presentation of 2022 budget

HMFBNP Public Presentation of Approved 2022 FGN Budget Final

Published on 5 January 2022

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5-Step Guide on How to Prepare a Convincing Annual Budget Presentation

Michelle Harris - Guest Contributor

• Reevaluate company and departmental goals
• Gather budgeting information
• Set up the annual budget
• Create a convincing budget presentation
• Present your budget and win!

Learn how to present your departmental budget and gain the approval of decision-makers.

Every year, leaders are responsible for creating an annual budget for their department. It’s one thing to grapple with the numbers, but presenting the budget can be a more challenging task.

If your annual budget isn’t convincing enough, chances are you won’t get everything you require to run your department the way it needs to. Anything less than what is required and you’ll have a rough time getting through the coming year.

We’ve put together a list of five steps designed to help you prepare an exceptional annual budget presentation that cannot go unnoticed. Using this step-by-step approach will help you convince executive leaders that every component of your budget is absolutely necessary to run your department and meet company goals.

1. Reevaluate company and departmental goals

Before determining your annual budget, go back and review your company’s and department’s goals . Note anything that’s changed from previous years. This is particularly important in the case of a changing economy and market or disruptions in business due to the pandemic and other unexpected events. As goals change, so must the budget—pay close attention to all historical data. As you develop your departmental budget, you want to ensure that it aligns with your department and the company’s overall goals and objectives.

2. Gather budgeting information

Allow plenty of time to gather all of the intel needed to create a detailed and accurate budget. Don’t merely go by the departmental expenses and payments made during the previous year. Your previous year's budget is important, but also pay attention to the actual records to identify shortfalls or a surplus in the budgeted items.

When creating a budget, you have different options on how you approach it and especially when presenting it. Of course, this can all depend on your industry, company, and specific department. Following are the different types of budgets that companies most often use:

Also, discuss budgeting with team members and other stakeholders to ensure that you cover all of your bases. However, every piece of budgeting information should be based on facts rather than opinions. That way, you’ll be sure to have a budget that’s appropriately allocated.

3. Set up the annual budget

Next, sit down to create the actual budget. Depending on your preferred method, or that of your company, you can use spreadsheets or budgeting software. Each budget typically includes the following basic elements:

In addition to the basic items, you may also want to consider additional and unexpected expenses that may occur. You may think of different scenarios that could arise and determine how they might impact your business and affect your budget. You may then tweak the budget as you see fit. This allows you to plan ahead and be well-prepared for any adversity that may surface.

4. Create a convincing budget presentation

Carefully setting up your annual budget and aligning it to your company’s and department’s goals will make the following creative bit easier. The worst thing to do is try to throw together a budget while creating the presentation. You must have your budgeting ducks lined up in a row first.

presentation tips

As you plan out your presentation, consider including the following to help you convince the decision-makers:

Budget presentation title

Budget presentation agenda

Executive summary

Company SWOT analysis

Business challenges

Budget plan and allocation

Budget process and timeline

Departmental deliverables

Steps following budget approval

There are many ways to make an effective and impactful presentation. It can be anything from a simple printed booklet to an interactive multimedia presentation. It doesn’t have to be over-the-top but should show that your budget is well organized, thorough, and fact-based.

5. Present your budget and win!

It doesn't matter how you choose to present your budget—you can use PowerPoint or other media—but it should include graphics and other information to make your case. Here are a few tips to keep in mind:

Keep it brief (not more than 10 slides).

Include charts, diagrams, graphs, etc. for better data visualization.

Showcase your problem-solving skills by giving solutions.

Show enthusiasm, but don't deliver a long speech.

Enhance your annual budget presentation

Unless you’re an experienced accountant or a natural penny pincher, you probably cringe at the thought of creating an annual budget. Even more so, it can be frustrating trying to get your boss to accept your budget. That’s why it’s critical to know how to create an impressive and convincing annual budget presentation that wins the approval of business stakeholders.

There are plenty of options available to help you enhance your presentations to showcase an annual budget that will garner a “yay” rather than a “nay.” At Capterra, we’ve done all the dirty work to compile a list of presentation software for you to easily compare and choose from. Our shortlist gives you the top-ranked suggestions, so you can see which software ranks the highest.

If you need help getting your numbers in order before you’re ready to present, take a look at the available budgeting software , including the best free budgeting software for small businesses .

Was this article helpful?

About the author.

Michelle Harris is a strategist residing on Florida’s beautiful Gulf Coast. Providing global clients with solutions to head-banging problems is her passion at Shel-Shok, LLC. She is a Ph.D. candidate researching finance decision-making and holds graduate degrees in management and marketing. Her background includes art, education, medicine and conservation (she is a glorified bug hugger!). When not strategizing, you will find her motorcycling, belly dancing, roller derbying and beach bumming.

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Budget Statement 2022

National Budget Statement 2022 presented by the Honourable Colm Imbert, MP, Minister of Finance in the House of Representatives on Monday 4th October, 2021.

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Full text of President Buhari’s speech at the presentation of 2022 budget

Budget of Economic Growth and Sustainability

Delivered By:

His Excellency, President Muhammadu Buhari

President, Federal Republic of Nigeria

At the Joint Session of the National Assembly, Abuja

Thursday, October 7, 2021

1. It is my great pleasure to be here once again to present the 2022 Federal Budget Proposals to this distinguished Joint Session of the National Assembly.

2. Distinguished and Honourable leaders, and members of the National Assembly, let me start by commending you for the expeditious consideration and passage of the Supplementary Appropriation Bill 2021. This further underscores your commitment to our collective efforts to contain the COVID-19 Pandemic and address the various security challenges facing our country.

3. I will also take this opportunity to thank you for the quick consideration and approval of the 2022-2024 Medium-term Expenditure Framework and Fiscal Strategy Paper. Our hope is that National Assembly will continue to partner with the Executive by ensuring that deliberations on the 2022 Budget are completed before the end of this year so that the Appropriation Act can come into effect by the first of January 2022.

4. The 2022 Budget will be the last full year budget to be implemented by this administration. We designed it to build on the achievements of previous budgets and to deliver on our goals and aspirations as will be reflected in our soon-to-be launched National Development Plan of 2021 to 2025.

5. Distinguished Senators and Honourable Members, in normal times, I make use of this opportunity to provide an overview of global and domestic developments in the current year, a summary of our achievements, and our plans for the next fiscal year.

6. However, these are exceptional times. The grim realities of COVID-19 and its lethal variants are still upon us. From President to Pauper, the virus does not discriminate.

7. This is why our country still maintains its COVID -19 guidelines and protocols in place to protect its citizens and stop the spread of this disease.

8. Over the past few days, we have consulted with the Presidential Steering Committee on COVID-19 and the leadership of the National Assembly on how best to present the 2022 budget proposal keeping in mind the deep-rooted traditions in place and the guidelines for safe mass gatherings.

9. We ultimately decided that the most responsible and respectful approach was to hold a shorter than usual gathering while allowing the Honourable Minister of Finance, Budget and National Planning to provide fuller details of our proposals in a smaller event.

10. I am sure many of you will be relieved as my last budget speech in October 2020 lasted over fifty minutes.

11. Still, over the next few minutes, I will provide key highlights of our 2021 performance as well as our proposals for 2022.

PERFORMANCE OF THE 2021 BUDGET 12. The 2021 ‘Budget of Economic Recovery and Resilience’ is based on a benchmark oil price of 40 US Dollars per barrel, oil production of 1.6m b/d, and exchange rate of 379 Naira to US Dollar. Furthermore, a Supplementary budget of 982.73 billion Naira was recently enacted to address exigent issues in the Security and Health sectors.

13. Based on the 2021 Fiscal Framework, total revenue of 8.12 trillion Naira was projected to fund aggregate federal expenditure of 14.57 trillion Naira (inclusive of the supplementary budget). The projected fiscal deficit of 6.45 trillion Naira, or 4.52 percent of GDP, is expected to be financed mainly by domestic and external borrowings. 14. By July 2021, Nigeria’s daily oil production averaged one 1.70million barrels (inclusive of condensates) and the market price of Bonny Light crude averaged 68.53 US Dollars per barrel.

15. Accordingly, actual revenues were 34 percent below target as of July 2021, mainly due to the underperformance of oil and gas revenue sources. Federal Government’s retained revenues (excluding Government Owned Enterprises) amounted to 2.61 trillion Naira against the proportionate target of 3.95 trillion Naira for the period.

