The liberal government has released the 2018/2019 budget on Tuesday, and there are some changes from what Canadian Finance Minister Bill Morneau predicted in his fiscal update last October.
The first big change is that $7.2 billion has been removed from the infrastructure spending budget. $4 billion of the $7.2 billion being removed from infrastructure spending will be spent to fund programs and services for veterans.
The budget set forth claims that the deficit will “shrink” to about $18 billion for 2018/2019, compared to the $19.5 billion deficit for this year. They still have no idea when the budget will actually be balanced.
There is an obvious theme to the new budget as well, which was given the title of Equality Growth: A Strong Middle Class. The gender narrative in the budget is said to promote equality and help provide resources that will help more women enter the labor force, it also allows for both parents of a child to take part in paid parental leave.
Justin Trudeau’s government has also introduced new taxes and new policy actions to the tune of $20.3 billion, that will last until 2022. The issue with this is that if these new measures were not being made, then our deficit this year would only be around $15 billion, and could drop as low as $6.5 billion by 2022.
Bond Issuance will also be reduced over the next two years by 17%, a big drop from 2016/2017/s record of $114 billion. This is because there have been less maturities and some stronger growth than was expected this past year.
There are also some tax changes being made:
Only corporations with a big passive investment will be able to access the small business tax rate.
Large Canadian corporations will have a harder time getting approval for refundable taxes.
There will be an increase on tobacco tax that will raise $1.5 billion between now and 2022.