What to expect in the 2022 federal budget

‘It’s a tough budget to do … I’m not jealous of the finance minister and the finance officials trying to put together all the uncertainties at the moment.’

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Finance Minister Christiaan Freeland will present this year’s federal budget on April 7, the first since the last general election that the Liberals have returned for a second minority mandate.

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What can we expect? Further spending on national defense, an expensive carbon capturing tax credit, dental care, as agreed with the NDP. Here’s a round-up of the different things to keep an eye on in Freeland’s documents this weekend.


The estimated deficit in the Fall Economic Update last December for 2022-2023 was $ 58.4 billion. This was before the war in Ukraine, which called for more defense spending, and for the Liberals’ agreement with the NDP, which called for more social spending.

On the other hand, higher prices are driving higher revenues for the government to offset some of these additional costs.

Mostafa Askari, chief economist at the Institute of Fiscal Studies and Democracy (IFSD), told the National Post that he expects a “bump” in the number of deficits due to unforeseen events on the world stage and the promise of numerous platforms in past elections.

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Deficits will eventually go down, but don’t expect a balanced budget anytime soon.

“The work and behavior of this government is quite predictable. In every budget since they were elected, if they had some surprisingly positive results in terms of revenue, they would have found a spending program for it, ”said Askari.

At the same time, the former deputy parliamentary budget officer said he did not want to be the shoes of Freeland.

“It simply came to our notice then. I am not jealous of the finance minister and the finance officials trying to unify all the uncertainties that exist at the moment. “

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Russia’s aggression in Ukraine has led to the issuance of high alert to most of its closest and dearest neighbors – including Canada.

Ahead of the budget, Defense Minister Anita Anand told reporters earlier this month that the cabinet would have a number of options to consider – but the question on the minds of many in Ottawa is whether Canada will achieve the two percent benchmark called for by NATO.

The latest NATO figures show that Canada spent 1.36 per cent of its GDP on defense last year. This represents a fall from the coalition’s previous estimate of 1.39 percent for 2021, which it released in June. This percentage is the lowest in NATO.

For comparison, the U.S. military budget spends 3.52 percent of GDP, while the United Kingdom spends 2.29 percent.

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Canada’s 2020-21 military spending is just over 23 23 billion, according to the Department of National Defense data. The two-percent increase in defense spending translates into an increase of about $ 16 to $ 17-billion.

Canada is under pressure from both NATO and our allies to increase costs.

Referring to Canada as a key part of its Ukraine mission, NATO Secretary-General Jens Stoltenberg told the Ottawa Conference on Defense and Security earlier this month that Canada would increase its military spending.

Carbon capture

Environment Minister Steven Gilbolt announced a 29 9.1 billion new investment in his emissions reduction plan on March 29, focusing on areas such as electric vehicles, environmentally friendly reforms and agriculture, but he cut costs for a key commitment.

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“I think the biggest question mark coming out of the plan, which I hope the budget will answer, is how the government is going to formulate their investment tax credit for carbon capture and storage,” said Michael Bernstein, executive director of Clean Properties.

The proposed tax credit, announced in Budget 2021, proposed the introduction of tax credits for various industries, including concrete, plastics and fuels, as well as a new green project aimed at reducing CO2 emissions by at least 15 percent. Megaton annual.

Industry players have indicated that they expect the government to bear at least 50% of the cost of capturing carbon.

It costs about $ 1 billion to capture one megaton of carbon, Bernstein says, so we’re looking for a tax credit that costs $ 7.5 billion a year. It remains to be seen how many years of tax credit may be needed to encourage industries to build the necessary infrastructure.

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“The forthcoming federal budget is an opportunity for the federal government to be bold about housing and to resolve this crisis once and for all,” said Joan Vanderheiden, president of the Federation of Canadian Municipalities and mayor of Strathroy-Karadock, Ont.

He said municipal leaders would look specifically at the federal budget to “scale up” the Rapid Housing Initiative, which provides new, affordable housing to vulnerable groups. Following the signing of the agreement with the NDP, the government has agreed to extend the program for another year.

Vanderheaden said he hopes the government will double the funding for the Permanent Reaching Home program, which aims to prevent and reduce homelessness in Canada.

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The forthcoming budget will be an opportunity for the government to implement its many promises in the hopes of calming the red-hot housing market and helping first-time buyers buy a home.

Liberals have pledged nearly $ 15 billion for housing over five years, including a rent-to-own program, a tax-free first home savings account, as well as a multi-generation home renovation tax credit. They have promised to invest 1.4 million homes in four years.


Provinces and territories have been calling for substantial increases in health transfers for two years now, but the federal government has always reiterated that these federal-provincial talks will wait until the epidemic is over.

With no end to the epidemic, the federal government has announced that it will provide an additional $ 2 billion one-time peak to help provinces deal with epidemic-related pressures and reduce surgical backlogs, for example.

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The money is part of Bill C-17, which was introduced in the House of Commons in March.

In the run-up to the campaign, liberals have pledged দেওয়ার 25 billion over five years to provinces and territories for specific health-related commitments. That includes অপেক্ষা 6 billion for waiting-list eliminations, $ 4.5 billion for mental health and $ 3 billion to help provinces recruit more staff.

Dental care

The inclusion of dental care in the NDP-Liberal Confidence and Supply Agreement was a priority, setting a timeline for where the program would be launched this year.

Children under the age of 12 will be enrolled in 2022, the program will then expand to “People under the age of 18, the elderly and people with disabilities” in 2023. It will be fully implemented by 2025 for low-income families

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In 2020, the Parliamentary Budget Officer estimates the cost of a similar program. He said there would be a one-time, 3 billion, advance cost, “to cover the cost of treating the incurable wounds of the majority of the eligible population.”

He estimated the net cost of the program to the government at 1.255 billion in the first year, $ 4.12 billion in the second year and an average of $ 1.5 billion in the next three years.


While the NDP-Liberal agreement does not specify when and how the Pharmacare plan could be implemented, its potential impact on this year’s budget is less clear.

During the 2021 election, the NDP asked the PBO to spend on a universal drug coverage plan. It is estimated that such a plan would cost 21 5.21 billion in its first full year, rising to an average of about .1 11.1 billion over the next three years.

But the agreement between the NDP and the Liberals does not promise a full plan implementation by 2025 and does say that they should “continue to make progress towards a universal national pharmacare program by the end of 2023 by passing the Canada Pharmacare Act.”


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