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FORUM: A budget for a booming economy (May 2022)

May 17th, 2022 · No Comments

Inflation, housing and a green transition are all key elements

By Chrystia Freeland

On that Thursday in March, just over two years ago—when our travel plans were hastily cancelled, when our children came home from school, and when we rushed to the grocery store to buy toilet paper and hand sanitizer—we knew then that this virus would disrupt our lives.

But few of us realized quite how much or for quite how long.

Yet here we are. We bent, but we did not break. Canadians have done everything that has been asked of them, and more.

And so, to all of them—to all of you in University-Rosedale—I first want to say thank you!

Last month, I tabled Budget 2022—our plan to grow the economy and make life more affordable for Canadians.

When COVID-19 first hit, Canada suffered a tremendous economic blow. Three million Canadians lost their jobs. Our economy contracted by 17 per cent¬¬—the deepest recession since the Great Depression.

But today, the Canadian economy has not just recovered—it is booming. 

Our real GDP is more than a full percentage point above where it was at the start of the pandemic. As of March 2022, Canada has recovered 115 per cent of the jobs that were lost during those awful first months. We now have an unemployment rate that sits at just 5.3 per cent—the lowest on record. There are more Canadians employed now than before the pandemic.

This is thanks to the remarkable resilience of Canadians, and to the emergency financial assistance we put in place to protect Canadians and Canadian businesses in their time of need.

But while our economy has come roaring back, that doesn’t mean there aren’t more challenges that we need to tackle.

Inflation—a global phenomenon—is making things more expensive in Canada, too. Snarled supply chains have driven prices higher at the checkout counter. Buying a house is out of reach for far too many Canadians. Russia’s illegal and barbaric invasion of Ukraine is directly contributing to higher food and energy prices—both here at home and around the world.

We need to do better, as a country, at innovating and encouraging small businesses to grow. We need to continue to address the existential threat of climate change.

In response to these challenges, Budget 2022 outlines a plan to build a stronger and more resilient economy based on three pillars: investing in Canadians; investing in economic growth and innovation; and investing in the green transition.

Investing in Canadians: Put simply, Canada does not have enough homes. Anyone in Toronto can tell you what that means for housing prices. Budget 2022’s housing measures will put us on the path to double housing construction over the next decade. It will help Canadians save for and buy their first home, ban foreign investment in Canadian housing and curb the unfair practices that make housing more expensive for Canadians. The budget invests in Canadian workers by ensuring they have the skills they need for the good-paying jobs of today and tomorrow, and it will make it easier for skilled immigrants—people our economy needs!—to make Canada their home. The budget also makes further significant investments in affordable child care, in our public health care system and in advancing reconciliation with Indigenous peoples. 

Investing in economic growth and innovation: Our plan includes launching a world-leading Canada Growth Fund that will attract tens of billions of dollars in private investment for  Canadian industries and Canadian jobs. A new innovation and investment agency will help Canadian businesses innovate, grow, and create new jobs. The budget also proposes to implement Canada’s first Critical Minerals Strategy—one that will create thousands of good jobs and capitalize on a growing need for the minerals used in everything from phones to electric cars. Other measures include steps to build more resilient supply chains and to cut taxes for our growing small businesses.

Investing in the green transition: the global economy is changing, and Canada can lead the way on the path to net-zero. 

The Canada Growth Fund will help bring to Canada some of the trillions of dollars in private capital looking to invest in clean industries and jobs. 

In addition to more investments to protect our land, lakes, and oceans, we will also make it more affordable for Canadians to purchase zero-emission vehicles, build and expand a national network of zero-emission vehicle charging stations and make new investments in clean energy.

And to make sure we aren’t leaving our children with bills they won’t be able to pay, we are also continuing to deliver on our fiscal anchor—a declining debt-to-GDP ratio and the unwinding of the COVID-19 deficits we took on to keep Canadians safe. This anchor will ensure our finances remain sustainable for decades to come. Canada has a proud tradition of fiscal responsibility. It is my duty to maintain it—and I will.

Budget 2022 is a responsible plan to grow our economy and make life more affordable for Canadians. It will make it easier for businesses to grow. It will mean more jobs and more prosperity for Canada, and it will mean a better, cleaner economic future for our children. 

And it will make sure that Canada remains the best place in the world to live, work, and raise a family.

Chrystia Freeland is Deputy Prime Minister and Minister of Finance and MP for University-Rosedale. 


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