over time, generate new growth and help offset the steep cost of the subsidies. But Finance Minister Chrystia Freeland is also proposing to run larger deficits at a time many economists are still concerned about high inflation and the prospect of a recession.
The budget adds $43 billion in net new costs over six years, even as the government projects about $34 billion less in revenue compared with forecasts in November. The end result is a significantly higher deficit each year through 2028, and no prospect of a balanced budget in sight.
Weaker growth means income taxes will come in lower than expected, while debt charges are rising amid higher interest rates and elevated borrowing.
