2024 Fall Economic Statement Update

The Government of Canada released the 2024 Fall Economic Statement on Monday, December 16, 2024.

 

However, along with the Fall Economic Statement, there were several significant political developments: Minister Freeland (Minister of Finance) and Minister Fraser (Minister of Housing, Infrastructure and Communities) both announced their resignations on Monday.

 

The Honourable Dominic Leblanc has been named Minister of Finance, and he keeps his portfolios of Public Safety, and Intergovernmental Affairs in addition.

 

In the lead-up to the announcements, it was reported that the former Finance Minister and Prime Minister were at odds regarding a range of affordability measures, including the GST holiday and proposed $250 cheques to all Canadians who made less than $130,000 per year. Freeland was the first senior cabinet minister close to the Prime Minister to express anything less than full confidence in his leadership.

 

The goal of the FES was to demonstrate to the public that the federal government is prepared to go toe-to-toe with the incoming Trump administration. The Liberals under Justin Trudeau will face tremendous headwinds in giving the public any sense of confidence after what transpired early today.

 

The document focuses on 3 key pillars:

  1. Reducing Everyday Costs
  2. Investing to Raise Wages
  3. Safety, Security and Fair Governance

 

 

Government Fiscal Overview

 

The federal deficit is now tagged at $61.9 Billion for 2023/2024. The deficit for 2024/2025 is anticipated to by $42.8 Billion. Both numbers eclipse the fiscal guardrail of $40.1 Billion previously set by Minister Freeland. At the same time, former Minister Freeland’s preferred fiscal guardrail, the Debt-to-GDP ratio, is trending in the direction that the government would like, declining from 42.1 per cent in 2023-2024 down to 41.9 per cent in 2024-2025.

 

Funding and Program News

Newcomer Integration

  • The 2024 Fall Economic Statement announces that the federal government is considering further measures to create a more nimble and resilient labour market, that supports newcomer integration into their chosen professions, including by removing the tax-exempt status of regulatory colleges that do not accelerate credential recognition and publishing a national credential recognition performance framework.

Healthcare Worker Mobility

  • The 2024 Fall Economic Statement announces the government’s intent to consider a similar standard setting framework as the Red Seal Trade Program to enable the mobility of health care workers across the country.

Personal Support Workers

  • The 2024 Fall Economic Statement announces that, as provinces and territories have not agreed to bilateral deals to raise the wages of personal support workers, the federal government intends to introduce a new refundable tax credit for personal support workers, potentially modelled on the design of the tax credit for volunteer firefighters. To implement this measure, the government intends to introduce legislation as soon as possible. Further details will be announced in due course.

Sexual and Reproductive Health

  • The 2024 Fall Economic Statement proposes to provide $90 million over six years, starting in 2024-25, with $20 million ongoing, to Health Canada to expand and make permanent the Sexual and Reproductive Health Fund. 

Leveraging AI

  • Following consultations this summer, the 2024 Fall Economic Statement is announcing the Canadian Sovereign AI Compute Strategy, which will provide support to our world-class researchers and innovative AI firms in the coming years. Using funding provided by Budget 2024, this Strategy will provide:
    • Up to $200 million over two years, starting in 2025-26, for targeted investments to augment existing compute infrastructure and capacity in the near-term to meet immediate needs, including:
      • $30 million for the Vital real-time health computing infrastructure for Trials, Artificial Intelligence, and a Learning Health System (VITAL) to pilot a secure digital AI infrastructure to leverage Canadian health data.

Red Tape Reduction

  • To reduce unnecessary barriers to innovation, productivity, and economic growth, and lower regulatory costs for Canadians and Canadian businesses, the 2024 Fall Economic Statement proposes to provide $27.8 million over five years, starting in 2025-26, for a new Red Tape Reduction Office, sourced from existing resources of the Treasury Board Secretariat. The Red Tape Reduction Office will:
    • Accelerate the cutting of red tape from the regulatory system, including strengthened efforts to address overly burdensome or outdated requirements in existing regulations;
    • Establish measures to track, assess, and communicate results of regulatory action to ensure a stronger, evidence based regulatory framework; and,
    • Improve accountability, oversight, and transparency, including through stronger engagement with Canadians and Canadian businesses and a dedicated channel for feedback on regulatory red tape.
  • The Red Tape Reduction Office will prioritize work in key sectors including, but not limited to, telecommunications, transportation, power generation and transmission, innovation, medicine, and health.

You can read more about the 2024 Fall Economic Statement by clicking here.