In her budget speech, Freeland said, “our ability to spend is not infinite. The time for extraordinary covid support is over. And we will review and reduce government spending, because that is the responsible thing to do.”
As expected, Freeland’s budget focuses some of the new spending in three key areas: fighting climate change, housing, and defence. The additional defence spending is a kind of last-minute add-on resulting from the war in Ukraine, which has highlighted Canada’s obligations as a member of NATO.
The deficit for 2022-23 is projected to be C$52.8 billion, which is lower than the C$144 billion projected in the last fiscal update. Revenue from high commodity prices, particularly oil, gives Freeland more room to spend without resorting to higher deficit spending. The budget contains about C$60 billion in new spending.
“While debt and deficits remain high, new spending was more modest than predicted,” the…