16. The Federal Government’s share of Oil revenue totalled 570.23 billion Naira as of July 2021, which was 51 percent below target, while non-oil tax revenues totalled 964.13 billion Naira. The poor performance of oil revenue relative to the budget was largely due to the shortfall in production as well as significant cost recovery by NNPC to cover the shortfall between its cost of importing petrol and the pump price.

17. The National Assembly will recall that in March 2020 the Petroleum Products Pricing Regulatory Agency announced that the price of petrol would henceforth be determined by market forces.

18. However, as the combination of rising crude oil prices and exchange rate combined to push the price above the hitherto regulated price of 145 Naira per litre, opposition against the policy of price deregulation hardened on the part of Labour Unions in particular.

19. Government had to suspend further upward price adjustments while engaging Labour on the subject. This petrol subsidy significantly eroded revenues that should have been available to fund the budget.

20. On a positive note, we surpassed the non-oil taxes target by eleven (11) percent in aggregate. The sustained improvement in non-oil taxes indicates that some of our revenue reforms are yielding positive results. We expect further improvement in revenue collections later in the year as more corporate entities file their tax returns and we accelerate the implementation of our revenue reforms.

Improving Revenue Generation and Administration 21. We have stepped up implementation of the strengthened framework for performance management of government owned enterprises (GOEs), with a view to improve their operational efficiencies, revenue generation and accountability. The 50% cost-to-income ratio imposed on the GOEs in the Finance Act 2020 has contributed significantly to rationalizing wasteful expenditures by several GOEs and enhanced the level of operating surpluses to be transferred to the Consolidated Revenue Fund (CRF). I solicit the cooperation of the National Assembly in enforcing the cost-to-income ratio and other prudential guidelines during your consideration of the budget proposals of the GOEs, which I am also laying before you today.

22. On the expenditure side, as at end of July 2021, a total of six point seven-nine (6.79) trillion Naira had been spent as against the pro-rated expenditure of seven point nine-one (7.91) trillion Naira. Accordingly, a deficit of four point one-seven (4.17) trillion Naira was recorded as at end of July 2021. The deficit was financed through domestic borrowing.

23. Despite our revenue challenges, we have consistently met our debt service commitments. We are also up to date on the payment of staff salaries, statutory transfers, and overhead costs. As at (4th of October 2021, a total of 1.732 trillion Naira had been released for capital expenditure.

24. I am pleased to inform you that we expect to fund MDAs’ capital budget fully by the end of the fiscal year 2021.

25. Capital releases thus far have been prioritised in favour of critical ongoing infrastructural projects in the power, roads, rail, agriculture, health and education sectors.

26. We have made progress on the railway projects connecting different parts of the country. I am glad to report that the Lagos-Ibadan Line is now completed and operational. The Abuja-Kaduna Line is running efficiently. The Itakpe-Ajaokuta rail Line was finally completed and commissioned over thirty (30) years after its initiation.

27. Arrangements are underway to complete the Ibadan-Kano Line. Also, work will soon commence on the Port Harcourt-Maiduguri Line and Calabar-Lagos Coastal Line, which will connect the Southern and Eastern States to themselves and to the North.

28. Progress is also being made on several power generation, transmission, and distribution projects, as well as off-grid solutions, all aimed towards achieving the national goal of optimizing power supply by 2025.

29. I am again happy to report that we continue to make visible progress in our strategic road construction projects like the Lagos – Ibadan expressway, Apapa – Oworonsoki expressway, Abuja – Kano expressway, East-West Road and the second Niger bridge. We hope to commission most of these projects before the end of our tenure in 2023.

30. The Pandemic revealed the urgent need to strengthen our health system. Towards this end, we constructed 52 Molecular labs, 520 bed intensive care units, 52 Isolation centres and provision of Personal Protective equipment across 52 Federal Medical Centres and Teaching Hospitals.

31. We continue to push our expenditure rationalization initiatives which we commenced in 2016. For example, on personnel costs, the number of MDAs captured on the Integrated Payroll and Personnel Information System increased from 459 in 2017 to 711 to date.

32. The recent passage of the Petroleum Industry Act 2021, and consequent incorporation of the Nigeria National Petroleum Corporation should also result in rationalisation of expenditure, as well as increased investments and improved output in the oil and gas industry.

33. Distinguished Senators and Honourable Members, you will agree with me that a lot has been accomplished over the last year but there is still much to be done. I will now proceed with a review of the 2022 Budget proposal.

THEME AND PRIORITIES OF THE 2022 BUDGET

34. The allocations to MDAs were guided by the strategic objectives of the National Development Plan of 2021 to 2025, which are:

a. Diversifying the economy, with robust MSME growth;

b. Investing in critical infrastructure;

c. Strengthening security and ensuring good governance;

d. Enabling a vibrant, educated and healthy populace;

e. Reducing poverty; and

f. Minimizing regional, economic and social disparities.

35. The 2022 Appropriation therefore is a Budget of Economic Growth and Sustainability.

36. Defence and internal security will continue to be our top priority. We remain firmly committed to the security of life, property and investment nationwide. We will continue to ensure that our gallant men and women in the armed forces, police and paramilitary units are properly equipped, remunerated and well-motivated.

37. The 2022 budget is also the first in our history, where MDAs were clearly advised on gender responsive budgeting. These are part of critical steps in our efforts to distribute resources fairly and reach vulnerable groups of our society.

PARAMETERS AND FISCAL ASSUMPTIONS 38. Distinguished Members of the National Assembly, the 2022 to 2024 Medium Term Expenditure Framework and Fiscal Strategy Paper sets out the parameters for the 2022 Budget as follows:

a. Conservative oil price benchmark of 57 US Dollars per barrel;

b. Daily oil production estimate of 1.88 million barrels (inclusive of Condensates of 300,000 to 400,000 barrels per day);

c. Exchange rate of four 410.15 per US Dollar; and

d. Projected GDP growth rate of 4.2 percent and 13 percent inflation rate.

2022 REVENUE ESTIMATES 39. Based on these fiscal assumptions and parameters, total federally-collectible revenue is estimated at 17.70 trillion Naira in 2022.

40. Total federally distributable revenue is estimated at 12.72 trillion Naira in 2022 while total revenue available to fund the 2022 Federal Budget is estimated at 10.13 trillion Naira. This includes Grants and Aid of 63.38 billion Naira, as well as the revenues of 63 Government-Owned Enterprises.

41. Oil revenue is projected at 3.16 trillion, Non-oil taxes are estimated at 2.13 trillion Naira and FGN Independent revenues are projected to be 1.82 trillion Naira.

PLANNED 2022 EXPENDITURE 42. A total expenditure of sixteen point three-nine (16.39) trillion Naira is proposed for the Federal Government in 2022. The proposed expenditure comprises:

a. Statutory Transfers of 768.28 billion Naira;

b. Non-debt Recurrent Costs of 6.83 trillion;

c. Personnel Costs of 4.11 trillion Naira;

d. Pensions, Gratuities and Retirees’ Benefits 577.0 billion Naira;

e. Overheads of 792.39 billion Naira;

f. Capital Expenditure of 5.35 trillion Naira, including the capital component of Statutory Transfers;

g. Debt Service of 3.61 trillion Naira; and

h. Sinking Fund of 292.71 billion Naira to retire certain maturing bonds.

Fiscal Balance 43. We expect the total fiscal operations of the Federal Government to result in a deficit of 6.26 trillion Naira. This represents 3.39 percent of estimated GDP, slightly above the 3 percent threshold set by the Fiscal Responsibility Act 2007. Countries around the world have to of necessity over-shoot their fiscal thresholds for the economies to survive and thrive

44. We need to exceed this threshold considering our collective desire to continue tackling the existential security challenges facing our country.

45. We plan to finance the deficit mainly by new borrowings totalling 5.01 trillion Naira, 90.73 billion Naira from Privatization Proceeds and 1.16 trillion Naira drawdowns on loans secured for specific development projects.

46. Some have expressed concern over our resort to borrowing to finance our fiscal gaps. They are right to be concerned. However, we believe that the debt level of the Federal Government is still within sustainable limits. Borrowings are to specific strategic projects and can be verified publicly.

47. As you are aware, we have witnessed two economic recessions within the period of this Administration. In both cases, we had to spend our way out of recession, which necessitated a resort to growing the public debt. It is unlikely that our recovery from each of the two recessions would have grown as fast without the sustained government expenditure funded by debt.

48. Our target over the medium term is to grow our Revenue-to-GDP ratio from about 8 percent currently to 15 percent by 2025. At that level of revenues, the Debt-Service-to-Revenue ratio will cease to be worrying. Put simply, we do not have a debt sustainability problem, but a revenue challenge which we are determined to tackle to ensure our debts remain sustainable.

