Trudeau government presents $53 billion deficit

The Trudeau government presented a $53 billion deficit budget amidst global economic uncertainty.

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Although the government earned an additional $14.3 billion from increased tax revenues due to inflation and high energy prices, the government still incurred a $52.8 billion deficit. 

The 2022-2023 budget is Finance Minister Christina Freeland’s second budget. 

Freeland studied Russian history and literature and has no relevant experience in finance and economics other than through her journalism career. 

The budget includes a two-year ban on foreigners purchasing Canadian homes in an attempt to curb housing prices which have nearly doubled since prime minister Trudeau took office.

The budget includes $7.4 billion in new spending, including housing, climate change, and “reconciliation”. 

The budget presents a variety of economic scenarios amidst the global uncertainty regarding the Ukraine-Russia conflict. One of the projections includes a rise in Canada’s debt-to-GDP ratio, already amongst the highest of industrialized countries. 

If the conflict in Europe continues, this scenario is likely to bring sustained and stronger inflation in Canada, along with weaker economic growth. 

Canada will also remain under NATO targets with just 1.5% of its GDP in defense spending. 

“Justin Trudeau is basically taking money that he’s been collecting from Canadians who are suffering because of inflation. And he’s using it to pay for the promises that he made to the NDP, and in turn, they’re going to prop him up”, interim leader of the Conservative Party Candice Bergen told reporters. 

The NDP has confirmed it will vote in favor of the budget, while the Conservatives and the Bloc said they will vote against it.

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