Budget 2021 A Recovery Plan for Jobs, Growth, and Resilience

Budget 2021
A Recovery Plan for Jobs,
Growth, and Resilience

Introduction
The Federal Liberal government released its first budget in two years this afternoon and as expected, this historic post-pandemic recovery
plan delivered equally historic levels of spending. According to Finance Minister and Deputy Prime Minister Chyrstia Freeland, the first
woman to deliver a budget in Canadian history, the budget’s investments address three main challenges: conquering COVID-19, punching
our way out of the recession and recovering jobs in the hardest hit areas, and building a more resilient Canada for the future. At its roots
the budget, “A Recovery Plan for Jobs, Growth, and Resilience,” makes major investments in existing pandemic programs, job recovery, in
particular for women and those in the travel and tourism sector, the “green” transition and new social infrastructure.

Highlight Spending
New spending in Budget 2021 reaches $101.4 billion over the next three years
while this year’s deficit will reach $354.2 billion before returning to pre-pandemic
levels of $30.7 billion by 2025/26. By that time the federal debt will have doubled
to $1.4 trillion however, new tax streams announced in the budget should bolster
Canada’s debt-to-GDP ratio used by economists to judge the health of national
debts around the world.

Major Funding and Programs
•   $12 billion to extend key aid to businesses;
•   Continuation of emergency COVID-19 measures such as CEWS and CERB. The
    Canada Recovery Benefit will also be extended;
•   $3 billion over five years to support the provinces and territories in creating
    and upholding high standards of care inside long-term care facilities;
•   $2.2 billion over the next seven years on boosting Canada’s biomedical and
    life sciences research sector to in part increase vaccine development;
•   $424 million in 2021-22 to ensure the “safe reopening” of Canada’s borders,
    through funding further air travel protections and mandatory quarantine
    measures;
•   $100 million over the next three years, to support projects for mental health
    interventions for populations disproportionately impacted by COVID-19, such
    as health care and front-line workers;
•   $30 billion over the next five years to create new child care spaces;
•   Plans for legislating the federal minimum wage at $15/hr;
•   Several programs including the ‘Sectoral Workforce Solutions Program” and
    the ‘Canada Recovery Hiring Program’ will address rehiring across the
    economy and help transition individuals from the federal wage subsidy in the
    hardest hit industries; and
•   Significant investment will be made into the ‘green transition’ and will
    include $4.4 billion over the next five years for Canadians to retrofit their
    homes and another $7.2 billion into the Strategic Innovation Fund for green
    projects.

•   While no specific plan for reopening borders or easing restrictions is listed in the budget, the government does list measures to improve
                         the eventual reopening of borders and easing of border restrictions. This is a positive sign that the government is turning its attention to
                         this critical part of economic recovery. In fact, if not for the pandemic, many of the facilitation measures would be lauded by business
                         travellers. Going forward, this will support the advocacy efforts of the GBTA going forward. Measures and support for travel include:
                     •   $656.1 million over five years, beginning in 2021-22, and $123.8 million ongoing, to the Canada Border Services Agency (CBSA) to

Travel and Borders       modernize our borders. Funding will transform the border experience for travellers through touchless and automated interactions,
                         enhance CBSA’s ability to detect contraband, and help protect the integrity of our border infrastructure. Funding will also support three
                         Canadian preclearance pilots in the United States that would enable customs and immigration inspections to be completed before goods
                         and travellers enter Canada.
                     •   $82.5 million in 2021-22 to Transport Canada to support major Canadian airports in making investments in COVID-19 testing
                         infrastructure.

                     •   $105.3 million over five years, starting in 2021-22, with $28.7 million in remaining amortization and $10.2 million per year ongoing to
                         Transport Canada to collaborate with international partners to further advance the Known Traveller Digital Identity pilot project, which
                         will test advanced technologies to facilitate touchless and secure air travel.
                     •   $6.7 million in 2021-22 to the Canadian Air Transport Security Authority to acquire and operate sanitization equipment.

The Coming Days

Given the Liberal government’s minority position, it will need the support of at least one political party in the House of
Commons and over the next several weeks parties in the House of Commons will debate the budget. For months political
watchers have speculated that the government was devising a plan to head to the ballot box however, with so much at
risk for the other parties, in particular the Conservative Party of Canada and the New Democratic Party, it remains
unclear if any party is in a position to challenge the government at such a sensitive time for Canadians.