Budget 2024: Remarks by the Deputy Prime Minister and Minister of Finance

April 16, 2024 - Ottawa, Ontario

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Mr. Speaker, we are acting today to ensure fairness for every generation.

We are moving with purpose to help build more homes, faster.

We are making life cost less.

We are driving the kind of economic growth that will ensure every generation of Canadians can reach their full potential.

And we are making Canada’s tax system more fair—by ensuring that the very wealthiest pay their fair share.

We are doing this because a fair chance to build a good, middle class life—to do as well as your parents, and grandparents, or better—has always been the promise of Canada.

But today, Millennial and Gen Z Canadians can get a good job, they can work hard, they can do everything their parents did and more, and too often the reward remains out of reach.

They look at their parents’ lives and wonder: How will I ever be able to afford that?

The same anxiety haunts those of us who care about our younger generations—their parents and grandparents. What many parents have achieved for themselves—a degree of comfort and security—we want for our children and grandchildren.

We want their hard work to be rewarded, as it has been for us. We want them to look forward to the future with a sense of anticipation, not angst.

We have arrived at a pivotal moment for Millennials and Gen Z.

These Canadians have so much talent and potential. They need to see and believe that our country can work for them.

Making the promise of Canada real for younger Canadians requires action from us. And that is what we are delivering.

It begins with building more homes, at a pace and scale not seen since after the Second World War.

Over the past three weeks, we have shared with Canadians our new and ambitious plan to solve the housing crisis—and to help ensure that Canadians, especially younger Canadians, are better able to afford their rent or mortgage payments.

We are investing to kickstart the construction of more rental apartments and more affordable housing across our country.

We are topping up the Housing Accelerator Fund, which is doing exactly what we intended and exactly what Canada needs—cutting through red tape and breaking down zoning barriers. This innovative Fund is at the vanguard of a housing revolution in Canada and is fast-tracking the creation of new homes.

We are making the math work for builders by cutting federal taxes on new apartment construction, breaking down regulatory and zoning barriers, providing direct low-cost financing, and making more government land available for building.

In a country with winters as long and as cold as ours, we are scaling up innovative construction techniques, like modular housing, to build homes year-round. Modular housing makes Canadian homes less expensive and the Canadian economy more productive.

To support all this new housing, we are investing in the infrastructure communities need to grow and increasing the number of construction workers, by creating opportunities for apprentices and recognizing foreign credentials.

We are making it easier for Canadian homeowners to add a basement suite or a laneway house, so middle class Canadians can be part of the housing solution, too.

Mr. Speaker, our work to build more homes, faster across our country is, quite literally, an exercise in nation building—a true Team Canada effort. Together, we are putting into action a plan to build nearly 4 million homes by 2031—and to unlock the door to the middle class for more young Canadians.

While we work urgently to increase the supply of housing, our government is taking action to bring relief to Canadians—especially younger Canadians—by making it more affordable to rent or to buy a new home.

This starts with better protecting renters from steep rent increases and renovictions.

It also means making sure they get credit for their on-time rental payments—so they’re in a better position to qualify for a mortgage, maybe even at a lower rate, when the time comes to buy their first home.

For first-time buyers, we will be extending the maximum amortization period of a mortgage to 30 years, on new builds, including condos—which means lower monthly payments and greater opportunity for young people to get those first keys of their own.

Combined with tax-free ways to save for a first down payment, through the Tax-Free First Home Savings Account and the enhanced Home Buyers’ Plan, the longer amortization period will ensure more younger Canadians are able to afford that first home—and take that next big step into a prosperous middle class life.

Mr. Speaker, the second part of our plan is making life cost less.

Inflation has now been back within the Bank of Canada’s target range for three months in a row. That is good news for Canadians. But more is needed to help reduce the cost of living—to help younger Canadians gain ground.

As a government, we’ve made transformative enhancements to Canada’s social safety net.

