Highlights from the 2023 federal budget
Budget is targetting three main areas: health care/dental, affordability and clean economy
The 2023 federal budget is proposing spending to make life more affordable, encourage investments in green energy, provide improved health-care services and roll out the next stage of the federal dental care program. It also offers targeted funding for students, workers, science and defence.
Here is a list of some of the more significant funding initiatives in Budget 2023.
- $43B in net new spending over six years.
- 3 main priorities: health care/dental, affordability and clean economy.
- Doubling of GST rebate extended for lower income Canadians, up to $467 for a family.
- $13B over five years to implement dental care plan for families earning less than $90K.
- $20B over six years for tax credits to promote investment in green technologies.
- $4B over seven years for an Indigenous housing strategy.
- $359 million over five years for programs addressing the opioid crisis.
- $158 million over three years for a suicide prevention hotline, launching Nov. 30.
- Creation of new agency to combat foreign interference.
- Deficit for 2022-23 expected to be $43B, higher than projected in the fall.
- Higher than expected deficits projected for next 5 years.
- Federal debt hits $1.18 trillion. Debt-to-GDP ratio will rise slightly over next 2 years.
Affordability
The federal government is rolling out a number of small measures to help Canadians that amount to about $3.3 billion in new spending since the fall economic update. The measures are meant to take the sting out of the cost of living as rising interest rates and inflation hammer family budgets.
Chief among them is the so-called "grocery rebate," a one-time hike to the GST rebate which will provide up to $467 for families, $234 for singles and up to $255 for seniors, at a cost of $2.5 billion.
The government is also using the budget to announce that it has negotiated a 27 per cent reduction in the interchange fees Visa and Mastercard charge small businesses. It says this measure will save eligible small businesses in Canada approximately $1 billion over five years.
The budget also offers about $814 million in 2023-24 to help students starting their academic year on Aug. 1, 2023. The measures include: increasing the student loan limit from $210 to $300 a week; increasing student grants by 40 per cent;
Divorced parents will now be allowed to open up joint RESPs and mature students aged 22 and older will no longer have to undergo credit screening when applying for first-time student grants and loans.
On the housing file, the budget says financial institutions can start offering the Tax-Free First Home Savings Account to Canadians starting on April 1, 2023. The budget also proposes to spend $4 billion over seven years, starting in 2024-25, to implement a co-developed Urban, Rural and Northern Indigenous Housing Strategy.
Health, dental and addictions
By far the largest bucket of money in the budget is for health and dental care — $3.6 billion in new spending in 2023-24.
The budget launches the next stage of the dental care plan — which the Liberal government agreed to as a condition of its supply and confidence agreement with the New Democrats. Last year, the government opened the program to low-income Canadians under the age of 12. This year, the program is being expanded to people under 18, persons living with a disability and seniors. It's set to be fully implemented by 2025.
The budget offers an additional $250 million over three years to establish an Oral Health Access Fund starting in 2025-26, with $75 million annual funding after that. The program is meant to target gaps in vulnerable populations.
Watch: Freeland presents details of dental plan in 2023 budget:
Health care is getting a boost of more than $3 billion in 2023-24 as a part of the federal government's multi-year deal with the provinces.
Additional funding is spread across a number initiatives, including developing and testing ways to improve retirement savings for personal support workers. The budget puts up $359.2 million over five years to tackle substance abuse by providing better supports, a safer supply of drugs, better data on substance abuse and supervised injection sites.
The budget offers $158 million over three years, starting in 2023-24, to the Public Health Agency of Canada to support the implementation and operation of the Suicide Prevention Line, as well as $36 million over three years for reproductive health.
Green investments
U.S. President Joe Biden's Inflation Reduction Act offers massive incentives for investments in the green economy. It has acted as a magnet for investment south of the border — so much so that the Liberal government has responded with $1.2 billion this year and almost $21 billion over five years to help Canada keep pace.
