OMSSA Report on the 2024 Federal Budget

By: Darryl Wolk

April 2024

On April 16, Deputy Prime Minister and Finance Minister, Chrystia Freeland, delivered the 2024 Federal Budget. The budget focused on three themes: Solving the Housing Crisis, Fairness for Younger Generations, and Economic Growth and Productivity. 

Total spending in the Federal Budget will come in at $535 Billion in spending against $497.5 Billion in government revenues. The deficit is projected to be slightly smaller than last year's $40 Billion deficit coming in this year at $39.8 Billion. $11.5 Billion in new spending will happen this year with another $53 Billion in new spending projected over the next five years. 

It should be noted that the next federal election is expected to take place before October 2025 with Ottawa insiders expecting next year’s budget to trigger the election. The NDP is expected to support the government on the budget after securing a new Pharmacare plan that will cover diabetes medication and contraceptives over the next five years, and previously announced Canada Dental Benefit. 

OMSSA Members should be cautious about any spending promises that go beyond 2025. In the event Pierre Poilievre and the Conservative Party form the next government, there is no guarantee that any of the measures promised in the budget beyond 2025 will be honoured. The budget also shows that spending in future years will be tightly controlled to reduce deficits in future years, although the current budget document offers no plan for a balanced budget at all.

Despite the increase in capital gains and carbon taxes, the deficit is only projected to be $200M less than last year. The consequences of doubling the national debt and rising interest rate cuts related to future deficit projections have also hit the federal government hard. This year, the federal government will pay $54 Billion in interest costs. This figure represents more than the federal government’s health transfers to the provinces, is less than all GST revenue collected by government, and is significantly more than the cost of the Canada-wide Early Learning and Child Care (CWELCC) program over five years. 

As deficits continue in the years ahead, debt serving costs will increase further unless the Bank of Canada implements significant rate hikes or the Canadian economy sees higher than expected economic growth. There is also a chance the $39.8 Billion projected budget deficit could increase in the event of an economic downturn, another active wildfire season or unexpected geopolitical event. 

Similar to the 2024 Ontario Budget, the Federal Budget signals slowing spending in future years and that will impact OMSSA advocacy where the need to secure more funding on issues such as housing, homelessness, and child care will be more difficult in the years ahead. Neither federal or provincial budgets addressed the advocacy and request from OMSSA, the Federation of Canadian Municipalities, and Association of Municipalities of Ontario, towards a new funding arrangement for municipalities.

Most of the key highlights of the Federal Budget were announced in the days leading up to the budget. Highlights for OMSSA Members and the human services sector include:

Health, Human Services and Child Care:

• Launching the new National Pharmacare Plan with $1.5 Billion over five years. This first phase will ensure the effective roll-out of pharmacare, while providing immediate support for the health care needs of women and covering lifesaving diabetes medication. Free contraception will ensure every woman has the ability to choose the contraceptives that works best for them, no matter the cost.
• Delivering the Canadian Dental Care Plan as announced in Budget 2023 to ensure everyone in Canada has access to the dental care they need. By 2025, the fully rolled-out dental plan will cover nine million Canadians who currently don't have dental insurance.
• Launching a new Canada Disability Benefit with $6.1 Billion over six years, and $1.4 Billion ongoing to supplement provincial and territorial benefits, increasing the financial well-being of over 600,000 working-age persons with disabilities. Budget 2024 also addresses barriers to accessing the Canada Disability Benefit by covering the cost of the medical forms required to apply for the Disability Tax Credit.
• Launching a new National School Food Program by providing $1 Billion over five years to work with provinces, territories, and Indigenous partners to expand access to school food programs to more than 400,000 kids.
• Launching a $1 Billion Child Care Expansion Loan Program to build more child care spaces and renovate existing child care centres saving families thousands of dollars a year on child care, enable more parents to pursue their careers, and give every child the best start. Affordable child care is now supporting a record high of 85.4% labour force participation for working aged women.

Housing and Homelessness:

• A new Public Lands for Homes Plan to use all tools available to unlock 250,000 new homes by 2031 on public lands. This also includes Canada Post properties, National Defence land, and office buildings.
• Building more rental apartments faster with an additional $15 Billion in new loan funding for the Apartment Construction Loan Program, bringing the program's total to over 131,000 new homes by 2031-32.
• Providing a $400 Million top-up to the $4 Billion Housing Accelerator Fund which is already fast-tracking the construction of over 750,000 new homes over the next decade thanks to 179 agreements with municipalities, provinces, and territories.
• Launching a new $1.5 Billion Canada Rental Protection Fund to protect and grow the stock of affordable housing in Canada.
• Providing $1 Billion for the Affordable Housing Fund to build affordable homes and launch a permanent Rapid Housing Stream to build on the success of the previous three rounds of the Rapid Housing Initiative.
• Investing an additional $1.3 Billion for Reaching Home: Canada's Homelessness Strategy to address homelessness and encampments.
• Accelerating the construction and upgrading of housing-enabling infrastructure by providing $6 Billion over 10 years through a new Canada Housing Infrastructure Fund.
• 3.87 Million new homes by 2031 projected by the Federal Government resulting from housing measures announced in the budget.

Indigenous:

• Indigenous Housing and Community Infrastructure investments of $918 Million beyond the $5 Billion already available for communities in 2024-25 to accelerate work to narrow housing and infrastructure gaps in First Nations, Inuit, and Métis communities as follows:
  • $426 Million for First Nations on reserve;
  • $62 Million for Self-Governing and Modern Treaty First Nations;
  • $370 Million for Inuit communities; and,
  • $60 Million for Métis communities.

OMSSA welcomes the new loans to increase capacity in child care, investments in rental construction, additional funding for Reaching Home and funding to support new community housing projects to address wait times and repair backlogs. OMSSA Members will continue to work with our federal and provincial partners towards supporting the most vulnerable in communities across Ontario and Canada. 

OMSSA staff will continue going through budget details and will work with our Members on our new federal advocacy strategy in the months ahead. OMSSA is also concerned with National Housing Strategy funding as it applies to Ontario’s missed targets. In the event this funding is lost, many projects and programs would be cancelled at a time when municipalities throughout Ontario and Canada are facing increased encampments, a rising demand for homelessness services, and economic threats that could compound the issue. 

OMSSA encourages all three levels of government to work together on housing and homelessness that has reached crisis levels in urban, suburban, rural and Northern communities within Ontario. OMSSA also looks forward to working with our partners at CMHC to address housing supply and expand child care spaces resulting from the new measures announced in the 2024 Federal Budget.

Additional Resources:

• Full 2024 Budget
• Key Measures
• Speech from Finance Minister
• News Release

(lead photo courtesy of CTV News)

About the Author

Darryl Wolk is Manager of Policy Development and Public Affairs for the Ontario Municipal Social Services Association.  Darryl started with OMSSA in 2017. He has over ten years of government relations experience and graduated with an MBA from the University of Windsor in 2004. Darryl appreciates the opportunity to advocate and consult with Ontario’s municipal service managers, province and federal government to advance priority issues in the health and human services sectors.