Taken individually, the events of the last two years have not been without precedent. Canada has endured previous recessions and even pandemics. We have been buffeted by European wars and fought in them, too. We have experienced crises big and small, and we have always prevailed.
But in this country's nearly 155 years, Canadians have never been through a time like the one we have been living through these past 25 months.
On that Thursday in March of 2020––when travel plans were hastily cancelled and lines suddenly formed at our grocery stores––we knew that this virus would disrupt our lives. But few imagined quite how much and for quite how long.
Yet here we are. We bent but we did not break.
Canadians have done everything that has been asked of them, and more.
And so, to all of them—to all of you—I want to say thank you!
I now have the honour of tabling my second federal Budget. I tabled my first in April of 2021.
In the year preceding it, the Canadian economy had teetered on the brink.
Our economy contracted by 17 per cent—the deepest recession since the 1930s. Three million Canadians lost their jobs.
It was a shattering economic blow. The Great Depression scarred this country for a generation or more. It was entirely reasonable to fear that the COVID recession would likewise hamstring us for years; that millions of Canadians would still today be without jobs; and that the task of rebuilding our country would be the work of decades.
We knew we could not let that happen. And so we provided unprecedented emergency support to Canadian families and Canadian businesses. Our relentless focus was on jobs—on keeping Canadians employed, and on keeping their employers afloat.
It was an audacious plan. And it worked.
Our economy has recovered 112 per cent of the jobs that were lost during those awful first months, compared to just 90 per cent in the United States. Our unemployment rate is down to just 5.5 per cent—close to the 5.4 per cent low in 2019 that was Canada's best in five decades.
Our real GDP is a full 1.2 per cent above where it was before the pandemic. Just think about that: After a devastating recession—after wave after wave and lockdown after lockdown—our economy has not just recovered. It is booming.
Today, Canada has come roaring back.
But Canadians know that fighting COVID and the COVID recession came at a high price.
Snarled supply chains are driving prices higher at the checkout counter. Buying
a house is out of reach for far too many Canadians.
Inflation—a global phenomenon—is making things more expensive in Canada, too.
The money that rescued Canadians and the Canadian economy—deployed chiefly and rightly by the federal government to the tune of eight of every ten dollars invested—has depleted our treasury.
Our COVID response came at a significant cost, and our ability to spend is not infinite. We will review and reduce government spending, because that is the responsible thing to do.
And on this next point, let me be very clear: We are absolutely determined that our debt-to-GDP ratio must continue to decline. Our pandemic deficits are and must continue to be reduced. The extraordinary debts we incurred to keep Canadians safe and solvent must be paid down.
This is our fiscal anchor—a line we shall not cross, and that will ensure that our finances remain sustainable so long as it remains unbreached.
Canada has a proud tradition of fiscal responsibility. It is my duty to maintain
it—and I will.
So now is the time for us to focus—with smart investments and a clarity of purpose—on growing our economy.
That is what our government proposes to do. And this is how we propose to do it.
Pillar one of our plan is investing in the backbone of a strong and growing country: our people.
Let me start with housing.
Housing is a basic human need, but it is also an economic imperative. Our economy is built by people, and people need homes in which to live.
But Canada does not have enough homes. We need more of them, fast.
This Budget represents perhaps the most ambitious plan that Canada has ever had to solve that fundamental problem.
Over the next ten years, we will double the number of new homes we build. This must become a great national effort, and it will demand a new spirit of collaboration—provinces and territories; cities and towns; the private sector and non-profits all working together with us to build the homes that Canadians need.
We will invest in building more homes and in bringing down the barriers that keep them from being built. We will invest in the rental housing that so many count on. We will make it easier for our young people to get those first keys of their own.
And we will do everything we can to make the market fairer for Canadians.
We will prevent foreign buyers from parking their money in Canada by buying up homes. We will make sure that houses are being used as homes, rather than as commodities to be traded.
But on housing, I would like to offer one caution: There is no silver bullet which will immediately, once and forever, make every Canadian a homeowner in the neighbourhood where they want to live.
As Canada grows—and as a growing Canada becomes more and more prosperous—we will need to continue to invest, year after year after year, in building more homes for a growing country.
A growing country and a growing economy also demand a growing workforce. A lack of workers—and of workers with the right skills—is constraining the industrialized economies around the world.
But there is good news.
In 2020, Canada had the fastest population growth in the G7. At a time when the world is starved for workers and talent, our country's unique enthusiasm for welcoming new Canadians is a powerful—and particularly Canadian—driver of economic prosperity.
This Budget will make it easier for the skilled immigrants that our economy needs to make Canada their home.
It will also invest in the determined and talented workers who are already here.
We will make it more affordable for our workers to move to where the jobs are. Programs like the Canada Worker's Benefit will make it more worthwhile for people to work.
We will invest in the skills that Canadian workers will need to fill the good-paying jobs of today and tomorrow, and we will break down barriers and ensure that everyone is able to roll up their sleeves and get to work if they want to.
And yes: One of those barriers is affordable childcare.
When we promised—less than a year ago—to make high quality, affordable childcare a reality for all Canadians, our plan was certainly welcomed. But the cheers were muted by justifiable skepticism. After all, similar promises had been made and broken for decades—five of them in fact!
That's why, as I stand here today, I am so proud to say we have delivered. We have signed agreements on early learning and child care with every single province and territory.
This is women's liberation. It will mean more women no longer need to choose between motherhood and a career. And it will make life more affordable for middle class Canadian families.