49. Very importantly, we have endeavoured to use the loans to finance critical development projects and programmes aimed at improving our economic environment and ensuring effective delivery of public services to our people. We focused on;

a. the completion of major road and rail projects;

b. the effective implementation of Power sector projects;

c. the provision of potable water;

d. construction of irrigation infrastructure and dams across the country; and

e. critical health projects such as the strengthening of national emergency medical services and ambulance system, procurement of vaccines, polio eradication and upgrading Primary Health Care Centres across the six geopolitical zones.

Innovations in Infrastructure Financing 50. In 2022, Government will further strengthen the frameworks for concessions and public private partnerships (PPPs). Capital projects that are good candidates for PPP by their nature will be developed for private sector participation.

51. We will also explore available opportunities in the existing ecosystem of green finance including the implementation of our Sovereign Green Bond Programme and leveraging debt-for-climate swap mechanisms.

Enhancing Revenue Mobilisation 52. Our strategies to improve revenue mobilisation will be sustained in 2022 with the goal of achieving the following objectives:

a. Enhance tax and excise revenues through policy reforms and tax administration measures;

b. Review the policy effectiveness of tax waivers and concessions;

c. Boost customs revenue through the e-Customs and Single Window initiatives; and

d. Safeguard revenues from the oil and gas sector.

53. Distinguished Senators and Honourable Members, I commend you for the passage of the Petroleum Industry Act 2021. It is my hope that the implementation of the law will boost confidence in our economy and attract substantial investments in the sector.

Finance Bill 2022 54. In line with our plan to accompany annual budgets with Finance Bills, partly to support the realization of fiscal projections, current tax and fiscal laws are being reviewed to produce a draft Finance Bill 2022.

55. It is our intention that once ongoing consultations are completed, the Finance Bill would be submitted to the National Assembly to be considered alongside the 2022 Appropriation Bill.

CONCLUSION 56. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, this speech would be incomplete without commending the immense, patriotic, and collaborative support of the National Assembly in the effort to deliver socio-economic development and democracy dividends for our people.

57. I wish to assure you of the strong commitment of the Executive to strengthen the relationship with the National Assembly.

58. Nigeria is currently emerging from a very difficult economic challenge. We must continue to cooperate and ensure that our actions are aimed at accelerating the pace of economic recovery so that we can achieve economic prosperity and deliver on our promises to the Nigerian people.

59. The fiscal year 2022 is very crucial in our efforts to ensure that critical projects are completed, put to use and improve the general living conditions of our people.

60. It is with great pleasure therefore, that I lay before this distinguished Joint Session of the National Assembly, the 2022 Budget Proposals of the Federal Government of Nigeria.

61. I thank you most sincerely for your attention.

62. May God bless the Federal Republic of Nigeria.

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• 2022 budget
• Muhammadu Buhari‎

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Budget of the U.S. Government, Fiscal Year 2022

Published: May 28, 2021

Issued by the Office of Management and Budget (OMB) , the Budget of the United States Government is a collection of documents that contains the budget message of the President, information about the President's budget proposals for a given fiscal year, and other budgetary publications that have been issued throughout the fiscal year. Other related and supporting budget publications are included, which may vary from year to year.

Browse the Budget for fiscal Year 2022 and previous editions of the Budget back to 1996.

Learn more about the Budget of the United States Government.

Purchase a print copy of the Budget through GPO’s retail and online bookstores.

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I want to lead, i want to learn, register for the newsletter, resource library, budget, deficits, and debt, demographics, defense and national security, other programs, retirement security, taxes and revenues, infographics, you are here, the federal government has borrowed trillions, but who owns all that debt.

At the end of 2022, the nation’s gross debt had reached nearly $31.4 trillion . Of that amount, about $24.5 trillion, or 78 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors. The remaining $7.0 trillion (22 percent), was intragovernmental debt, which simply records transactions between one part of the federal government and another.

Debt Held by the Public

Economists generally view held by the public (DHBP) is as the most meaningful measure of debt , because it reflects the amount that the Treasury has borrowed from outside lenders through financial markets to support government activities. At high levels, DHBP can crowd out private investments in the economy , make it more difficult to respond to economic crises, and increase volatility within the economy.

As of the end of December 2022, DHBP was $24.5 trillion, or 98 percent of GDP. That borrowing came from both domestic and foreign creditors, with the former holding about two-thirds of it.

Domestic Holders of Federal Debt

Domestic holdings of federal debt have increased notably over the past decade, rising from $6.0 trillion in December 2011 to $17.3 trillion at the end of December 2022. The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation’s money supply, is the largest holder of such debt .

In fact, the central bank doubled its borrowing over the past couple of years as part of its effort to mitigate the economic impact of the COVID-19 pandemic with its holdings rising from $4.3 trillion in mid-March 2020 (around the time that many businesses shut down) to $9.0 trillion in early June 2022. Since that point, though, the Fed has generally been reducing the size of its balance sheet to combat high inflation.

Other domestic holders of public debt include investment funds (mutual and pension funds), commercial banks (depository institutions), state & local governments, insurance companies, and other corporations and individuals.

Foreign Holders of Federal Debt

Foreign ownership of U.S. debt, which includes both governments and private investors, is much higher now than it was about 50 years ago. In 1970, total foreign holdings accounted for $14.0 billion, or just 5 percent, of DHBP. As of December 2022, such holdings made up $7.3 trillion, or 30 percent, of DHBP. Of that amount, 54 percent was held by foreign governments while private investors held the remaining 46 percent . Because Treasury securities are backed by the full faith and credit of the U.S. government, creditors including foreign investors often view lending to the United States as a safe investment.

In recent years, however, the foreign share of DHBP has declined due to the rapid growth in purchases by the Federal Reserve in response to the economic effects of the COVID-19 pandemic. Foreign holdings peaked at 49 percent of DHBP in 2011, but dropped to 30 percent by the end of 2022.

Investors in Japan and China hold significant shares of U.S. public debt. Together, as of September 2022, they accounted for nearly $2 trillion, or about 8 percent of DHBP. While China’s holdings of U.S. debt have declined over the past decade, Japan has slightly increased their purchases of U.S. Treasury securities. Investors in many other countries — including the United Kingdom, Switzerland, and Ireland — have increased their holdings of U.S. debt as well.

Foreign ownership of U.S. debt can have implications for the nation’s economy and financial markets. When foreign investors purchase Treasury securities, the federal government must send income abroad in the form of interest payments. On the one hand, that foreign investment may help increase U.S. economic activity if the money borrowed from such investors is used for productive purposes, such as stimulating recovery from a recession or funding investments in the nation’s economy. On the other hand, some analysts note that more foreign-owned debt reduces the control of financial markets in the U.S. and more income sent abroad means less is available for domestic investors.

Intragovernmental Debt

Intragovernmental debt records a transfer from one part of the government to another, and therefore has no net effect on the government’s overall finances. As of December 2022, intragovernmental debt totaled $7.0 trillion, a $2.0 trillion increase from a decade ago. In almost all cases, such debt is held in government trust funds — accounting mechanisms to track money designated for a specific purpose or program.

The largest holder of intragovernmental debt is the Social Security Old-Age and Survivors Insurance trust fund, which holds about $2.7 trillion, or 38 percent of intragovernmental debt. Other accounts holding such debt include retirement funds for federal employees, Medicare’s Hospital Insurance trust fund, and the Highway trust fund.

What Does All This Debt Mean For the Federal Budget and the Economy?

The amount of federal debt issued to the public can affect the country’s fiscal and economic health in a number of ways . The nation’s high and rising levels of such debt can affect economic growth and poses a number of risks ; it could:

• Reduce private investment and slow the growth of the economy
• Increase interest payments to foreign holders, thereby potentially reducing national income
• Elevate the risk of a fiscal crisis
• Lead to higher interest rates
• Constrain lawmakers from implementing policies to respond to crises or invest in the future
• Impede intergenerational equity, preventing future generations from accessing public goods and services

Until lawmakers in Washington agree on a fiscally sustainable approach to the federal budget, public debt will continue to rise — threatening important safety net programs as well as domestic and foreign confidence in U.S. markets that can eventually chip away at economic opportunities for Americans.

Related: What is the National Debt Costing Us?

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An overview of the 2022 long-term budget outlook.

Presentation by Phillip Swagel, CBO’s Director, to the National Economists Club.

Each year, the Congressional Budget Office publishes a report presenting its budget projections (for federal debt, deficits, spending, and revenues) and economic forecast for the next 30 years under the assumption that current laws governing taxes and spending generally do not change. CBO’s most recent projections, which underlie this presentation, were published on July 27, 2022.

