Good morning. It’s James Keller in Calgary.
The latest federal budget has some big policies that will affect Western Canada. There are measures designed to calm hot housing markets like Vancouver’s, money to reduce emissions for Alberta and Saskatchewan oil and gas, and funding to protect fresh water in places like Lake Winnipeg.
Overall, the budget includes $56-billion in new spending for initiatives such as a national dental program for low-income Canadians, while projecting a $52.8-billion deficit.
Housing is a big focus, both to control overheated markets and also to accelerate new construction to address a supply gap. There is money for affordable housing and a savings program for first-time buyers that will work like RRSPs.
One of the big headlines out of the federal budget was a ban on foreign purchases for two years, something that the Liberals promised in their 2021 election platform. There’s a lot of debate about what is driving up home prices, which have jumped by more than 50 per cent in the past two years. One frequent talking point is the influence of speculators and investors from outside the country.
The budget includes just a few lines about the ban, which would apply to people who are not Canadian citizens or permanent residents. There would be exemptions for refugees, people fleeing international crises, people with work permits and, in some instances, international students on the path to permanent residency.
B.C. took measures against foreign buyers six years ago as prices in the Vancouver region hit a crisis point. While it wasn’t a ban, it did see that segment of the market shrink considerably, from nearly 30 per cent of purchases in some areas of the Vancouver region to less than 2 per cent today.
While sales and prices appeared to cool in the immediate aftermath, they recovered quickly and were soon setting new records. B.C.’s Housing Minister David Eby said he didn’t think the policy would make much difference to his province, though the government does stand to lose $100-million a year it collects from the foreign-buyer tax.
The budget also puts a heavy focus on emissions reductions, with a suite of tax credits and a new $15-billion investment fund.
The goal is to deter investment in fossil fuels while making it cheaper to launch clean energy projects, such as battery-storage solutions; clean hydrogen; and carbon capture, utilization and storage.
The Alberta government has been pushing for carbon-capture tax credits, arguing that such a program would need to be set at 50 per cent to make such facilities permanent – which is what Ottawa is adopting.
The budget also provided more detail to measures included in the emissions-reduction plan released last month, including more money to help homeowners make energy-efficient upgrades, funding for Indigenous-led climate solutions and $900-million to expand electric-vehicle charging infrastructure.
For more on the budget, check out our explainer about what stood out.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief James Keller. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.
Wendy Cox
James Keller