The federal government has presented its 2024 budget, which includes billions in new spending and a deficit of nearly $40 billion.
With a focus on “fairness for every generation,” Deputy Prime Minister and Finance Minister Chrystia Freeland's budget largely centres around housing while introducing increased taxes for some of the country’s wealthiest earners and a higher excise for tobacco and vaping products.
Budget 2024 lays out a strategy to unlock 3.87 million new homes by 2031.
According to the budget, the feds will “use all tools available to convert public lands to housing, including leasing, acquiring other public lands for housing, and retaining ownership, whenever possible.”
That includes building homes on Canada Post and National Defence land when possible.
There is also mention of introducing an accelerated capital cost allowance, from a rate of 4% to 10%, for new purpose-built rental projects.
The budget also allows a 30-year mortgage amortization for first-time home buyers purchasing newly constructed homes.
Additionally, the federal budget lays out a plan to use $1.1 billion over the next decade to transform 50% of the federal offices into housing.
The feds have proposed taxing residentially zoned vacant lands to encourage construction with consultations beginning later this year.
A $15-billion top-up has been announced for the Apartment Construction Loan Program alongside a $400 million to the Housing Accelerator Fund, which now sits at $4.4 billion.
The budget also lays out $1.3 billion in additional funding to “help communities scale-up their efforts” to address homelessness and encampments.
The Affordable Housing Fund will get an additional $1 billion top-up.
A new $1.5 billion Canada Rental Protection Fund that will provide $1 billion in loans and $470 million in contributions to support affordable housing providers to acquire units and preserve rents was included in the budget.
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One of the bigger ticket items under the federal budget is a plan to increase taxes on capital gains on the “wealthiest 0.13%.”
“To make Canada's system more fair, the inclusion rate—the portion of capital gains on which tax is paid—for capital gains for individuals with more than $250,000 in capital gains in a year will increase from one-half to two-thirds. Individuals will continue to only pay tax on 50 per cent of any capital gains up to $250,000 per year,” explains a backgrounder release issued Tuesday.
“The inclusion rate will also increase to two-thirds for all capital gains realized by corporations and trusts.”
Those new rules will apply to capital gains realized on or after June 25, 2024 and it is estimated that this measure would increase federal revenues by $19.4 billion over five years starting in 2024-25.
As for the increased tax on tobacco products, the federal government says it will be $5.49 per carton of cigarettes, which is estimated to increase federal revenues by $1.36 billion over the next five years.
Additionally, the excise duty on vaping products will increase by 12%, which is estimated to raise revenues by $310 million by 2029.
Another big ticket item under the 2024 federal budget is the beginning phases of rolling out a universal pharmacare plan with $1.5 billion over five years.
That also includes the continued funding for contraceptives and diabetes medication.
The delivery of the national dental care plan, which was announced in 2023, will continue through this budget with a plan to have the fully-rolled out dental plan covering nine million Canadians by 2025.
In response to ongoing overdose crisis, this year’s budget announces $150 million over the next three years to Health Canada for an Emergency Treatment Fund, which would be open to municipalities and Indigenous communities.
Budget 2024 launches a new Canada Disability Benefit with $6.1 billion over six years, and $1.4 billion ongoing, to supplement provincial and territorial benefits, increasing the financial well-being of over 600,000 working-age persons with disabilities.
A new youth mental health program is included in budget 2024, funded by $500 million over five years.
Budget 2024 proposes to provide $4 million over two years to continue supporting initiatives through the Mental Health of Black Canadians Fund plus $630.2 million over two years to support Indigenous people’s access to mental health services.
The budget includes an extended and increased student grants and interest-free loans, at an estimated total cost of $1.1 billion this year.
The budget introduces plans to legislative amendments to expand the reach of Canada student Loan Forgiveness Program to early childhood educators who work in rural and remote communities with an estimated cost of $48 million over four years.
Additionally, there are plans to expand the Canada Student Loan Forgiveness Program to more health care and social services professionals, like dentists, pharmacists, teachers and social workers, who also work in rural and remote communities.
That comes with an estimated price tag of $253.8 million over four years.
According to the budget, there are plans to help students with the cost of housing by updating the formula used by the Canada Student Financial Assistance Program to calculate housing costs when determining financial need, to reflect the cost of housing today.
Budget 2024 launches a new National School Food Program by providing $1 billion over five years to work with provinces, territories, and Indigenous partners to expand access to school food programs to more than 400,000 kids.
The federal government has also introduced a $1 billion Child Care Expansion Loan Program to build more child care spaces and renovate existing child care centres.
Click here to read more about the key measures under the 2024 federal budget and click here to view the 416-page document.
