On Tuesday, November 21, the Government released it’s Fall Economic Statement. The statement is, in effect, a mini budget to continue Government aims in advance of the 2024 Budget.
The statement shows that the government plans $20.8 billion in net new costs over six years. Unfortunately, there is no plan to return to a balanced budget. Furthermore, with interest rates at a 20-year high, the cost to borrow all that money has spiked from $20.3 billion in 2020-21 to $46.5 billion in this fiscal year. The debt service charges will march even higher still in the years ahead. Carrying the debt is expected to cost the federal treasury $60.7 billion a year in 2028-29, according to the economic statement. Finally, the government plans to issue $71 billion more in bonds and treasury bills than it had originally projected in its March budget.
Some key takeaways from the announcement are as follows:
- Housing: Housing is a major focus of the statement, with the government committing $15 Billion into a new Apartment Construction Loan Program. Unfortunately, the program will only build around 1500 homes a year while Canada will need 5.8 million new homes built by 2030.
- GST on Mental Health Services: Following similar Conservative legislation from earlier this year, the 2023 Fall Economic Statement proposes to exempt professional services rendered by psychotherapists and counselling therapists from the GST/HST.
- Journalism: Over the next five years, the government expects to spend $129 million on an updated Canadian journalism tax credit, beginning this year. Ottawa proposes to increase the cap on labour expenditures per eligible newsroom employee to $85,000, from $55,000. It is also increasing the amount of salary that can be claimed under the program to 35 per cent, from 25 per cent.
As further development from this statement is debated, my colleagues and I will continue to advocate for proper fiscal management, ensuring Canadians receive the services they need at a cost they can actually afford.