Budget 2023 won’t fuel inflation, but misses the bigger economic picture: experts – National

Last week’s federal budget won’t spur inflation, but it may miss the bigger economic picture as a looming recession and the country’s cost-of-living crisis continue to weigh on Canadians, experts say. say.

Finance Minister Chrystia Freeland’s budget announced on Tuesday promises to cut more than $15 billion in spending from the government’s books but forecast a map to a balanced budget in the fall economy The federal deficit is projected to fall by as much as $14 billion from $43 billion in the downside scenario from 2027 to 2028.

Craig Alexander, former chief economist at Deloitte, said: “The size of the deficit they’re projecting going forward doesn’t really push prices up compared to the path we’ve already taken. No,’ he said.An interview with Mercedes Stevenson that aired on Sunday waist block.

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But he said, “One of the things that worries me is if we get into a recession, which I actually think is a relatively high probability in the short term. The financial situation will deteriorate.”

The budget allowed Freeland and the government to balance necessary investments without fueling inflation, which stood at 5.2% in February.

But food inflation is even higher, at 10.6%, marking the seventh straight month of double-digit price increases.

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According to reports such as Global News, the biggest item in terms of affordability is the so-called “grocery rebate” aimed at low-income households, excluding boosts in health care and expanded dental care plans. Billions of dollars spent. before the budget announcement on Tuesday.

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The one-time rebate is expected to provide $467 directly to a family of four, $234 to a single Canadian with no children, and $225 to an average senior citizen.

An estimated 11 million Canadian households are expected to receive a boost through the GST tax credit mechanism so they don’t have to spend on groceries.

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Armine Yalnizyan, an economist and Atkinson Fellow on the Future of Workers, told Stevenson he would like to see more measures to help Canadians address affordability and housing shortages.

“There’s been a lot of talk about how we’re going to handle Ticketmaster’s junk fees, or how we’re going to deal with the aggravation we’re facing at airports,” she said. “These are exacerbations. They are inconveniences. They are not hunger or homelessness issues.”

She added that the government had missed an opportunity to work on reforming employment insurance, which had been promised but is months behind schedule.

Instead, the budget includes $5.4 million to extend the work-sharing program for another three years.

“There was this hilarious tone about the best time on the budget yet to come,” she said. “But what about the times we’re in?”

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Federal Budget 2023: Will the Government’s Fiscal Plan Make Life More Affordable for Canadians?

Freeland told reporters in British Columbia on Thursday that the budget reflects the $10 billion housing plan announced in last year’s budget and still has a $4 billion housing acceleration program. He said it was.

Other key items included in the net $43 billion in new spending include clean technology tax credits to boost the emerging green economy and compete with the United States. An expanded dental care program that balloons costs to $13 billion. We previously announced a health care deal with the state.

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Alexander said he supports investments in what he calls the “care economy”, including funding for dentistry and health, as well as credit for clean technology. They fear that a predicted “shallow recession” will make it harder to pay for these programs, making it harder to sustain the economy.

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“They will be forced to provide stimulus again to support the economy, and the government’s financial situation will deteriorate significantly from its current situation,” he said.

“I think we really need to have a grown-up conversation in this country about the programs we offer and how much they cost. It’s not that we need to cut those investments. Investing in the care economy.” I think we need to increase , but we have to do it financially and responsibly.”

—Using Craig Lord’s files

© 2023 Global News, a division of Corus Entertainment Inc.

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