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“Finance Minister Chrystia Freeland unveiled the federal government’s latest economic update today, highlighting affordability measures for Canadians struggling through a cost-of-living crisis, while trying to balance fiscal restraint and help rein in inflation. Through her highly anticipated fall economic update, Freeland announced billions in net new spending, and projected the deficit will be $40 billion in 2023-24. This year’s document was less of a mini-budget, with fewer new spending measures than in recent years, marking more of a return to the traditional fall fiscal updates of pre-pandemic years.
Housing Affordability:
As Freeland had signalled, the update focused heavily on housing, with measures geared toward making renting and purchasing a home more affordable, namely by building up supply. Canada Mortgage and Housing Corporation has been warning there needs to be at least 3.5 million more homes built by 2030 to improve affordability. While the Liberals have indicated the need to build more housing is among the most urgent of issues, many of the fall economic update’s new spending announcements will not come into effect in the immediate future.
Mortgage Relief:
Plans to create a Canadian Mortgage Charter will “support more Canadians through the temporary financial stress caused by elevated interest rates.” Following several consecutive interest rate hikes, the program is set to include measures to help mortgage holders at risk.
Grocery Prices and Mental Health Support:
Addressing grocery prices and mental health support were also top priorities in the fall economic statement. While there is no new spending to offset the pinch people are feeling at the checkout, the proposed amendments to the Competition Act and other measures aim to indirectly help bring down prices. Additionally, certain psychotherapy and counselling services may soon be exempt from the GST and HST, providing relief for individuals seeking mental health support.
Junk Fees and Miscellaneous Affordability Measures:
Freeland also highlighted certain miscellaneous affordability measures she said will eliminate “junk fees” and help Canadians weather cost-of-living challenges. This includes amendments to air passenger protections and a promised update on steps being taken to reduce bank fees.
In conclusion, the fall economic statement aims to tackle affordability concerns through a series of measures targeting housing affordability, mortgage relief, grocery prices, mental health support, and miscellaneous affordability measures. While some measures offer potential relief for Canadians in the future, the impact may still be delayed, and the immediate need for relief remains a challenge. As the government grapples with fiscal restraint and inflation, it is crucial to closely monitor the effectiveness of these measures and their overall impact on Canadians’ financial well-being.”
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