Evening Update: Federal budget unveils plans for $56-billion in new spending, higher taxes, but critics call it short on growth plans

Good evening, let’s start with today’s top stories:

The federal government’s budget plan lays out more than $56-billion in new spending over six years as part of what Finance Minister Chrystia Freeland says is a package that will boost innovation and green technology, but some economists say falls short of a long-term growth agenda.

Described as a strategy to grow the economy and make life more affordable, budget highlights include $5.3-billion to run a national dental care program for lower-income people, the creation of two arms’ length agencies focused on attracting private investment in Canada and billions for housing and defence.

Among the highlights:

• Housing: The federal government is proposing more than $10-billion in new spending on a slew of housing-related initiatives, much of it aimed at increasing supply. The largest chunk, at $4-billion over five years, is for the launch of a Housing Accelerator Fund, which aims to speed up development and create 100,000 in net new housing units.
• Housing: A two-year ban on home purchases by foreigners, following a pledge in the 2021 election campaign. However, many foreign buyers will be exempt from the ban, such as individuals on work permits who are living in Canada.
• Defence: $6.1-billion over five years in direct new spending by the Defence Department to increase the capabilities of the Canadian Armed Forces, with an additional $1.4-billion in annual spending on the armed forces after that.
• Dental care: $5.3-billion in funding over five years, and $1.7-billion in continuing spending, to expand access to dental care. The plan starts this year with children under 12 and would eventually reach full implementation by 2025.
• Climate: $7.5-billion in various green initiatives as part of Canada’s goal of net-zero emissions by 2050, though many were extensions of existing or already-announced initiatives.
• Reconciliation: $10.6-billion to support reconciliation efforts with Indigenous communities.
• The budget includes a temporary Canada Recovery Dividend, in the form of a one-time 15-per-cent tax on taxable income for the 2021 tax year, payable over five years.

Your pocketbook

Measures aimed at taming home prices are the centrepiece of the Trudeau government’s latest budget, with pledges spanning billions of dollars for new home construction, curbs on speculation and foreign buyers and help for Canadians hoping to buy their first home, including a new Tax-Free First Home Savings Account. Erica Alini reports on what you need to know as affordable housing takes centre stage in this year’s budget.

Analysis

Patrick Brethour reports the Liberals correctly diagnose the deep-rooted economic problems that Canada faces, and that threaten to mire this country in a low-wage, less prosperous future. An intensifying global competition for capital, a persistent lack of private-sector investment and the resulting flaccid productivity growth are huge challenges that the budget acknowledges.

Read more:

• Full budget highlights: What you need to know about housing, defence and climate spending
• Robyn Urback: Chrystia Freeland’s 2022 federal budget is a political instrument as much as an economic ledger
• Patrick Brethour: The Liberals’ ‘spend, tax and pray’ budget devoid of bold growth measures

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United Nations suspends Russia from human-rights body over Ukraine

The United Nations General Assembly on Thursday suspended Russia from the UN Human Rights Council over reports of “gross and systematic violations and abuses of human rights” by invading Russian troops in Ukraine.

The U.S.-led push garnered 93 votes in favour, while 24 countries voted no and 58 countries abstained. A two-thirds majority of voting members – abstentions do not count – was needed to suspend Russia from the 47-member council.

The U.S. Senate on Thursday also voted unanimously to suspend normal trade relations with Russia and ban the importation of its oil, ratcheting up the U.S. response to the invasion amid reports of atrocities.

Lawmakers overwhelmingly support the substance of the two bills, but they had languished for weeks in the Senate, which worked to hammer out the final details. Both bills are expected to gain the House’s support later Thursday before going to President Joe Biden to be signed into law. Each bill passed the Senate unanimously, 100-0.

Meanwhile, Ukraine has retaken Chernihiv after Russian forces retreated from the historic city this week. Among the first places that Russian troops reached in their invasion of Ukraine, the city endured weeks of siege. But in the face of death, destruction and Russian atrocities, its residents never gave in, Nathan VanderKlippe reports.

At least one person was also killed and 14 were wounded in shelling on Ukraine’s northeastern city of Kharkiv on Thursday, regional governor Oleh Synehubov said in an online video address. The Ukrainian military earlier said Russian troops were bombarding the city with shells and rockets.

Read more:

• Russia-Ukraine live updates
• Chernihiv residents never gave in amid death, destruction and Russian atrocities

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Why Ottawa dropped appeal of Catholic Church payouts for residential school survivors

The federal government abandoned its 2015 appeal of a court ruling that released the Catholic Church from its financial obligations to residential school survivors because it believed there was a “low likelihood of success,” according to records obtained by The Globe and Mail.

For almost seven years, Indigenous leaders have sought answers to why Ottawa dropped its legal action against the Catholic Church, which was short $21.3-million in a fundraising campaign meant to benefit survivors. Documents released last week by the Department of Justice through an access-to-information request provide some insight into the decision.

In a memorandum to then-justice minister Jody Wilson-Raybould dated April 21, 2016 – five months after the appeal was abandoned – Duaine W. Simms, then an assistant general counsel and director of the Aboriginal-affairs portfolio at the Department of Justice, wrote that there “would be a low likelihood of success of an appeal from factual findings and conclusions, and even if successful, an even lower chance of success in finding legal levers to force the Catholics to relaunch a moribund fundraising campaign.”