Related Publications

• The 2022 Long-Term Budget Outlook July 27, 2022
• The Demographic Outlook: 2022 to 2052 July 27, 2022

Liz Truss refuses to apologise for sparking mortgage rate rise - but admits one failing as PM

Liz Truss spent 49 days as prime minister in 2022 - during which time her government's mini-budget caused a surge in borrowing costs and saw the pound fall to a 37-year low against the dollar.

Economics and data editor @EdConwaySky

Sunday 21 April 2024 06:49, UK

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Liz Truss has acknowledged she and her government lost the confidence of financial markets following the mini-budget of October 2022 – but has refused to apologise to homeowners for higher interest rates.

Talking to Sky News, the former prime minister blamed her downfall on the Bank of England, primarily governor Andrew Bailey. However, she said she did not meet Mr Bailey once during her time in office.

"I actually had a meeting set up - I wanted to meet him," she said. "But I was advised that would be a bad idea. And perhaps I shouldn't have taken that advice.

"But that advice came from the cabinet secretary and what I didn't want to do is further exacerbate the [market] problems.

"In retrospect, yes, I probably should have spoken directly to the governor of the Bank of England at the time."

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Asked about the aftermath of the mini-budget , at which her chancellor Kwasi Kwarteng announced a series of unfunded tax cuts, without presenting evidence of how he would pay for them, Ms Truss said: "It's fair to say that the government did not have the confidence of the markets…

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"But if you have organisations within the state, like the Bank of England, like the Office of Budget Responsibility, who are pretty clear to people they don't support the policies that are being pursued and are essentially undermining those policies, then it is difficult to command the confidence in the markets - because the markets look to the government for that leadership."

During Ms Truss's short time in office , the expected path for the Bank's interest rate a year ahead rose from below 4% to around 6%.

While those rates were increasing before the fiscal event, they shot up dramatically in the wake of the mini-budget, rising even further when, a few days later, Mr Kwarteng promised even more tax cuts.

That sharp increase in interest rates precipitated a short-lived crisis in UK financial markets, which triggered the near collapse of liability-driven investment (LDI) funds which underlie the pension market.

Asked whether she would apologise for the sharp rise in interest rates during her time in office, Ms Truss said: "I question the premise of what you're asking me, because mortgage rates have gone up across the world.

"The issues that I faced in office, were issues of not being able to deliver the agenda because of a deep resistance within the establishment."

More from Sky News: Resignations and rebellions in less than 50 days as PM Truss memoir breaks Cabinet Office rules

She continued: "I think it's wrong to suggest that I'm responsible for British people paying higher mortgages. That is something that has happened in every country in the free world.

"I'm not saying that I got everything absolutely perfect in the way the policy was communicated. But what I am saying is I faced real resistance and actions by the Bank of England that undermine my policy and created the problems in the market."

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Ms Truss was talking to Sky News in Washington DC on the US leg of her publicity tour for her new book, Ten Years To Save the West .

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Since publication it has emerged that one of the quotes she used in the book, attributed to Mayer Amschel Rothschild, is in fact a fake quote, often used in an antisemitic context.

Ms Truss said: "I'm very sorry about that. It was a complete mistake. It was something I found online and I've said I'm very sorry to the British Board of Deputies for that.

"It will be removed from all future editions of the book and removed from the Online Edition."

Asked whether she feels more at home in the US than in the UK these days, she said: "Well, I do like aspects of American politics. I believe that on economics the US has got it more right than the UK has.

"My heart's in Britain. But I think you've got to be prepared to learn from other countries that have that success."

You can watch the full interview with the former prime minister on Sky News's Sunday Morning with Trevor Phillips programme from 8.30am this morning. Trevor is also joined by Energy Security and Net Zero Secretary Claire Coutinho, shadow justice secretary Shabana Mahmood and Reform UK leader Richard Tice.

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Economic and Fiscal Overview

On this page:, 1. recent economic developments, 2. canadian economic outlook, 3. fiscal outlook.

The Canadian economy is outperforming expectations. In the face of higher interest rates, Canada has avoided the recession that some had predicted. Inflation has fallen from its June 2022 peak of 8.1 per cent to 2.9 per cent in January and to 2.8 per cent in February 2024. The labour market remains solid. Over 1.1 million more Canadians are employed today than before the pandemic, marking the fastest jobs recovery in the G7 (Chart 1). Real wages (wages adjusted for inflation) have gone up, meaning Canadians, on average, have more purchasing power. And, our economy is growing, with data from Statistics Canada revealing that real GDP at basic prices grew 0.6 per cent in January (7.4 per cent annualized), and preliminary estimates pointing to 0.4 per cent growth in February (4.9 per cent annualized), suggesting that growth in the first quarter of 2024 is on track for around 3.5 per cent.

Private sector forecasters expect that the year ahead should bring further progress. By the end of the year, they expect economic growth will pick up, interest rates will be lower, and inflation will decline to about 2 per cent. Both the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) project that Canada will see the strongest economic growth in the G7 in 2025.

At the same time, Canadians are facing challenges as some of the biggest factors for costs of living, such as groceries and housing, remain elevated. For too many Canadians, hard work isn't paying off. Our government won't let them get left behind. For younger Canadians who are concerned that they may not achieve the same standard of living as previous generations, we are helping them reach their full potential. Millennials are now the largest Canadian generation, having surpassed baby boomers in July 2023. Millennials' success in the workforce is Canada's success. We will ensure they succeed by boosting innovation, increasing productivity, in turn, raising wages and creating more good jobs—ensuring that Canada's economy reaches its full potential.

Ongoing investments—including in the Canada Child Benefit, Canada-wide affordable child care, housing construction, and enhanced benefits and pensions for seniors—are making life more affordable for Canadians and improving access to housing. Investments in economic growth and competitiveness are already showing results—Canada received the highest per capita foreign direct investment in the G7 in the first three quarters of 2023 (Chart 2).

Heightened risks surrounding the global economy call for careful economic and fiscal management. Inflation remains elevated in many areas of the world and there is uncertainty surrounding how fast interest rates can be brought down. Global conflicts, including Russia's full-scale invasion of Ukraine and continued attacks by insurgents on shipping routes in the Red Sea, pose a risk to commodity prices and global supply chains.

The federal government is supporting Canadians while at the same time maintaining the lowest net debt- and deficit-to-GDP ratios of all G7 countries and preserving Canada's long-term fiscal sustainability.

The government is focused on expanding the capacity of the Canadian economy to create new opportunities today and for the next generation. The government is helping to create good jobs, raising the incomes of Canadians, and growing the middle class. The government is focused on accelerating productivity growth and the uptake of clean technologies as well as artificial intelligence (AI), ensuring Canada is a competitive place to do business, and unlocking pathways to success for younger generations. These are the next steps in building an economy that works for everyone—for today and for tomorrow.

Canada's Economy is Outperforming Expectations

The Canadian economy is doing better than expected. In the face of rapid and substantial increases in interest rates to tame inflation, growth has slowed but outperformed expectations in 2023. Canada avoided the recession expected by many forecasters (Chart 3), with real GDP rising by 1.1 per cent in 2023, over three times higher than what was forecasted in Budget 2023 (0.3 per cent).

Canada's economy is growing. Despite some temporary factors such as the Quebec public sector strikes late in 2023, real GDP rose by 1 per cent on an annualized basis in the fourth quarter, driven by strong global demand for Canadian exports, as well as resilient demand from households for goods and services. Economic indicators are also encouraging so far in 2024. With the economy benefiting from a boost from the unwinding of temporary factors, this translated into strong real GDP gains in January (7.4 per cent annualized) and preliminary February (4.9 per cent annualized). This suggests that growth in the first quarter of 2024 is on track for around 3.5 per cent annualized. In recent months, household and small business sentiment has also been more positive.

Canada's strong economic fundamentals have helped the economy weather the impacts of higher interest rates. These strong fundamentals include solid labour markets driving ongoing gains in workers' income, as well as solid household and business balance sheets.

The surprising strength of the U.S. economy has also been a factor supporting Canada's better-than-expected performance (Chart 4). Growth in the U.S. has far outpaced expectations, driving solid external demand for Canadian goods and services, as well as foreign direct investment in Canada, which provided a sizeable boost to the Canadian economy throughout the past year.

Substantial Progress Bringing Inflation Back to Target

Inflation emerged as a major global economic challenge, which persisted as the global economy recovered from the pandemic. This reflected numerous global factors, including pandemic-related disruptions, supply chain congestion, and rebounding global demand for goods, as well as surging commodity prices following Russia's illegal full-scale invasion of Ukraine. Since central banks around the world swiftly increased interest rates, inflation in Canada has come down from its June 2022 peak of 8.1 per cent to 2.8 per cent in February 2024.

