November 3rd, 2022

This afternoon Deputy Prime Minister and Finance Minister Chrystia Freeland presented the 2022 Fall Economic Statement. The Fall Economic Statement foresees the federal deficit at $36.4 billion in 2022-23, down from the $52.8 billion projected in the April 2022 federal budget. The latest news also forecasts a balanced budget by 2027-28. However, taking into consideration the global economic climate and the threat of a recession on the horizon, the fall economic statement does warn that Canada could enter “a mild recession in the first quarter of 2023.”

Throne Speech Highlights/Promises:

  • Permanently eliminate interest on federal student and apprentice loans
  • Advance payments and shift the Canada Workers Benefit to be quarterly
  • Consult with credit card companies and small businesses with the intent to lower and regulate credit card transaction fees
  • The implementation of a two per cent tax on share buybacks by public corporations in Canada
  • Launch the promised “Canada Growth Fund” by the end of the year.
  • A refundable tax credit equal to 30% of the capital cost of investments in clean technologies.
  • A tax-free savings account for first-time buyers and other measures promised in the 2022 federal budget to deliver on the commitment to housing affordability.
  • $250 million over the coming five years to help workers acclimate to dynamic global demands.
  • $60 million over the next three years for the creation of a new “rapid response fund for workers”
  • $802.1 million over the next three years for the already existing “youth employment and skills strategy.”

Areas of Focus

  • In April’s budget the Liberals stated that they aimed to bring the deficit down to just two per cent of GDP this year. The fall economic statement foresees it will be 1.3 per cent of Canada’s $2.8-trillion economy, and federal debt-to-GDP ratio is forecasted to keep declining.
  • This update in conjunction to what was seen in Budget 2022 highlights public debt charges are higher and are expected to increase to $34.7 billion in 2022-23 due to the spike in short-term interest rates. It is also noted that they may decline slightly in 2024-25 as inflation and interest rates are projected to lull.

Opposition Reaction

  • The Conservatives have been vocal about no new taxes and no new spending that was not offset by savings and the NDP are calling for more support for people and more measures to target “corporate greed.”

Looking Forward

In the longer run, the federal government is forecasting a budget surplus of $4.5 billion during the 2027-28 fiscal year. This signifies the first time the Liberals have foreseen a balanced budget since coming into power in 2015.

Link to fall economic statement 2022.

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