Strap on a new pair of shoes and step into the 2023 federal budget analysis.
What happened: We were warned the government’s budget would not offer a “goodie bag” and unless you’re part of the green economy, that’s probably true. New spending will focus on clean energy investments and national dental care.
Why it matters: In any budget, whether it involves government spending or a week in France, there’s a balance to be struck between splurging on “key priorities” and not blowing the bank. This budget tends toward the former.
- The deficit will balloon to ~$40 billion this year, up by ~$10 billion from last fall’s economic forecast, and a balanced budget is no longer in sight.
Scotiabank economist Rebekah Young credits the budget's growth goals, but she told The Globe and Mail “it’s hard to argue this is a budget of fiscal restraint in any sense.” That’s also a perfect segue to how taxpayer funds will be put to work.
$67.3 billion in new green energy spending over five years to compete with similar incentives outlined in the US Inflation Reduction Act, the largest of which is a $6.3 billion tax credit for clean electricity producers.
$13 billion towards the expansion of a national dental care program over five years, up from $6 billion that had been first budgeted. The program will expand to all households with incomes below $90,000 by 2025.
- $2 billion towards a grocery rebate that will be rolled out through the country’s GST rebate program, with the aim of helping lower income Canadians who may be struggling with the rising cost of food.
$21.5 billion is projected in internal savings by cutting federal travel and using fewer consultants, as well as hiking taxes for high-earners (including a plan to raise ~$3 billion through changes to the Alternative Minimum Tax) and banks.
Big picture: In addition to headline announcements, the government also included crowd-pleasers like limiting alcohol tax hikes, introducing right-to-repairlaws, automating some simple tax filing, and bringing in new limits on “junk fees.”