“The TFSA [tax-free savings account], you pay taxes going in – it’s after-tax money, but not this one. And if you invest in housing, your principal residence is not going to be taxed either. So it is a very generous tax incentive where you can earn income completely untaxed.”
#Budget2023 is a plan to deliver stronger public health care, create more good jobs, and ensure we build an economy that works—for everyone.
— Finance Canada (@FinanceCanada) March 28, 2023
How fiscally prudent was the budget?
Economic observers were watching closely to see how the Liberal administration and federal finance minister Chrystia Freeland would achieve a tricky balance between addressing the overall affordability crisis facing Canadians and demonstrating fiscal prudence in an uncertain economic climate.
Laurin said the government had failed to strike that sweet spot, describing the budget as a plan whose theme was “borrowing to spend again and again and again.”
According to the Institute’s research, every successive budget and fiscal update since 2019 has featured additional spending, he noted, with higher borrowing factored in until 2024-25 despite the fact that COVID relief measures are expected to have been phased out completely by then.
“It’s really a staggering amount of new spending since 2019, just before the pandemic,” he said. “Our view hasn’t changed on this: it’s not prudent [on a macro perspective].