2024 Federal Budget: Summary and Key Takeaways

Deputy Prime Minister and Finance Minister Chrystia Freeland revealed the highly anticipated 2024 federal budget last week, outlining the Liberal government's spending plans amidst immense economic challenges and political pressures. 

With pre-announced spending nearing $40 billion, the government hopes to balance between addressing rising issues such as housing affordability and economic growth while maintaining fiscal responsibility. The budget is expected to focus on building more homes, making daily expenses more affordable, and creating new job opportunities, especially for younger generations. 

Key standouts of the budget include significant investments in the housing market, specifically aimed at increasing supply, supporting renters, and assisting first-time buyers. Additionally, the government plans to introduce a national lunch program, expand child-care access, boost defense spending, and invest in artificial intelligence. 

To uphold fiscal targets outlined in the fall economic statement, Finance Minister Freeland faces tough decisions regarding revenue generation. While ruling out tax hikes on the middle class, she remains hesitant on the possibility of newtaxes targeting wealthier individuals or corporations. Economists speculate that revenue may instead come from deferred spending, tax increases, or targeted measures such as wealth taxes. 

The budget rollout strategy this year has been unique, with the government selectively teasing out announcements in waves to build anticipation. With this strategy, the government is attempting to show the theme of commitment to address the concerns of younger Canadians facing economic challenges and affordability issues. 

Looking ahead to 2025, the budget's impact on the economy and political landscape is crucial. While challenges persist, such as slipping competitiveness and declining productivity, economists anticipate a gradual economic recovery supported by potential interest rate cuts. This could bolster government revenues and provide momentum for a more robust budget in 2025, aimed at restoring voter confidence and addressing long-term economic concerns. 

As political oppositions such as the conservatives voice their expectations for the budget, including calls for fiscal restraint and measures to lower costs for Canadians, the liberal government faces pressure to deliver tangible results. How the budget shapes the economic trajectory and political dynamics leading up to the next federal election will be closely watched, with implications for Canada's future prosperity and governance.