7 key takeaways from the Liberal government’s spring economic snapshot

Prime Minister Mark Carney and Finance Minister François-Philippe Champagne introduced their spring economic update on Tuesday, the first since the Liberals were re-elected last year under Carney’s leadership.

The update provides a snapshot of the federal finances since November’s budget.

Typically the budget is tabled around this time of year with a fall fiscal update, but Carney has reversed the federal budgetary calendar since taking office.

Here are some key highlights from Tuesday’s update.

State of the federal books

As Carney hinted on Monday, Tuesday’s update shows a lower-than-forecasted deficit for the fiscal year that ended last month.

November’s budget was projecting a deficit of $78.3 billion for the year, but Tuesday’s update says the deficit came in at $66.9 billion.

The government saw a $60-billion uplift, in part due to revenue from surging oil prices. Tuesday’s outlook outlines $37.5 billion of spending on newly announced measures.

The government projects it will still eliminate its operating deficit — how much it spends on running day-to-day operations — over the next three years. But much of those savings aren’t projected to materialize until after this coming fiscal year.

Carney has promised to balance the operating budget while only running deficits to finance investments. The overall budgetary outlook doesn’t show a path to balance, with the government slated to run deficits of well over $50 billion each year into 2031.

Emphasis on skilled trades recruitment

The Liberals are aiming to recruit 80,000-100,000 new skilled trade workers by the 2030-31 fiscal year.

A key promise of the Carney government was to build homes and national interest projects, which will require more trade workers.

The government is pumping $6 billion over five years behind its promise to recruit, train and hire thousands of new workers.

Included in the program is an apprenticeship grant in the shape of a $400 per week income top-up to apprentices completing in-class training. There will also be a one-time bonus of $5,000 for apprentices who complete their Red Seal certification.

The government is also promising a first-year wage subsidy of up to $10,000 for employers who hire apprentices.

Additional funding is also being allocated to modernize training programs, including by introducing online exams and digital logbooks.

Lowering Canada Pension Plan rates

The Liberals will introduce legislation that will lower the rates employers and employees pay into the Canada Pension Plan (CPP), starting next year.

The reduction will drop the CPP contribution from 9.9 per cent to 9.5 per cent of an employee’s paycheque.

Tuesday’s economic update cites the most recent actuarial report, which suggests the government has room to lower the contribution rate and keep the CPP solvent. The changes have agreement from provincial finance ministers, the document says.

The government estimates that the contribution reduction will translate into annual savings of about $133 for an employee earning $70,000 a year.

Outsourcing air passenger complaint resolutions

The government announced that it’s planning to outsource the resolution process for air passenger complaints to “a neutral, third-party dispute resolution organisation.”

As it stands, the Canadian Transportation Agency (CTA) — a quasi-judicial tribunal and regulator — is solely tasked with settling disputes between airlines and customers.

WATCH | Airline complaint backlog doubles to nearly 95,000:

Airline complaint backlog doubles to nearly 95,000

The federal government is weighing whether millions of dollars in funding should be extended to clear a backlog of airline complaints, potentially delaying the process for Canadians to have their grievances addressed.

But the CTA has been dealing with a backlog of air passenger complaints since the air passenger bill of rights was introduced in 2019. The agency told CBC News last month that the backlog had hit 95,000 complaints.

The document doesn’t indicate what sort of third-party adjudicator would be brought on to help relieve the complaints backlog, but it pointed to the U.K. and EU systems as models to follow.

Air Canada announced earlier this month that it would pilot a program that would transfer air passenger complaints to a third party.

Changes to disability tax credit application process

Tuesday’s economic update is promising to “streamline” the process for certain individuals applying to the federal disability tax credit.

The new proposed process is slated to reduce the amount of paperwork individuals with a formal diagnosis of one of more than 40 long-term conditions would need to fill out, the document says. Those long-term conditions include mental impairments such as Alzheimer’s, dementia and Down syndrome, as well as several physical conditions.

The government will also change the criteria to allow podiatrists to certify eligibility for certain conditions, and also expand what physiotherapists, speech pathologists and occupational therapists can certify.

Sports funding

The government is announcing new funding for sports facilities and programs across the country. According to the economic update, $755 million is being allocated over the next five years, with roughly $188 million being promised on an annual basis afterward.

A large portion of that funding, $660 million, is being geared toward sports organizations to boost youth participation.

An additional $50 million is being set aside to upgrade facilities to host “world-class sporting events,” with the aim of ensuring those facilities can continue to be used after those events.

Another $45 million is being earmarked toward high-performance athletes. This tranche of funding will also address some of the findings in the Future of Sport in Canada Commission’s final report.

Banning crypto ATMs

The government has laid out broad plans to address fraud and financial crimes in the past year. Several of those previously announced measures were highlighted in Tuesday’s economic update.

But the Liberals are also tacking on an additional measure, announcing Tuesday that they intend to ban cryptocurrency ATMs.

WATCH | How fraudsters are using crypto ATMs to get your money:

How fraudsters are using crypto ATMs to get your money

Crypto ATMs are the main way fraudsters are getting money from Canadians, according to a federal report. The CBC’s Angelina King and Farrah Merali dive into the issue in the three-part series Feeding Fraud: The Crypto ATM Problem.

Crypto ATMs look like a traditional banking machine, but instead of dispensing cash from a bank account, the majority of these machines allow customers to deposit cash and then convert it into cryptocurrency that they can send to a virtual wallet anywhere in the world.

These machines have reportedly been a tool for fraudsters in recent years, with victims reporting the loss of $14.2 million to scams through crypto ATMs in 2024, according to the Canadian Anti-Fraud Centre.

Article source: https://www.cbc.ca/news/politics/takeaways-from-spring-economic-update-carney-9.7180305?cmp=rss