![]() It also foresees continuing inflation with the disruptive impacts that will have. By the numbersīudget 2022 emphasizes current uncertainties including the Russian invasion of Ukraine, supply chain disruptions, and the threats to global growth from both. This acknowledges the reality that the extraordinary financial support offered by the federal government throughout the pandemic resulted in significant profits and an ability to recover faster for many financial institutions. Of note, in an effort to ensure large financial institutions support Canada’s broader recovery, the budget proposes to introduce a so-called ‘Canada Recovery Dividend’ which will require banks and life insurers’ groups to pay a one-time 15 per cent tax on taxable income above $1 billion for the 2021 tax year. The finance minister was also clear in her budget speech that the federal government is now winding down the pandemic-related spending that has contributed to unprecedented deficit levels in recent years. It remains to be seen if this budget has met those expectations with its notable innovation and investment initiatives. In addition to spending restraint, business leaders and bank economists were looking for growth-friendly policies and action to address Canada’s lagging GDP and productivity gap. The budget reflects the government’s trade-offs between the big-ticket items – health care, housing, climate change and defence spending – over the five-year planning horizon. The combination of inflation and sharply increased energy prices has created an unanticipated revenue windfall for the federal government that provided flexibility for the new spending announced. This budget is also the first test of the supply and confidence agreement recently negotiated between the Liberals and the New Democrats. In addition, Russia’s war against Ukraine added an urgent imperative to respond to new geopolitical realities. Some of the spending outlined in the budget document does advance select campaign promises. THE CANADIAN PRESS/Adrian Wyldĭuring last fall’s election, the Liberals promised to spend an additional $78 billion between now and 2025-26 on new and improved programs. Deputy Prime Minister and Finance Minister Chrystia Freeland. Many private sector economists have expressed concern that more federal spending will overstimulate an already overheated economy. The Bank of Canada has indicated that it is “prepared to act forcefully” on inflation. The inflation rate in Canada now stands at 5.7 per cent, its highest level in 31 years, and supply chain problems continue to disrupt the economy and raise commodity prices. In crafting this year’s budget, Deputy Prime Minister and Minister of Finance Chrystia Freeland faced a challenging economic and political environment. Managing spending pressures and ensuring growth
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |