(Justin Trudeau walking past Parliament: 2015)
Canada's federal party in power is currently under heavy scrutiny from the public as they trail the opposition in current public polls. According to these polls, if an election were held right now, the Liberal Party would kicked out of power with the Conservatives comfortably securing a majority. The party is in peril from all sides, the economy is facing a cost of living crisis that hasn't been seen since the 1980s, the Conservatives are picking up steam over their new leader, and the NDP is looking knock the Liberals down by pushing for their own policy advancements.
The coming fall session will make or break the Liberals. If the party can get back up on their feet by addressing the country's most pressing issues, then they'll be competitive against the Conservatives in the next election. Otherwise, any deviation from what Canadians deserve in this time of uncertainty will result in a dramatic crash for the Liberals. Fortunately, the government's levers will be under the Liberal's hands for the next two years and there's much still they can do.
A Freeze on the Carbon Tax?
The federal government is under fire from the Conservatives over the carbon tax. While the goal of the tax is to reduce consumers’ reliance on fossil fuels, Canadians are feeling the pinch on their budgets as the carbon tax continues to rise over time. As a result, the carbon tax is causing food and fuel costs to rise to a certain degree.
Several provincial governments, most notably Newfoundland, are calling on the federal government to put a freeze on carbon tax hikes as the country faces a cost of living crisis. Canadians in the Atlantic provinces, where gas prices are already high, are especially suffering from carbon-tax-induced gas price increases.
The federal government finds itself in a predicament. If they were to put a freeze on carbon tax hikes, then the Conservatives would be more emboldened to remove the carbon tax if their party came into power. The Conservatives would paint the carbon tax as a policy failure and would rail against the tax until its removal.
In either case, the government is staunchly pro-carbon tax, and seeing such a freeze on it is very unlikely.
Canada’s Most Pressing Issue: Addressing the Housing Crisis
Canadian incomes have not kept up with the cost of housing. More and more Canadians are paying a higher portion of their income on rent and mortgages. Under Trudeau’s government, housing costs, including rents, mortgages, and the prices of homes, have quite literally doubled.
The federal government has recognized the problem and is looking to implement policies to help alleviate housing costs this fall. Although the feds have been vague on details, we can likely expect a long-term housing fund that municipalities can access to build homes based on density. Such a fund would see billions flow to municipalities that speed up building, build high and densely, and ensure prices are relatively affordable based on cheaper building permits and administrative requirements.
The federal government is also expected to modify the Canada Mortgage and Housing Corporation’s (CMHC) role in housing. According to Canada’s new housing Minister, Sean Fraser, the federal government is possibly looking to change the CMHC’s mandate to build affordable housing itself. Specifically, the CMHC may once again be mandated to build affordable, purpose-built rental housing to add more housing stock. Just as the CMHC did post-World War II, the department may find itself once again building supply.
Any amount of added supply, be it from public or private dollars, would help Canada’s housing crunch. According to the CMHC’s projections, Canada needs to build 5.8 million homes by 2030 to restore affordability. However, the CMHC also indicates that, assuming the current rate of building continues, only 2.3 million homes will have been added by 2030. A far cry from restoring housing affordability.
Pharmacare: A 2023 Timeline
Mark Holland, the newly appointed health minister, reveals that his government intends to pass pharmacare legislation in the coming fall. According to the Health Minister, the program will be taking “input” from Prince Edward Island’s venture with the federal government on funding medication.
While the NDP supports a universal single-payer program that covers a list of drugs for all Canadians. The Liberals are open to expanding the scope of what a pharmacare program could look like. That is to say, giving funds to provinces based on certain conditions and thereby calling it pharmacare once all provinces have signed the appropriate agreements.
The full cost of the program is pegged at $15 billion. However, according to a report from the Parliamentary Budget Office, the fully funded program would lead to $4.2 billion in annual savings. For the average Canadian, another report finds that the program would save $1641 per patient by preventing unexpected trips to the hospital.
To top it all off, pharmacare also has mass public support; a 2023 poll by Environics indicates that 87% of Canadians support a national pharmacare program.
Adjusting Immigration Levels Due to Lack of Infrastructure
Canada is one of the fastest-growing developed countries in the world. More and more people from outside the country are increasingly coming to Canada and permanently settling here. As a result, governments - both provincial and federal - are ramping up all sorts of infrastructure like healthcare, transportation, education, and housing to ensure we can provide the ethical capabilities of our public services to the people coming here.
The federal government recognizes this problem and has accordingly initiated a revision of how it counts immigration. This comes from a recent CIBC Capital Markets report stating that Canada has underestimated its count of non-permanent residents by 1 million people. As a result, the report states that the number of people the government hasn’t accounted for has had a significant effect on the housing market.
As of this year, Canada is on track to welcome 900,000 international students, the highest it’s ever been in Canadian history. With this new information, the federal government is possibly considering a cap on the number of international students coming in to quell the housing supply crunch.
In a recent statement, Canada’s new Immigration Minister, Marc Miller, said, “It isn't entirely housing, it's more appropriately the integrity of the system that has mushroomed, ballooned in the past couple of years." For the government, addressing the housing crisis likely means altering the immigration system so as to balance the number of international students coming into the country with Canada’s current level of infrastructure capability. Otherwise, the minister says the very integrity and confidence of Canada’s immigration system is at stake.
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