What Newcomers Should Know About Canada’s 2024 Federal Budget

What Is The Federal Budget?

The federal budget outlines the government’s planned spending and priorities for the upcoming fiscal year. Taxpayers are typically interested in it because it outlines where taxpayer money will be spent, including areas like healthcare, education, infrastructure, and social and care economy programs. It typically includes proposed changes to the federal tax rates, and it’s where new taxes would be introduced and tax increases or cuts would also be announced.  

The federal budget announcement is always a politically charged event and it attracts a great deal of news coverage and commentary. We’re hoping to contribute to that by outlining exactly how the recent budget announcement will impact newcomers to Canada. 

Aligning Immigration With Housing Capacity

Access to affordable housing is one of the most pressing issues in Canada. Rental housing costs have increased dramatically across the country in recent years, and purchasing a house is something that many residents in Canada no longer see as realistic. 

There are many factors driving the housing shortage in Canada, but Canada’s increasing population and large population of temporary residents is one contributing factor. 

In the federal budget announcement, Canada did not announce any new changes for immigrants. It reiterated previously announced strategies designed, in part, to address housing shortages, including setting a target for the number of temporary residents and international students in Canada in the Immigration Levels Plan. 

“Normalizing permanent and temporary immigration levels is critical to ensuring that newcomers have the opportunities and social supports they need to succeed when coming to Canada. Further, these changes will ensure that newcomers, and all Canadians, have an affordable place to call home. The scale of this reduction is significant in the context of housing demand: in recent years, Canada has built about 220,000 housing units annually.” 

Credit for Paying Rent

This announcement isn’t directly targeted towards newcomers, but it could have an outsized impact on newcomers to Canada. The reason for this is that newcomers ordinarily arrive in Canada with no credit score and no credit history. A strong credit score and credit history can be a key to securing loans in Canada, as well as finding a rental property (since some landlords want to see your credit score or history before signing a lease).

Canada’s government plans to introduce measures that would allow residents to use their rental payments to increase their credit score. This would require FinTech innovation in Canada, since no system is currently set up that would allow this. But it would be helpful for newcomers, since it adds another lever newcomers can pull to grow their credit score and history more quickly after landing in Canada. 

“While we work urgently to increase the supply of housing, our government is taking action to bring relief to Canadians—especially younger Canadians—by making it more affordable to rent or to buy a new home.

This starts with better protecting renters from steep rent increases and renovictions.

It also means making sure they get credit for their on-time rental payments—so they’re in a better position to qualify for a mortgage, maybe even at a lower rate, when the time comes to buy their first home.” (emphasis added)

For context, a ‘renoviction‘ refers to landlords that evict tenants to renovate the property and then rent it out at a significantly increased rate.

Foreign Credential Recognition

Canada plans to invest $50 million in 2024 and 2025 to improve the Foreign Credential Recognition Program in Canada. This program provides training, work placements, wage subsidies, and mentoring to newcomers. 

At least $25 million of this amount will be dedicated to streamlining foreign credential recognition in the construction industry so that skilled foreign workers can build more homes. The remaining funding will go towards the health care sector. These two sectors being targeted in the budget is not surprising given the high demand for workers and high numbers of job vacancies.

Newcomers who work in these sectors should expect to see changes that make it easier to come to Canada and start working in a professional setting with recognized foreign credentials. 

Affordability Measures

The federal budget touches on: 

• More affordable groceries.
• Cheaper internet, home phone, and cell phone plans. 
• A right to repair devices. 
• Lower banking fees. 

The changes proposed in this arena largely relate to removing hidden fees and increasing competition through legislative changes. These changes, again, may benefit many newcomers to Canada. Newcomers often earn less than their Canadian counterparts in their early years in Canada, and international students have been heavily impacted by the swift increases to the cost of living in Canada. Any changes that would tangibly reduce the amount of money being spent on essential services could make it easier for those who have recently landed in Canada.

Community Inclusion & Safety

Canada’s budget notes that one in three people in Canada is a member of a racialized or religious minority community and that the country has welcomed newcomers from around the world for generations. It also notes that there have been some recent issues relating to hate that the government is committed to combating. 

While there are a range of measures designed to combat hate of all kinds, there is a particular emphasis on addressing the rise in antisemitism and Islamophobia. The Action Plan on Combatting Hate package proposes to provide around $7.3 million over six years to create safer and more inclusive communities. 

The messaging for newcomers here should be clear: Canada is diverse, welcoming, and tolerant, and it is committed to staying that way. 

Finally, Canada is a relatively safe country, but it isn’t perfect. Canada’s Eastern provinces, for example, face significant risks relating to auto theft, while gender-based violence is also problematic. The budget introduces measures designed to address these safety issues, which impact all Canadian residents, including newcomers.