$15B: The cost of the Liberal-NDP pact in the 2022 federal budget

NDP Leader Jagmeet Singh says his caucus will support the 2022 federal budget

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The Liberal government’s 2022 budget includes approximately $15 billion in spending for major initiatives related to its supply and confidence agreement with the NDP.

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A number of budget measures related to housing and health initiatives, including a dental plan, were included in the Liberal-NDP agreement announced last month. The budget plans to raise about $6.1 billion over five years from new taxes on banks and financial institutions, another NDP asks.

Some of the spending measures, like $4 billion for a new Housing Acceleration Fund, were also in the Liberals’ election platform before they were listed as priorities in the NDP-Liberal deal. Others, including dental care, came from the NDP.

The budget allocates $5.3 billion over five years and then $1.7 billion on an ongoing basis to the dental care program. Children under 12 will be covered this year, with the program then extending to under 18s, the elderly and people with disabilities the following year. The program, which will be available to families with annual incomes below $90,000, will be fully implemented by 2025.

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Pharmacare was another top priority for the NDP, with both parties agreeing to continue to advance universal national pharmacare. The budget does not allocate any funding for pharmacare, but does indicate that the government will introduce pharmacare legislation in Canada and work to pass it by the end of 2023, and task “the Canadian Drug Agency to develop a national formulary of essential drugs and bulk drugs”. purchase project. »

The budget also provides about $6 billion for various housing initiatives that were referenced in the agreement between the two parties.

The biggest of these is $4 billion over five years for the Housing Acceleration Fund, which focuses on increasing housing supply – a total of 100,000 net new homes over the past few years. next five years. “To make housing more affordable, more housing needs to be built,” the budget says. The aim is “to inspire towns and villages that are mobilizing to get more housing built, while ensuring that municipalities are able to obtain the support they need to modernize and build new housing” .

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Another $1.5 billion over two years is being allocated to extend the Rapid Housing Initiative, which the government expects to create “at least 6,000 new affordable homes”. An additional $475 million will go to the Canada Housing Benefit to provide a “one-time payment of $500 to people facing housing affordability issues.”

NDP Leader Jagmeet Singh said his caucus would support the 2022 federal budget.

Singh says the budget tabled by Finance Minister Chrystia Freeland honors the deal he struck last month to back the Liberals on key votes like budgets in exchange for the government implementing priorities of the NDP on health care, housing and reconciliation.

The budget also promises to reform the Rental Construction Finance Initiative to put more emphasis on affordability. The promise to move forward with a homebuyer’s bill of rights, which could include measures such as guaranteeing homebuyers the legal right to a home inspection, is also not costed. but included in the budget, and also previously promised in the Liberal platform.

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The budget provides additional funding to improve and expand Indigenous housing in Canada, an area where the New Democrat-Liberal agreement called on the government to make a “significant additional investment.”
This includes $4 billion over seven years in new funding that will go to Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada “to accelerate work to close the gaps in Indigenous housing” on reserve and indigenous communities.

The budget also provides an unspecified amount of a total pot of $209.8 million “to increase support provided to communities to document, locate and commemorate burial sites at former residential schools,” another priority included in the budget. ‘deal.

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A measure that was also in the agreement between the Liberals and the NDP should bring in revenue for the government. Banks and life insurance groups “will pay a one-time tax of 15% on taxable income over $1 billion for the 2021 tax year,” the budget says. It is expected to gross $4 billion over the next five years. The government is also permanently increasing the tax rates of certain banking and life insurance groups, which will bring in an additional $2 billion.

“While many sectors continue to recover, Canada’s major financial institutions have made significant profits during the pandemic and have recovered faster than other parts of our economy, thanks in part to federal pandemic supports. for the people and companies that have helped reduce risk to the balance sheets of some of Canada’s largest financial institutions,” the budget says. “The federal government is therefore proposing two measures to ensure that these major financial institutions help support Canada’s overall recovery.

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Although uncosted and not included in the deal between the NDP and the Liberals, the budget also includes a reference to raising taxes for Canada’s wealthiest — something the NDP has campaigned on for years.
The budget indicates that 28% of taxpayers with gross income over $400,000 pay a federal rate of 15% or less, making “heavy use of deductions and tax credits.” He noted that’s “less than some middle-class Canadians are paying.” The Liberals also promised such a tax in their election platform.

The budget promised to examine a new minimum tax regime, which it said would “go further to ensure that all wealthy Canadians pay their fair share of taxes.” He said he would provide additional details on this measure in his financial update later this fall.

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