OTTAWA — The federal Liberals gave an update Tuesday on the government’s finances, and with it, how they plan to spend a windfall generated by better than expected economic growth.
Here are some highlights from the fall economic update:
— Positive economic developments have left the government with about $46.6 billion more to spend over five years than they’d projected in the 2017 budget.
— The economic update details ways they plan to spend roughly $14.9 billion of that over five years, leaving the rest to pull down the deficit.
— The deficit this fiscal year is now projected to be $18.4 billion, down from the spring projection of $25.5 billion. By 2021-2022, the deficit will fall to $10.9 billion. It had originally been projected to come in at $15.8 billion.
— The government focused on four major spending measures in the update: indexing the Canada Child Benefit to cost of living increases, expanding the Working Income Tax benefit program, formalizing a promised cut to the small business tax rate and ongoing work to overhaul the tax code.
— The indexation of the Canada Child Benefit project will now begin in July 2018, two years ahead of schedule. Over five years, the increases are projected to cost about $5.6 billion. As an example, the government says someone currently receiving the maximum amount of $6,400 for a child under six would see that rise to $6,496 next year, and $6,626 by 2019-2020.
— Expanding the Working Income Tax Benefit program. The program is designed to account for the fact that when people go off government assistance and get a job, their paycheque may not be as high as government support and so there’s less incentive to work. The benefit seeks to make up some of that pay difference. The government says they’ll spend $500 million a year starting in 2019 to allow more people to qualify.
— Taken together, measures to lower the small business tax rate to 10 per cent next year and nine per cent in 2019, along with ongoing overhauls to the tax code, will cost the government $1.3 billion between 2017 and 2022, but that doesn’t take into account one of the major changes coming to tax rules on how passive investments are handled.
— Almost $9 billion in program spending is detailed in the update, some of which has not been previously announced at all, or has only been detailed in very broad strokes. Among the new programs: over $1 billion for Fisheries and Oceans Canada and Canadian Coast Guard Services over six years; $760 million for security at Canada’s embassies and consulates over six years; $4 million over two years to expunge the criminal records of Canadian previously convicted of consensual sexual activity with same-sex partners; $526 million for legalization marijuana and a further $150 million over six years to handle drug-impaired driving.
The Canadian Press