CTF/FCE Overview Analysis of the 2023 Federal Budget
The 2023 federal budget titled A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future focused on a few key themes: addressing the affordability crisis, taking some further action on climate change, and trying to offset new spending with new revenue sources. However, none of the main items that the CTF/FCE was keeping a watchful eye for materialized in this year’s budget.
Given a $5.7 billion dollar drop in revenue this year, the government has sought to slash spending over the next five years on travel, the use of consultants, and the use of professional services to the tune of $15.4 billion. However, due to increased spending on big ticket items – such as dental care, the government will be operating at a deficit again. The Minister of Finance’s budget projects the deficit will be $40.1 billion in 2023-24 — a significant increase from the projection of $30.6 billion in the fall.
Below the CTF/FCE has highlighted some items of interest to the Federation as well as to Member and Associate Organizations. We will continue to monitor these commitments, advocating for the items highlighted below that we see as lacking in current federal financial planning.
The federal government is following-through on their promise to the New Democratic Party of Canada to improve healthcare for Canadians with dental care support as part of the Supply and Confidence Agreement signed in 2022. Moving into the next phase of dental care support from children to low-income Canadians the federal government has made the following commitment:
Budget 2023 proposes to provide $13.0 billion over five years, starting in 2023-24, and $4.4 billion ongoing to Health Canada to implement the Canadian Dental Care Plan. The plan will provide dental coverage for uninsured Canadians with annual family income of less than $90,000, with no co-pays for those with family incomes under $70,000. The plan would begin providing coverage by the end of 2023 and will be administered by Health Canada, with support from a third-party benefits administrator. Details on eligible coverage will be released later this year.
Cost of Living
While the top-up of the Canada Housing Benefit is not getting renewed in this budget (and the last day to apply is March 31, 2023!), where the federal government provided a one-time payment for rent relief to low-income Canadians ($20,000 for individuals, $35,000 for families), they are introducing a one-time grocery rebate costed at $2.5 billion:
For 11 million low- and modest-income Canadians and families, the Grocery Rebate will provide eligible couples with two children with up to an extra $467; single Canadians without children with up to an extra $234; and seniors with an extra $225 on average. This will be delivered through the Goods and Services Tax Credit (GST Credit) mechanism.
Also, the federal government has confirmed that on April 1, 2023, the Tax-Free First Home Savings Account program will be offered by financial institutions. Canadians saving for their first home can save $40,000 ($8,000 a year) for their first home tax-free. Like a Registered Retirement Savings Plan (RRSP), contributions will be tax-deductible, and withdrawals to purchase a first home—including from investment income—will be non-taxable, like a Tax-Free Savings Account (TFSA). Tax-free in; tax-free out.
Concert goers rejoice – the federal government has, among some small changes aimed at making life more affordable, alluded to possibly finally taking on Ticketmaster with this commitment:
Budget 2023 announces the government’s intention to work with regulatory agencies, provinces, and territories to reduce junk fees for Canadians. This could include higher telecom roaming charges, event and concert fees, excessive baggage fees, and unjustified shipping and freight fees.
The CTF/FCE applauded MP Alexandre Boulerice’s private member’s bill, Bill C-302, An Act to amend the Canada Labour Code (replacement workers) when it was introduced last fall, and we are applauding the federal government now in committing to prohibit replacement workers. In Budget 2023, the following commitment was included:
The ability to form a union, bargain collectively, and strike is essential to a healthy democracy. These important rights can be undermined when an employer brings in replacement workers to temporarily do the work of unionized workers during a strike or lockout. Budget 2023 proposes to table amendments to the Canada Labour Code, before the end of 2023, that would prohibit the use of replacement workers during a strike or lockout, and improve the process to review activities that must be maintained to ensure the health and safety of the public during a work stoppage.
The CTF/FCE has been following Bill C-13, An Act for the Substantive Equality of Canada’s Official Languages due to commitments regarding federal support for minority language learners. We are appreciative of the funding already put forth regarding minority language support across Canada, and particularly pleased to see the federal government making further commitments on this front; the federal government made the following commitment in Budget 2023:
Budget 2023 also proposes to provide $679.2 million over five years, starting in 2023-24, for the Department of Canadian Heritage to support equal access to services of equal quality in education by working with provinces and territories to make high-quality minority-language education, opportunities for second-language learning, and bilingual government services more readily available across Canada.
