March 29th, 2023
Finance Minister Chrystia Freeland delivered the new federal budget Tuesday, a mixed bag of additional health care spending, some affordability measures, and a continuation of deficit financing.
The budget outlook includes weak GDP growth of 0.3 per cent, another $43 billion in net new spending initiatives over earlier projections, and a turn away from a previous government commitment to balance the books within five years.
Among the âwinsâ for business are a commitment to a national supply chain strategy that will fund key infrastructure. There is talk of a commitment to the Atlantic Loop energy grid and to work with the provinces on dropping inter-provincial trade barriers. The budget earmarks $21 billion for clean tech investments, mostly through tax credits, and the government has worked with Visa and Mastercard to reduce credit card charges for small business by an average of 27 per cent.
The proposed six per cent increase in the excise tax on alcohol has been capped at two per cent for one year starting April 1. There is also more than $100 million for regional development agencies like ACOA to spend on tourism-related projects.
On the âmissed opportunitiesâ side of the ledger, the biggest miss is the lack of a commitment to balanced spending. Servicing the countryâs net debt will cost more over the next 10 years than the $196 billion health care agreement recently negotiated with the provinces.
There are a few labour-related program announcements in the budget but little new housing spending. The digital services tax, which places an extra three per cent over HST on all digital services, remains despite opposition. The government also did not commit to an overall review of our tax system, a key recommendation from the Chamber.
The Chamber of Commerce for Greater Moncton will continue to monitor federal spending programs this spring as more details emerge.