Canadian 2024 Federal and Provincial Budgets: Crafted with Canada’s Younger Generations in Mind

May 15, 2024
Brynn Bruder
Brynn Bruder
Sr. Research Analyst, SLED & Canada Market Analysis
Canadian 2024 Federal and Provincial Budgets

As Canada’s fiscal year kicked off in April, governments began tabling their budgets and revealing their priorities for 2024. At the federal and provincial levels, the most notable priority to come out of this year’s budget cycle is housing. Governments across Canada are looking to tackle the nation’s severe housing crisis and make homeownership more affordable for younger generations. In addition to housing, there are some new and innovative spending programs being introduced this year, but the 2024 budget cycle is largely meant to boost funding in core areas like education, healthcare and public safety.

Deltek’s GovWin IQ platform and research team cover the Canadian government contracting markets extensively, and our research has found that in a time of economic uncertainty, governments are deliberately prioritizing basic issues, which are often the ones most important to Canadians. Some jurisdictions in Canada will also be holding elections soon, and their budgets are an appeal to voters on fundamental concerns.

2024 Canadian Federal Budget

“Fairness for Every Generation” is the theme of the 2024 Canadian federal budget, which proposes $52.9 billion in new funding. Coming in at over 400 pages long, the budget caters to millennials and Generation Z with its focus on housing and education assistance. Canada’s better-than-expected economic growth left the federal government with more wiggle room to increase spending. This growth coupled with higher taxes will keep the projected deficit of $39.8 billion under control, according to the government.

Housing is the focal point of the 2024 federal budget, which outlines a plan to build nearly 4 million new homes by 2031. The budget sets aside $8.5 billion in new spending for housing initiatives to achieve this goal. Increasing Canada’s housing supply is a key aspect of the Liberal government’s strategy to win over millennial and Generation Z voters. With a federal election looming, this budget is designed for the younger generations, who are a target demographic for the Liberals.

In the area of defence, the budget sets aside $8.1 billion in new funding over the next five years, plus an additional $73 billion over the next two decades. While this investment will increase Canada’s military spending from 1.33 to 1.76 percent of GDP, it will still fall short of NATO’s 2 percent target for members. Canada will also continue to support Ukraine with $1.6 billion in military aid and $216.7 million for reconstruction.

To combat election interference by foreign states, the Canadian Security Intelligence Service (CSIS) will receive $655.7 million to enhance its intelligence capabilities and its presence in Toronto, the Canadian city most frequently cited in accounts of foreign meddling. Canada is currently in the midst of a public inquiry into election interference by China, Russia, and other countries.

The next federal election will take place on or before October 20, 2025, and the Liberal government is making this budget part of its platform. Many of the budget’s new spending programs were advertised prior to budget day itself, as the Liberals look to promote their policies and boost their chances amongst voters. The budget’s new spending programs focus largely on housing, youth, Indigenous communities, social services and the economy.

Expanding Canada’s Housing Supply

  • $15B to top-up the Apartment Construction Loan Program and build 30,000 more new homes.
  • $6B to build infrastructure in support of new housing communities.
  • $1.3B to address homelessness and encampments.
  • $1.1B to transform 50 percent of federal office space into housing.
  • $400M to top-up the Housing Accelerator Fund and build 12,000 additional new homes.

Investing in the Younger Generations

  • $1.1B to extend increased student grants and interest-free loans.
  • $500M to improve access to mental health supports for youth.
  • $60M to support young entrepreneurs by funding 6,250 businesses owned by young people.
  • $39.2M to help students develop coding and digital skills.

Supporting Indigenous Communities

  • $1.4B to increase access to K-12 and post-secondary education for First Nations students.
  • $918M to build new housing units and infrastructure in Indigenous communities.
  • $630M to improve Indigenous people’s access to mental health services.
  • $467M to support First Nations and Inuit-led policing.
  • $290M to restore and promote Indigenous languages and cultures.

Strengthening Social Services

  • $1.5B to launch a new National Pharmacare Plan.
  • $1B to build and renovate more childcare centers.
  • $1B to expand access to school food programs.

Boosting the Canadian Economy

  • $3.5B to build new strategic research infrastructure and provide federal research support and grants.
  • $2.4B to spur the development of Canadian-owned and located AI infrastructure.
  • $200M to invest in Canadian start-ups.

To help cover the various multi-billion-dollar spending initiatives being proposed, the budget puts forth a tax hike on capital gains, which is expected to net the government a little over $19 billion in the next five years. The proposed increase would raise the taxable portion of capital gains from half to two-thirds for annual capital gains over $250,000. The overarching response to this measure has been one of concern, particularly within the tech industry. Industry leaders warn that raising capital-gains taxes could stymie the innovation economy by discouraging investment, entrepreneurship and productivity.

