Higher taxes, more spending, and greater subsidies to “green” energy are just some of the things dealers can expect from the 2023 federal budget, according to the Canadian Automobile Dealers Association (CADA)’s latest update.
Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Budget 2023 — A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future on March 28. CADA was in the key stakeholder budget lock-up to read and study it before the report was released to the public; it plans to lobby the government for additional items that were not included or clarified in this year’s budget.
“As a top-line, this budget was a choice between fiscal responsibility and economic growth while placating the NDP social agenda,” said CADA in its update. “As a result, Budget 2023 has [a] higher, longer-term deficit and debt, higher taxes, higher spending, and higher subsidies to ‘green’ energy and some Canadians.” It also doubles debt servicing costs.
CADA considers the government’s anticipation of a 40.1 billion deficit in the budget — which they said is a small reduction from last year’s budget — to be among the most relevant Budget 2023 highlights for Canadian dealers.
Other important elements include a refundable tax credit to manufacture clean technologies, such as zero-emission vehicles. An investment of at least $10 billion by the Canada Infrastructure Bank through its Clean Power priority area — including at least $10 billion through its Green Infrastructure priority area. And $3 billion over 13 years towards new measures that would support a more sustainable and affordable electricity grid.
The budget also emphasized EVs and batteries as economic priorities for investment, but additional details on the amount to be invested are yet to be provided. Overall, CADA said the budget “was a missed opportunity to present a coordinated strategy to generate economic growth and address the rising costs for businesses.”
The association will continue to put pressure on the federal government for tax relief, getting rid of the luxury tax, taking action on the stolen vehicle crisis, and marrying electric vehicle mandates with concrete action on charging infrastructure.