The federal government’s fall economic statement presented by Deputy Prime Minister and Finance Minister Chrystia Freeland on Tuesday includes billions of dollars in new spending and targeted policy measures aimed at increasing Canada’s housing supply in the years ahead, with the deficit projected to be $40 billion in 2023-24.

Noting Canadians continue to feel the squeeze of inflation and high interest rates in their everyday lives, while increasingly becoming preoccupied about their looming mortgage renewals, Freeland’s fiscal update is focused on responding to two pressing challenges: affordability and accelerating home building, while trying to maintain a degree of fiscal restraint.

As the minority Liberals continue to scale back new spending and try to find billions in savings, Tuesday’s economic check-in on the country’s finances is, as expected, not a major spending package. The more sizeable financial commitments are not set to roll out the door until 2025, the year of the next scheduled federal election.

Continuing to reduce post-pandemic spending, the 2023 fall economic statement outlines $20.8 billion in additional spending over the next six years, beyond what was announced in the 2023 federal budget.

This includes an estimated $15.7 billion in new measures announced Tuesday and will be offset by a projected $2.5 billion in public sector reduction-centric savings, seeing net new spending work out to $13.2 billion, according to finance officials.

And, in an effort to signal ways the Liberals plan to support Canadians without further dipping into their pockets, the 131-page document also includes a series of cost-free policy and legislative pledges, including bringing forward a bill to create a new Department of Housing, Infrastructure and Communities.

Broadly, Freeland has announced Canada will be putting billions into building new homes, increasing the number of construction workers, cracking down on short-term rentals and grocery competition, as well as rolling out anticipated green investment tax credits.

The fiscal update also builds on the 2023 federal budget pledge to find savings within federal departments and agencies to help pay for key programs such as dental care, by announcing an expansion of those refocusing efforts to see $4.8 billion per year as of 2026-27.

Speaking with reporters inside the lockup in advance of tabling the fiscal document in the House of Commons, Freeland sought to make it clear that while the Canadian economy is slowing, the country is in a position of strength.

She said private sector economists now expect Canada to avoid a potential recession as was forecasted as a possibility this time last year(opens in a new tab). “The foundation of our fall economic statement is our responsible fiscal plan,” Freeland said. “In the face of global inflation, our government has reduced the deficit faster than any country in the G7.”

The federal government’s fall economic statement presented by Deputy Prime Minister and Finance Minister Chrystia Freeland on Tuesday includes billions of dollars in new spending and targeted policy measures aimed at increasing Canada’s housing supply in the years ahead, with the deficit projected to be $40 billion in 2023-24.

Noting Canadians continue to feel the squeeze of inflation and high interest rates in their everyday lives, while increasingly becoming preoccupied about their looming mortgage renewals, Freeland’s fiscal update is focused on responding to two pressing challenges: affordability and accelerating home building, while trying to maintain a degree of fiscal restraint.

As the minority Liberals continue to scale back new spending and try to find billions in savings, Tuesday’s economic check-in on the country’s finances is, as expected, not a major spending package. The more sizeable financial commitments are not set to roll out the door until 2025, the year of the next scheduled federal election.

Continuing to reduce post-pandemic spending, the 2023 fall economic statement outlines $20.8 billion in additional spending over the next six years, beyond what was announced in the 2023 federal budget.

This includes an estimated $15.7 billion in new measures announced Tuesday and will be offset by a projected $2.5 billion in public sector reduction-centric savings, seeing net new spending work out to $13.2 billion, according to finance officials.

And, in an effort to signal ways the Liberals plan to support Canadians without further dipping into their pockets, the 131-page document also includes a series of cost-free policy and legislative pledges, including bringing forward a bill to create a new Department of Housing, Infrastructure and Communities.

Broadly, Freeland has announced Canada will be putting billions into building new homes, increasing the number of construction workers, cracking down on short-term rentals and grocery competition, as well as rolling out anticipated green investment tax credits.

The fiscal update also builds on the 2023 federal budget pledge to find savings within federal departments and agencies to help pay for key programs such as dental care, by announcing an expansion of those refocusing efforts to see $4.8 billion per year as of 2026-27.

Speaking with reporters inside the lockup in advance of tabling the fiscal document in the House of Commons, Freeland sought to make it clear that while the Canadian economy is slowing, the country is in a position of strength.

She said private sector economists now expect Canada to avoid a potential recession as was forecasted as a possibility this time last year(opens in a new tab). “The foundation of our fall economic statement is our responsible fiscal plan,” Freeland said. “In the face of global inflation, our government has reduced the deficit faster than any country in the G7.”

‘Targeted’ Housing, Rental measures

The core new commitments included in the fall economic statement centre on two themes: helping Canadians with affordability concerns, and creating more housing and jobs.

On the housing front, to eventually incentivize building more rental housing, the federal government will be offering up to $15 billion in new loan funding starting in 2025-26. The Liberals are calling this the “Apartment Construction Loan Program” rebranding an existing initiative that has already announced billions behind it.

The government estimates this move will help build more than 30,000 new rental housing units across the country.

The program will see the low-interest loans facilitated through the Canada Mortgage Housing Corporation (CMHC) to allow builders to forge ahead on projects they may have previously shelved.

An additional $1 billion is also being earmarked for a new affordability-focused housing fund that, over three years and starting in 2025-26, will support non-profit, co-op, and public housing builds, aiming for 7,000 new homes by 2028. Alongside this, Freeland is promising $309.3 million in new funding for the “Co-operative Housing Development Program.”

To protect homeowners worried about looming mortgage renegotiations at higher interest rates, Freeland has unveiled a new “Canadian Mortgage Charter” detailing the relief Canadians can expect from banks if they are in financial difficulty.

Under this new charter, the fall economic statement outlines some new expectations Canadians can have of their banks, namely: temporary extensions of the amortization period, waiving certain fees and costs, advanced contact with renewal options, and allowing lump-sum and prepayments.

Source: CTV News