Canada will increase its military spending because of the war in Ukraine, according to a budget unveiled Thursday which also includes a component to attract foreign investment and measures in favor of housing to fight against the erosion of purchasing power.
“We are now spending more on defense than we expected before the Russian invasion of Ukraine,” said Chrystia Freeland, the finance minister, adding that this war posed “the most serious threat in the world today”. .
The first woman to head the Ministry of Finance began her speech in Parliament by looking back on the last 25 months marked by the shock of the Covid-19 pandemic and the return of war in Europe.
After two years, which constituted a “terrible economic shock” and led to exceptional spending by the Canadian state, Ottawa has planned to tighten the purse strings globally but to invest in its army.
Eight billion additional dollars are allocated to strengthen the defense budget, which remains however below the 2% of GDP requested by NATO.
The government must be “ready to face a now more dangerous world”, continued Minister Chrystia Freeland, adding that “the fight of Ukrainians is ours, a fight for democracy”.
Canada, with one of the largest Ukrainian diasporas in the world, also plans to increase direct aid to Ukraine with a loan of one billion Canadian dollars via the IMF and a new envelope of 500 million for military aid.
The country, which expects a budget deficit of 113.8 billion Canadian dollars (83 billion euros) in 2021-2022, has also revised downwards its growth forecast for 2022 to 3.9%, in particular in due to global supply difficulties and the war in Ukraine.
The minister, however, welcomed the economic recovery of recent months, the country has recreated the jobs lost during the pandemic and has an unemployment rate at levels close to historic lows.
– Housing crisis –
For this first budget of Justin Trudeau’s third term since his re-election last September, the focus is on the housing crisis, a “fundamental” problem that will require a “great national effort”.
With the population growth “the fastest in the G7” in 2020 and a crying lack of housing, Ottawa is counting on the “most ambitious plan that Canada has ever had to implement” to encourage, among other things, the emergence of new construction sites. of construction.
The government also intends to prohibit for two years the purchase of houses by foreign investors in an attempt to counter the meteoric increase in real estate prices in recent years.
However, Canada is relying on foreign investment in its climate policy. He hopes to attract “billions of dollars in private capital that we need to transform our economy at high speed and at scale,” through a new growth fund, Chrystia Freeland said.
This five-year, $15 billion fund is to become the “keystone of Canada’s net-zero emissions economy” and accelerate private capital investment in decarbonization and clean technology projects.
To boost electric vehicles, the government wants to release an envelope of more than 3 billion Canadian dollars “to make zero-emission vehicles more affordable”.
The 2022 budget also provides an envelope of more than five billion dollars for dental care for Canadians, a measure proposed by the New Democratic Party (NDP, left), ally of the Liberals of Justin Trudeau.
The two parties recently signed a political agreement to allow the government to remain in place until the 2025 elections, despite its minority in parliament.
The budget, presented Thursday, will be put to a vote in the House of Commons in the coming weeks.
© 2022 AFP
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