Today, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, released Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience, the Government of Canada’s plan to finish the fight against COVID-19 and ensure a robust economic recovery that brings all Canadians along.
“This budget is about finishing the fight against COVID-19,” said Minister Freeland. “It’s about healing the wounds left by the COVID-19 recession. And it’s about creating more jobs and prosperity for Canadians in the days—and decades—to come.”
Budget 2021 outlines a $12 billion plan to extend key COVID-19 business aid programs and commits to continue other income support measures, while plotting out the reopening of society and international borders:
- The government plans to extend the federal wage and rent subsidies and lockdown supports. Set to expire in June, CEWS and CERS will now be available through September 2021. The Canada Emergency Wage Subsidy has helped more than 5.3 million Canadians keep their jobs and provided more than $73 billion in support to the Canadian economy to date. The Canada Emergency Rent Subsidy proposal includes an intention to gradually decrease the rate of the subsidy, beginning July 4, 2021, in order to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens.
- Budget 2021 proposes an extension to the Canada Recovery Benefit (CRB) aimed at Canadians who aren’t covered by employment insurance (EI), though the $500-a-week support will drop to $300 per week after July 17, 2021. Today, over half a million Canadians who had a job before the crisis are still out of work or working sharply reduced hours, worse than in the depths of the 2008 recession. Many businesses, particularly those that rely on close in-person contact or travel, continue to struggle.
- Billions more is being earmarked to support affected workers though a range of steps, including a series of changes to the EI program, which includes extending the EI sickness benefit from 15 to 26 weeks and continuing to offer COVID-19-prompted caregiving supports in the short-term.
- Budget 2021 proposes to extend the application deadline for support under the Regional Relief and Recovery Fund (RRRF) and the Indigenous Business Initiative until June 30, 2021 (as has been done with the CEBA loan). Budget 2021 proposes to provide up to $80 million in 2021-22, on a cash basis, for the Community Futures Network of Canada and regional development agencies, and to shift remaining funds under the Indigenous Business Initiative into 2021-22, to support an extended application deadline for the Regional Relief and Recovery Fund and Indigenous Business Initiative until June 30, 2021. This would support small businesses in rural communities so they can continue to serve local populations.
Here are some other key proposals relevant to our business community:
- Proposals for small and medium-sized businesses include several transformative programs:
- A new Canada Digital Adoption Program that will assist over 160,000 businesses with the cost of new technology. And it will provide them with the advice they need to get the most of new technology with the help of 28,000 young Canadians who will be trained to work with them.
- STREAM 1: To help main street businesses expand their customer bases online, they can access support to digitize and take advantage of e-commerce opportunities. Eligible businesses will receive microgrants to help offset the costs of going digital—and support to digital trainers from a network of up to 28,000 well trained young Canadians.
- STREAM 2: More comprehensive support to adopt new technology for “off-main street” businesses, such as small manufacturing and food processing operations. Support for these businesses will emphasize advisory expertise for technology planning and financing options needed to put these technologies to use.
- Allowing Canadian small businesses to fully expense up to $1.5 million in capital investments in a broad range of assets, including digital technology and intellectual property. This represents an additional $2.2 billion investment in the growth of Canada’s entrepreneurs over the next five years.
- $1 billion to revitalize Canada’s tourism sector, dedicated to helping tourism businesses recover, and support festivals and cultural events that provide jobs and growth in many of our cities and communities.
- Supporting women, Black Canadians, and other underrepresented entrepreneurs who face barriers to launching and owning businesses through $300 million to enhance initiatives like the Black Entrepreneurship Program and the Women Entrepreneurship Strategy.
- Establishing a $15 federal minimum wage: The Government of Canada is announcing its intention to introduce legislation that will 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. This will directly benefit over 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.
- Budget 2021 proposes to provide an additional $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. This would mean thousands more Canadians and small businesses will have faster, more reliable internet connections.
- The Budget delivers on a focus on reskilling and upskilling to get people back to work and addressing employer’s needs through student placements, apprenticeships, skills training, and other workforce programs including the “Sectoral Workforce Solutions Program” aimed at helping fill in-demand jobs. It also includes a proposal for a new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic.
The pandemic has also highlighted the importance of childcare to the economy. The government is setting aside $30 billion over the next five years with permanent ongoing funding to enact the national plan and create more spaces. In addition, most Canadians will be pleased to see $2.2 billion over the next 7 years to boost Canada’s biomedical and life sciences research sector to in part increase vaccine development.
“Obviously, there are some critical recovery strategies and interesting business-focused proposals in Budget 2021, and we are very relieved to see the extension of key COVID-19 relief, but we are concerned about ongoing deficits,” says Chuck Davidson, President & CEO, Manitoba Chambers of Commerce. “Canada’s net debt is now over $1 trillion for the first time ever, after a $354 billion deficit for the pandemic year just over. It is expected to keep climbing with deficits of $155 billion this year, and $60 billion in 2022-23. What does the path to fiscal restraint look like?”
