Fall Economic Statement 2023 Overview

We have provided an overview of Chrystia Freeland, the Minister of Finance and Deputy Prime Minister's federal government’s 2023 Fall Economic Statement.

FES 2023 Overview

Today Chrystia Freeland, the Minister of Finance and Deputy Prime Minister, tabled the federal government’s 2023 Fall Economic Statement (FES) (2023 Fall Economic Statement (canada.ca). The two main themes of this year’s FES were supporting the middle class and building more homes, faster.

In her speech, Minister Freeland spoke about her government’s investments in early learning and childcare, public transit, EV battery factories and energy projects. The Minister tried to strike a balance between praising Canada’s overall economic performance and recognizing that many Canadians are still struggling – especially when it comes to affording housing. 

The Statement itself seeks to underline that is the federal government is also delivering on its commitment to responsible fiscal management, citing that because of its plan Canada has had the fastest rate of fiscal consolidation in the G7 since the depths of the pandemic and maintains both the lowest deficit- and net debt-to-GDP ratios of all G7 countries. However, it is not all good news. Although Canada is expected to avoid a recession, it will see subdued growth in the coming quarters as the impacts of higher interest rates continue to build. The deficit for this fiscal year is projected to be $40 billion with no date given for a balanced budget.

Housing

The federal government is introducing new measures to incentivize the construction of new rental housing, protect renters and homeowners, and make it easier for Canadians to buy their first home, including:

  • $4 billion Housing Accelerator Fund – cut red tape and build more than 100,000 new homes across Canada, faster;
  • Repurposing more federal lands to build homes on;
  • Removing the GST from new rental housing, including co-operative housing corporations that provide long-term rentals;
  • Unlocking $20 billion in low-cost financing for rental construction to build up to 30,000 more homes per year;
  • Financing more rental housing by providing $15 billion for loans through the Apartment Construction Loan Program, to help build 30,000 new homes. Formerly known as the Rental Construction Financing Initiative, for a total of more than $40 billion in loan funding.
  • Investment of $309.3 million in new funding for the Co-operative Housing Development Program, which was announced in Budget 2022. In collaboration with the Co-operative Housing Federation of Canada and other co-op housing partners, CMHC is working to launch the co-developed program in early 2024.
  • Building more affordable housing for the most vulnerable Canadians with $1 billion for the Affordable Housing Fund. This investment aims to support non-profit, co-op, and public housing providers in order to build more than 7,000 new homes by 2028.
  • Breaking down barriers to labour mobility within Canada, with priority for construction workers and health care professionals, and prioritizing skilled tradespeople for permanent residency;
  • Cracking down on non-compliant short-term rentals and supporting municipal enforcement of short-term rental restrictions; and,
  • A new Canadian Mortgage Charter to ensure Canadians at financial risk can access the tailored mortgage relief they can expect from their bank to help them make their payments and stay in their homes.

Supporting the Middle Class

The new initiatives under this umbrella include: 

  • Reforming legislation to crack down on unfair practices that drive up costs; To further enhance competition in Canada, the federal government is taking action by amending the Competition Act and the Competition Tribunal Act to ensure Canadians can have more choice in where they take their business. The government is proposing amendments to the Competition Act in order to:
    • Strengthen the tools and powers available to the Competition Bureau to enable it to crack down on abuses of dominance by bigger companies, such as predatory pricing;
    • Further modernize merger reviews, including by empowering the Competition Bureau to better detect and address “killer acquisitions” and other anti-competitive mergers; ˗ Enhance protections for consumers, workers, and the environment, including by prohibiting misleading “greenwashing” claims and improving the focus on worker impacts in competition analysis; 
    • Empower the Commissioner of Competition to review a wider selection of anti-competitive collaborations and seek meaningful remedies to ensure that harmful conduct is not repeated; and,
    • Broaden the reach of the law by enabling more private parties to bring cases before the Competition Tribunal and receive payment if they are successful.
  • The 2023 Fall Economic Statement also proposes amendments to the Competition Tribunal Act to ensure legal cost awards during case adjudication do not prohibit a robust defence of competition. This proposed comprehensive modernization of Canada’s competition regime builds on significant recent reforms, including those in Bill C-56.
  • Ensuring Canada’s five largest grocery chains keep their commitments to stabilize prices and enhancing competition in the grocery sector;
  • Removing the GST from psychotherapy and counselling services, to make mental health care more affordable for Canadians;
  • Continuing to crack down on junk fees, including lowering non-sufficient fund (NSF) fees charged by banks, investigating international mobile roaming rates, and ensuring that airlines seat all children under the age of 14 next to their accompanying adult at no extra cost;
  • Amending legislation to support Canadians’ right to repair their devices and products by preventing manufacturers from refusing to provide the means to repair them in an anti-competitive manner;
  • A new Employment Insurance adoption benefit, which would provide 15 weeks of shareable benefits to parents; and,
  • Enhancing low-cost and no-cost banking accounts to reflect the realities of modern banking while designating a single independent ombudsman to help Canadians resolve complaints with their banks.
  • Introduce legislation through Budget 2024 to establish a consumer-driven banking framework that would regulate access to financial data. This framework will ensure that Canadians and small businesses have safe and secure access to financial services and products that help them manage and improve their finances.

Clean Economy

  • The 2023 Fall Economic Statement announces that the Canada Growth Fund will be the principal federal entity issuing carbon contracts for difference. The Canada Growth Fund will allocate, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements.

Pensions

  • The federal government believes that continued domestic investments by Canada’s pension funds have the potential to boost Canada’s economy and create good careers for people across the country.
  • The 2023 Fall Economic Statement announces that the federal government will work collaboratively with Canadian pension funds to create an environment that encourages and identifies more opportunities for investments in Canada by pension funds and by other responsible investment pools, while helping to deliver secure pensions for Canadians.
  • To enable pension funds to more fully participate in Canada’s economic growth, the 2023 Fall Economic Statement also announces that the government will explore removing the “30 per cent rule” from investments in Canada. The 30 per cent rule restricts Canadian pension funds from holding more than 30 per cent of the voting shares of most corporations.
  • As part of this effort, and in order to improve transparency around pension investments, the government also proposes to require large federally-regulated pension plans to disclose the distribution of their investments, both by jurisdiction and asset-type per jurisdiction, to the Office of the Superintendent of Financial Institutions (OSFI). This information will be made publicly available, and the government will engage with provinces and territories to discuss similar disclosures by Canada’s largest pension plans in a simple and uniform format.

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