Ten-dollar-a-day child care is already saving parents thousands of dollars a year—and making it financially possible for more Canadians to choose to start a family of their own.

Now we’re making further investments– creating even more child care spaces so more families can benefit, and so more mothers don’t have to choose between a career and a family.

This is feminist social policy—and it is smart economic policy, too. Already, thanks to our early learning and child care investments, Canada reached a record high for working age women’s labour force participation in Canadian history.

Enrolment started in our new Canadian Dental Care Plan in December—and more than 1.7 million Canadians have already signed up. Next year, nine million uninsured Canadians will have dental coverage.

And we’ve introduced legislation to deliver the first phase of national pharmacare, which will provide universal coverage for many diabetes medications and make contraceptives free—ensuring every Canadian woman can freely choose the contraceptive that works best for her, not just the only one she can afford.

Free contraceptives are central to a woman’s right to control her own body. That is a fundamental woman’s right. It is a fundamental human right.

As a woman, as a mother—and as Canada’s Finance Minister and Deputy Prime Minister—let me say clearly here today: this is an essential right our government will always protect. Women in other countries—our friends, our neighbours—are losing their right to control their own bodies. We will not let that happen here.

Our government’s transformative investments are having a meaningful impact—helping every generation save money.

The Canada Child Benefit is the foundation of our support to young Canadian families—and has helped lift more than 650,000 children out of poverty since 2016.

The Canada Workers Benefit provides a meaningful boost to our lowest-paid–and often most essential–workers.

Our new Canada Disability Benefit will increase the financial well-being of low-income Canadians with disabilities.

And we will launch a National School Food Program—working with provinces and territories to expand access to school food programs and help 400,000 more children get good, healthy food—so that they can have a fair start at a good, healthy life.

The list of supportive, cost-saving measures goes on, Mr. Speaker. The GST Credit arrives every three months to put some extra money in the pockets of millions of Canadians.

The Canada Carbon Rebate ensures that we fight climate change in the most cost-effective way, delivering hundreds of dollars to Canadians, every three months, including yesterday. Eight out of ten Canadians get back more than they pay in the provinces where the federal price on pollution applies.

And in this budget, we are delivering on our promise to return carbon pricing proceeds to small- and medium-sized businesses.

I am proud to announce that our new Canada Carbon Rebate for Small Businesses will soon return over $2.5 billion directly to about 600,000 small- and medium-sized businesses. This real, meaningful support is a testament to our commitment to Canada’s small businesses.

Mr. Speaker, at a time when prices are high, we are delivering real investments that help make life cost less for Canadians.

The third part of our plan is growing the economy in a way that’s shared by everyone.

To drive the kind of growth Canada needs today, we are redoubling our efforts to attract investment, increase productivity, and boost innovation.

We’re working to empower our best entrepreneurs to put their ideas to work here in Canada and create good-paying and meaningful jobs.

How do we do that? To quote one of our country’s great philosophers, we need to skate to where the puck is going.

That means doubling down on Artificial Intelligence.

We were the first country to have a national AI strategy.

Over the past several years, we’ve supported the creation and growth of one of the world’s leading, most talented AI communities.

Today, Mr. Speaker, we are taking the next step to secure Canada’s AI advantage.

We are equipping our AI innovators with the compute power they need to attract and nurture the best researchers, scale up businesses, and drive the innovation that will deliver transformative economic opportunities for Canada and Canadians.

Home grown Canadian AI companies are already helping to boost the productivity of Canadian workers.

A natural area to seize a further competitive advantage for Canada is building the mechanical heart of the AI economy—data centres.

We have a natural edge: we have abundant and clean electricity; we have skilled and experienced engineers; we have the cold climate needed to help cool supercomputers; and we are physically close to the world’s largest market which has vast data processing needs.

We are introducing Accelerated Capital Cost Allowances for innovation-enabling and productivity-enhancing assets. This means that investments in things like computers, data network infrastructure, and more, will be eligible for immediate write-offs. This will encourage companies to reinvest, create more jobs, and make their businesses more productive and innovative.

