Canada's Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks during Question Period in the House of Commons on Parliament Hill on Feb. 28.BLAIR GABLE/Reuters
Finance Minister Chrystia Freeland will deliver the 2022 budget on April 7, the government announced on Tuesday.
“Our government was re-elected on a commitment to grow our economy, make life more affordable and to continue building a Canada where nobody gets left behind. That is exactly what we are doing and that is what we’re going to continue to do in the budget that I will present to this House on April 7th, 2022, at 4 p.m.,” Ms. Freeland said in the House of Commons.
The 2022 federal budget will be an opportunity for the government to outline how it intends to wind down the massive emergency spending related to the COVID-19 pandemic, while delivering on the billions in promised new spending from last year’s Liberal Party election platform and the recently announced parliamentary co-operation agreement with the NDP.
The agreement involved the NDP pledging to keep the minority Liberal government in power until June, 2025, in exchange for action on NDP priorities, including dental care, pharmacare and increased federal transfers to the provinces for health care.
Chrystia Freeland readies another big-spending federal budget amid fears of rising inflation
The timing of the announcement means the spending plan will be released just one day before the House of Commons breaks on the Friday for a two-week recess over Easter, returning on April 25.
Party leaders rarely attend Friday question periods, meaning the timing of the budget release will limit the opposition’s ability to immediately question Prime Minister Justin Trudeau and Ms. Freeland in the Commons in relation to its content.
Ms. Freeland’s December fiscal update projected that the size of the federal deficit would decline from $327.7-billion in 2020-21, to $144.5-billion in 2021-22 and $58.4-billion for the 2022-23 fiscal year that begins on April 1.
Recent projections from private-sector economists have said that those estimates likely remain a reliable guide for Ottawa’s bottom line. Economists say Ottawa will likely benefit in the short term from stronger-than-projected revenues owing to factors such as updated forecasts for economic growth, inflation and the higher price of oil, but those gains will be largely offset by the added spending from election platform commitments and other recent promises.
A report released Tuesday by Desjardins economist Randall Bartlett suggests the short-term gains could be followed by longer-term pain.
“Major spending commitments during and since the 2021 federal election raise questions about the long-term sustainability of federal finances,” Mr. Bartlett states in the report.
While the recent agreement between the Liberals and the NDP did not include any costing estimates, Mr. Bartlett’s report notes that the Parliamentary Budget Officer has estimated the NDP’s proposed national pharmacare plan would cost more than $11-billion a year.
“Given all of the recent spending commitments, any near-term drop in the federal deficit from today’s improved economic outlook could be fleeting,” the report states. “It’s an open question whether spending can be restrained or sufficient revenues raised to keep the federal debt from growing faster than the economy. If the debt rises too quickly on the back of continued large deficits, federal fiscal sustainability could come to be questioned.”
Also on Tuesday, the provincial and territorial premiers launched an online awareness campaign designed to inform Canadians about the “urgent need” for long-term, flexible funding for health care.
On Friday, the federal government announced $2-billion in health care spending earmarked to help provinces and territories address backlogs in surgery, medical procedures and diagnostics worsened by the COVID-19 pandemic.
But provincial and territorial leaders have been calling for an increase to the Canada Health Transfer (CHT), worth about $43.1-billion this year. The transfer is a payment made by Ottawa to support the delivery of health care.
The premiers want the federal government to increase its contribution to health spending to 35 per cent from 22 per cent, which would amount to about $28-billion more this year. They argue the CHT is the most effective mechanism for Ottawa to support improvements to health services for Canadians, while allowing provinces and territories to address their own needs.
- With files from Kristy Kirkup
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