Canadia’s debt surpasses $1 trillion: everything to know about Freeland’s first budget

For the first time in Canadian history, the country’s debt has surpassed $1 trillion, following a $354 billion deficit for 2020 and an expected $155 billion deficit for the 2021-2022 fiscal year.

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The budget revealed today extends the CRB, wage subsidy and rent subsidy until September 25th 2021. The Canada Recovery Benefit will drop from $500 to $300 per week on July 17th. Wage subsidies will also start dropping on July 4th. 

Investments in child care will total $30 billion over 5 years, split equally among provinces and the federal government. The Trudeau government aims at reducing child care costs by half in 2022. 

Old age security recipients over 75 years old will receive a $500 lump sum payment in August 2021. The federal government will waive student loan interest until March 31st, 2023 for students. The income threshold for graduates to start paying their student loans will go from $26,000 to $40,000. 

The Trudeau government has also allocated $4.4 billion in interest-free loans for “green” home upgrades.

The federal government is also setting up a basket of new taxes, including a 1% annual tax for foreigners who own vacant or “underused” residential Canadian real estate, a luxury tax on cars over $100,000 and boats over $250,000 and a 3% digital services tax on large e-commerce platforms. 

The Trudeau government is bringing forward new programs to combat systemic racism at a cost of $468 million. 

The budget also includes a $15 minimum wage for employees in federally regulated workplaces, a total of approximately 26,000 employees. 

The budget also includes a 5-year $13 billion spending plan for Indigenous communities. 

Canada has become the country in which the debt-to-GDP ratio increased the most throughout the pandemic, far ahead of Japan and the United States. 

When considering the total debt of Canadians, including federal and provincial debt, Canada now ranks amongst one of the most indebted countries in the world.

This was Chrystia Freeland’s first budget as the Canadian Minister of Finance. Freeland graduated in Slavonic studies and has previous experience as a journalist. 

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