Highlights from the new 2021 federal budget

Program Extensions:

Ottawa’s budget measures for small and medium-sized businesses include pandemic-related program extensions and funding boosts even as the government rolls out a $15 federal minimum wage.

It will extend the wage subsidy, the rent subsidy, and its lockdown top-ups to Sept. 25, then gradually decrease them starting in June as vaccinations become more widespread.

The government will also expand the timeframe of its COVID-19 income support programs for those taking sick leave because they’ve contracted the virus, are in self-isolation, or must take time off work to care for children and family.

As the rent and wage programs wind down, the government plans to introduce a new hiring subsidy of up to 50 per cent on the incremental remuneration paid to eligible employees between June 6 and Nov. 20 for a maximum of $1,129 per employee per week.

The government proposes a new Canada Digital Adoption Program, which would train and deploy 28,000 young Canadians to help small businesses move online and support e-commerce initiatives.

On the other side of the leger, some small business costs will increase with the new minimum wage set to rise with inflation and include provisions to ensure that where provincial or territorial minimum wages are higher, the higher wage prevails

Child Care:

The largest contributor is $30 billion over five years on top of existing planned child-care spending to drive down fees in licensed daycares and eventually get to $10 a day by 2026.

The Liberals’ 2021 budget doesn’t commit or estimate how many new spaces could be created by the spending, focusing instead on the cost to parents.

The plan would aim to see an average drop in fees next year by 50 per cent for preschooler daycare spaces that last year ranged from about $451 per month in Winnipeg to $1,250 a month in Toronto.

Eventually, they aim to have an average fee of $10 a day across the country outside of Quebec, which has its own system.

Freeland said the plan won’t deliver instant gratification, noting it is a long-term strategy that will take country-wide effort to invest in children and young parents.

Infrastructure:

Freeland is topping up the Liberals’ 10-year, $40-billion housing strategy with an additional $2.5-billion commitment.

Some 60 per cent of that will go towards the construction of 4,500 new units under the so-called Rapid Housing Initiative, which seeks to provide vulnerable Canadians with affordable homes.

The budget’s plan to build or repair 35,000 units in total makes only a small dent in the 1.6 million Canadians in need of housing assistance.

The 739-page document also reiterates an eight-year, $15-billion pledge from February for public transit projects ranging from new subway lines to electric buses.

The budget further sets aside $23 million over four years for Infrastructure Canada to conduct what it calls the country’s first-ever national infrastructure assessment, partly to identify the next steps toward a long-discussed, never-developed high-frequency rail link between Toronto and Quebec City.

Environment:

Pushing the private sector to develop clean technology and heavy emitters to adopt it is where billions in new money will flow from the budget pledge to tackle climate change.

Around $17 billion is promised in the years ahead to promote a “green” recovery out of the COVID-19 pandemic and create jobs.

Included in that is $5 billion more into a fund meant for projects used by industry to reduce their greenhouse gas emissions.

The government says that will be spread out over seven years and is on top of the $3 billion announced last year when the Liberals unveiled their plan to reach net-zero emissions by 2050.

Another measure targeting heavy emitters is a new tax incentive to encourage companies to adopt technology that traps carbon dioxide into the ground from fuel combustion instead of seeing it released into the atmosphere.

The government says it will soon begin consultations on designing a tax credit for capital spent on carbon capture and storage technology in hopes of increasing how many million tonnes Canada traps annually.

Defence:

Ottawa is promising millions of additional dollars to help fight sexual misconduct in the Canadian Armed Forces as it seeks to address anger and frustration over how the issue has been handled.

That includes more than $75 million in new funding spread over the next five years specifically dedicated to the problem while redirecting another $158 million from other parts of the military.

The plan states the new money will be used to increase victim support services, develop new prevention training, and bring more independent oversight of the military’s handling of complaints.

It does not, however, say where the redirected money will come from or what form that independent oversight might take.

The budget also includes plans to help veterans access mental-health services faster and includes more money to increase the number of military aircraft and warships ready to quickly respond to a request from the NATO military alliance.

It sets aside money for the first time to start work on upgrading North America’s NORAD defensive system with the United States, as well as funds to keep the existing system, which is already past its best-before date, up and running.

Other Highlights:

$3 billion over five years, starting in 2022-23, to Health Canada to support provinces and territories in improving standards for long-term care. The government says this funding will keep seniors safe and improve their quality of life.
$2.2 billion in Canada’s bio-manufacturing and life-sciences sector to rebuild Canada’s national capacity in bio-manufacturing and vaccine development and production.
Introducing legislation to establish a federal minimum wage of $15 per hour, rising with inflation, with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail.
$1 billion over six years, starting in 2021-22, to the Universal Broadband Fund to support a more rapid rollout of broadband projects in collaboration with provinces and territories and other partners.
$18 billion over the next five years to try to narrow the socio-economic gap between Indigenous and non-Indigenous people, including $6 billion for infrastructure in Indigenous communities, and $2.2 billion to help end the tragedy of missing and murdered Indigenous women and girls.
Introduce Canada’s first national tax on vacant property owned by non-residents.
Introducing a new tax on the sales, for personal use, of luxury cars and personal aircraft with a retail sales price over $100,000, and boats, for personal use, over $250,000.

by David Opinko / The Canadian Press

Highlights from the new 2021 federal budget

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