In the first three quarters of 2023, Canada attracted the highest per capita foreign direct investment in the G7, and the third most total FDI in the world.

Our budget builds on that significant accomplishment—because attracting investment is key to driving growth, increasing productivity, and boosting innovation.

With the Canada Growth Fund and our $93 billion suite of Investment Tax Credits, we are already encouraging businesses to invest in emerging clean technologies that can drive growth and productivity —and create more good-paying jobs.

Today we are proposing a new Investment Tax Credit to attract companies investing across the electric vehicle supply chain. Canada boasts an abundance of natural resources. We intend to leverage this national advantage to build entire supply chains. And our new Investment Tax Credit will encourage precisely that.

We are investing over $5 billion in Canadian brainpower. More funding for research and scholarships will help Canada attract the next generation of game-changing thinkers pursuing excellence.

And we are building on our track record of making it more affordable to go to college and university by renewing the increase in up-front Canada Student Grants and interest-free loans, increasing the amount of financial aid students get for housing, and making it easier for mature students to go back to school affordably. All of this is on top of our campaign promise to eliminate interest on Canada Student Loans, which we delivered on a year ago.

Our new Canadian Entrepreneurs’ Incentive will ensure entrepreneurs get to keep a bigger share of the profits from the risks they take and the hard work they do and have more money to reinvest into their next venture.

A prosperous future and abundant good paying jobs depend on Canada’s innovators, entrepreneurs, and researchers. That is why we are supporting them.

Mr. Speaker, there are those who claim that the only thing government can do when it comes to economic growth is get out of the way.

I’d like to introduce them to the talented tradespeople and brilliant engineers who, last Thursday, made the final weld—the Golden Weld—on a great national project: the Trans Mountain pipeline. It took our government to get it built—and last week the Bank of Canada estimated this project will add one-quarter of a percentage point to our GDP in the second quarter.

Mr. Speaker, as we invest with purpose for the benefit of our younger generations and those who love them, we continue to stick to a responsible economic plan.

As part of that plan, in the fall we set three very specific fiscal guideposts:

• Maintaining the 2023-24 deficit at or below $40.1 billion;
• Lowering the debt-to-GDP ratio in 2024-25, relative to the 2023 Fall Economic Statement, and keeping it on a declining track thereafter;
• And maintaining a declining deficit-to-GDP ratio in 2024-25 and keeping deficits below 1 per cent of GDP in 2026-27 and future years.

In this budget, each one of these objectives is being met, as is our fiscal anchor—a declining federal debt-to-GDP ratio over the medium term.

In fact, Canada has the lowest deficit- and net debt-to-GDP ratios in the G7, as recognized in our triple-A credit rating.

And private sector forecasters are now predicting a soft landing for the Canadian economy—avoiding the recession and heartbreaking surge in unemployment that many had thought was inevitable.

Canadians know how important it is to responsibly manage a budget in the face of rising costs, and they rightly expect their government to do the same.

That is why, going forward, federal public service organizations will be required to cover a portion of increased operating costs through their existing resources. Most of these savings will be achieved through natural attrition in the federal public service. As a result, over the next four years, we expect the ranks of the public service to decline by approximately 5,000 full-time equivalent positions.

Mr. Speaker, to responsibly build a fairer future for younger Canadians, we need to make sure our tax system is more fair.

In Canada and around the world, the 21st century winner-takes-all economy is making those at the very top richer, while too many middle class Canadians are struggling just to avoid falling behind.

The job of our tax system is to lean against this structural inequality—to fund investments in the middle class, especially in young Canadians, by asking those who are benefitting from the winner-takes-all economy to pay a little bit more.

Today, our tax system doesn’t do that. Today it is possible for a carpenter or a nurse to pay tax at a higher marginal rate than a multi millionaire. That isn’t fair. That must change. And it will.

