By The Canadian Press

As deficit grows, the Federal Budget spends more on a wide variety programs

Mar 19, 2019 | 3:33 PM

OTTAWA —  The Federal Budget is expected to sink Canadians deeper into the red this year as the Liberal government plans to spend a windfall of new revenue.

The federal budget predicts a deficit of $19.8 billion for 2019-20, including a $3-billion contingency fund.

The forecast compares with a $19.6-billion deficit predicted in the government’s fall economic update, despite billions in unexpected revenue from income and excise taxes.

Offsetting the increased revenue, the budget plan includes new spending on a wide range of new items, including skills training, income boosts for seniors and programs for first-time homebuyers.

The new outlook also predicts slightly softer economic growth this year, coming in at 1.8 percent compared with the fall’s forecast of 1.9 percent.

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Based on the Liberal campaign platform in 2015, this was supposed to be the year the government books tipped back into the black with a surplus of $1 billion. However,  $19.8-billion deficit for the 2019-20 fiscal year means the government will borrow $200-million more than anticipated.

Highlights from the 2019 federal budget tabled Tuesday:

— $1.7 billion over five years, and $586 million a year after that, for a Canada Training Benefit to help workers upgrade skills and acquire new ones while keeping their jobs. The benefit includes a $250-a-year tax credit to pay for training programs and access to employment insurance to cover living expenses for up to four weeks away from work.

— $1.18 billion over five years to toughen border security, including hiring more judges to handle judicial reviews of asylum applications.

— Measures to make housing more affordable, especially for first-time buyers, by letting them borrow $35,000 from RRSPs (up from $25,000) and having the Canada Mortgage and Housing Corp. contribute a small share of equity for down payments.

— A federal deficit of $19.8 billion, including a $3-billion “risk adjustment,” an increase of $200 million from last year’s forecast. The Liberals’ forecast again includes a gradual reduction in the deficit, but not quite as quickly as anticipated last year. By 2023-2024, the projected federal deficit is $11.4 billion.

— $3.9 billion for farmers in supply-managed industries affected by new trade agreements with Europe and a block of Pacific Rim countries.

— $2.2 billion for municipalities’ and First Nations’ infrastructure projects, through a one-time boost to the amount distributed through the federal gas-tax transfer.

— $1.2 billion over three years to enhance social services for Indigenous families and children, the main element in a package of spending aimed at Indigenous Peoples.

— Lowering the interest rate on Canada Student Loans to the prime rate, from the current prime-plus-2.5-percentage-points.

— Creating a new Canadian Drug Agency to centralize the evaluations of the effectiveness and efficiency of new drugs and buy in bulk nationwide, instead of province-by-province.

— $500 million a year, starting in 2022, to subsidize the costs of drugs for rare diseases, whose high costs are distributed among very few patients.

— $300 million over three years for rebates of up to $5,000 on electric or hydrogen-fuel-cell vehicles (with a maximum purchase price of $45,000).

— $950 million for municipal governments to refit their own buildings for energy efficiency and to provide their own subsidy programs for private homeowners to do the same.

— $50 million over five years to devise a new national dementia strategy.

Details of each of the items can be found in the “Canada” news section of LethbridgeNewsNOW.com