“In finalizing the [Indian Residential Schools Settlement Agreement], all parties agreed to support the promotion of healing, education, truth and reconciliation, and commemoration. While Canada can expect that the parties will be guided by these intentions, Canada cannot prevent other parties from taking a narrow view of their legal obligations.”

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ALSO ON OUR RADAR

Employers still reluctant to formalize hybrid and remote-work language in offer letters: Employers still appear reluctant to formalize such arrangements in employment contracts, despite having company policies that allow for a voluntary return to office or a permanent hybrid-work setup.

A return to offices reignites the small joys of everyday interactions: The return to office has re-established connections with long-lost friends, colleagues and communities.

CIBC CEO urges economic growth plan as ‘policy No. 1′ to meet mounting challenges: Canadian Imperial Bank of Commerce chief executive officer Victor Dodig said Canada needs to be “obsessed with economic growth” to boost prosperity and combat pressure from high inflation and rising interest rates.

Ketanji Brown Jackson confirmed as first Black female U.S. Supreme Court Justice: The Senate confirmed Ketanji Brown Jackson to the Supreme Court on Thursday, shattering a historic barrier by securing her place as the first Black female justice and giving President Joe Biden a bipartisan endorsement for his effort to diversify the court.

Who is eligible for a fourth COVID-19 vaccine dose across Canada?: Provinces and territories are expanding eligibility for fourth doses of the COVID-19 vaccine to millions to be “obsessed with economic growth” to boost prosperity and combat pressure from high inflation and rising interest rates. Here’s where things stand so far.

MARKET WATCH

The S&P 500 ended higher on Thursday, with Microsoft and Tesla fuelling a late-session rally while investors eyed the war in Ukraine and a potentially more aggressive Federal Reserve.

Gains in Microsoft Corp, Tesla Inc and Apple Inc helped lift the S&P 500.

Also supporting the S&P 500, Pfizer Inc jumped after it said it would buy privately held ReViral Ltd in a deal worth as much as $525 million, its second acquisition in less than six months to boost its drug portfolio.

The S&P traded at a loss for much of the day before rallying near the end of the session.

According to preliminary data, the S&P 500 gained 17.83 points, or 0.40 per cent, to end at 4,498.98 points, while the Nasdaq Composite gained 5.78 points, or 0.04 per cent, to 13,894.60. The Dow Jones Industrial Average rose 93.50 points, or 0.27 per cent, to 34,590.01.

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TALKING POINTS

How many more people will become the “Ghosts of Afghanistan?”

“How many more fathers, brothers, mothers and daughters have to disappear like that before Canada lives up to its commitments? The irony is that Bismillah became a ‘ghost’ the same week that a film I directed for TVO called Ghosts of Afghanistan won the highest accolades in Canada, winning three prizes at the Canadian Screen Awards, including Best Documentary.” – Julian Sher

Pakistan’s constitutional crisis exposes its chilly relationship with the U.S.

“Given the embattled [Prime Minister Imran Khan’s] efforts to stay in power, people in Pakistan should be concerned about how Mr. Khan may be using it to stir anti-American hysteria for electoral gains. That’s especially troubling, given that his claims may be hurting all Pakistanis’ economic and social prospects by doing so.” – Murtaza Haider

Rebuilding fisheries and wild fish stocks for coastal First Nations would be reconciliation in action

“Canada’s federal government talks a big game when it comes to reconciliation – always with a capital “R” for emphasis and importance. But when it comes to moving from words to action, that big game often slows to a snail’s pace. For First Nations in the North Pacific Coast, one historical challenge has been the decline of fisheries that we rely on – owing to Canada’s unsustainable management practices.” – Christine Smith-Martin and Marilyn Slett

What’s the best way to beat the latest wave of COVID-19: action, or wishful thinking?

“Sometimes the fix for a problem can be so mundane and obvious that it’s hard to work up enthusiasm for it. Front tire looking squishy? Pump it up. Roof looking a little mossy? Replace those shingles. A highly contagious subvariant of a novel coronavirus running amok? Get boosted. And put on a mask.” – The Editorial Board

LIVING BETTER

Why you might need to update the executor in your will as you get older

Most Canadians eventually get around to estate planning and putting their financial affairs in order – even if that often occurs later in life than it should.

But creating a last will and testament really needs to involve more than a quick visit to a lawyer’s office for a document signing.

For those nearing or entering retirement, it is critical not only to ensure your will is up to date, but also that you have chosen an executor(s) up to the challenge of carrying out your final wishes.

Given that your executor acts as your voice after you die, Canadians need to put a lot more thought into who they select for the role, says Darren Coleman, senior portfolio manager, private client group, with Coleman Wealth at Raymond James Ltd. In Toronto.

“People need to change this misconception or idea that it is an honour to choose someone as your executor,” he says. “It is a sign of tremendous trust and confidence in someone else, but at the same time, you’re also handing someone a remarkably difficult burden.”

TODAY’S LONG READ

The 22 most influential people in Canadian film

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Ahead of Sunday’s Canadian Screen Awards, The Globe and Mail presents the changemakers whose creativity, influence and sheer will are reshaping the country’s film industry for the better.

Evening Update is written by Emerald Bensadoun. If you’d like to receive this newsletter by e-mail every weekday evening, go here to sign up. If you have any feedback, send us a note.