Finance Minister Chrystia Freeland unveiled the federal government’s 2024 budget in the House of Commons today, outlining key priorities and initiatives aimed at steering Canada through economic recovery and addressing pressing national challenges.
Freeland emphasized the government’s commitment to fiscal responsibility while also championing investments in critical sectors such as healthcare, housing, and climate action. The budget, she said, seeks to strike a balance between supporting Canadians in the short term and laying the groundwork for long-term economic growth.
Freeland highlighted the importance of responsibly managing the country’s finances, particularly in the face of rising costs. “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,” she said.
To this end, the minister announced measures to cover a portion of the costs through existing resources, with most savings expected to be achieved through natural attrition in the federal public service. Over the next four years, Freeland projected a decline in the ranks of the federal public service as part of this fiscal strategy.
Addressing concerns about income inequality, Freeland spoke about the need for a fairer tax system. She highlighted the winner-takes-all economy, which has seen the wealthy grow richer while many middle-class Canadians struggle to keep pace.
“Our tax system must lean against this structural inequality, funding investments in the middle class, especially in young Canadians,” Freeland asserted. To achieve this, the government is raising the inclusion rate to two-thirds on annual capital gains above $250,000 for individuals. This move, she said, would help make life more affordable for millions of Canadians, particularly Millennials and GenZs.
Freeland delved into the details of the capital gains tax changes, emphasizing that the first $250,000 in capital gains every year for individual Canadians would be taxed at the current rate. The lifetime capital gains exemption will also be raised to $1.25 million. Importantly, these changes will only affect 0.13% of Canadians with an average annual income of $1.4 million, ensuring that 99.87% of Canadians will not see an increase in personal income taxes on capital gains.
While acknowledging that no one likes paying more tax, Freeland called on Canada’s wealthiest citizens to consider the broader societal implications. “What kind of country do you want to live in?” she asked, urging the top 1% and 0.1% to reflect on the societal costs of extreme wealth disparity.
She also highlighted the historical bipartisan support for taxing capital gains in Canada, referencing initiatives by previous governments. “Taxing capital gains is not a partisan idea. It is an idea that anyone who cares about fairness should support,” Freeland argued.
In conclusion, Freeland emphasized the need for a comprehensive plan rather than mere slogans, pointing to initiatives like building more homes, making life more affordable, and growing the economy in a way that benefits everyone.
“Today we say to our younger generation and to those who care about them, we are putting all the power of government to work for you. We will build more homes. We will make life cost less. We will unlock the door to the middle class for more Canadians,” Freeland declared.