This afternoon, Canada’s Finance Minister and Deputy Prime Minister, the Honourable Chrystia Freeland, tabled the 2023 Fall Economic Statement (FES) in the House of Commons.
This Fall Economic Statement focuses mainly on economic growth and supporting Canadians with the increasing cost of living by attempting to stabilize housing prices and accelerate home building.
Additionally, the government plans to encourage grocery sector competition and introduce new investments in order to address the affordability crisis.
Overall, federal deficit projections are $40.1 billion in 2023-24, decreasing to $38.4 billion in 2024-25, to $38.3 billion 2025-26, to $27.1 billion in 2026-27, and finally to $23.8 billion in 2027-28. The deficit improves to $18.4 billion in 2028-2029.
Fiscal objectives include maintaining the 2023-24 deficit at or below $40.1 billion, lowering debt-to-GDP ratio in 2024-25, and maintaining a declining deficit-to-gdp ratio in 2024-25 and keeping deficits below 1 percent of GDP in 2026-27.
This FES includes $13.2 billion in net new spending measures between 2023 and 2029.
A $1 billion affordability-focused housing fund, supporting seeing more homes built.
Opening up $15 billion in 10-year, low-interest loans to build 30,000 more rental housing units across Canada, via the Canada Mortgage Housing Corp. (CMHC).
New mortgage guidance for lenders that will set expectations for homeowners regarding renewal. The “Canada Mortgage Charter” will include a new requirement that mortgage lenders proactively contact homeowners four to six months before they are set to renew their mortgage to assess their options. Many homeowners will be facing much higher interest rates at renewal time in the next two years. The Office of the Superintendent of Financial Institutions and the Financial Consumer Agency of Canada will be the principal enforcers of the new rules.
Leveraging Federal Funding to Build More Homes
The Statement reaffirms the government’s intentions to tie access to federal infrastructure funding to actions by the provinces, territories, and municipalities.
Removing the GST From New Co-Op Rental Housing
The federal government is creating incentives to build more homes by removing the GST from new co-op rental housing. This applies to projects beginning construction between September 14, 2023 and that end in 2030, with completion before 2036. This will not apply to substantial renovations of existing rental complexes, which will prevent renters from renovictions.
More Financing for Apartment Construction
The government announces an additional $15 billion in new loan funding for the Apartment Construction Loan Program, starting in 2025-26. This will support over 30,000 new homes across Canada, with the total contributions from this program adding up to 101,000 new homes by 2031-2032.
Building More Affordable Housing
The government is investing an additional $1 billion over 3 years for the Affordable Housing Fund. This fund will support non-profit, co-op, and public housing providers to build more than 7,000 new homes by 2028.
Previously announced on September 26, 2023, the government plans to increase the CMHC’s annual limit to support low-cost financing by $20 billion per year.
The federal government is investing $309.3 million in new funding for the Co-operative Housing Development Program, which was originally announced in budget 2022.
The government promises a Canadian Mortgage Charter for homeowners at risk because of higher interest rates.
The federal government plans to stop tax deduction of rental expenses on short-term rental properties where the practice is restricted.
The government is continuing the launch of the Canadian Dental Care Plan by supporting up to 9 million uninsured Canadians who have a family income of less than $90,000 with oral health services.
The government will also be removing the GST/HST from psychotherapy and counselling services.
Finally, the government is introducing a new 15-week shareable EI adoption benefit for adopting and surrogate parents.
The government is focused on implementing the new clean economy investment tax credits for carbon capture, clean technology adoption, clean hydrogen, clean technology manufacturing, and clean electricity. The FES expands on their clean technology and clean electricity tax credits
Starting in April 2024, the pollution price rural top-up will be doubled to 20%.
Starting in 2023-24, $500 million over 4 years will be allocated to enhance the Oil to Heat Pump Affordability program.
The requirements of the Canada Greener Homes Initiative will be reviewed to make it easier for Canadians to switch to heat pumps.
From November 9, 2023 to March 31, 2027, there will be a temporary pause on the federal fuel charges from the delivery of heating oil as work is underway to replace heating oil furnaces.
Amendments will be made to the Competition Act to encourage more competition to lower prices, provide Canadians with more choices, and more innovative products and services.
Amending the Competition Act through Bill C-56, the Affordable Housing and Groceries Act, to enhance competition in the grocery sector to bring down costs and ensure Canadians have more choice in where they purchase groceries.
Establish the Grocery Task Force to monitor and investigate big grocers’ work to stabilize prices and other practices in the sector like “shrinkflation”.
The federal government is prioritizing the reduction of excessive or unfair fees through amendments to the Air Passenger Protection Regulations and investigations on international mobile roaming charges.
The Financial Consumer Agency of Canada (FCAC) will work with banks to improve low and no-cost bank accounts and make these accounts more accessible to Canadians.
Starting November 1, 2024, the Ombudsman for Banking and Services Investments (OBSI) will act as the external complaints body for Canada’s banking sector.
In Budget 2024, legislation will be introduced to establish a consumer-driven banking framework to regulate access to financial data.
On November 22, 2023, the government will release final regulations under the Retail Payment Activities Act to make payment services secure for businesses and Canadians.
The government intends to amend the Canadian Payments Act by expanding eligibility to Payments Canada to payment service providers supervised by the Bank of Canada, operators of designated clearing houses, and credit union locals who are members of a credit union central.
The repayment deadline for Canada Emergency Business Account (CEBA) loans in order to qualify for partial loan forgiveness has been extended to January 18, 2024.
The government also will explore removing the 30% from investments in Canada for pension funds.
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This afternoon, Peter Bethlenfalvy, Ontario’s Minister of Finance, delivered the 2023 Fall Economic Statement in the Ontario Legislature.
This afternoon, the Honourable Chrystia Freeland, Canada’s Minister of Finance, delivered the 2023 Budget in the House of Commons.