In response to rising inflation, the Bank of Canada rapidly raised its benchmark interest rate by 4.75 percentage points to 5 per cent, as of July 2023—where it remains today. Falling energy prices and an easing of global supply-chain challenges have also been key drivers of the substantial decline in inflation seen since the second half of 2022.

Today, inflation has been within the Bank of Canada's target range of 1 to 3 per cent for the past two months. This is significant progress in bringing down inflation for Canadians. Progress on inflation remains uneven, especially as it relates to shelter price inflation, owing significantly to the rise in mortgage interest costs (Chart 5). Private sector forecasters expect inflation to remain around 3 per cent through the first half of 2024 and then to gradually decline to close to 2 per cent by the end of the year (Chart 6).

Despite recent improvements in inflation, some of the key household costs for Canadians, such as groceries and housing, remain elevated. Addressing these challenges for the long-term requires targeted policies to solve the underlying structural issues that are behind the high cost of essentials for Canadians. This is a key focus of Budget 2024.

Inflation for groceries has fallen from a peak of 11.4 per cent in January 2023 to 2.4 per cent in February 2024. This marked the first time grocery prices rose more slowly than headline inflation since the fall of 2021. However, grocery prices are still up 19 per cent overall since October 2021. To help Canadians with the cost of groceries, the government will deliver new targeted relief to expand school food programming across the country. The government also continues its work to strengthen competition in the grocery sector to provide more choices to Canadians and help stabilize prices. We have done this by reforming competition law and empowering the Competition Bureau, which is responsible for enforcing competition law to crack down on unfair practices that drive up prices.

The cost of housing is similarly elevated. Rent inflation averaged 6.4 per cent in 2023 and, at 8.2 per cent in February, it remains too high for Canadians (Chart 7). Mortgage interest costs have also risen sharply. Many Canadians who need to renew their mortgage this year or next will face substantial increases in their average monthly payment.

Canada has a longstanding housing shortage and building the homes needed to restore housing affordability will require a great national effort—and it is an effort that the federal government is leading.

Today, for too many Canadians—whether in big cities or small towns—the dream of homeownership feels out of reach, and higher rent is making it difficult to find an affordable place to call home.

Canada's affordability pressures are rooted in a longstanding challenge of insufficient new housing supply to meet growing demand. For decades, the construction of new homes has been constrained by entrenched structural barriers, including zoning restrictions, lengthy permitting processes, and skilled labour shortages. The result is that vacancy rates have fallen, driving up house prices and rents. More recently, a rapid increase in population has boosted housing demand and put additional strains on Canada's ability to properly welcome these newcomers.

Rental market pressures, in particular, have intensified over the past year with strong underlying demand as homeownership unaffordability kept households in the rental market for longer. Nationally, the cost of rent is up 8.2 per cent compared to a year ago, rising at its fastest pace since the early 1980s (Chart 7). Pressures are broad-based across the country and reflect exceptionally tight rental market conditions, with the rental vacancy rate dropping to just 1.5 per cent in 2023, its lowest level since at least 1988.

Restoring housing affordability for Canadians requires a substantial and sustained increase in new housing supply. The federal government is increasing investment, attracting and retaining construction workers, and cutting red tape to jumpstart housing construction across the country. These investments are having an impact, notably in the rental market, with construction of purpose-built rental housing units accelerating well above historical norms (Chart 8).

The government is also announcing additional measures in Budget 2024 to reduce barriers to new construction for homebuilders, build affordable housing and provide shelter to those without homes, and make it more affordable to rent and own a home.

The Labour Market is Delivering Higher Wages

Nothing makes more of a difference for the personal well-being and prosperity of Canadians than having a good job. Even as the economy has slowed and interest rates have risen, the labour market has remained solid. The unemployment rate, at 6.1 per cent, is low by historical standards (Chart 9). While hiring has slowed and job vacancies have declined in recent months, this has occurred without significant layoffs. Strong population growth and historically high working-age participation—particularly among women—have helped businesses fill a record-high level of job vacancies. Supported by the new Canada-wide system of early learning and child care, more women are participating in the labour force than ever before.

A strong labour market also matters for affordability. Wage growth has outpaced inflation for the past 13 months. On average, real wages—wages after accounting for inflation—are now higher than they were just prior to the pandemic, a positive sign that the purchasing power of Canadians has strengthened despite global economic hurdles. Overall, real average weekly earnings have risen by 4.6 per cent since 2019 (Chart 10). Consequently, over the course of a year, a worker earning the average weekly wage (before taxes) of $1,270 today can afford the same basket of goods and services as in 2019 with an additional $2,900 left over at the end of the year to save or spend. Moreover, household average wealth after inflation has increased by 8.9 per cent between 2019 and 2023. Importantly, these increases have been broad-based across income groups.

Looking forward, we have an urgent need to increase productivity to grow the Canadian economy. With real average weekly earnings now above their 2009-2019 trend, further improvements in living standards will depend on expanding the productive capacity of the Canadian economy. Investing in productivity and growth is a focus of Budget 2024. 

Canadian households are earning more in inflation-adjusted terms than just before the pandemic, as strong labour market conditions have driven gains in employment income. Real average weekly earnings are up across all income groups since the end of 2019, with especially large gains of over 4.6 per cent for the lowest income groups (Chart 11).

Higher incomes have helped Canadians save more. Combined with rising asset prices, this has resulted in substantial gains in the real wealth of households (Chart 12). As with earnings, wealth gains have been broad-based across the income distribution, with the lowest income group seeing the fastest growth (and this was felt across all age groups). These gains in inflation-adjusted earnings and wealth show that Canada's strong economic recovery has disproportionately benefitted Canadians in the lowest income quintiles, who have increased their share of Canada's wealth.

Unlocking Canada's Full Economic Potential

Canada has struggled with productivity growth—how much more income we are able to generate with each hour worked. This has led to a longstanding productivity gap, notably with the United States. Expanding the productive capacity of the Canadian economy and overcoming Canada's productivity challenges are essential. Enhancing productivity growth is pivotal for reinforcing the economy's strength, resilience, and competitiveness and for elevating Canadians' living standards. Key to unlocking Canada's full economic potential is building confidence for businesses to make the investments needed to improve productivity and keep pace with rapidly developing markets, and the needs of an economy in transition to net-zero.

The government has made significant investments to nurture an environment in which businesses have the confidence to invest. These policies include investments in health care, early learning and child care, better integration of newcomers, boosting housing supply, and fostering historic investments for the net-zero transition. These investments ensure people are healthy and able to contribute to their full potential in the labour force. And there are already signs that these policies have started to pay off.

Affordable child care has helped enable Canada's labour force participation rate for women in their prime working years to reach a record high of 85.7 per cent in September 2023, compared to just 77.4 per cent in the United States.

Net-zero investments have contributed to Canada being recognized by BloombergNEF as having the strongest electric vehicle supply chain potential in the world—leapfrogging the previous frontrunner, China, and the United States. Canada has also been recognized for its world-class reserves of critical minerals, ranking first in mining potential as determined by global companies in the sector (Chart 13). Building on this advantage, businesses in industries critical for the net-zero transition are already making significant investments in Canada, a trend that is expected to continue over the coming years (Chart 14). Canada's oil and gas sector is also expected to make investments to improve its competitiveness and take advantage of the Trans Mountain Expansion Project anticipated to come online in May. The additional export transportation capacity provided by the twinning of the existing pipeline will make it easier for the sector to get products to world markets, providing better pricing for Canadian crude oil.

Canada is among the best placed economies to become a global hub of electric vehicle and battery manufacturing, reflecting our abundance of critical metals, expertise in automotive supply chains, and close integration with the U.S. economy, where demand is expected to continue growing. These strengths have led many multinational firms to announce significant battery manufacturing plant investments in Canada.

To seize the investment opportunities of the global clean economy, the government is delivering, on a priority basis, six major economic investment tax credits, which represent $93 billion in federal incentives. These will provide businesses the certainty they need to invest in Canada across a range of technologies to support the transition to net-zero: Carbon Capture, Utilization, and Storage; Clean Technology Adoption; Clean Hydrogen; Clean Technology Manufacturing; Clean Electricity; and, new in Budget 2024, EV Supply Chains. As the government's cornerstone incentives, the major economic investment tax credits will attract private investment, grow Canada's economy, and create high-paying jobs. In anticipation, new major projects have already launched across the country.

