The federal government unveiled its 2024 budget on Tuesday, pledging billions of dollars in new spending, offset by new revenue streams.
Ahead of the document’s release, the Liberals committed to an unconventional communications rollout, selectively announcing many of the larger line items in the weeks leading up to what they signalled would be a budget geared toward “generational fairness.”
Vowing not to grow the deficit while maintaining other fiscal guardrails, ministers have faced questions in the last several weeks around how they plan to pay for new measures announced in the budget, and whether they would propose new or higher taxes for wealthier Canadians or corporate Canada.
From plans to boost new housing stock, encourage small businesses, and increase taxes on Canada’s top-earners, CTVNews.ca has sifted through the 416-page budget to find out what will make the biggest difference to your pocketbook.
Ahead of the official budget release, the federal government had teased that the document would have a major focus on housing and building up supply, including billions of dollars in now-already announced measures, and stitched together into a “plan to solve the housing crisis,” that was revealed last Friday.
According to the budget, the Liberals are laying out “a bold strategy to unlock 3.9 million new homes by 2031,” using a string of measures with spending spread out over the next several years.
“Because the best way to make home prices more affordable is to increase supply—and quickly,” the budget reads.
Some of those measures include a plan to convert public lands into housing, a new Canada Housing Infrastructure Fund, and a top-up to the Apartment Construction Loan Program.
According to the Canada Mortgage and Housing Corporation, Canada needs to build 3.5 million homes by 2030 to restore affordability.
In terms of shorter-term measures included in the budget, 30-year mortgage amortization for first-time homebuyers purchasing new builds will be available as of Aug. 1, 2024. And as of Tuesday, there will be an increase to the Home Buyers’ Plan, from $35,000 to $60,000, allowing first-time home buyers to draw more from their RRSP and put down a larger down payment.
Also outlined in the budget are measures aimed at helping renters.
Those include a Canadian Renters’ Bill of Rights — which is contingent on provincial and territorial buy-in — although a timeline for the policy measure is not laid out in the budget document.
The federal government also plans to call on and “set a firm expectation” with “banks, fintechs, credit bureaus, and landlords,” to allow renters to earn credit for one-time rental payments, which the Liberals say could “(make) it easier to get a mortgage, and maybe even at a lower rate.”
Those banks, landlords and credit bureaus, however, are not legally obligated to do so.
Leading up to budget day, experts warned the federal government would need a way to bring in additional revenue to help pay for some of its new spending, and there was speculation that could include a wealth tax, something Finance Minister Chrystia Freeland would not rule out.
Instead of a wealth tax, however, the budget includes plans to increase the capital gains inclusion rate — the share of capital gains that are taxed — for less than one per cent of Canada’s top earners.
That means that as of June 25, people with more than $250,000 in capital gains in a year will have to pay taxes on a larger portion of that money. The inclusion rate will also increase for the capital gains of corporations and trusts.
The change makes for a more straightforward calculation at tax time, increasing the portion of capital gains that are taxed, as opposed to determining how much someone is worth and then taxing the wealthiest.
This change will also apply to about 12 per cent of Canada’s corporations, according to the budget.
For the vast majority of people — 99.87 per cent of Canadians, per the government’s calculation — there will be no increase to the personal income taxes on capital gains.
Included in the budget are measures aimed at both helping existing small- and medium-sized businesses grow, as well as getting new ventures off the ground.
Specifically, the federal government unveiled the New Canada Carbon Rebate for Small Businesses, which it says will “urgently return proceeds from the price on pollution” to businesses with fewer than 500 employees.
The retroactive rebate, from 2019-20 through 2023-24, will apply to an estimated 600,000 businesses in the form of “an automatic, refundable tax credit directly for eligible businesses” where the federal backstop applies.
The finance minister will specify the amount of the rebate payments at a later date, according to the budget.
The Liberals are also earmarking $200 million over two years, starting in 2026-27, to increase available venture capital for the “equity-deserving entrepreneurs” of some start-ups.
And an additional 6,250 businesses owned by young Canadians will also be eligible for financing, mentorship, and other supports, by 2029.
The budget also includes proposed tax changes to small- and medium-sized businesses, including the amount of tax-free capital gains on the sale of business shares and farming and fishing property, effective June 25. 2024.
To help post-secondary students pay for school, the federal government plans to boost existing grants and interest-free loans, to the tune of about an additional $1.1 billion this year.
The Liberals estimate that extending increased grants and increased interest-free loans will help support a combined more-than 1.2 million students.
The budget also details plans to help students afford a place to live by changing the formula to calculate financial assistance eligibility.
Going forward, an updated formula used by the Canada Student Financial Assistance Program will factor the cost of housing when determining financial need and funding eligibility.
“This will deliver more student aid for rent to approximately 79,000 students each year at an estimated cost of $154.6 million over five years,” according to the budget.
The Liberals also plan to waive the GST when building new student residences at some post-secondary institutions, in the same vein as announced last year on purpose-built rental housing. According to the budget, they hope scrapping the GST on some residences will incentivize the construction of new student housing, a measure with an expected $19-million price tag over five years, starting this year, and $5 million per year after that.
“Building more student housing is good for young people, and makes sure there is a fair rental market for everyone,” the budget reads.
The budget includes measures to help shoulder some of the cost of raising children.
Namely, it spells out the previously announced funds for a new school food program, earmarking $1 billion over five years to expand access to more than 400,000 students.
According to the budget, the program is expected to save the average participating family with two children up to $800 a year.
The federal government is also aiming to make child care more affordable, namely by increasing the number of available spaces.
The new Child Care Expansion Loan Program, to the tune of $1 billion, will provide loans and grants to build or renovate child-care centres, and changes to the Canada Student Financial Assistance Act and the Canada Student Loans Act will expand loan forgiveness eligibility for some early childhood educators.
According to the budget, all provinces and territories are on track to achieving $10-a-day child care, but the document does not specify by what date.
The Liberals have finally put funding behind their long-promised Canada Disability Benefit: $6.1 billion over six years and $1.4 billion ongoing.
They’re framing the program as a legacy social policy that will help hundreds of thousands of low-income, working-age people with disabilities, designed to supplement existing provincial and territorial benefits.
The budget also promises coverage for the cost of medical forms required to apply for this financial assistance.
The federal government is also proposing to expand the Disability Supports Deduction — which allows some people with disabilities to deduct certain expenses — to include new costs covered under the program.
Namely, the Disability Supports Deduction could include, subject to specified conditions: the cost of an ergonomic work chair, the cost of a bed positioning device, the cost of a navigation device for low vision, and the cost of memory or organization aids, among other accommodations.
Also included among new healthcare funding is $1.5 billion over five years to launch the new national pharmacare plan. The first phase, as pre-announced, will help cover diabetes and contraception medications.
The budget also lays out a series of smaller cost-saving measures — including pushing for transparency in airline fees and calling on the provinces to help cut junk fees — to help Canadians keep more money in their wallets when they can.
Using the example of global pop superstar Taylor Swift’s upcoming Canadian concert tour, the federal government is also pledging to work with the provinces and territories to “encourage them to adopt best practice requirements for ticket sales.”
According to the budget, those best practices include better ticket sales transparency, stronger protections for Canadians against excess fees, and preventing fraudulent resellers and the use of bot technology.
With files from CTVNews.ca’s Senior Digital Parliamentary Reporter Rachel Aiello
