Federal government to release budget on March 28

Deputy Prime Minister and Finance Minister Chrystia Freeland. (Adrian Wyld/The Canadian Press - image credit)
Deputy Prime Minister and Finance Minister Chrystia Freeland. (Adrian Wyld/The Canadian Press - image credit)

The federal government will table its next annual budget on Tuesday, March 28.

Deputy Prime Minister and Minister of Finance Chrystia Freeland confirmed the budget's release date on Friday.

She told the House of Commons that the budget will make life more affordable and provide "good jobs and prosperity for all Canadians from coast to coast to coast."

The budget is expected to contain measures to address the impacts of the recent U.S. Inflation Reduction Act and the new federal provincial health-care agreement announced by the Liberal government last month.

That announcement commits the federal government to spending $196.1 billion on health care over the next decade — including $46.2 billion in new spending on top of funds previously budgeted.

The deal, which is being pitched by the federal government as a generational fix for an ailing health-care system, would begin with provinces and territories getting an unconditional $2-billion boost to the Canada Health Transfer (CHT) to cover immediate measures to address hospital backlogs and overflowing pediatric hospitals.

The proposal also includes a five per cent annual hike to the CHT for the next five years, with a built-in mechanism to permanently increase funding in the years after.

Inflation Reduction Act

The Biden administration's Inflation Reduction Act, which cleared the U.S. Congress last year, includes uncapped tax credits designed to unleash investment to accelerate the transition to a cleaner economy south of the border.

Last fall, a senior federal finance department official called the tax credits a "game-changer for climate transition" and warned they would amount to "a gravitational black hole" drawing capital to the U.S. at the expense of Canada and other countries.

Freeland tabled an initial response to those challenges in last fall's economic statement — tax credits for clean energy capital costs and for hydrogen production.

Those credits were backstopped by the promise of further action in the 2023 budget. Now, the federal government is warning that provinces will need to offer incentives of their own in key sectors, such as critical mineral extraction and advanced manufacturing.