Fall Economic Statement 2023

Fall Economic Statement 2023 – Analysis

Sara Krynitzki

Policy Advisories

3 mins read

November 27, 2023

On November 21, 2023 Finance Minister Chrystia Freeland unveiled the “Fall Economic Statement” – a fiscal update that typically serves as a report on the government’s expenditures and current financial picture, taking into account key changes that have occurred since the last federal budget. Fall Economic Statements usually project what’s to come in the coming months, including any new measures the government is planning to introduce to reflect its priorities.

This year’s FES has been framed by government officials in the lead-up to its release, as squarely focusing on affordability and housing, as affordability concerns are now central issues dominating headlines and concerns of Canadians.

Indeed, the most notable feature of the FES for philanthropy was the government’s promise of $1 billion over three years starting in 2025-26 for the Affordable Housing Fund to support non-profit, co-op, and public housing providers build an additional 7,000 homes by 2028. Formerly known as the National Housing Co-Investment Fund, it is likely to be a mix of low cost loans and fully non-repayable funding.

In addition, an extra $15-billion has been promised in low-cost loans for building rental apartments to support the construction of an additional 30,000 homes.

The government also committed to establishing the Department of Housing, Infrastructure and Communities – a rebranding of Infrastructure Canada, that clarifies the departments powers, duties and functions.

For those in our sector interested in affordability and housing issues, as well as those concerned with investment opportunities that produce social as well as financial returns, these commitments are noteworthy.

Under the “Previously Announced Measures” section of the FES, the Alternative Minimum Tax (or AMT) is listed, noting that the government has intention to proceed, “as modified to take into account consultations and deliberations since their release.” What modifications may take place is not mentioned.

Changes to the AMT rates and rules are scheduled to take effect January 1, 2024, which includes for the first time AMT applying to charitable donations from high-income individuals. Accordingly, this change has drawn the attention from many charities and donors. The impact of these changes are unknown and should be monitored carefully, as evidence should drive policy. The charitable sector should not become collateral damage for legitimate efforts to address rising income inequality.

PFC will monitor the development and roll-out of the promises and the impact and opportunities for our sector they present.

Learn more: https://www.budget.canada.ca/fes-eea/2023/home-accueil-en.html