The budget offers three investment tax credits. The first — equal to 30 per cent of the cost of investments in new machinery and equipment used to manufacture or process key clean technologies and to extract, process, or recycle critical minerals — is expected to cost of $4.5 billion over five years.
The Clean Hydrogen Investment Tax Credit will cover somewhere between 15 and 40 per cent of eligible project costs; higher rebates will go to projects that produce the cleanest hydrogen. The hydrogen credit is worth about $5.6 billion over five years.
Watch: Freeland proposes $21 billion to promote investment in green tech:
The budget also provides $6.3 billion over five years to fund the Investment Tax Credit for Clean Energy, which will offer a credit of 15 per cent for investments in non-emitting electricity, natural gas fired electricity generation and energy storage.
Lastly, the Investment Tax Credit for Carbon Capture, Utilization and Storage will cost about $520 million over five years and is available to businesses that invest in storing carbon dioxide or use it in other industrial processes.
To be eligible for the highest rates for these investments credits, businesses must pay their employees a total compensation package that is equal to the existing union wage for the same or comparable jobs, including pensions and benefits.
The budget also earmarks $650 million over ten years for monitoring, assessment and environmental restoration work in the Great Lakes, Lake Winnipeg, the St. Lawrence River and other major bodies of water.
Advancing reconciliation
The budget will provide $2.8 billion as a part of the Band Class settlement, which will compensate 325 bands that opted into the Gottfriedson Band Class litigation to address the collective harms cause by residential schools.
The budget provides $171 million to ensure First Nations children have access to health-care services under Jordan's Principle. Both the Band Class settlement and the Jordan's Principle money have been booked in for the 2022-23 fiscal year.
Science and space
The budget is also offering $1.4 billion to the Canadian Space Agency so it can continue participating in the International Space Station until 2030. The agency is getting an additional $1.2 billion over 13 years so it can contribute to building a lunar utility vehicle.
The Canadian Space Agency will get another $150 million over five years to fund the development of new technologies and an additional $76 million over eight years to support Canada's participation in the Lunar Gateway station.
Workers and trade
The Liberal government is also offering up a number of programs an initiatives to improve skills and working conditions including $197.7 million in 2024-25 to create work placements for students through partnerships between employers and post-secondary institutions.
Tradespeople are also being offered a deduction of $500 to $1,000 to help with the cost of new equipment.
The budget is also proposing an anti-scab law prohibiting the use of replacement workers during a strike or lockout in federally regulated industries. It says legislation will be introduced before the end of the year.
Increasing revenues, efficiencies
The federal government has announced a number of cost saving initiatives that it says will allow it to fund other programs. Chief among them is a $7.1 billion cut in spending over five years on consultants, travel and professional services.
The budget also proposes to cut departmental spending by $7 billion over four years and $2.4 billion per year ongoing after that.
The budget proposes to ensure that the wealthiest Canadians pay their fair share of taxes — an effort it claims will net the federal government $2.9 billion over five years.
The budget also announces that the federal government's proposed tax on share buybacks by public corporations will apply as of Jan. 1, 2024. The tax will direct $2.5 billion in revenue into federal coffers over five years.
The budget is also proposing to increase revenues by $3.15 billion over five years by amending the Income Tax Act to treat dividend received on Canadian shares held by financial institutions as business income.
Defence, security
To cope with foreign interference, Budget 2023 proposes $49 million over three years to help the RCMP protect Canadians from harassment and intimidation by foreign governments. It promises $13.5 million over five years starting in 2023-24 and $3.1 million ongoing to Public Safety Canada to create a National Counter-Foreign Interference Office.
The budget promises Ukraine an additional loan of $2.4 billion for 2023, which will be provided through the International Monetary Fund.
To deal with backlogs and provide support services for veterans, the budget offers $156.7 million over five years, and $14.4 million ongoing, to Veterans Affairs Canada, the Royal Canadian Mounted Police and the Veterans Review and Appeal Board.
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