Finance Minister Chrystia Freeland unveiled the federal government’s latest economic update today, touting affordability measures for Canadians struggling through a cost-of-living crisis, while trying to balance fiscal restraint and help rein in inflation.
Freeland — through her highly anticipated fall economic update — announced billions in net new spending, and projects the deficit will be $40 billion in 2023-24.
This year’s document was less of a mini-budget, with fewer new spending measures than in recent years, marking more of a return to the traditional fall fiscal updates of pre-pandemic years.
There are, however, still a series of measures included that may impact you, and CTVNews.ca has sifted through the 131-page fall economic statement to find out which will make the biggest difference to your pocketbook.
TRYING TO FIND A PLACE TO RENT?
Ahead of the fall economic statement’s release, Freeland had signalled the update would focus heavily on housing, with measures geared toward making renting and purchasing a home more affordable, namely by building up supply.
“Put simply: Canada does not have enough homes—and we need to build more of them, fast,” the fall economic statement reads.
The Canada Mortgage and Housing Corporation has been warning there needs to be at least 3.5 million more homes built by 2030 to improve affordability.
While the Liberals have indicated the need to build more housing is among the most urgent of issues, many of the fall economic update’s new spending announcements will not come into effect in the immediate future.
Some of those include:
- $15 billion in new loan funding, starting in 2025-26, for the Apartment Construction Loan Program, to support more than 30,000 new homes. This is an expansion of the program formerly known as the Rental Construction Financing Initiative, which will now see more than 101,000 new homes supported by 2031-32, according to the federal government;
- $1 billion over three years, starting in 2025-26, for the Affordable Housing Fund, for more than 7,000 new non-profit, co-op, and public housing by 2028;
The fall economic statement also announces plans to remove the GST on new rental housing for some eligible co-operative housing. This was an initiative spurred on by the NDP in exchange for its support passing Bill C-56, the “Affordable Housing and Groceries Act.”
The fall economic statement also includes measures to crack down on short-term rental properties, such as AirBnB and VRBO, in an attempt to free up those spaces for longer-term residence.
There are plans to:
- Deny income tax deductions for certain expenses incurred related to short-term rental income and for short-term rental operators who fail to comply with provincial or municipal rules;
- Support municipalities implementing their own rules to crack down on short-term rentals, including earmarking $50 million over three years to support municipal regulations enforcement.
A sign advertises a new home for sale in Carleton Place, Ont. on Tuesday, March 17, 2015. (THE CANADIAN PRESS/Sean Kilpatrick)
WORRIED ABOUT YOUR MORTGAGE?
Also included in the fall fiscal update are plans to create a Canadian Mortgage Charter, which the federal government says will “support more Canadians through the temporary financial stress caused by elevated interest rates.”
After several consecutive interest rate hikes, the Bank of Canada has held its rate steady at five per cent since this summer. Inflation, meanwhile, is likely to stay above the two per cent target into the new year, according to the central bank governor, as more Canadians’ mortgages are set to come up for renewal.
In an effort to respond to this, Freeland has unveiled a new “Canadian Mortgage Charter,” laying out how financial institutions should “provide tailored relief and ensure payments are reasonable for borrowers.”
The program is set to include measures to:
- Allow “temporary extensions of the amortization period for mortgage holders at risk;
- Waive fees and costs that would have otherwise been charged for relief measures;
- Not require insured mortgage holders to requalify under the insured minimum qualifying rate when switching lenders at mortgage renewal;
- Contact homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;
- Give homeowners at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and,
- Not charge interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.”
Cuts of poultry are seen in the meat section at an Atlantic Superstore grocery in Halifax, Friday, Jan. 28, 2022. THE CANADIAN PRESS/Kelly Clark
STRUGGLING TO AFFORD GROCERIES?
Aside from housing, the federal government has repeatedly said bringing down the cost of food is among its highest priorities.
NDP Leader Jagmeet Singh — who is more than a year and a half into his party’s confidence-and-supply agreement with the Liberals — had also said plans to address grocery prices were at the top of his list of must-sees in the fall economic statement.
While the fall economic statement does include proposed measures to indirectly help bring down prices, it doesn’t lay out any new spending to offset the pinch people are feeling at the checkout.
Namely, it cites plans to amend the Competition Act, including:
- Improving the Competition Bureau’s tools and powers to crack down on “abuses of dominance by bigger companies”;
- Modernize merger reviews to better detect and deter “killer acquisitions”;
- Prohibiting “greenwashing” claims as part of new environment protections; and
- Empower Canada’s Commissioner of Competition to review a wider range of anti-competitive collaborations.
The fiscal update also notes the Liberals’ pre-secured commitments from the country’s five largest grocers to help “stabilize” prices, and their planned establishment of a Grocery Task Force.
A girl, 16, holds her phone as she sits for a portrait in a park near her home on Friday, March 24, 2023. (AP Photo Erin Hooley / File)
SEEKING MENTAL HEALTH SUPPORT?
Included in this fall economic statement is an affordability measure that could impact pocketbooks in the shorter term, namely to exempt certain psychotherapy and counselling services from the GST and HST.
According to the document, services covered by public health plans are already exempt from the GST and HST, as are services by some health care practitioners, namely some doctors, nurses, dentists, optometrists and midwives, depending on the province.
The Liberals hope to include psychotherapists and counselling therapists under that list by enacting new legislation, without a specific timeline for this tax change to come into effect.
While not directly a mental health effort, Freeland is also committing to:
- Changes to employment insurance for families welcoming children via adoption or surrogacy; and
- Following through on commitments to amend the Canada Labour Code to create paid leave for workers in federally-regulated sectors who experience a pregnancy loss.
Money is removed from a bank machine, Monday, May 30, 2016 in Montreal.THE CANADIAN PRESS/Ryan Remiorz
IRKED BY BANK, AIRLINE FEES?
Freeland also highlighted certain miscellaneous affordability measures she said will eliminate “junk fees” and help Canadians weather cost-of-living challenges, including:
- Amendments to air passenger protections to ensure children under the age of 14 can sit with their accompanying adult without additional fees;
- An investigation of mobile roaming charges with an update to come next year; and
- An update by the next budget on steps being taken to reduce bank fees and directing the Financial Consumer Agency of Canada to work with banks on improving the features of low- and no-cost bank accounts, such as e-transfers.
With files from CTVNews.ca’s Senior Digital Parliamentary Reporter Rachel Aiello