Canada economic update: $40B deficit in 2023-24

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Rachel Aiello
Senior Digital Parliamentary Reporter

OTTAWA - The federal government's fiscal update presented by Deputy Prime Minister and Finance Minister Chrystia Freeland on Tuesday includes billions of dollars in new spending and targeted policy measures aimed at increasing Canada's housing supply in the years ahead.

It projects the deficit will be $40 billion in 2023-24, dropping slightly to $38.4 billion in 2024-25.

Noting Canadians continue to feel the squeeze of inflation and high interest rates, Freeland's fall economic statement is focused on responding to two pressing challenges: affordability and accelerating home building, while trying to maintain a degree of fiscal restraint.

As the minority Liberals continue to scale back new spending and try to find billions in savings, Tuesday's economic check-in, as expected, is not a major spending package.

The 2023 fall economic statement includes $13.2 billion in net new spending over six years, according to finance officials, though the more sizeable financial commitments are not set to roll out until 2025, the next federal election year.

Broadly, Freeland has announced Canada will be putting billions into loans to build new rental units, cracking down on short-term rentals and encouraging grocery sector competition, as well as rolling out anticipated green investment tax credits.

In an effort to signal ways the Liberals plan to support Canadians without further dipping into their pocketbooks, the 131-page document also includes a series of policy and legislative pledges.

While the finance minister has expressed a degree of optimism that private sector economists are expecting Canada to avoid a potential recession ¬– seeing subdued growth instead – the Liberals once again have presented an economic document that does not project a path back to a balanced budget.

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