Trudeau government claims to be 'making life cost less' in adding $40 billion to national debt with new budget

Finance Minister Chrystia Freeland racked up another $40 billion in debate as she delivered her fourth federal budget. The Trudeau government budget contains another $52.9 billion in new spending over the next five years, including $8.5 for housing programs.

The Liberals plan to pay for a portion of this plan by heaping more taxes on the rich, including higher capital gains taxes. However, Freeland's definition of the rich would seem to include many Canadians who own real estate. The budget document notes that the government is increasing the tax to 66.7 percent on capital gains over $250,000, up from the current 50 percent. 

They are also eying cigarettes and vaping products as sources of revenue. Freeland says she will raise $21.9 in this way.

"We are making Canada's tax system more fair by ensuring that the very wealthiest pay their fair share," Freeland said Tuesday after tabling Budget 2024.

"We are doing this because a fair chance to build a good, middle class life — to do as well as your parents, and grandparents, or better — has always been the promise of Canada."

Freeland predicted she would produce a projected budget deficit of about $40 billion in the 2024-25 fiscal year — an amount she termed “fiscally prudent.”

While the government is spending more overall, it says that better-than-expected economic growth and higher taxes will keep the deficit under control.

Despite promises of moving Canada’s defense spending to the NATO standard of 2 percent of the GDP, the military will have to wait – possibly years.

While the overall defense budget is slated to rise by another $33.8 billion in the current fiscal year, that is $635 million less than it was promised in the 2023 federal budget.

Conservative leader Pierre Poilievre pleaded with the federal government to limit its spending, noting that the next election is slated for October 2025. 

“But there's still another year and a half where Canadians have to find a way to survive. So my message to Justin Trudeau is this, in one word: stop. Stop doubling housing costs,” he said.

“Stop taxing our farmers and food when our single moms and seniors are going hungry. Stop the inflationary deficits that are driving up interest rates and forcing Canadians to lose their homes. Stop endangering our social programs and jobs by adding more and more debt.”

Freeland provoked laughter from Conservative MPs and smirks from some Liberal members when she said the Trudeau government is “making life cost less.”

The Trudeau government is spending about twice as much as it collects in revenue.

The cycle of deficit spending is only escalating. According to documents released in March by Canada’s Department of Finance, the Trudeau government had a budgetary deficit of $25.7 billion for the April 2023 to January 2024 period of the current fiscal year.

For the same period during the previous fiscal year, the Trudeau government posted a $6.4 billion deficit, about one-quarter of the more recent number.

In listing its financial record for the April to January period, the finance department noted that revenues had increased by $10.5 billion or 3 percent "largely reflecting higher personal income tax revenue, other taxes and duties, and other non-tax revenues. These increases were partially offset by lower corporate income tax revenues."