Canada's strong tradition of macroeconomic stability is an important foundation for economic growth and investment. Knowing that the federal government's finances are sustainable, even as aging populations put pressure on government budgets in Canada and around the world, is an important source of certainty for both Canadian and foreign investors. Sustainable federal finances also support the credit ratings of private businesses and other orders of governments.

Although Canada has many economic advantages, including a highly educated workforce, broad trade access to global markets, and democratic stability, we must maximize our potential. Canada must ensure a business- and innovation-friendly environment that facilitates decisions to invest and grow. This requires a sustained focus on enabling businesses to seize new opportunities and leverage Canada's world-class research capabilities for further technological advancements. Additionally, it requires ensuring that businesses have the right incentives to invest in Canada's transition to net-zero—whether those investments come from within Canada or from foreign companies—so they can create good jobs for today and for tomorrow.

These policy actions, combined with the government's efforts to unlock pathways to the middle class for everyone, are fundamental to increasing living standards over the long-term.

The past two years have seen a strong, temporary rise in immigration, particularly increases in the temporary resident population. This has been a factor in the recent decline in GDP per capita. The government recently announced it will reduce the share of temporary residents in Canada to 5 per cent of the total population over the next three years. This will lead to approximately 600,000 fewer temporary residents compared to current levels, which will result in a significant easing in demand across the housing market.

Given newcomers typically earn less than the average Canadian upon arrival, a large one-time increase in the number of newcomers has weighed on average income and productivity in the short-term. This should not be misinterpreted to imply that those already in the country are becoming worse off. Over time, this composition effect will fade as newcomers integrate into the economy.

In recent years, newcomers to Canada have steadily improved their integration into the labour market, with each newcomer wave seeing smaller initial income gaps than those in the past. Looking specifically at the outcomes of economic immigrants over the most recent ten-year period, it took six years for them to reach the median Canadian income. By the end of the decade after their arrival, they surpassed the median Canadian income by close to ten per cent.

While the economy has been resilient, growth in Canada has softened in the face of elevated inflation and higher interest rates, just as it has across the globe. In 2015, the oil price shock caused a temporary decline in GDP per capita of 1 per cent, which was recovered two years later.

As a result, the government expects GDP per capita to recover along with the further integration of newcomers into the Canadian labour market and the normalization of the post-pandemic immigration surge over the next few years.

Newcomer settlement time, combined with the government's investments in economic growth, mean weakness in GDP per capita is largely temporary, not systemic. Budget 2024 is the next step in the government's economic plan to address structural challenges, particularly boosting productivity growth and investment, which will increase GDP per capita.

Budget 2024 builds on the government's ongoing efforts to accelerate productivity growth, unlock innovation, increase investment, and help businesses of all sizes to grow. Investments today will power the world of tomorrow, accelerate the transition to a net-zero economy, and increase incomes and productivity.

In 2017, Canada was the first country in the world to develop a national artificial intelligence (AI) strategy, and through additional complementary government programming has invested more than $2 billion to ensure Canada is a global AI leader for generations. The national AI strategy and investments in emerging and high impact technologies will help ensure Canada's strategic research capabilities are at the cutting edge—paving the way for strengthening Canada's productivity. This will help create the good jobs of tomorrow for Canadians and ensure that Canada is a place where young leaders with innovative ideas know that they can succeed.

In the face of fundamental economic changes including a realignment of global trade and a rapidly evolving digital economy, the need to strengthen Canada's productivity growth has never been greater.

The government is taking action to attract business investment, cut regulatory red tape, and attract investment in the net-zero economy. These efforts are underpinned by providing businesses with the certainty they need to invest in Canada. This will grow our productivity and our economy, while creating more good-paying jobs for Canadians.

Key growth and productivity boosting measures in Budget 2024 include:

Boosting research, innovation, and productivity

• $2.4 billion to support access to computing power and investment in Canada's compute infrastructure to ensure Canadian researchers and AI start-ups and scale-ups have the resources they need to grow in Canada. These investments would also support AI adoption, safety, and skills training.
• $3.5 billion in strategic research infrastructure and federal research support to ensure Canada's researchers can reach their potential, strengthen Canada's fundamental research capacity, and develop a new generation of talent.
• Increasing financial support for graduate student and post-doctoral researchers, as well as developing ways to help researchers obtain jobs with businesses that need specialized talent to ensure Canada's top science talents play a critical role in shaping Canada's research and industrial capacity for years to come.
• Reviewing ways to modernize the Scientific Research & Experimental Development tax incentives and further capitalizing the program with $600 million over four years, and $150 million per year ongoing, to boost research and innovation.

Growing a clean economy for the net-zero future

• Delivering key components of the government's $160 billion investment in clean growth measures announced since 2015. These investments will help bring down the costs of technologies that will enable the transition to net-zero emissions and ensure Canada remains competitive through that transition.
• Delivering, by the end of this year, major economic investment tax credits to attract private investment, create more jobs, and drive Canada's economy towards net-zero by 2050. Budget 2024 also announces expanded eligibility for the Clean Technology Manufacturing investment tax credit, allowing more businesses to benefit.
• A new Electric Vehicle (EV) Supply Chain investment tax credit to support the EV supply chain and secure the future of Canada's automotive industry.
• New investments to grow Canada's biofuels sector, which can be used to decarbonize heavy industry, and heavy transportation like marine, aviation, and rail.
• Extending for an additional year collaboration with our largest trading partner through the Canada-U.S. Energy Transformation Task Force, which is bolstering critical mineral and nuclear energy supply chain integration.
• A series of new actions to get major projects built faster by clarifying and reducing timelines for approvals.

Helping businesses scale-up

• $725 million to support growing businesses by allowing businesses to immediately write off the full cost of specified productivity-enhancing assets critical for certain businesses to succeed.
• The new Canadian Entrepreneurs' Incentive to provide a tax break for entrepreneurs, ensuring they benefit from the fruits of their hard work while facing lower tax burdens.
• Encouraging Canadian pension funds to invest in Canada, by launching a working group chaired by Stephen Poloz (former Governor of the Bank of Canada), and supported by the Deputy Prime Minister and Minister of Finance, to find more opportunities for Canada's largest pension funds to drive economic growth at home.
• Putting the capital of financial Crown corporations to work more efficiently and ensuring they better address market gaps by taking on more risk, including additional support for new and high-growth businesses, emerging sectors, and under-financed equity-deserving groups.

Cutting red tape to boost innovation and business growth

• Advancing work on regulatory "sandboxes" to help create temporary agile rules and approaches that allow businesses to reach their full potential, instead of holding them back.
• Addressing internal trade barriers, including through regulatory harmonization, in collaboration with provinces and territories, to cut the red tape holding back trade between provinces and territories, to ensure Canada can reach its full economic potential.
• Ensuring everyone in Canada can fully contribute by working with provinces and territories to reduce barriers for internationally-educated and certified professional and tradespeople, particularly in health care and construction sectors.

Inclusive growth with opportunities for everyone

• Renewed support for the Aboriginal Entrepreneurship Program.
• Up to $5 billion in loan guarantees for natural resource and energy projects to be made available to Indigenous communities to provide successful applicants access to affordable capital, creating economic opportunities and supporting their economic development priorities.
• Investing to create more opportunities for youth in their pursuit of entrepreneurial goals while renewing the support for innovation-driven growth across all regions in Canada.

Responsible macroeconomic management

• Attracting business investment by maintaining the lowest marginal effective tax rate (METR) in the G7, at an advantage of 5.2 percentage points compared to the United States, and at a level below the OECD average. Canada's manufacturing sector is particularly competitive at 7.5 per cent—an advantage of 14.3 percentage points over the United States.
• Adopting a fiscal strategy that complements rather than contradicts monetary policy as inflation continues its decline from its June 2022 peak of 8.1 per cent to 2.8 per cent in February 2024.
• Delivering on the commitment to refocus $15.8 billion over five years and $4.8 billion ongoing in government spending to the programs and services that matter most to Canadians.
• Maintaining declining debt- and deficit-to-GDP ratios to keep federal debt servicing charges as low as possible in a period of elevated interest rates.

Private Sector Economists Expect a Soft Landing

The average of private sector forecasts has been used as the basis for economic and fiscal planning in Canada since 1994, helping to ensure objectivity and transparency, and introducing an important element of independence into the government's economic and fiscal forecast.

Economic Scenario Analysis

The March 2024 survey provides a reasonable basis for economic and fiscal planning. The economic outlook nevertheless remains clouded by a number of key uncertainties, which could impact the trajectory of inflation, interest rates, and economic growth.

