The finance minister, Chrystia Freeland, is postponing a balanced budget indefinitely, instead engaging in small-scale measures for the public, but which add to the visibly bloated debt.
This latest update includes $13.2 billion in new spending over the next six years, which rises to $21 billion when we include measures included in last spring’s budget. From next year, debt costs will reach 7 to 8 billion.
Here’s what to remember from the Trudeau government’s economic update on Tuesday.
Another tile for Airbnb
Faced with a housing crisis of historic proportions, the Trudeau government is offering a helping hand to cities and provinces to tackle short-term rental sites like Airbnb. Starting Jan. 1, cities that adopt such regulations will be able to deny tax deductions related to expenses incurred by landlords using these sites. Ottawa will provide cities with $50 million over three years. According to Minister Freeland, these measures could eventually free up 30,000 housing units. Objective: “Encourage the return of short-term rentals to the long-term housing market”.
Appease the interest of banks
Ottawa also deals with persistent bank charges that affect the most disadvantaged. This includes first lowering fees for insufficient funds — sometimes as high as $50 — but more broadly making no-fee or low-fee accounts accessible to a larger number of people. The Financial Consumer Agency of Canada (FCAC) should work with banks to allow more debit transactions, bill payments and online transfers without fees. Finally, Ottawa wants to give an independent ombudsman the power to resolve complaints against banks.
Travel with kids with ease
The government also wants to force airlines to offer parents the option of under-14s sitting next to them on flights, with the aim of eliminating “unnecessary charges”.
Parental leave for adoption
In addition to benefits for new parents who choose to adopt a child, Minister Freeland plans to expand Employment Insurance to provide 15 weeks of parental leave that couples can share. Ottawa estimates that 1,700 families could benefit from this at an estimated cost of $48 million over the next six years.
Tax holiday for psychotherapy
The central government wants to abolish GST in consultation with psychiatrists and counseling therapists. The surprise move is expected to cost the public exchequer 50 million over the next five years.
Inquiry on roaming charges
Roaming costs often cause many (bad) surprises for Quebec travelers outside the borders. Ottawa has mandated the Radio-television and Telecommunications Commission (CRTC) to investigate the practice and return next year with a report on ways to combat this blight.
