Introduction

If you're one of the nearly 19 million working Canadians eagerly anticipating a $250 cheque from the Liberal government in the new year—hold off on those spending plans. Sources have indicated to the National Post that Finance Minister Chrystia Freeland is poised to reverse the government's commitment to the proposed “Working Canadians Rebate,” a move that could save approximately $4.68 billion.

Details of the Policy Change

According to insiders, this policy change will not be included in the forthcoming fiscal update planned for Monday. Instead, the government is reportedly considering revisiting this initiative in 2024, provided they can secure support from another political party.

Originally, the Liberal government intended to distribute $250 cheques to those Canadians who worked in 2023 and earned below $150,000. However, due to a lack of parliamentary support, the plan has stalled. The NDP, led by Jagmeet Singh, has expressed willingness to back a GST holiday measure but indicated it would withhold support for the rebate unless it included seniors, individuals with disabilities, and injured workers. The Bloc Québécois shared similar sentiments, which could have inflated the program's cost by an additional $2 billion.

Freeland’s Relationship with the Prime Minister’s Office

Freeland's apparent reluctance towards this rebate has reportedly strained her relationship with the Prime Minister’s Office. Reports suggest that the affordability package, which also introduced a temporary GST holiday, initially originated from the PMO. Yet, discrepancies have arisen regarding spending priorities.

Political Climate and Speculation

In recent public appearances, Freeland exhibited visible distress when asked about these tensions, reflecting the difficulty she faces in this challenging political climate. Many speculate that she may be under scrutiny for her position, especially as rumors swirl about former Bank of Canada Governor Mark Carney potentially stepping in as finance minister—a scenario that may be developing behind the scenes as two distinct cabinet shuffle plans circulate.

Public Sentiment and Upcoming Elections

This uncertainty underscores growing unease at the highest levels of government, with implications for upcoming elections. A recent poll revealed that a significant 70% of Canadians viewed the Liberal government’s measures as electoral strategies rather than effective solutions to inflation, raising concerns about the party's support leading into future votes.

Fiscal Update Predictions

Additionally, the fiscal update is expected to reveal significantly higher deficits than the previously projected $40 billion for 2023/24, with estimates potentially reaching $60 billion for the past year.

Freeland's Commitments

Nevertheless, in her efforts to redirect funds, Freeland has announced a commitment to invest an additional $1.9 billion over six years into the Scientific Research and Experimental Development tax incentive, alongside a $1 billion investment in the Venture Capital Catalyst Initiative aimed at bolstering mid-sized Canadian companies. Also notable is a plan to draw investment from Canadian pension funds to build AI data centers, potentially unlocking up to $45 billion through government matching.

Conclusion

If this fiscal update turns out to be Freeland's last as finance minister, she can at least claim she attempted to steer funding toward more impactful initiatives, deeming the past rebate proposals ineffective and not aligned with the country's pressing financial needs.

Stay tuned as we continue to follow this developing story and its implications for working Canadians and the broader economy.