Small businesses will have some reprieve from the proposed changes to the capital gains tax, as Budget 2024 seeks to increase the Lifetime Capital Gains Exemption for the sale of small business shares. The budget includes other key benefits for small businesses, notably a new carbon rebate and a procurement set-aside program. The federal government announced its intention to legislate procurement targets for small- and medium-sized businesses. Proposed targets will be outlined in the 2024 Fall Economic Statement.

2024 Canadian Provincial Budgets

The four provinces with the largest expenditures – Ontario, Quebec, British Columbia and Alberta – are prioritizing many of the same initiatives in their 2024 budgets. Considerable investments are being made in housing, education and healthcare, particularly in boosting the number of teachers and healthcare professionals in the workforce. Provinces are also looking to bolster their public safety and disaster response capabilities in the face of heightened crime and climate disasters. Overall, provinces are going back to the basics with this year’s budgets, maintaining the status quo by focusing on core issues from education to public safety.

Ontario Provincial Budget for 2024

Ontario’s $214.5 billion budget is the most expensive spending package in the province’s history. Titled “Building a Better Ontario,” the 2024 budget includes the province’s most ambitious capital plan to date:

– $190.2 billion over the next decade. This capital spending will go towards building and expanding highways, transit, homes, high-speed internet and other critical infrastructure. Ontario is projecting a deficit of $9.8 billion in the coming fiscal year, but the deficit is projected to lower to $4.6 million in 2025-26 before the province posts a modest surplus of $500 million in 2026-27. Highlights from this year’s budget include:

  • $2.2B for municipal housing programs and incentives to spur the construction of new housing units.
  • $2B to expand home and community care and increase compensation for frontline workers.
  • $965M to support hospital operations.
  • $825M for municipal water infrastructure projects to enable new housing communities.
  • $200M to build and upgrade sports, recreation and community facilities.
  • $46M to improve public safety in the Greater Toronto Area, including the purchase of four police helicopters.
  • $18M to support Ontario’s advanced research computing facilities and ensure their capacity to integrate with technologies like AI.

Quebec Provincial Budget for 2024

Quebec’s $157.8 billion budget projects a deficit of $11 billion for this fiscal year. While the deficit is higher than anticipated, the province is looking to achieve a balanced budget by 2029-30 and is taking preliminary steps to meet that goal. Healthcare and education are the two largest expenditures in the 2024 budget, at $61.9 billion and $22.4 billion respectively. These are significant increases from last year, with healthcare spending up by 4.2 percent and education up by 9.3 percent. Notable initiatives from this year’s budget include:

  • $3.7B to improve access to healthcare, hospital fluidity and quality of care for vulnerable populations.
  • $1.3B to promote access to housing and provide supports for vulnerable individuals.
  • $818.7M to attract and retain school staff, support educational partner organizations and enhance school buildings.
  • $400M to facilitate immigrants’ economic and social integration.
  • $187.1M to promote Quebec’s culture and the French language.
  • $127.5M to protect the environment and adapt to climate change.
  • $126M to grow the labor pool and increase productivity in the construction industry.

British Columbia Provincial Budget for 2024

British Columbia’s $89.4 billion budget is dubbed “Taking Action for You” and prioritizes the middle class, families and housing. While a deficit of $7.9 billion is projected, the 2024 budget promises rebates and other handouts during an election year. Further spending announcements and promises are expected leading up to the provincial election in October. Key spending initiatives include:

  • $968M to hire more teachers and school staff, including special education teachers, teacher psychologists and counselors.
  • $405M to bolster the province’s disaster preparedness and response capacity.
  • $398M for justice and public safety programs.
  • $270M to deliver cancer treatments and strengthen prevention and screening services.
  • $248M to expand transit infrastructure.
  • $198M for the BC Builds program to speed up the development of new housing units.
  • $93M for measures to reduce emissions, such as installing electrical vehicle charging infrastructure.

Alberta Provincial Budget for 2024

Alberta’s $73.2 billion budget represents an increase of nearly 4 percent compared to last year’s budget. A $367 million surplus is expected in 2024-25, but the province will still need to borrow $2.4 billion to fulfill its budgetary requirements. Spending on healthcare and education is up in the 2024 budget, with other spending priorities ranging from public safety to affordable housing to disaster response:

  • $6.6B for physician compensation and development programs.
  • $3.6B to maintain and expand healthcare facilities throughout the province.
  • $1.55B to develop a recovery-oriented system of care for those experiencing addiction or mental health challenges.
  • $1.2B, including $842M in new funding, to increase student enrollment and hire hundreds of new teachers.
  • $717M for affordable housing initiatives, including $254M in new funding to build 3,300 new housing units and complete 1,800 units already underway.
  • $151M to enhance wildfire response, readiness, planning and operations.
  • $49M for equipment and facilities needed by first responders and sheriffs.

To further explore themes from the 2024 budget cycle, download our research on 10 Hotspots in Canadian Government Contracting for 2024.


 

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