The 2023 federal budget released by the government hones in on green investments, dental care funding for low-income earners, and other affordability challenges.
Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the nation's spending plan in the House of Commons on Tuesday afternoon, projecting nearly $491 billion of investments and a deficit of $40.1-billion for 2023-24.
Freeland said over the next five years, the feds expect to increase spending by nearly $60 billion and no longer expect to balance the books by 2027-28, as previously projected.
"I have never been more optimistic about the future of our country than I am today," said Freeland. "Budget 2023 will deliver new, targeted inflation relief for the Canadians who need it most; stronger public health care, including dental care for millions of Canadians; and significant investments to build Canada's clean economy. At a challenging time in a challenging world, there is no better place to be than Canada."
Highlights of the 2023 fiscal budget include:
• An investment of $2.5-billion for a Grocery Rebate GST credit with up to $467 for eligible couples with children, $234 for single Canadians without children, and $225 for seniors.
• Up to $46.2-billion for federal-provincial-territorial health spending.
• $13 billion for a federal Dental Care Plan to benefit up to nine million uninsured Canadians with an annual family income of less than $90,000, and with no co-pays for those under $70,000. The plan will begin to roll out by the end of 2023.
• A $4.5-billion investment equal to a 30 per cent tax credit on clean technology manufacturing for investments in machinery and equipment used to process key clean technologies and extract, process, or recycle certain critical minerals essential to clean technology supply chains.
• Cuts of $15.4 billion from public service spending.
The budget also includes plans to go after predatory lenders. Currently, the Criminal Code caps legal interest rates at 60 per cent. This has been in place since 1980 when the key overnight lending rate set by the Bank of Canada was 21 per cent compared to the current 4.5 per cent. Freeland said the 2023 budget will propose the criminal interest rate be lowered by nearly half to 35 per cent, which is what it is in Quebec.
The feds announced they are also going to temporarily cap the planned April 1 increase to the excise duty on alcohol at two per cent instead of the scheduled six per cent rise. The cap is expected to remain in place for one year.
There are also some benefits included for post-secondary school students, including raising the interest-free Canada Student Loan limit from $210 to $300 per week of study and waiving the requirement for mature students to undergo credit screening to qualify for federal student loans and grants.
Small business owners will see their interchange fees with Visa and MasterCard reduced by up to 27 per cent. The budget noted deals with the two credit card giants to lower transaction fees.
To help finance the newly announced investments, the Liberals said they promise to find $9.8-billion of savings within the public service sector. The government also plans to introduce tax measures, including ones aimed at wealthier individuals and corporations.
Pierre Poilievre, the leader of the Official Opposition, slammed Freeland's budget in the House of Commons, calling Freeland the "Minister of Inflation" and stated the Conservatives will vote against the plan.
"Today's budget by the costly coalition of the NDP and Liberals is a full-frontal attack on the paycheques of hardworking Canadians," said Poilievre in a media scrum early Tuesday evening. "We asked for three things. The government should have brought home lower prices by eliminating inflationary deficits and carbon taxes, brought home powerful paycheques with lower taxes that reward hard work, and brought homes that people could afford by getting rid of the government gatekeepers to speed up and lower the cost of building permits."
The federal deficit is forecasted to decrease by $14-billion over the next five years from $43-bilion, while the debt-to-GDP ratio will raise in the coming year before falling to 39.9 per cent in 2027-28 from 42.4 per cent. The projected deficit is at risk of growing if the promised savings are not found, and the economy slows more than expected.