How to explain this situation? Government revenues decreased by $5.5 billion compared to what was forecast in the spring. At the same time, Ottawa plans to spend an additional $16.4 billion for commitments already made, especially ‘under indigenous claims’.
The update also reveals that the federal government anticipates that, for the current year, the deficit will increase from $39.8 billion to $48.3 billion.
Ms. Freeland will nevertheless have respected the two other ‘financial anchors’ that she had given herself, namely to maintain the ratio of debt in relation to the size of the economy on a downward trajectory and that the ratio of the deficit in relation to GDP remains below 1% from 2026-2027.
While the president-elect of the United States, Donald Trump, threatens to impose tariffs of 25% on Canadian imports, Ottawa is quantifying its plan to protect its border with its southern neighbor. He intends to spend $1.3 billion over six years for `a complete set of investments’, but does not detail their nature.
What’s a little more surprising is that it’s over six years and that it’s gone back more or less equally, explains Geneviève Tellier, professor at the school of political studies at the University of Ottawa There is not much new money being spent this year or next year. Will that be enough to satisfy the Americans? I don’t think so.’
And the government is reinstating its program which allows businesses to more quickly amortize investment costs for the acquisition, among other things, of machines and manufacturing equipment. With a bill of $17.4 billion over six years, it is by far the most expensive measure in the economic statement.
Professor Tellier explained that the measure will make the corporate tax system more competitive with the Americans and other international markets. `We suspect that with the customs tariffs, with undoubtedly a reduction in taxes for companies in the United States, that could harm competition from Canadian companies,’ she explained.
The famous GST holiday that came into effect on Saturday and for two months will cost $1.6 billion, we confirm. Ottawa is not saying a word about the Liberals’ proposal to send a $250 check to Canadians who earned work income of less than $150,000 in 2023.
Among other measures in the document, the government intends to spend nearly $600 million over three years to remove assault-style weapons from circulation and to ‘fairly’ compensate their owners.
The $5 bills will now feature Terry Fox, a Canadian hero who attempted to cross the country, covering an average of 42 kilometers per day with his artificial leg, to raise funds for in cancer research.
Former Prime Minister of Canada Sir Wilfrid Laurier will be moved on the $50 bills, but Ottawa is not saying what fate it reserves for Mackenzie King in this banking shakeup.
The economic statement does not announce any ways and means motion, which would force a vote of confidence in the government, and which could therefore possibly bring it down.
