Freeland set to table 2024 federal budget in the House of Commons

Finance Minister Chrystia Freeland is finally set to present the federal budget in the House of Commons on Tuesday afternoon, showcasing how the government plans to win back support from disgruntled Canadians worried about the cost of living.

The Liberal government has already unveiled significant planks of the budget over the last few weeks during a campaign-style pre-budget tour aimed at drumming up attention for their agenda.

Prime Minister Justin Trudeau has pledged the upcoming spending plan will earmark billions of dollars to build more homes, expand child care, beef up the military and grow the country’s artificial intelligence capacity.

The government’s new housing measures are summarized in a 28-page document published Friday, which Trudeau called “the most comprehensive and ambitious housing plan ever seen in Canada.”

The prime minister promised it will build nearly 3.9 million homes by 2031.

Much of the budget is aimed at giving hope to younger Canadians who have come of age during a tumultuous economic era, Trudeau said on Monday, and “now feel like middle-class stability is out of reach.”

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However, attention on Tuesday will likely shift to the government’s fiscal outlook and its plan to make up the difference between new spending and a pledge to keep the deficit at bay.

The Liberals, who have been intensely criticized by fiscal conservatives for their spending track record, are under particular pressure to limit spending right now.

With inflation still above the Bank of Canada’s target, deficit spending could keep price growth elevated and delay the central bank from cutting interest rates.

To alleviate these concerns, Freeland has promised the federal budget will abide by new fiscal guardrails presented in the fall, including that the federal deficit will not increase beyond $40 billion for the 2023-24 fiscal year.

The fall economic statement also set the goal of keeping deficits below one per cent of the GDP beginning in 2026-27 and lowering the debt-to-GDP ratio in 2024-25 relative to the projection.

The Liberal government will likely benefit from stronger-than-expected economic growth that will give it some extra fiscal room in the federal budget.

New taxes may make up the rest of the difference.

The prime minister and finance minister have both ruled out raising taxes on the middle class to pay for new spending.

But Freeland was mum on whether corporations or wealthy Canadians could see their taxes rise.

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New public opinion polling conducted by Leger shows two-thirds of Canadians would prefer that the government find savings elsewhere to pay for new spending.

Just over one-quarter would prefer running a larger deficit and eight per cent would want the government to raise taxes.

But when respondents were asked about the prospect of a tax hike on wealthy Canadians or corporations, the majority of them supported those measures.

An overwhelming majority — 78 per cent — supported a wealth tax on Canadians worth $10 million or more.

The online poll of 1,525 adults taken between Friday and Sunday cannot be assigned a margin of error because online polls aren’t considered statistically balanced samples, but the results were weighted for statistical accuracy.

The federal budget comes at a time when the Liberals desperately need to win back voters on affordability issues after ceding significant ground to the federal Conservatives.

But that won’t be an easy feat.

Conservative Leader Pierre Poilievre has successfully chipped away at Canadians’ faith in the governing Liberals with an economic message focused heavily on housing and cost-of-living issues.

However, the Leger polling suggests there’s a disconnect between Canadians’ perception of the federal government’s performance and their support for specific measures proposed by the Liberal government.

Only about one-third of respondents agreed the federal government is pursuing policies that will help the middle class or address housing affordability.

Meanwhile, a majority of respondents supported recent budget announcements by the Liberal government, including more infrastructure spending for housing, a national school food program and loans for rental construction.

Freeland is expected to present the federal budget at around 4 p.m. in the House of Commons.