Canada’s federal government in Ottawa has released a fall economic update that largely focuses on providing funding for affordable housing.
In what is often referred to as a “mini budget,” federal Finance Minister Chrystia Freeland announced plans to spend $20.8 billion over six years on affordable housing and a variety of clean energy projects.
Freeland also projected continued budget deficits for the federal government, with no plans to return to a balanced budget.
Ottawa’s budget deficit is projected to come in at $40 billion in the current fiscal year and decline to $18.40 billion by 2028-2029.
Due to the increased spending, Canada’s debt-to-GDP ratio is forecast to rise to 42.7% in the next fiscal year before falling to 39.1% in 2028-2029.
Additionally, the government led by Prime Minister Justin Trudeau plans to issue $71 billion worth of bonds and Treasury bills in its upcoming March 2024 budget.
In terms of affordable housing, Ottawa plans to provide an additional $1 billion over three years to build more than 7,000 homes, largely for people who are newly arrived to Canada.
The government also plans to provide an extra $15 billion in new funding for the construction of more than 30,000 rental homes across the country.
Minister Freeland also announced a new Canadian mortgage charter that outlines how financial institutions are to work with Canadians to ensure that their mortgage payments are less restrictive.
Beyond affordable housing, the federal government announced a $15 billion fund to help lower carbon emissions. The finance minister reiterated a previously announced clean investment tax credit for carbon capture and storage.
