The federal government plans to cut middle-class taxes and remove internal trade barriers by Canada Day as part of what King Charles called “the largest transformation of its economy since the Second World War” during his Speech from the Throne delivered in Ottawa Tuesday.
Speaking on behalf of the government, the King outlined sweeping economic reforms that could reshape how Canadian businesses operate, including plans to eliminate barriers that cost the economy up to $200 billion annually and reduce project approval times from five years to two years.
Tax relief and GST cuts target affordability
The government will reduce middle-class taxes, saving two-income families up to $840 per year, according to the speech. First-time homebuyers will see GST eliminated on homes at or under $1 million, delivering savings of up to $50,000, while the GST will be lowered on homes between $1 million and $1.5 million.
“The government is guided by its conviction that the economy is only truly strong when it serves everyone,” the King said, acknowledging that “many Canadians are struggling to get ahead.”
Internal trade barriers to disappear
One of the most significant changes for businesses involves removing internal trade barriers between provinces and territories. The government will introduce legislation to eliminate all remaining federal barriers to internal trade and labour mobility by Canada Day.
“Internal barriers to trade and labor mobility cost Canada as much as $200 billion each year,” the King noted, adding that several provinces and territories have already begun removing such barriers.
The government aims to create “one Canadian economy out of 13” and establish “true free trade across Canada,” which officials believe will help the country “realize its full economic potential.”
Project approvals streamlined
A new major federal project office will cut approval times for significant projects from five years to two years while maintaining environmental standards and constitutional obligations to Indigenous peoples. The government also plans to reach cooperation agreements with provinces and territories within six months to achieve “one project, one review.”
This streamlined approach comes as the government works to identify projects “that will connect to Canada, that will deepen Canada’s ties with the world, and that will create high paying jobs for generations.”
Housing industry expansion planned
The government will create Build Canada Homes, a new organization focused on affordable housing development. This initiative will invest in prefabricated and modular housing industries while providing financing to affordable home builders.
Municipal development charges will be cut in half for all multi-unit housing as part of efforts to “double the rates of home building while creating an entirely new housing industry using Canadian technology, Canadian skilled workers and Canadian lumber.”
Immigration system changes ahead
Starting in 2027, the government will cap temporary foreign workers and international students at below 5% of Canada’s population. However, it will continue attracting “the best talent in the world to build the economy” and encourage Canadians working abroad to return home.
The King said the government is “dedicated to rebuilding the trust of Canadians in immigration by restoring balance to the system.”
Fiscal discipline measures
Government operating spending, which has grown 9% annually, will be reduced to below 2% growth. The government plans to balance its operating budget within three years by “cutting waste, capping the public service, ending duplication, and deploying technology to improve public sector productivity.”
Transfers to provinces, territories and individuals will be maintained despite the spending cuts.
Enhanced security measures
New legislation will strengthen border security and give law enforcement additional tools to combat fentanyl trafficking. The Canada Border Services Agency will receive expanded powers to examine export goods and prevent transport of illegal products, including stolen vehicles.
The government also plans to hire thousands more RCMP personnel and deploy additional scanners, drones, helicopters and canine teams at borders.
Skills development focus
The transformation will “build hundreds of thousands of good careers in the trades” as Canada develops into “a Science and Innovation Hub,” according to the speech.
The King emphasized that fundamental change creates opportunity for renewal and urged Canada to “think big and to act bigger” during this period of global uncertainty.
