Trudeau's housing gambit has business worried about tax hikes
BNN Bloomberg
Prime Minister Justin Trudeau’s government is set to unveil an ambitious budget aimed at fixing housing affordability and helping young Canadians — but the big question is whether it will raise taxes to pay for it.
The government has already announced at least $46 billion, including $17 billion in loans, for measures that include boosting housing supply, supporting artificial intelligence development and increasing defense spending. But the cost of debt is growing, and Finance Minister Chrystia Freeland has promised to keep its deficits under control in the budget to be released Tuesday.
“They’ll have to raise taxes and push out a bunch of already committed spending from past budgets into future years,” Robert Asselin, a former Trudeau adviser who’s now with the Business Council of Canada, said in an interview. “What else can a government addicted to spending do when faced with exploding debt service costs?”
Most economists expect deficits to continue but not substantially worsen. Finance Minister Chrystia Freeland has promised to keep shortfalls around $40 billion for the current fiscal year and the next two. Starting in 2026-2027, she plans to cap deficits near one per cent of nominal gross domestic product.
