441-02697 (Parliament and politics)

Climate action is critical to Canada’s long-term health and economic prosperity. Carbon pollution pricing is widely recognized as the most efficient means of reducing greenhouse gas emissions, which is why the Government of Canada continues to make sure that it is not free to pollute in Canada.

The federal price on pollution is revenue neutral for the federal government; the direct proceeds from the federal carbon pricing system remain in the province or territory where they are collected. Put simply, every dollar collected from the carbon price is returned.

In provinces where the federal fuel charge applies, over 90 percent of projected direct proceeds are returned to residents of those provinces through the quarterly Canada Carbon Rebate. As confirmed by independent experts, the majority of households receive more back in rebates than they pay through the carbon price, with low- and middle-income households benefitting the most. The other projected fuel charge proceeds are used to support small and medium-sized businesses and Indigenous governments. In Budget 2024, the government announced the new Canada Carbon Rebate for Small Businesses, an accelerated and automated return process to provide direct refunds to small and medium-sized businesses. Recognizing that many farmers use natural gas and propane in their operations, farming businesses may claim a refundable tax credit to directly receive a portion of fuel charge proceeds.

Starting in April 2024, residents of provinces where the federal fuel charge applies started receiving their first of four quarterly Canada Carbon Rebate payments for this fiscal year, with additional payments in July 2024, October 2024, and January 2025. A family of four in these provinces will, under the base Canada Carbon Rebate in the 2024-25 fiscal year, receive: $1,800 in Alberta, $1,200 in Manitoba, $1,120 in Ontario, $1,504 in Saskatchewan, $760 in New Brunswick, $824 in Nova Scotia, $880 in Prince Edward Island and $1,192 in Newfoundland and Labrador.

Those living in a rural or small community are eligible for a supplement in addition to the base Canada Carbon Rebate amount (except in Prince Edward Island, where all residents receive the rural top-up). In recognition of rural Canadians' higher energy needs and more limited access to cleaner transportation options, the government increased the rural supplement from 10 percent to 20 percent of the base rebate amount, starting in April 2024.

The government is also working to expand rural supplement eligibility to more Canadians who need this support and, as committed to in Budget 2024, will announce a proposal for better defining rural areas later this year.

The Government of Canada will continue to take action to support the middle class and make life more affordable for Canadians, including through actions announced in Budget 2024 to build more affordable homes and make life cost less.

On April 12, 2024, the federal government released a new ambitious housing plan, Solving the housing crisis: Canada’s Housing Plan. Building on important federal investments launched in 2017, Canada’s Housing Plan and Budget 2024 laid out a bold strategy to unlock 3.87 million new homes by 2031, which includes a minimum of 2 million net new homes on top of the 1.87 million homes previously expected to be built.

The Government of Canada has taken steps to protect Canadians and enhance community safety. For example, the Building Safer Communities Fund will provide over $600 million to support municipalities and Indigenous communities in their efforts to address gun and gang prevalence. The government is also working with a wide range of partners to crack down on auto theft through a number of intelligence collection, intervention, and legislative actions. The government amended the Criminal Code to strengthen tools for law enforcement and prosecutors to address auto theft, including a new aggravating factor at sentencing if an offender involved a young person in committing an offence under the Criminal Code, along with the Radiocommunication Act to more strictly control devices believed to be used to steal cars. The government also invested $28 million in the Canada Border Services Agency to enhance its capacity to detect and search containers with storing vehicles, including new technology and $15 million for Public Safety Canada to allocate funding to provincial, territorial, and municipal police forces to address auto theft, and to strengthen policing to crack down on international organized crime.

In addition, the government has made targeted changes to the bail system, with amendments to the Criminal Code’s bail provisions having come into force in January 2024. These amendments promote community safety and reinforce public confidence in the administration of justice by placing a reverse onus on serious repeat violent offenders seeking bail, and enhancing the reverse onus requirements for repeat intimate partner violence offenders.

Finally, as the government invests to support and protect Canadians and ensure Canada’s long-term health and economic prosperity, it has taken a responsible, balanced approach to fiscal management that will also preserve Canada’s long-term fiscal sustainability.

Since emerging from the pandemic, the government has maintained a commitment to its fiscal anchor: reducing federal debt as a share of the economy over the medium term. Further, similar to those of the Parliamentary Budget Officer, the long-term projections presented in Budget 2024 show that the fiscal position of the federal government will remain sustainable over the longer term as demonstrated by a continuously declining debt-to-GDP ratio beyond 2028-29.   

Careful and responsible fiscal management has put Canada in an enviable fiscal position relative to our global peers. Canada’s net debt burden is still lower today than in any other G7 country prior to the pandemic. By delivering the fastest fiscal consolidation in the G7 since the depths of the pandemic, Canada is also projected to have the smallest deficit in the G7 as a share of the economy this year, tied with Germany, and over the next two years. Continued responsible fiscal management is also reflected in Canada’s top-tier credit ratings from Moody’s (AAA), S&P (AAA), and DBRS Morningstar (AAA), as well as Fitch (AA+). Canada is one of only two G7 economies, along with Germany, to have a AAA rating from at least two of the three major global credit rating agencies. These credit ratings help maintain investors’ confidence and keep Canada’s borrowing costs as low as possible.