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Highlights:
- In the lead up to the budget, Chrystia Freeland reportedly met with finance officials regarding innovation policy and with 20 feminist organizations
- Prime Minister Justin Trudeau and the New Democrats agreed to support the minority government till 2025
- Changes in housing measures, dental care and military spending can be expected in the new budget
Canada’s 2022 budget is scheduled to be unveiled on Thursday, April 7. Many may be curious about what to expect in it and what the big issues are. In this article, we shall explore what might be the significant factors at play, the likely agenda that will be prioritized in the budget and why they might be so, along with the big questions.
Factors at play
Canada’s federal budget will likely be majorly driven by the Liberal Party of Canada that has led the country for the majority of the past century or so. That may perhaps be one of the reasons the country is considered one of the most progressive countries in the world. In all likelihood, the 2022 federal budget will reflect this.
In the lead up to the budget, Finance Minister and Deputy Prime Minister Chrystia Freeland reportedly met with finance officials regarding innovation policy and with as many as 20 feminist organizations. On March 22, Prime Minister Justin Trudeau and the New Democrats agreed to support the minority government till 2025.
Defence
One of the things that would make for an interesting watch in the new budget is military spending. If you go by the percentage of GDP contributed to NATO, Canada is one of its least givers. In recent years, this figure has been less than 1.4 per cent.
However, its neighbor, Russia, has invaded a country and is now being pressured by biting sanctions. On March 22, Defence Minister Anita Anand said she is looking at “aggressive options”.
The big question: Will Canada meet NATO’s requirement of contributing a minimum of two per cent of its GDP?
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Fiscal anchor
Inflation is high, and interest rates are likely to rise. The budget will likely address this in some way and try to have a fiscal anchor to lower the deficit for 2022-2023, which is projected to be C$58.4 billion.
The big question: What tax measures will be included in the budget?
Climate actions
On April 3, Environment and Climate Change Minister Steven Guilbeault said the budget could see “new” elements regarding the matter.
The big question: What will be the tax credits offered in relation to carbon capture?
Housing
Changes in housing measures can be expected in the new budget. Both the Liberals and NDP seemed to be concerned about this issue and housing prices hit an all-time high in February. It's hard to ignore supply when dealing with the issue.
The big question: Will the Rapid Housing Initiative (RHI) see an expansion?
Also read: What sanctions has Canada imposed on Russia over Ukraine crisis?
Dental and healthcare
The Liberals agreed to launch a new dental care program for middle- and lower-income Canadian households in order to ensure they had the support of the NDP.
The big question: What about the C$25 billion promised by the Liberals for healthcare during the snap election campaign and what strings will be attached to it?
Also read: Why did Russia invade Ukraine?
Bottom line
The budget will probably reflect the agendas of both the parties in power. These are some of the top issues that Canada's federal budget of 2022 can be expected to address and the important questions that go along with them.
Mrs. Freeland and company will need to balance reducing the deficit with spending on healthcare and housing amid high inflation; climate actions with military spending. It’s no mean feat.
Also read: What are some challenges BRICS countries face amid Russia-Ukraine war?
