In the 2022 federal budget, the government is unveiling $60 billion in new spending over the next five years, aimed at “targeted,” initiatives to build the economy, while continuing to chip away at the deficit.
From addressing housing affordability, to shoring up the Canadian military in the face of global instability due to Russia’s war in Ukraine, and making good on progressive policy commitments helping to keep them in power, Thursday’s federal budget from Deputy Prime Minister and Finance Minister Chrystia Freeland outlines how the federal Liberals propose to steer the Canadian economy through persistent inflation, while moving away from pandemic-era massive stimulus spending.
The budget proposes $9.5 billion in net new spending for the 2022-23 fiscal year—with the biggest ticket items focused on housing supply, Indigenous reconciliation, addressing climate change, and national defence—while also set to take in more than $2 billion in revenue-generating efforts.
- How to watch the 2022 federal budget announcement on CTV News
The total new spending outlined in the 2022 federal budget adds up to more than $60 billion, though the net new spending is much less—approximately $29 billion— after factoring in plans to rake in tens of billions in new revenue by targeting banks and other profiteers to help pay down Canada’s debt.
The budget— titled “A Plan to Grow Our Economy and Make Life More Affordable”— shows that the federal deficit is projected to sit at $113.8 billion for fiscal year 2021-22, down from the $144.5B estimated in the latest fiscal update. In years following, the deficit is also set to be reduced from past projections, with the 2022-23 deficit estimated at $52.8 billion, and declining each year following, to $8.4 billion by 2026-27.
The government attributes Canada “roaring back” from the pandemic—citing real GDP returning to pre-pandemic levels ahead of schedule and the jobs recovery rebound— as well as heightened government revenues as helping bring the budget closer to balance than anticipated, while still pursuing billions in new spending.
"This budget invests heavily in economic growth," Freeland said during a press conference under embargo as part of the budget lockup before tabling the nearly 300 page document in the House of Commons. “This is a three-part growth plan: It’s a suite of investments in people that will drive growth, with housing as the centerpiece of that investment. It is investments in the green transition, which we all know is essential… And the third element is an investment in productivity,”
Framing budget 2022 as a “fiscally responsible approach to economic growth,” the Liberals say their priority remains building an economy “that works for everyone.”
Conference Board of Canada Chief Economist Pedro Antunes told CTV News that comparing to pre-pandemic times, it’s still a “fairly big spending budget,” but that the spending is being made possible because of the relatively improved financial situation and the coming new revenue measures.
“The fiscal situation in terms of revenues and expenses is improved from what we had in the economic update. And this is largely because we’ve had an inflationary shock, and that’s driven up revenues overall, that’s driven up commodity prices, which helps the federal government. And we’ve had a very rapid improvement in the economy overall… so that’s lowered some expenses for the government,” said Antunes.
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Deputy Prime Minister and Finance Minister Chrystia Freeland speaks about the implementation of the Emergencies Act, Thursday, February 17, 2022 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