Our government is raising the inclusion rate to two-thirds on annual capital gains above $250,000 for individuals.

This new revenue will help make life cost less for millions of Canadians, particularly Millennials and Gen Z. It will help fund our efforts to turbocharge the building of more homes. It will support investments in growth and productivity that will pay dividends for years to come.

So, who will pay more?

Well, Mr. Speaker, most Canadians have no capital gains in a typical year. So, they won’t pay more.

The first $250,000 in capital gains, every single year, enjoyed by each individual Canadian will be taxed at the current rate. Individual Canadians enjoying this substantial annual gain won’t pay a penny more.

The lifetime capital gains exemption, an amount fully exempt from taxation, will be raised to $1.25 million.

And this change will not, of course, apply to the sale of Canadians’ principal residence, which is and will remain fully exempt from the tax on capital gains.

Only 0.13 per cent of Canadians—with an average annual income of $1.4 million—will pay more on their capital gains.

For 99.87 per cent of Canadians, personal income taxes on capital gains will not increase.

Taxing capital gains is not an inherently partisan idea. It is an idea that everyone who cares about fairness should support.

In fact, the idea of taxing capital gains in Canada was first broached by the government of Prime Minister John Diefenbaker and his Royal Commission on Taxation, chaired by Kenneth Carter.

And Prime Minister Brian Mulroney raised the capital gains inclusion rate to 75 per cent—higher than the rate we’re establishing today.

Yet, I know there will be many voices raised in protest. No one likes paying more tax, even—or perhaps particularly—those who can afford it the most.

But before they complain too bitterly, I would like Canada’s one per cent—Canada’s 0.1 per cent—to consider this: What kind of Canada do you want to live in?

Do you want to live in a country where you can tell the size of someone’s paycheque by their smile?

Do you want to live in a country where kids go to school hungry?

Do you want to live in a country where a teenage girl gets pregnant because she doesn’t have the money to buy birth control?

Do you want to live in a country where the only young Canadians who can buy their own homes are those with parents who can help with the downpayment?

Do you want to live in a country where we make the investments we need—in healthcare, in housing, in old age pensions—but we lack the political will to pay for them and choose instead to pass a ballooning debt onto our children?

Do you want to live in a country where those at the very top live lives of luxury—but must do so in gated communities, behind ever higher fences, using private health care and airplanes, because the public sphere is so degraded and the wrath of the vast majority of their less privileged compatriots burns so hot?

Every one of us here in this Chamber today—and every Canadian across our great country—needs to ask themselves these same questions, because the stakes could not be higher.

Democracy is not inevitable. It has succeeded and succeeds because it has delivered a good life for the middle class. When democracy fails to deliver on that most fundamental social contract, we should not be surprised if the middle class loses faith in democracy itself.

Tax policy is not only, or chiefly, the province of accountants or economists. It belongs to all of us—because it is how we decide what kind of country we want to live in and what kind of country we want to build.

This is our path forward, Mr. Speaker. This is our plan to renew the promise of Canada.

There are some who don’t share our vision.

They believe that the job of government is to do little, then less, and ultimately as close as possible to nothing at all.

Because we understand that to do big things in Canada, sometimes government needs to lead the charge—whether it is getting more homes built, faster, or finally creating a national system of early learning and child care, or bending the curve on emissions.

Let’s be honest about what austerity and shrinking the state would mean for Canadians: It means you’re on your own. It means no one will give you a hand when you falter—and that you are choosing to turn your back on the friend or neighbour who has not been as lucky as you. That is not the Canadian way—we take care of each other.

To make a difference in people’s lives, you need a plan.

Canada needs action, not indifference. We are acting.

The times call for building up our country, not sitting on the sidelines. We are building.

Today we say to our younger generations, and to those who care about them: We are putting the power of government to work for you.

We will build more homes. We will make life cost less. We will grow our economy in a way that works for everyone.

Together, we will unlock the door to the middle class for more Canadians–and renew the promise of our great country.

Thank you.