While there is no money for publicly funded public K-12 education initiatives, Canada has promised more support for post-secondary students. See some of the commitments made below:
Budget 2023 proposes to provide $813.6 million in 2023-24 to enhance student financial assistance for the school year starting August 1, 2023. This includes:
- Increasing Canada Student Grants by 40 per cent—providing up to $4,200 for full-time students.
- Raising the interest-free Canada Student Loan limit from $210 to $300 per week of study.
- Waiving the requirement for mature students, aged 22 years or older, to undergo credit screening in order to qualify for federal student grants and loans for the first time. This will allow up to 1,000 additional students to benefit from federal aid in the coming year.
Finally, we can talk about everyone’s favourite topic, taxes. The federal government is looking to change the way the wealthiest Canadians pay taxes while also providing tax relief for middle-class Canadians. See below:
To ensure the wealthiest Canadians pay their fair share of tax, Budget 2023 proposes legislative amendments to raise the Alternative Minimum Tax rate from 15 per cent to 20.5 per cent and further limit the excessive use of tax preferences. Under the proposed reforms, the basic AMT exemption would increase more than fourfold, from $40,000 to $173,000, significantly increasing the income level necessary to pay the AMT. This would result in a tax cut for tens of thousands of middle-class Canadians, while the AMT will more precisely target the very wealthy.
The CTF/FCE, in their 2023 pre-budget submission, asked for four main items. Unfortunately, most of those items go relatively unsupported in this federal budget. In October 2022, we asked for:
- Targeted long-term and sustainable funding for a National Advisory Council on Publicly Funded Public Education (NACE) to deal with these issues impacting all families across Canada.
- While funding for this was not included in budget 2023, the CTF/FCE is positive that our advocacy and momentum regarding the NACE may see federal support next budget.
- The federal government to ensure that funding the provinces and territories receive from the Canada Mental Health Transfer is linked to the establishment of publicly funded in-school K-12 mental health support programming.
- We know this issue is a high-priority issue for Canadians and we will continue to press the federal government (and encourage our member organizations to press their Premiers too) to have more funding to support student mental health programming in schools. The CTF/FCE has seen the federal government invest in teacher mental health through a pilot in 3 schools across Canada, in collaboration with the Centre for Addiction and Mental Health (CAMH) and University of Ottawa. We want to see more support such as this for both students and teachers.
- We do acknowledge there is money in budget 2023 for youth mental health – in the form of $20.2 million over five years, starting in 2023-24, to the Public Health Agency of Canada for a new community-based program to prevent substance use among young people – but this isn’t enough to address the issue.
- Targeted long-term and sustainable funding for a National School Nutrition Program in conjunction with provinces, territories, and Indigenous organizations that is sustainable and locally sourced where possible.
- The CTF/FCE is very disappointed that the federal government has not taken the opportunity to support Canadian families with a National School Nutrition Program, especially at a time when they at least in part recognize that the cost of groceries and cost of living expenses are going up. In Budget 2022, the federal government committed to working with partners to establish a National School Food Policy and they held consultations in late 2022 (which CTF/FCE was a part of) but no money for the roll-out has been included in Budget 2023. We remain hopeful that money for this vitally important initiative will come but are shocked it wasn’t in the budget announcement for 2023.
- Targeted long-term and sustainable funding for an increase in staff to process and expedite refugee applications and an increase in supports for individuals and their families who seek refuge within Canada.
- Budget 2023 proposes to provide $43.5 million in 2023-24 to Justice Canada to maintain federal support for immigration and refugee legal aid services. This money is welcome but considering the backlogs experienced by Canadians following significant increases to Service Canada budgets to address passport processing, we are not confident this money will make a significant difference in processing refugee claims.
Overall, the federal government has introduced some niche ways to make life a bit more affordable for Canadians. Unfortunately, the economic outlook and increased spending means that despite belt-tightening in other areas the federal deficit stands to increase again.
The CTF/FCE will continue to keep watch of legislation that implements these commitments and advocate for the supports we hope to see in the next federal budget be it the NACE or a National School Nutrition Program.