Data on economic growth and inflation released so far this year remain broadly consistent with a soft landing. However, progress on inflation remains uneven as shelter price inflation has persisted. Long-term interest rates have declined after surging last year as risks around the growth and inflation outlook have eased, but there remains considerable uncertainty as to when central banks will begin to cut policy rates. At the same time, geopolitical tensions have increased owing to heightened uncertainty related to Russia's full-scale war in Ukraine, U.S.-China relations, and Red Sea supply chain disruptions. So far, the impacts have been contained, but new economic pressures related to these conflicts and geopolitical volatility impacting confidence and investment decisions remain a risk.

To facilitate prudent economic and fiscal planning, the Department of Finance Canada has developed scenarios that incorporate these uncertainties and consider faster or slower growth tracks.

The downside scenario sees a shallow recession in Canada. Various headwinds such as structural imbalances in housing markets and spillovers from geopolitical tensions keep inflation and interest rates elevated for longer than expected, with adverse effects on confidence and consumer activity. At the same time, the U.S. also sees persistent inflation, higher interest rates, and subsequently slower growth. Along with a weaker economic recovery in China, this contributes to slower global growth. Taken together, these factors result in real GDP in Canada contracting by 0.1 per cent in 2024 before rebounding modestly in 2025, compared to a period of moderate growth expected in the survey (Chart 19). In addition, slower global growth leads to lower commodity prices. Overall, the level of nominal GDP in Canada is $34 billion below the survey, on average per year, in the downside scenario (Chart 20).

In contrast, the upside scenario sees moderately faster economic growth than in the survey. A more resilient U.S. economy—underpinned by strong balance sheets for households and firms and recent supply side improvements in productivity—benefits the Canadian economy through higher export demand and improved global commodity prices. Despite more economic resilience, inflation slows roughly as expected in the survey, both in Canada and globally, amid falling input costs. These developments result in economic growth picking up faster than expected in the second half of 2024. The improved global outlook, alongside extended crude oil production cuts by OPEC+, leave oil prices above the survey. Overall, the level of nominal GDP is $34 billion above the survey, on average per year, in the upside scenario .

Canada's Responsible Economic Plan

Responsible fiscal stewardship has left Canada in an enviable fiscal position. Canada's net debt-to-GDP ratio is well below that of our G7 peers. Our deficits are modest and declining, particularly relative to the size of our economy. We are one of only two G7 countries rated AAA by at least two of the three major global ratings agencies. This has been achieved through the government's responsible economic plan that has enabled proactive investments to support Canadians and Canada's long-term prosperity, which will have a direct and lasting impact for future generations.

Budget 2024 is a responsible economic plan that makes generational investments by raising revenues from those with the greatest ability to pay and investing in economic growth and opportunity for every generation. Transformative investments in clean energy, in opportunities for workers, in innovation, and to improve housing affordability will support a business environment that gives investors confidence Canada's workforce is ready for more opportunities. This will enable our economy to attract more investment and to create more jobs, supporting reductions to Canada's net debt- and deficit-to-GDP ratios, which are already the lowest in the G7.

Budget 2024 supports fairness for every generation by sticking to the fiscal objectives laid out in the fall economic statement, setting both deficits and the federal debt burden on a downward track.

As a result of these actions, and incorporating the results of the March 2024 survey of private sector economists, the budgetary balance is expected to improve slightly from the $40.1 billion deficit projected for 2023-24 in Budget 2023, at $40 billion or -1.4 per cent of GDP. This improves to a $20.0 billion deficit in 2028-29, or about -0.6 per cent of GDP (Table 1).

In the upside scenario , the budgetary balance would improve by an average of approximately $6.1 billion per year, and the federal debt-to-GDP ratio would fall to 41.2 per cent in 2024-25 from 42.0 per cent in 2023-24 and be 1.4 percentage points lower than the Budget 2024 outlook in 2028-29 (Chart 21).

In the downside scenario , the budgetary balance would deteriorate by an average of approximately $6.6 billion per year and add 1.2 percentage points to the federal debt-to-GDP ratio by 2028-29. That said, even under the downside scenario, the deficit would remain below 1 per cent of GDP by the end of the forecast horizon, and the federal debt-to-GDP ratio would still be lower in 2028-29 than it is today.

Details of the government's fiscal outlook and the fiscal impact of the scenarios can be found in Annex 1.

Maintaining Canada's Responsible Fiscal Anchor

The government has taken action to ensure necessary new investments are paid for by those with the greatest means. This has enabled the government to maintain its commitment to its fiscal objectives and achieve its fiscal anchor to reduce the federal debt-to-GDP ratio over the medium-term. This metric is key not only for fiscal sustainability, but also to preserve Canada's AAA credit rating, which helps maintain investors' confidence and keeps Canada's borrowing costs as low as possible. Fiscal prudence supports a macroeconomic environment in which the Bank of Canada is able to bring down interest rates as soon as possible.

The government's fiscal objectives, as outlined in the 2023 Fall Economic Statement, guided decision making for Budget 2024:

• Maintaining the 2023-24 deficit at or below the Budget 2023 projection of $40.1 billion.
• Lowering the debt-to-GDP ratio in 2024-25, relative to the 2023 Fall Economic Statement, and keeping it on a declining track thereafter.
• Maintaining a declining deficit-to-GDP ratio in 2024-25 and keeping deficits below 1 per cent in 2026-27 and future years.

Budget 2024 is consistent with the government's fiscal anchor, and these fiscal objectives . Notably, Budget 2024 surpasses the government's debt-to-GDP fiscal objective, forecasting a significant fall from 2023-24, and onwards. Budget 2024 projects that, in 2024-25, the debt-to-GDP ratio will be 41.9 per cent, before declining to 39.0 per cent over the five year forecast horizon.

Moving forward, as part of its responsible economic plan, the government will keep deficits below 1 per cent of GDP beginning in 2026-27 and future years.

Preserving Canada's Fiscal Advantage

The fiscal objectives announced in the 2023 Fall Economic Statement reinforced the fiscal anchor of a declining federal debt-to-GDP ratio over the medium-term, further underscoring the government's commitment to long-term fiscal strength. In particular, and as discussed in more detail in Annex 1, the fiscal objective of keeping deficits below 1 per cent of GDP,beginning in 2026-27, provides additional insurance that public finances remain strong beyond the medium-term as Canada adapts to an aging population, the impacts of climate change, and the transition to net-zero.

Budget 2024's forecast upholds these fiscal objectives, with the federal debt-to-GDP ratio declining in 2024-25 and throughout the remainder of the forecast, and deficit-to-GDP ratios below 1 per cent of GDP starting in 2026-27.

Modelling scenarios based on a set of reasonable economic and demographic assumptions show both the federal debt-to-GDP ratio (Chart 24) and the public debt charges-to-GDP ratio (Chart 25) declining over the entire long-term projection horizon spanning from 2029-30 to 2055-56. This is despite adverse demographic trends, including an aging population, assumed moderate future productivity growth rates and higher borrowing costs. Sensitivity analysis around these long-term fiscal projections also indicates fiscal sustainability would be preserved under the downside scenario (see Annex 1 for details).

Notes: While based on reasonable assumptions, these long-term projections should not be viewed as forecasts. Notably, these projections do not reflect all potential economic and fiscal impacts of the global economic evolutions that Canada will have to navigate over the coming decades, nor do they fully reflect positive impacts that can be expected to result from the foundational investments made by the government up to now. Details and sensitivity analysis around these long-term projections are presented in Annex 1.

Sources: Statistics Canada; Department of Finance Canada.

International Comparisons

Canada's net debt as a share of the economy remains lower today than in any other G7 country—an advantage that Canada is expected to maintain (Chart 26). Canada's responsible economic plan has also delivered the fastest fiscal consolidation in the G7 since the depths of the pandemic, resulting in Canada having the smallest net debt and deficit in the G7 as a share of the economy over the current and next two years (Chart 27).

By meeting the additional fiscal objectives introduced in the 2023 Fall Economic Statement , Budget 2024 maintains a long Canadian tradition of fiscal responsibility, which is a pillar of Canada's excellent credit ratings from Moody's (Aaa), S&P (AAA), Fitch (AA+), as well as DBRS Morningstar (AAA). Along with Germany, Canada is one of only two G7 economies to have a AAA rating from at least two of the three major global credit rating agencies.

Notes: The internationally comparable definition of "general government" includes the central, state, and local orders of government, as well as social security funds. For Canada, this includes the federal, provincial/territorial, and local and Indigenous government sectors, as well as the Canada Pension Plan and the Quebec Pension Plan.

Source: International Monetary Fund, October 2023 Fiscal Monitor .

