Federal budget papers over important details
In introducing the 2024 federal budget, Finance Minister Chrystia Freeland promised a better life to young Canadians who have been struggling with affording the same lifestyle as previous generations. “A fair chance to build a good middle class life — to do as well as your parents, or better — that’s the promise of Canada. For too many, especially for younger Canadians, that promise is at risk,” Freeland wrote in her introduction. “We have a plan to fix that.”
That plan includes taxing the wealthiest people and corporations while spending on programs like housing and health care.
While that might sound good on paper, it may be covering some cracks.
One of the key criticisms coming out of the Tuesday budget announcement is a plan by Prime Minister Justin Trudeau to increase the capital gains exclusion rate from 50 per cent to 66.7 per cent for anyone realizing gains of more than $250,000. The two-thirds rate would also apply to corporations and trusts.
What’s lost in the discourse about this rate change that only affects the 0.13 per cent wealthiest people is that there may be average Canadians who have worked hard for years with a plan to sell assets to ensure their families’ future comfort. And, while there is a lifetime exemption for farming and fishing property up to $1.25 million, the Canadian Federation of Agriculture says the new rules might make intergenerational farm transfers more challenging.
Trudeau’s own former finance minister, for one, said raising this rate was a measure he avoided when preparing past federal budgets.
“We resisted it for a very specific reason: concerned about the growth of the country,” Bill Morneau said in a webcast for his new employer, accounting firm KPMG.
“From my perspective, this is clearly a negative to our long-term goal, which is growth in the economy, productive growth and investment.”
Morneau is not alone in wondering where the investment in the economy’s growth is to be found in Budget 2024.
Meanwhile, the spending promises are also short on details.
There are billion-dollar programs for renting, homebuilding, child care and school food — all excellent uses of taxpayers’ dollars. But if the money being funnelled to these funds is tied up in bureaucracy like we’ve seen in the rollout of the national dental program, or wasted like we saw in the Arrivecan scheme, Canadians have reason to be skeptical they will see much change to their daily lives.
As Memorial University of Newfoundland student Jawad Chowdhury told Saltwire, “It’s definitely a step in the right direction, but at the end of the day, it’s a lot of grants and loans.”
After all, with all the money Ottawa has spent — adding up to a $39.8-billion deficit as detailed in this budget — there continue to be First Nations communities with long-term drinking water advisories and food banks that can’t support the growing numbers of clients.
The young Canadians for whom Freeland promises a better future will not be able to live in homes constructed of red tape while they eat paperwork for supper.