CALGARY—The federal government on Tuesday tabled its 2024 budget, which hikes taxes and turns on the spending taps again while continuing this government’s pattern of mismanaging federal finances and harming Canada’s economy, according to Jake Fuss, director of fiscal studies at the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Time and time again, Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland have emphasized the importance of being fiscally responsible, but once again that rhetoric rings hollow,” Fuss said.
“With this budget, the government has doubled down on the failed policies that have sparked massive increases in federal debt and eroded Canada’s economy.”
Specifically, the budget introduces billions of dollars in additional program spending, which is now expected to be $77.2 billion higher over the next four years than the government projected last spring.
What’s more, the government plans to borrow to fund the new spending, resulting in a projected deficit of $39.8 billion this year— $4.8 billion higher than last year’s projection. And the government plans to continue borrowing, with annual deficits exceeding $20 billion planned for the subsequent four years.
According to the budget, due to this large increase in deficit-financed spending, the federal debt will climb $156.2 billion from now until April 2029.
The budget also hikes taxes by raising the capital gains inclusion rate from 50.0 to 66.6 per cent for capital gains over $250,000 to generate revenue. Research shows this is one of the most economically damaging sources of taxation, as it will disincentivize investment, which is crucial to improving economic growth.
“The evidence is clear—raising taxes on capital gains is economically damaging because it deters investment that Canada sorely needs to improve productivity and living standards,” Fuss said.
“The scale of deficit-financed spending and debt in this year’s federal budget demonstrates that the Trudeau government has no interest in being fiscally responsible.”
“Instead of showing restraint, the government chose to repeat its past fiscal mistakes and lead federal finances down an increasingly perilous path.”
Media Contact:
Jake Fuss, Director, Fiscal Studies
Fraser Institute
403 216-7175 ext. 432
[email protected]
 For more information, please contact:
Bryn Weese, Fraser Institute, 604-688-0221 ext. 589, [email protected]
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