Canada projects $19.8B deficit versus $19.6B in Nov
Canadian budget projections
Overall, there is some good news here for the Canadian economy and this should provide a lift for housing but it's not as stimulative as I thought it might be, given the looming election.
- Sees this year's deficit at $14.9B compared to $18.1B prior
- 2020 budget at $19.8B vs $19.6B prior
- Each year includes a $3B contingency
- Assumes 1.8% growth in GDP in 2019
- Assumes 1.6% GDP growth in 2020
Canada uses the average of private sector forecasts for its budget forecasts, not its own forecasts. It's a tradition that's been around awhile to limit political interference.
I though they might go for a larger deficit but they must think that current deficits are the limit of what they can do to win the Fall election.
- Canada to limit benefit of employee stock-option deductions for high-income earners
- Introduces first-time home buyer incentive with 10% shared equity loans on new homes and 5% on existing homes
- Home Buyer's Plan RRSP withdrawal raised to $35K from $25K
The incentive will offer some large incentives on mortgage costs. That sounds like a big boost for the housing market but details are still sketchy. Update: It sounds like a zero-interest loan for down payments. The example in the budget offers 10% on a $400K mortgage.
- Introduces income support and training subsidy for worker retraining
- Progress on National Pharmacare program with creation of Canadian Drug Agency