With Finance Minister Chrystia Freeland promising to keep the federal deficit from ballooning in Tuesday91裸聊视频檚 federal budget, all eyes will be on the Liberals91裸聊视频� plan to pay for their agenda 91裸聊视频� and whether that could include new taxes on the wealthy.
During a news conference Thursday, Freeland gave a direct response to a reporter91裸聊视频檚 question on whether Canadians can expect to see this year91裸聊视频檚 deficit increase.
91裸聊视频淣o,91裸聊视频� she said.
The finance minister reiterated that her government plans to honour the fiscal guardrails it pledged in the fall, including the promise to keep the federal deficit capped at $40.1 billion for the 2023-24 fiscal year.
But a slew of announcements ahead of the federal budget, including billions for housing and national defence, are raising a big question: How will the Liberals make the math work?
Politically, the Liberal government can91裸聊视频檛 afford to layer more spending onto the deficit, because of the risk it could keep inflation and interest rates higher for longer.
A slowing economy also means the federal government has less fiscal room to finance new initiatives.
There91裸聊视频檚 increasing suspicion that the Liberals91裸聊视频� solution to that dilemma will be to create new taxes targeted at corporations and the wealthy.
Freeland has ruled out raising taxes on the middle class in the upcoming federal budget 91裸聊视频� but won91裸聊视频檛 say if others are in for the same treatment.
Higher taxes on corporations would spark intense backlash from the business community and financial sector.
The Business Council of Canada has warned against raising corporate tax rates, arguing it would be bad for business investment at a time when the country is struggling with labour productivity.
91裸聊视频淚t would be pretty bad economic policy in my opinion,91裸聊视频� said Robert Asselin, the council91裸聊视频檚 senior vice-president of policy and a former budget director for the Liberals.
But Tyler Meredith, a former head of economic strategy and planning for Freeland, said no one should be surprised if the federal government increases taxes, given all of the demands they face to spend more.
Meredith said that even as they demand the budget not include new spending, stakeholders have pushed for more dollars towards defence and corporate subsidies to enable the green transition.
91裸聊视频淲ell, if you do all those things, that91裸聊视频檚 a lot of money,91裸聊视频� Meredith said, noting the government has other expensive priorities, such as pharmacare and dental care.
91裸聊视频淎nd at some point, if we want at the same time 91裸聊视频� a credible fiscal track, something has to give. And people shouldn91裸聊视频檛 be surprised by that.91裸聊视频�
Canadians have gotten a decent preview of the federal budget over the last three weeks as Prime Minister Justin Trudeau and his team embarked on an unconventional countrywide tour to sell their policies.
The Liberal government pledged billions of dollars for housing, national defence, a national school food program and loans to expand child-care centres.
And just days ahead of the budget, the Liberals unveiled their full plan to tackle the housing crisis.
On Friday, Trudeau called it 91裸聊视频渢he most comprehensive and ambitious housing plan ever seen in Canada,91裸聊视频� promising it will build nearly 3.9 million homes by 2031.
The government91裸聊视频檚 pre-budget strategy has helped the Liberals appear to drive the political agenda again after struggling for months to rebut the Conservatives91裸聊视频� narrative on cost-of-living issues.
The newly revealed housing plan earned the governing Liberals praise from industry groups, municipalities and the man who inspired much of the plan: Mike Moffatt.
Moffatt, a prominent housing expert and senior director of policy and innovation at the Smart Prosperity Institute, applauded the breadth of the plan.
91裸聊视频淭his is easily the most comprehensive housing plan I91裸聊视频檝e seen in my lifetime,91裸聊视频� Moffatt said.
Whether it earns the Liberals any favour with a disgruntled electorate is yet to be seen, as the federal Conservatives hold on to a double-digit lead they91裸聊视频檝e maintained since the summer.
The incumbent government is fighting an uphill battle against a growing belief among voters that the federal Liberals are to blame for the country91裸聊视频檚 economic woes.
As the Liberals renew their focus on affordability ahead of the budget, Conservatives and New Democrats are telling Canadians that the Trudeau government can91裸聊视频檛 be trusted to deliver results.
Despite the challenging political reality the minority Liberals face, Meredith said they still have time to turn things around.
He has counselled fellow Liberals to stay focused on the long game.
91裸聊视频淭hat being said, I think the key things that we have to watch for is whether or not people are actually opening their minds and paying attention,91裸聊视频� Meredith said.
91裸聊视频淚t91裸聊视频檚 very hard to change (the) dynamics if people aren91裸聊视频檛 listening. And that91裸聊视频檚 really what I would be watching for 91裸聊视频� anecdotally over the course of the next six months.91裸聊视频�
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