Kenora MP Eric Melillo has high expectations for this year’s federal budget as the country gets prepared to move past the COVID-19 pandemic.
Deputy Prime Minister and Minister of Finance, Chrystia Freeland, is set to unveil Canada’s 2022 Federal budget on April 7 at the House of Commons in Ottawa, with many calling for the government to help reduce our cost of living that’s only continuing to rise.
“Our government was re-elected on a commitment to grow our economy, make life more affordable and to continue building a Canada where nobody gets left behind,” Freeland told the House of Commons on March 29.
Melillo says his verdict on the budget will come down to the Liberal party’s priorities, noting this will be the first major document since the announcement of the ‘supply and confidence' agreement between the Liberal and NDP parties.
“I’m hoping to see the budget does not include any new tax hikes on Canadians,” said Melillo, in an interview with the Q Morning Show on April 1.
“The cost of living crisis that we’re seeing across the country, the government needs to do what it can to reduce those costs. The least they can do at this point is to ensure that they’re not raising taxes on Canadians.”
Freeland’s fiscal update in December 2021 suggested that inflation could return to its two per cent target by the end of the year. Canada’s inflation rate reached a high of 5.7 per cent in February, the highest it has been since August of 1991.
Initiatives expected to come from the budget include national dental care and pharmacare programs, with additional spending on healthcare, reconciliation with Indigenous people, growing our economy and lowering Canadian’s cost of living.
“I’ll be looking to see if funds are going to be targeted to support small businesses, increased health transfers and infrastructure in our northern and rural communities,” notes Melillo.
Melillo adds that Canada’s non-partisan Parliamentary Budget Officer has determined that large stimulus spending like CERB and many other supports throughout the pandemic are no longer needed, as the country continues to remove many pandemic restrictions.
Although, 2021’s budget announced $100 billion in stimulus spending over three years, and there are currently no plans to pull back on that funding.
“I hope to see the government will take a responsible approach to managing our debt and move on from those big pandemic programs that we saw, that were badly needed with the pandemic,” adds Melillo.
In 2021’s budget, Canada’s deficit was expected to fall from $354.2 billion in 2021 to $154.7 billion in 2022, with gradually declining deficits until 2025 – where the deficit is estimated to be about $30.7 billion.
Melillo says he also expects that a variety of global factors will weigh in on Canada’s decision-making process, including the war in Europe, sanctions on Russia, a rising cost of inflation and skyrocketing oil prices.
Last month, while Freeland was in Germany, she noted the geopolitical situation had changed ‘tremendously’, noting Canada’s military and defence spending may need to be re-evaluated.
The North Atlantic Treaty Organization, or NATO, has called for all members to spend at least two per cent of their Gross Domestic Product on defence, while Canada only spends about 1.4 per cent on defence.