2024 Federal Budget Explained

I am sure by now you have heard that Canada's 2024 federal budget was announced yesterday. It encompasses substantial financial shifts aimed at addressing a range of social, economic, and environmental challenges. In this article, I have included the key highlights in hopes that it gives you a broad perspective of the changes and potential impacts it will have for Canadians for years to come. Please keep in mind while reading that these highlights were captured from a variety of sources and my own understanding of the announcement. It is very important to do your own research as well to confirm figures and assess on your own the impact these changes will have on our economy and our population. 

Key highlights include significant adjustments to tax regimes, where capital gains taxes for high-wealth individuals, corporations, and trusts will surge, particularly affecting gains above $250,000 for individuals and on all gains for entities, aiming to generate an additional $19.4 billion over four years. The budget also targets tobacco and vaping products with increased excise taxes, estimating nearly $1.7 billion in revenue over five years.

To address the goal of constructing nearly 3.9 million new homes by 2031, the Canadian government has introduced several key measures. These include increasing the capital cost allowance rate for apartment builders from 4% to 10%, enabling greater tax deductions; extending mortgage terms to 30 years for first-time buyers of new homes; releasing and leasing more public lands, such as those owned by Canada Post and National Defence, for residential construction; and allocating $250 million over two years to tackle the critical challenges of encampments and the lack of shelter space for the homeless.

On the educational front, $48 million is allocated over four years to forgive loans for early childhood educators, alongside an extensive $253.8 million, plus annual follow-ups, dedicated to loan forgiveness for various health and education professionals. This is a significant investment in the Canadian workforce, intending to relieve the financial pressures faced by these vital sectors.

Public safety takes precedence with proposed amendments to the Criminal Code to tackle auto theft and regulate devices used in car thefts, coupled with substantial investments in combatting online harms and hate crimes, reflecting the government’s commitment to a safer and more inclusive Canada.

Environmentally, the budget earmarks over $900 million for green homes and energy efficiency programs, and details plans for a national flood insurance program. Business incentives focus on clean energy and the electric-vehicle supply chain, highlighting a shift towards more sustainable commercial practices.

In healthcare, the announcement covers groundbreaking pharmacare initiatives, including the provision for contraceptives and diabetes supplies, with a total allocation of $1.5 billion over five years. Furthermore, mental health services receive a significant boost through various funding initiatives aimed at expanding access, particularly for young and Indigenous populations.

Indigenous communities stand to benefit from over $5 billion in loan guarantees for resource projects, alongside investments in education, housing, and infrastructure, signalling a continued focus on elevating Indigenous rights and standards of living.

Foreign policy and defence are also notable, with an ambitious target to boost military spending to 1.76% of GDP by 2030, supporting Ukraine, and enhancing humanitarian crisis responses.

AI and technology receive a forward-looking investment of $2.4 billion, aiming to position Canada at the forefront of artificial intelligence research and development, while also ensuring safety and ethical considerations are addressed.

Socially, the government has pledged substantial funding towards expanding child care, creating new parks, and enhancing the national school food program, continually prioritising the welfare and growth of families and communities across Canada.

This budget, ambitious in its scope, seeks to balance between growth and responsibility, aiming to foster an equitable, sustainable, and prosperous future for all Canadians. I try to stay in my lane when it comes to conversations about National priorities, spending and overall deficits. I am a Mortgage professional and my focus is always on assisting my own clients on their mortgage financing options and solutions. I do not intend to be an economist or expert in this field and want to simply present this information due to its relevance in our sphere of real estate and finance. I would love to chat with you about your own financial goals pertaining to real estate and I am always available for a conversation. 

Please visit my website directly at www.paulstevenson.ca to learn more and to schedule a time to chat. As always, thank you for your support and have an amazing day!  Until next time. 

-Paul S