Introduction: Economic Resilience Amid Global Challenges

Over the past five years, Canada has faced an array of unprecedented challenges, including the COVID-19 pandemic, Russia’s invasion of Ukraine, and surging global inflation. Despite these obstacles, the Canadian economy has demonstrated remarkable resilience. Thanks to responsible fiscal management and a proactive economic plan, Canada has achieved a soft landing—moderating growth without a recession. For taxpayers, this is a moment to reflect on the opportunities and benefits created by these policies.

https://www.budget.canada.ca/update-miseajour/2024/home-accueil-en.html?utm_campaign=fin-fin-update-miseajour-24-25&utm_medium=vanity-url&utm_source=canada-ca_fall-economic-statement

Key Economic Developments in 2024

Canada’s economic performance in 2024 has been a testament to its robust foundations:

• Inflation Control: Inflation has remained within the Bank of Canada’s 1% to 3% target range throughout the year, with October seeing a steady rate of 2%.
• Job Creation: Over 330,000 jobs have been added, bringing unemployment down to a manageable 6.8%, despite global economic pressures.
• Wage Growth: For 21 consecutive months, wage growth has outpaced inflation, positioning Canadian workers among the best compensated in the G7.
• Interest Rate Relief: The Bank of Canada has reduced its policy rate five times, from 5% to 3.25%, providing relief for homeowners and businesses.

Major Initiatives Supporting Canadians

Cost of Living Relief

1. $10-a-Day Childcare:
   • This program is unlocking workforce potential, particularly among women, by reducing the financial burden of childcare.
   • Families save up to $14,300 per child annually, enhancing household budgets and economic productivity.
2. Housing Affordability:
   • Accelerated funding for affordable housing construction and reforms to expand 30-year mortgage amortizations are improving homeownership opportunities.
   • A temporary pause on immigration growth aligns housing supply with demand, easing market pressures.
3. Support for Seniors and Families:
   • Increased pensions and tax-free Canada Disability Benefits ensure financial stability for vulnerable Canadians.
   • Enhanced consumer protections against hidden fees and predatory lending practices.

Boosting Economic Growth

1. Innovation and Research:
   • Nearly $5 billion in funding for AI research and development solidifies Canada’s global leadership in innovation.
   • Tax incentives for businesses engaging in Scientific Research and Experimental Development (SR&ED) foster productivity.
2. Clean Energy Investments:
   • Over $94 billion allocated for clean energy tax credits and decarbonization projects drives Canada’s transition to a net-zero economy.
   • Key projects include investments in electric vehicle (EV) supply chains, renewable fuels, and hydrogen energy.
3. Small Business Support:
   • Lower credit card fees and accessible financing options provide relief for small businesses.
   • The Canadian Growth Fund incentivizes private capital investment in critical industries.

Fiscal Responsibility and Taxpayer Benefits

Canada’s commitment to fiscal prudence ensures taxpayers reap the benefits of a stable economic environment:

• Lowest Debt-to-GDP Ratio: At 14.4%, Canada boasts the lowest net debt-to-GDP ratio in the G7, safeguarding its AAA credit rating.
• Taxpayer Relief: New measures include automatic tax filing for low-income Canadians and enhanced rural top-ups for the carbon rebate.
• Crackdown on Predatory Practices: Aggressive action against predatory lenders and debt advisors strengthens financial protections.

Housing Affordability and Immigration Policy Adjustments

Housing affordability remains a priority for the federal government. Steps include:

• Increased Supply: Programs like the $6 billion Housing Infrastructure Fund and incentives for rental construction are driving unprecedented levels of homebuilding.
• Temporary Immigration Pause: A two-year reduction in immigration levels addresses housing shortages while supporting economic integration.

These measures aim to reduce Canada’s housing gap by 670,000 units by 2027, aligning supply with demand and fostering long-term affordability.

Labour Market Dynamics

Canada’s labour market continues to show resilience and adaptability:

• Workforce Participation: Investments in affordable childcare have pushed female participation rates to record highs.
• Broad-Based Employment Gains: High-wage industries have seen significant growth, contributing to a 7.4% increase in total employment since 2019.

Conclusion: Building a Resilient Future

Canada’s 2024 Fall Economic Statement outlines a clear path to sustainable economic growth. With inflation under control, wages rising, and strategic investments in housing, innovation, and clean energy, the future looks promising for Canadian taxpayers. By leveraging these opportunities, Canadians can look forward to an era of shared prosperity and economic stability.