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Federal budget includes $59.5B in new spending, looks to increase revenue

The three main focuses are the clean economy transition, health care and cost-of-living relief
Deputy Prime Minister and Finance Minister Chrystia Freeland, along with Prime Minister Justin Trudeau, arrive at the Hamilton Convention Centre, in Hamilton, Ont., on Monday, Jan. 23, 2023. THE CANADIAN PRESS/Nick Iwanyshyn

OTTAWA — The federal government announced $59.5 billion of new spending over the next five years as part of a narrowly focused budget that also promises to find savings in the public service and increase tax revenues.  

Finance Minister Chrystia Freeland’s budget tabled in the House of Commons today has three main focuses: the clean economy transition, health care and cost-of-living relief. 

To finance these priorities, the Liberals are promising to find $9.8 billion of savings within the public service. They also are introducing a range of tax measures, including ones aimed at wealthier individuals and corporations, that together would increase revenues by $11.7 billion. 

The federal deficit is projected to decrease to $14 billion by 2027-28 from $43 billion, while the debt-to-GDP ratio is expected to rise slightly in the coming year before falling to 39.9 per cent in 2027-28, down from 42.4 per cent.

While the Liberals’ budget presents a more restrained approach to finances, the projected deficit is at risk of growing if the promised savings aren’t found and the economy slows more than expected. 

The budget downgrades previous economic forecasts to account for a shallow recession this year, but economists warn a larger downturn could weigh considerably on federal finances.

This report by The Canadian Press was first published March 28, 2023.

The Canadian Press