Freeland spreads spending over years

• Even before she tables her fourth federal budget Tuesday, Finance Minister Chrystia Freeland has laid out billions in new spending, but the full financial picture could help her keep to deficit targets set last year, if only temporarily.

Unlike past budgets, where the details were kept secret until the day the document was tabled in Parliament, Freeland has spent the past three weeks revealing details of her coming fiscal plan.

She has announced a $500-million fund for youth mental health, $2.4 billion for artificial intelligence, $8.1 billion in new defence spending and $1 billion to expand school lunch programs.

Freeland has said the budget is about responding to young Canadians who are struggling, but insisted this help will not come at the expense of higher taxes.

“We recognize that there is an urgent need today to invest in Canada and Canadians, and we recognize in particular that we're at really a pivotal moment for young Canadians ... for Millennials, for Gen Z,” she said earlier this week. “We are not a government that will raise the tax burden on hard-working middleclass Canadians.”

The government has also pledged some bigger ticket items as loans: $15 billion for new apartment construction and $1 billion in loans for child-care centres. These items don't add to the government's direct budget deficit, though it is ultimately responsible.

Freeland has said that the budget will not increase the $40-billion deficit forecast last year.

She may be able to keep that promise because many of the big ticket items are spread over several years. The largest dollar figure so far, $8.1 billion for defence, is spread over five years.

The full accounting of all of Freeland's promises to date won't be revealed until Tuesday's budget, but all the items announced so far are likely to add up to less than $3 billion for the 2024-2025 fiscal year.

Kevin Page, a former parliamentary budget officer who now leads the Institute of Fiscal Studies and Democracy at the University of Ottawa, said what has been announced would only modestly add to the deficit.

He said the government will also be helped balancing the books with a better than expected economy.

“As we saw from the Bank of Canada, they revised up their growth projections, so that means a bigger economy and means more revenues,” he said.