Page details

2024 federal budget's key takeaways: Housing and carbon rebates, students and sin taxes

Budget sees nearly $53b in new spending over the next 5 years.

What's in the new federal budget?

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Finance Minister Chrystia Freeland today tabled a 400-page-plus budget her government is pitching as a balm for anxious millennials and Generation Z.

The budget proposes $52.9 billion in new spending over five years, including $8.5 billion in new spending for housing. To offset some of that new spending, Ottawa is pitching policy changes to bring in new revenue.

Here are some of the notable funding initiatives and legislative commitments in budget 2024.

Ottawa unloading unused offices to meet housing targets

One of the biggest pillars of the budget is its housing commitments. Before releasing the budget, the government laid out what it's calling Canada's Housing Plan — a pledge to "unlock" nearly 3.9 million homes by 2031.

The government says two million of those would be net new homes and it believes it can contribute to more than half of them. 

It plans to do that by:

• Converting underused federal offices into homes. The budget promises $1.1 billion over ten years to transform 50 per cent of the federal office portfolio into housing.
• Building homes on Canada Post properties. The government says the 1,700-plus Canada Post offices across the country can be used to build new homes while maintaining postal services. The federal government says it's assessing six Canada Post properties in Quebec, Alberta and British Columbia for development potential "as a start."
• Rethinking National Defence properties. The government is promising to look at redeveloping properties and buildings on National Defence lands for military and civilian use.
• Building apartments. Ottawa is pledging a $15 billion top-up to the Apartment Construction Loan Program, which says it will build 30,000 new homes across Canada.

Taxing vacant land?

As part of its push on housing, the federal government also says it's looking at vacant land that could be used to build homes.

It's not yet committing to new measures but the budget says the government will consider introducing a new tax on residentially zoned vacant land. 

• Freeland's new federal budget hikes taxes on the rich to cover billions in new spending
• Are you renting with no plans to buy? Here's what the federal budget has for you

The government said it plans to launch consultations on the measure later this year.

Help for students 

There's also something in the budget for students hunting for housing.

The government says it will update the formula used by the Canada Student Financial Assistance Program to calculate housing costs when determining financial need, to better reflect the cost of housing in the current climate.

The government estimates this could deliver more aid for rent to approximately 79,000 students each year, at an estimated cost of $154.6 million over five years.

• Updated Federal budget's funding boost for defence spread out over multiple years
• Liberals pledge $9B in new money for Indigenous communities in 2024 budget

The government is also promising to extend increased student grants and interest-free loans, at an estimated total cost of $1.1 billion this year.

Increase in taxes on capital gains

To help cover some of its multi-billion dollar commitments, the government is proposing a tax hike on capital gains — the profit individuals make when assets like stocks and second properties are sold.

The government is proposing an increase in the taxable portion of capital gains, up from the current 50 per cent to two thirds for annual capital gains over $250,000. 

New investment to lead 'housing revolution in Canada,' Freeland says

Freeland said the change would impact the wealthiest 0.1 per cent.

There's still some protection for small businesses. There's been a lifetime capital gains exemption which allows Canadians to exempt up to $1,016,836 in capital gains tax-free on the sale of small business shares and farming and fishing property. This June the tax-free limit will be increased to $1.25 million and will continue to be indexed to inflation thereafter, according to the budget.

The federal government estimates this could bring in more than $19 billion over five years, although some analysts are not convinced.

Disability benefit amounts to $200 per month 

Parliament last year passed the Canada Disability Benefit Act, which promised to send a direct benefit to low-income, working-age people with disabilities. 

Budget 2024 proposes funding of $6.1 billion over six years, beginning this fiscal year, and $1.4 billion per year ongoing, for a new Canada Disability Benefit.

Advocates had been hoping for something along the lines of $1,000 per month per person . They'll be disappointed.

According to the budget document, the maximum benefit will amount to $2,400 per year for low income individuals with disabilities between the ages of 18 and 64 — about $200 a month.

• Federal government plans to lease public lands for construction through new housing strategy
• Alberta premier says she's prepared to take Ottawa to court over housing deals

The government said it plans for the Canada Disability Benefit Act to come into force in June 2024 and for payments to start in July 2025.

Carbon rebate for small businesses coming 

The federal government has heard an earful from small business advocates who accuse it of reneging on a promise to return a portion of carbon pricing revenues to small businesses to mitigate the tax's economic costs.

• What's behind the carbon tax, and does it work?
• Federal government scales back carbon tax rebates for small businesses

The budget proposes to return fuel charge proceeds from 2019-20 through 2023-24 to an estimated 600,000 businesses with 499 or fewer employees through a new refundable tax credit.

The government said this would deliver $2.5 billion directly to Canada's small- and medium-sized businesses.

Darts and vape pods will cost more 

Pitching it as a measure to cut the number of people smoking and vaping, the Liberals are promising to raise revenues on tobacco and smoking products.

• Just Asking  wants to know:   What questions do you have about quitting smoking or vaping? Do you think sin taxes will encourage smoking cessation?  Fill out the details on  this form  and send us your questions ahead of our show on April 20.

Starting Wednesday, the total tobacco excise duty will be $5.49 per carton. The government estimates this could increase federal revenue by $1.36 billion over five years starting in 2024-25.

The budget also proposes to increase the vaping excise duty rates by 12 per cent effective July 1. That means an increase of 12 to 24 cents per pod, depending on where you live. 

• 'Stay the hell away from our kids': Health minister vows to restrict nicotine pouches — but how?

Ottawa hopes this increase in sin taxes will bring in $310 million over five years, starting in 2024-25.

More money for CBC 

Heritage Minister Pascale St-Onge has mused about redefining the role of the public broadcaster before the next federal election . But before that happens, CBC/Radio-Canada is getting a top-up this year. 

The budget promises $42 million more in 2024-25 for CBC/Radio-Canada for "news and entertainment programming." CBC/Radio-Canada received about $1.3 billion in total federal funding last year.

The government says it's doing this to ensure that Canadians across the country, including rural, remote, Indigenous and minority language communities, have access to independent journalism and entertainment.

Last year, the CBC announced a financial shortfall, cut 141 employees and eliminated 205 vacant positions. In a statement issued Tuesday, CBC spokesperson Leon Mar said the new funding means the corporation can balance its budget "without significant additional reductions this year."

Boost for Canada's spy agency 

As the government takes heat over how it has handled the threat of foreign election interference, it's promising more money to bolster its spy service.

The Canadian Security Intelligence Service is in line to receive $655.7 million over eight years, starting this fiscal year, to enhance its intelligence capabilities and its presence in Toronto.

• CSIS chief defends his spies' work after PM casts doubt on reliability of agency's reports
• Trudeau says it's his job to question CSIS intelligence, call out 'contradictions'

The budget also promises to guarantee up to $5 billion in loans for Indigenous communities to participate in natural resource development and energy projects in their territories.

These loans would be provided by financial institutions or other lenders and guaranteed by the federal government, meaning Indigenous borrowers who opt in could benefit from lower interest rates, the budget says. 

ABOUT THE AUTHOR

Catharine Tunney is a reporter with CBC's Parliament Hill bureau, where she covers national security and the RCMP. She worked previously for CBC in Nova Scotia. You can reach her at [email protected]

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Introduction of one-month treasury bill

In line with the announcement in the federal 2024 Budget , the Government of Canada will be introducing a temporary one-month treasury bill. The first one-month treasury bill auction will occur on 7 May 2024.

The objective of the one-month treasury bill is to support the Canadian money market’s orderly transition away from Bankers’ Acceptances (BAs).The one-month treasury bill will act as a partial substitute for investors of one-month BAs while private sector one-month investment alternatives are expanded and/or introduced.

This new treasury bill tenor is being introduced as a temporary program for one year. If one-month treasury bill auctions indicate demand is weak or it is apparent that the program is not meeting its intended objective, the government may reduce auction sizes or discontinue the program before one year. Conversely, the government may choose to extend the program or make the one-month treasury bill permanent if demand proves robust. Any decision regarding the future of the program will be communicated to market participants well in advance.

Operationally, one-month treasury bill auctions will take place on a bi-weekly basis, at 12:00 pm on the same day (Tuesdays) as Canada’s existing treasury bill auctions. Auction sizes are expected to be adjusted to reflect demand conditions. One-month treasury bill auctions will be announced through a separate Call for Tender and will be subject to the existing Terms and Conditions for treasury bill auctions. There will be no changes to the Terms and Conditions for the three, six, and twelve-month treasury bill auctions, however, starting on 7 May all treasury bill sectors’ Call for Tenders and Pre-Call for Tenders will occur at 1:00 pm on their relevant days (currently 10:40 am).

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