The Federal Budget: Some Highlights

OTTAWA – Finance Minister Chrystia Freeland unveiled the federal budget for 2024 on Tuesday. Some highlights:

Residential house

With hopes of building nearly 3.9 million new homes in Canada by 2031, the government plans to:

• increasing the capital cost reimbursement rate for apartments from four to 10 percent, allowing developers to write off more tax;

• extending the term of mortgage amortization for first-time buyers of new buildings to 30 years;

• making more public land available for housing, including Canada Post and National Defense properties, and leasing land to developers;

• spent $250 million over two years to address the “urgent problem” of camps and housing shortages for homeless people.

Taxes

High-net-worth individuals, corporations and trusts pay more capital gains tax. The inclusion rate increases from 50 percent to 66 percent on capital gains over $250,000 for individuals and all capital gains for corporations and trusts. The change is expected to provide an additional $19.4 billion over four years.

Excise taxes on cigarettes and tobacco products are rising: $4 per pack of cigarettes and 12 percent on vaping – totaling nearly $1.7 billion over five years.

Students

The government will spend $48 million over four years, and $15.8 million thereafter, to forgive early childhood educators' loans.

Another $253.8 million over four years and $84.3 million a year thereafter will go toward debt forgiveness for health and education workers, including hygienists, pharmacists, teachers and social workers.

Public safety and justice

The government plans to amend the Criminal Code to create new criminal offenses for car thefts linked to violent or organized crime.

They also plan to take measures to criminalize the possession or distribution of electronic devices used to steal cars and to regulate such devices.

$52 million over five years to pass and enforce the new Online Harm Act, which would require big online platforms to act responsibly and create a new digital safety commission and ombudsman.

There's new money to fight hate, including:

• $273.6 million over six years for public relations, law enforcement, counter-radicalization and victim support;

• $32 million over six years and $11 million annually thereafter for the Security Infrastructure Program, which funds the physical security of community and religious hubs;

• $7.3 million over six years each for the Special Representative for Holocaust Remembrance and Combating Anti-Semitism and the Special Representative for Combating Islamophobia.

Environmental policy

More than $900 million over six years for green homes and energy efficiency programs.

Ottawa is also planning a national flood insurance program by 2025 that will provide $15 million to the Canada Mortgage and Housing Corp.

It is creating several new parks and wildlife sanctuaries, including in British Columbia, Prince Edward Island and Windsor, Ont.

For businesses:

• A 10 percent tax credit on the value of buildings used for key parts of the electric vehicle supply chain over the next 10 years;

• A 15 percent tax credit for the same period for eligible investments in new equipment or renovations for clean electricity;

• A new $2.5 billion fuel tax credit for nearly 600,000 small and medium-sized businesses starting in 2019.

Health care

Part of the government's new pharmaceutical plan, the first programs, which include contraceptives and diabetes drugs and supplies, are expected to cost $1.5 billion over five years.

The budget includes $150 million over three years in the Emergency Treatment Fund to help municipalities and local communities fight the opioid crisis.

It also provides $6.1 billion over six years and $1.4 billion annually after that for Canada disability benefits and related costs.

Government on mental health issues:

• creating a $500 million fund to help public health organizations improve mental health for young people;

• legislates a “segregation right” for federally regulated workplaces;

• spent $630 million on access to mental health services for Indigenous peoples.

Local peoples

The budget includes up to $5 billion in “sector-agnostic” loan guarantees for local community resource projects.

It spends about $1.2 billion on primary and secondary education and infrastructure and $918 million on housing and infrastructure in First Nations funds.

The government is also developing an alert system for missing indigenous women, girls and people of different genders.

Foreign policy and defense

The Liberal government plans to increase military spending to 1.76 percent of GDP by 2030, including $8.1 billion over the next five years and $73 billion by 2044.

The budget provides $1.6 billion in lethal and non-lethal military aid to Ukraine over five years.

It includes $350 million over two years to respond to large-scale humanitarian crises and $159 million over five years to support the “transformation” of Canada's global affairs.

Foreign credentials

An additional $50 million over two years will strengthen the Foreign Account Recognition Program to help construction and health care workers.

Ottawa also plans to spend $77.1 million to integrate internationally educated health professionals with new institutions.

Asylum seekers

The budget includes $1.1 billion over three years to extend the housing assistance program for asylum seekers, and $274 million over five years for immigration and refugee legal aid.

It also includes $743.5 million over five years to strengthen the asylum system and streamline the appeals and removal processes.

Artificial intelligence

Ottawa is allocating $2.4 billion in the upcoming budget to boost its artificial intelligence capabilities.

The bulk of the money – $2 billion – will be used to improve access to computing capabilities and technical infrastructure.

Another $50 million over five years will support workers most likely to be impacted by artificial intelligence, including in creative industries.

The government also plans to fund Canada's new AI Safety Institute and Transport Technology Canada to use AI to screen air cargo bound for Canada.

School meal program

Ottawa is spending $1 billion over five years on a national school meal program that aims to feed 400,000 additional children.

Loans for child care centers

The Liberal government plans to forgive more than $1 billion in low-cost loans, grants and student loans to expand child care across Canada.

Public service

The federal workforce will shrink by about 5,000 full-time employees over the next four years due to “natural attrition,” part of a cost-cutting effort.

This Canadian Press report was first published on April 16, 2024.