Fees are already being slashed across the country. By the end of this year, they will be reduced by an average of 50 per cent.
And by 2025-26, child care will average just $10-a-day, from coast-to-coast-to-coast.
This is feminist economic policy in action.
Housing and immigration and skills and child care. These are social policies, to be sure. But just as importantly, they are economic policies, too.
This strategy, which our government has been pursuing for the past seven years, is what the US Secretary of the Treasury, Janet Yellen, has recently dubbed "Modern Supply Side Economics."
And because these policies will create supply-led growth that helps satisfy the demand driving inflation, they are precisely what Canada needs right now.
Our second pillar for growing our economy is the green transition.
In Canada—and around the world—climate action is no longer a matter of political debate or personal conviction; it is an existential challenge. That means it is also an economic necessity.
In the largest economic transformation since the Industrial Revolution, the world economy is going green.
Canada can be in the vanguard, or we can be left behind.
That is, of course, no choice at all—which is why our government is investing urgently in this shift.
Our plan is driven by our national price on pollution—the smartest, most effective incentive for climate action—and a new Canada Growth Fund which will help attract the billions of dollars in private capital we need to transform our economy at speed and at scale.
For our children, that means cleaner air and cleaner water tomorrow. And it will mean good jobs for Canadians today.
Our third pillar for growth is a plan to tackle the Achilles heel of the Canadian economy: productivity and innovation.
We are among the most educated countries in the world. Our scientists win Nobel prizes, and our cities are outshining Silicon Valley in creating high-paying technology jobs.
But we are falling behind when it comes to economic productivity. Productivity matters because it is what guarantees the dream of every parent—that our children will be more prosperous than we are.
This is a well-known Canadian problem—and an insidious one. It is time for Canada to tackle it.
We propose to do so, in part, with a new innovation and investment agency— drawing on international best practices from around the world—that will give companies across the country and across our economy the tools and incentives they need to create and invent, and to produce more with less.
We will encourage small Canadian companies to get bigger.
We will help Canadians and Canadian companies develop new IP—and turn their new ideas into new businesses and new jobs.
These three pillars—investing in people, investing in the green transition, and investing in innovation and productivity—will create jobs and prosperity today, and build a stronger economic future for our children.
They will make life more affordable, and they will ensure Canada continues to be the best place in the world to live, work, and raise a family.
From the first day we started working on this Budget, this growth agenda was always going to be our focus.
And then, Vladimir Putin invaded Ukraine.
The world we woke up to on February 24 was different from the one that had existed when we turned off the lights the night before.
When Putin opened fire on the people of Ukraine, he also turned his guns on the unprecedented period of prosperity that the world's democracies have worked so diligently to build over more than 76 years.
Our rules-based international order—born from the ashes of the Second World War—today confronts the greatest threat since its inception.
And so our response was swift and strong. Canada and our allies imposed the toughest sanctions ever inflicted on a major economy. Russia has become an economic pariah.
But Putin's assault has been so vicious that we all now understand that the world's democracies—including our own—can be safe only if the Russian tyrant and his criminal armies are entirely vanquished.
And that is what we are counting on the brave people of Ukraine to do. Because they are fighting our fight—a fight for democracy—it is in our urgent national interest to ensure they have the missiles and the money they need to win.
And that is what this Budget provides.
Putin's invasion of Ukraine has also reminded us that our own peaceful democracy—like all the democracies of the world—depends ultimately on the defence of hard power. The world's dictators should never mistake our civility for pacifism. We know that freedom does not come for free, and that peace is guaranteed only by our readiness to fight for it.
That is why this Budget makes an immediate, additional investment in our armed forces, and proposes a swift defence policy review to equip Canada for a world that has become more dangerous.
The images of Russian tanks rolling across Ukraine did not change the fundamental goal of this Budget.
But Putin's attack on Ukraine, and that country's remarkable and valiant resistance, has reinforced our government's deepest conviction—a line that runs through everything in this Budget, and in each of the Budgets that have preceded it: That the strength of a country does not come solely from the vastness of the reserves of its central bank, or from the size of the force in its garrisons.
Those do matter, to be sure. But they matter less than democracy itself.
They can be defeated—they are being defeated—by a people who are united and free.
And that is every country's true source of strength.
For a country to be strong, everyone must be included and empowered and united. So let me explain what that stronger country looks like here at home:
It means we need housing that is affordable for everyone, and a system where an entire generation is not priced out of owning a home.
It means we need to do our part to fight climate change so that we can leave our children with clean air, clean water, and a livable planet.
It means we need to continue to face up to the sins of our past, and ensure that Indigenous peoples in this country are able to live dignified and prosperous lives.
It means we need a health care system that allows people to see a doctor or a dentist, and to receive mental health care, too.
It means we need to continue to build a society that is truly equal for everyone, because the colour of your skin, or who you love, or where you were born should not dictate whether you get to share in the opportunities that Canada provides.
And it means we need an economy that allows businesses to grow and create good middle class jobs, and where everyone can earn a decent living for an honest day's work.
The brave people of Ukraine have shaken the world's older democracies out of our 21st century malaise. They have reminded us that the strength and unity of a country comes from the strength and unity of its people.
And they have reminded us that there should be no greater priority than to build a country that we would be willing to fight for.
That is what we have tried to do these last seven years. And that is what we will continue to do today.
And so, I am proud to introduce Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable.
A plan that invests in people. And a plan that will help build a Canada where nobody gets left behind.
The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance
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