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Canada: Trudeau says budget measures will help Canadians weather Bank of Canada rate hike

Conservatives blast Liberal budget as NDP strives to balance criticism with support

  Conservatives blast Liberal budget as NDP strives to balance criticism with support Conservative interim leader Candice Bergen said Thursday that Canada's most pressing problems aren't addressed in the new federal budget — which she claimed had been heavily influenced by NDP ideology. "We were looking for controlled spending, which would in turn control inflation," Bergen told reporters outside the House of Commons after the budget was tabled. "It is an irresponsible budget. It is a typical, classic, NDP spend-and-tax budget.

LAVAL, Que. — Measures in the recently tabled federal budget will help Canadians weather higher interest rates, Prime Minister Justin Trudeau said Wednesday, as he acknowledged there are no easy solutions to the country's housing affordability crisis.

  Trudeau says budget measures will help Canadians weather Bank of Canada rate hike © Provided by The Canadian Press

Earlier in the day, the Bank of Canada raised its key interest rate by half a percentage point to one per cent — its highest rate hike in more than 20 years — which is expected to increase the cost of bank loans, including variable-rate mortgages.

Following the Bank of Canada's announcement, several large banks said they would raise their interest rates. Both TD Canada Trust and RBC Royal Bank said Wednesday they would increase their prime rates by half a percentage point.

Cryptocurrency review, free tampons — and other things you might have missed in the budget

  Cryptocurrency review, free tampons — and other things you might have missed in the budget Finance Minister Chrystia Freeland released her second federal budget on Thursday — a 280-page, multi-billion-dollar plan focused on cooling down Canada's housing market, boosting defence spending and transitioning to a greener economy. But those aren't the only spending items in the federal government's new fiscal plan.But those aren't the only line items in the federal government's new fiscal plan. Here are some of the budget's lower-profile promises and funding initiatives.

"In the budget we put forward a plan to address the housing crisis that too many families are living through," Trudeau told reporters in a suburb north of Montreal, responding to a question about the interest rake hike.

As well as a tax-free savings account that can be used for the purchase of a first house, he said the budget for the 2022-23 fiscal year includes measures to double housing construction starts across the country and to "crack down" on speculation, including by limiting market access of foreign buyers.

"We know that there isn't any one thing any government can do," he said about the high cost of living in Canada. "Every family is a different situation, and the approach we take has to be multi-faceted."

In the city of Laval, where Trudeau visited Wednesday, the median price of a single family home has risen 67 per cent over the past five years, to $559,000, according to a recent report by the Quebec Professional Association of Real Estate Brokers.

Government report acknowledges 'feminist' federal budget benefits men more than women

  Government report acknowledges 'feminist' federal budget benefits men more than women The Liberal government has made gender equality a top priority, but its latest federal budget benefits men more than women because many spending initiatives target male-dominated sectors. A statement and impacts report on gender and diversity that accompanied the budget says nearly half of the budget's measures — 44 per cent — are expected to benefit women and men in equal proportions, while 42 per cent are expected to directly or indirectly benefit men. Only a considerably smaller share of the budget measures — roughly 14 per cent — will directly or indirectly benefit women.

The prime minister also responded to accusations by federal Tory leadership candidate Pierre Poilievre, who has said municipalities across Canada are helping to keep housing prices high by causing construction delays and adding costs. Poilievre wants the federal government to pressure cities to reduce bureaucracy and lower the costs involved in building homes.


Video: Freeland outlines proposed housing investments in the federal budget (cbc.ca)

Trudeau said his government is investing billions of dollars and partnering with cities to accelerate housing starts, "instead of talking about it, as some Conservatives are doing."

"It's good to see other parties agreeing with us that that's the best path forward," he added.

Later in the day, Finance Minister Chrystia Freeland addressed the Greater Vancouver Board of Trade, touting a $4-billion investment included in the budget to accelerate housing construction starts. She said the "Housing Accelerator Fund" will help municipalities modernize their housing-permit systems, including by helping them make the jump from paper to digital permits.

Freeland's budget leaves out a number of major Liberal campaign promises

  Freeland's budget leaves out a number of major Liberal campaign promises Finance Minister Chrystia Freeland tabled her second federal budget Thursday promising a return to "fiscal responsibility" after years of big COVID-related spending. Some of the Liberal Party's major 2021 election promises were left on the cutting room floor.It's a noticeably thinner budget that left some of the Liberal Party's major 2021 election promises on the cutting room floor. A number of those commitments — most notably more money for health care, mental health and long-term care, and more support for seniors — were slated to roll out starting in this fiscal year.

"There are lots and lots of municipalities across the country that are ready to issue more housing permits, but their systems are not allowing them to issue permits as quickly as they would like," Freeland said.

At a separate event on Wednesday, in Surrey, B.C., Freeland said her government's decision in 2016 to raise the requirements to obtain mortgages is paying off now that the central bank's key interest rate is rising. The 2016 so-called "stress test" ensured borrowers could afford to repay loans if interest rates increased.

Non-housing-related measures, such as the Canada Child Benefit and the recently signed agreements with the provinces to reduce daycare fees, would also help families that are struggling to pay their mortgages, Freeland added.

Still, she said, the federal government doesn't believe it can solve housing affordability on its own, or with a single budget.

"It's really important for us to recognize there is no single silver bullet," Freeland said. "This is a long-term challenge and we're going to have to keep investing in it year after year after year."

This report by The Canadian Press was first published April 13, 2022.

— With files from Hina Alam in Vancouver.

Jacob Serebrin, The Canadian Press

Bank of Canada hikes key interest rate 50 basis points for 1st time in 22 years .
The Bank of Canada is raising its key interest rate by half a percentage point, up to an even one per cent, in its first move of that magnitude in more than 20 years.The central bank’s key overnight rate now stands at one per cent.

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