Ongoing turmoil related to COVID, the war in Ukraine and the sharply higher and steadily rising interest rates have mixed up the economic picture that Freeland presented just a few months ago in its latest fiscal briefing. Canada is struggling with an affordable price as inflation, now at its highest level in decades, raises the price of almost everything – especially housing. The pandemic has exacerbated pre-existing housing market problems. Prices are so high in most markets that nine out of 10 prospective home buyers surveyed in a recent poll said they have given up on dreaming of owning a home. Since the current Liberal government took office in 2015, the average house price in Canada has doubled to a staggering $ 816,720 – the highest average ever recorded. Eliot Hughes is a senior consultant at Summa Strategies and a former employee of former Treasury Secretary Bill Morno. In an interview with CBC News, Hughes said he expects Freeland’s budget to be “a fairly focused, delicate and strategic budget that is well-targeted for support in specific areas and policies.” “It will be very, very focused, in contrast to the previous budgets of this liberal government,” Hughes said. “If there’s one thing Canadians want to remove from this budget, it’s that the government is trying to help people with housing.” As the Bank of Canada signals raising its overnight interest rate by 50 basis points next week to tackle inflation – a move that will cause sharp higher interest rates – housing will become “just a lot more challenging and problematic for Canadians” “It will be a much bigger challenge for the government,” said Hughes. Deputy Prime Minister and Treasury Secretary Chrystia Freeland tests a new pair of shoes before buying them at an Ottawa store on Wednesday. (Adrian Wyld / The Canadian Press)
Government sources told CBC News that the Federal Liberals are in tune with the issue of affordability and that Freeland’s budget will work out a plan to provide relief to Canadians who are worried about the cost of living spiraling out of control. The federal government, in cooperation with the provinces and territories, has already begun implementing national childcare – a program that will save some parents thousands of dollars a year by immediately reducing the costs associated with daycare. CLOCKS Prime Minister Justin Trinto talks about the federal budget:

Third for the federal budget

Prime Minister Justin Trinto outlines some of his thoughts on the federal budget to be tabled in Ottawa on April 7. 0:53
In addition to this childcare program, the budget is also expected to explain how the government intends to get more people into its own homes. Government sources said they expected this budget to become known as the “housing budget” because much of the document would be tailored to this issue. “What is the biggest cost you have? Where do you live?” Said a government source, speaking on condition of anonymity because they were not authorized to speak in public. “It will be a combination of short-term, medium-term and long-term things you can do that will address the cost elements and also the feeling that the system is working against [Canadians]. “

Foreign buyers are banned

Sources tell CBC News that the Liberal government will keep its promise to ban foreign buyers from buying non-entertainment, residential property in Canada for the next two years – an effort to stop foreign money from pushing prices higher than what is. The Liberals’ housing platform since the last election offers some clues as to what may be in Freeland’s second budget as finance minister. During the campaign, the party promised to create a new tax-free home savings account, an investment vehicle that would allow Canadians to save up to $ 40,000 and enjoy tax benefits on any investment gains. The party also promised to double its first-time home buyer’s tax credit from $ 5,000 to $ 10,000, which would return about $ 1,500 to a home buyer during taxation to offset the closing costs associated with a purchase.

Problem of lack of supply and high demand

The Liberals have submitted a plan to offset the monthly cost of mortgages by reducing the premiums charged by the Canada Mortgage and Housing Corporation (CMHC) on certain loans. They also said they would make First-Time Home Buyers’ Incentive more flexible – a equity mortgage program that provides for the government to provide some cash in advance in exchange for a share of the home. But Kevin Lee, CEO of the Canadian Home Builders’ Association, said the government could not focus solely on such incentives. He said housing prices are high in Canada because they are not enough. “It’s good old-fashioned financially. It has to do with both supply and demand. When you don’t have enough, prices go up and we see that,” he told CBC News. Proponents of her case have been working to make the actual transcript of this statement available online. (Rowan Kennedy / CBC)
Lee said Canada has far fewer homes per capita than other developed countries. In fact, recent estimates suggest that Canada is about 1.8 million homes less than the G7 average. For the past 20 years, Canada has built about 200,000 new homes each year. At the current rate, it will take years of steady construction just for Canada’s housing stock to reach the levels seen in other western countries.

The housing acceleration fund

Lee said Canada needs to supercharge construction and consistently repeat the record year enjoyed by home builders in 2021, when they built more than 270,000 new units – a pace of construction that has not been seen for five decades. Lee said the housing crisis “is really the number one issue we have at the moment as a country”. He proposed a possible correction in the “housing acceleration fund” presented by the Liberal Party in the last election campaign. The party’s platform said the government would allocate about $ 4 billion to municipalities that are “increasing housing supply faster than the historical average” – part of a plan to build 100,000 new middle-class homes in Canadian cities by 2024-25 . This money could be used as an incentive to encourage municipalities to facilitate housing construction. CLOCKS Parliamentary Budget Officer Yves Zirou previews federal budget with CBC Power & Politics

How much new spending, revenue will be in the 2022 budget?

Parliamentary Budget Officer Yves Zirou provides an analysis of what could be included in the federal government’s budget. 7:24
“We need solutions and we hope the budget will live up to that commitment,” Li said. “We need these $ 4 billion that really target municipalities to help them unlock the door to supply – that’s the key. “We need increased density, we need to speed up approval times, we need to reduce some of the bureaucracy and streamline the systems. We need to see how they structure this program.”

Return to more “normal” expenses?

In addition to focusing on laser housing, government sources say the budget will detail a number of other priorities. They include a promised increase in Canada’s national defense budget – a source says funding will go to the modernization of the North American Aerospace Administration (NORAD) – and new details on a tax incentive to start using and binding (CCUS) to help offset the greenhouse gas emissions associated with fossil fuels. Prime Minister Justin Trudeau and Defense Minister Anita Anand talk to Canadian troops deployed in Operation Reassurance during a visit to the Adazi military base in Adazi, Latvia, on March 8. The current budget is expected to boost defense spending. (Adrian Wyld / The Canadian Press)
Hughes said he believed the Liberal government would also show it was ready to return to more “normal” spending levels after years of massive budget deficits as the country faced the worst of the pandemic. With much of corporate Canada worried about the country’s rising debt, Hughes said he believed Freeland would produce a budget that would show Canada’s debt-to-GDP ratio – the government’s preferred “fiscal anchor” – to steady decline in the coming years. “If we look at a budget that is budget-limited – and I use the term ‘limited’ loosely when it comes to this government – I think that’s going to end up in Secretary Freeland, that’s going to be a imprint on it. “Ministers in terms of spending,” Hughes said.