“Chrystia Freeland, the federal Minister of Finance, will present her economic statement on Tuesday, which is expected to focus on housing and the cost of living. This presentation comes at a time when the Liberal government is struggling to regain the trust of dissatisfied Canadians due to the rising cost of living in the country.
However, given the government’s financial resources, Ms. Freeland has tried to lower expectations. “We need to make sure that our investments deliver what Canadians need, but we also need to do it in a fiscally responsible way,” she told reporters on Thursday. “We won’t be able to do everything.”
The minister was tight-lipped about the content of the statement, only reiterating that it will address housing and the cost of living. In a two-day meeting of the federal cabinet last August, Prime Minister Justin Trudeau had announced that combating the increase in the cost of living would be the number one priority.
Since then, the federal government has already announced a series of measures, including the elimination of the GST on the construction of new rental housing and the sale of surplus federal land and buildings to developers. Ms. Freeland stated that the government is seeking ways to make more federal land available and wants to address the issue of short-term rentals, which puts pressure on the availability of housing.
Tim Richter, co-chair of the National Housing Council, a body that advises the federal housing minister, predicts that the Liberals will wait until the spring budget to announce their main policies. “I have the feeling that the government will announce a series of measures between the fall economic statement and the budget. This budget will be the Liberals’ main focus on housing and homelessness,” he said, believing that the statement could foreshadow future policies.
Cost of Living
The cost of living is currently an unavoidable issue in federal politics. Rents and mortgages have dramatically increased. Low-income Canadians struggle to make ends meet. Some stakeholders warn of a situation that is forcing people onto the streets.
Ray Sullivan, CEO of the Canadian Housing and Renewal Association, wants investments to increase the number of social housing units in the country, but does not expect such a measure to be announced on Tuesday. “I’ll see what measures will help move towards a resolution of this serious political issue, the lack of housing.”
Several observers hope that the federal government will refrain from spending too much money in order to avoid fueling inflation and to help the Bank of Canada reduce its key rate more quickly. Some economists suggest tackling inflation as the main issue for a large portion of the population.
The federal government recently announced that $500 million of funds for travel and professional services have been reallocated and removed from the 2023-2024 budgets of many ministries. Tyler Meredith, a former director of strategy and economic planning for Ms. Freeland, states that the government will want to signal to Canadians and financial markets that it will restrict its spending to achieve this goal.
In the end, the upcoming economic statement aims to address pressing issues, such as the rising cost of living and housing availability, while also ensuring fiscal responsibility in light of the current economic climate. This statement will have a significant impact on the future policies and direction of the Canadian government in addressing these critical challenges.”