Freeland’s new federal budget hikes taxes on the rich to cover billions in new spending

HIGHLIGHTS:

• Ottawa to spend $52.9 billion more than planned over the next five years.
• Finance Minister Chrystia Freeland projects Ottawa will post a $40 billion deficit this fiscal year.
• The budget includes $8.5 billion in new spending for housing.
• Other major budget items include a $6 billion Canada Disability Benefit, a $1 billion national school food program and a $500-million fund for youth mental health.
• Freeland will hike capital gain taxes paid by the rich and corporations to collect an estimated $19 billion in new revenue.
• The cost to service the growing national debt has increased substantially — it’s now about $2 billion more than it was projected to be just a few months ago.
• The government will spend more on servicing its debt than on health care this year.

Finance Minister Chrystia Freeland’s fourth budget delivers a big-ticket housing program for millennials and Generation Z voters — a multi-billion dollar commitment to be paid for in part with a tax hike on the rich and corporate Canada.

Freeland’s document calls for about $52.9 billion in new spending over the next five years — a significant jump over what Ottawa had said it would spend in the fall economic statement released just a few months ago.

To offset some of that new spending, Freeland is pitching policy changes the government says will generate roughly $21.9 billion in new revenue. That money is to come in part from higher capital gains taxes and a hike to excise taxes on cigarettes and vaping products.

“We are making Canada’s tax system more fair by ensuring that the very wealthiest pay their fair share,” Freeland said Tuesday after tabling her budget in Parliament.

“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.”

The result is a projected budget deficit of about $40 billion in the 2024-25 fiscal year — roughly what Freeland had predicted.

While the government is spending more overall, it says that better-than-expected economic growth and higher taxes will keep the deficit under control.

The Liberal government’s preferred “fiscal anchor” — the budget benchmark that guides its decisions — has long been to keep the net debt-to-GDP ratio on a declining trend, with debt levels closely tracking the overall size of the economy.

The budget document says the government must meet that benchmark in the years ahead to retain Canada’s…