Economist Jim Stanford discusses the federal budget's impact on Canadians' wallets, aiming to make life more affordable. They delve into measures addressing housing affordability, changes in capital gains tax rates, and innovations in social programs like PharmaCare and dental coverage. The podcast also analyzes government finances, revenue sources, and investments in youth mental health and innovation.
The federal budget introduces incremental measures to tackle affordability challenges in housing, aiming to alleviate the cost of living for Canadians.
Adjusting capital gains tax measures aims to reduce preferential treatment for high-income individuals, generating revenue and addressing skewed benefits in asset transactions.
Deep dives
Impact of the Budget on Affordability Measures
The budget aims to address affordability challenges faced by Canadians, earning a B grade from economist Jim Stanford. While recognizing that it won't solve all affordability issues due to economic factors, the budget introduces incremental measures benefitting various groups. The focus on housing, with 15 to 20 measures addressing the crisis, stands out as a significant intervention by the federal government. Overall, the budget is expected to make a positive difference, although no single measure is termed game-changing.
Changes in Capital Gains Tax Measures
A key highlight of the budget is the adjustment in capital gains tax measures aiming to reduce the preferential treatment of capital gains income. By changing the inclusion rate from 50% to 66%, the government targets the top 1 10th of 1% of Canadians who benefit significantly from capital gains. This move, with exceptions for gains under a quarter of a million, is expected to generate revenue and address concerns about skewed benefits favoring high-income individuals in speculative asset transactions.
Budget Initiatives for Short-term Impact
While some housing measures may take time to show effects, the budget introduces immediate changes in mortgage lending rules and programs like PharmaCare, covering initial drugs for free. Initiatives like dental care for 9 million Canadians, disability benefits, and youth mental health programs provide short-term support. These social program innovations, along with housing and business tax changes, aim to alleviate cost of living challenges for Canadians.
In the weeks leading up to Tuesday's budget announcement, the federal government has been hammering a message that this document would make life more affordable for Canadians.
Does it accomplish that? What's in here that will matter to your wallet in the months to come? What takes aim at trying to bring down the cost of living over the next several years? And who's going to end up paying for all this?