By Ketki Saxena
Investing.com – Canadian Finance Minister Chrystia Freeland tabled the Liberal’s 2022 federal budget in Ottawa yesterday, outlining over $56-billion in new spending planned over the next six years.
Below is a breakdown of the biggest-ticket items on the budget, which included:
- $10.6 billion for reconciliation efforts with Indigenous Communities
- $10 billion for housing,
- $8 billion for defence
- $7.5 billion for green initiatives
- $7 billion for dental care as part of the Liberal’s deal with the NDP
Reconciliation Efforts with Indigenous Communities
$10.6 Billion will be spent to support reconciliation efforts with Indigenous communities, including $4 billion over six years on making sure First Nations children have access to the health, social and educational services and another $4 billion over seven years to address housing vulnerabilities.
Housing
$10 billion will be spent on various housing-related initiatives over the next five years, including $4 billion to build 100,000 new housing units in that period. An additional $1.5 billion will be dedicated to building 6,000 new affordable housing units in the next two years.
The government is also following through on a 2-year ban on non-resident foreign investors, and an increased tax on property flippers, who hold a unit for under twelve months. A new tax-free savings account will also be introduced for first-time homebuyers in 2023, allowing buyers to save up to $40,000 on a home. The government also proposed a $500 payment for Canadians facing housing affordability challenges.
Defence
$6.1 billion over five years towards upgrading the capabilities of the Canadian armed forces, with an additional $1.4 billion in annual spending after that. The budget also recommitted $252.2 million that had been previously for modernizing NORAD, the continental missile defence system. An additional $500 million will be spent on military aid for Ukraine this year.
Canada currently spends only about 1.34% of its GDP on defence. The budgeted-in increase will take that to approximately 1.5%, still well under Nato’s request that members spend at least 2% of domestic GDP on defence.
Green Initiatives
The budget promises $7.5 billion in green initiatives, including $1.7 billion over five years to incentivize the purchase of zero-emission vehicles, saving consumers around $5000 on the purchase of an EV. $548 million will also be spent over four years to incentivize businesses to buy zero-emission vehicles.
The government is also proposing a refundable tax credit for businesses to invest in carbon capture technologies, the cost for which is expected to be $2.6 billion over five years.
Dental Care
As part of their deal with the NDP, who have made dental care a priority, the Liberals committed $5.3-billion over five years and $1.7-billion in continuing funding. The plan will fully cover families with annual incomes below $70,000, and partially cover families with annual incomes up to $90,000. The plan starts this year for children under the age of 12 and will be fully implemented by 2025.