The Federal government released its 2021 Budget which is said to be focused on fighting COVID-19, supporting economic recovery and jobs, and Canada’s green transition.
The Canadian Trucking Alliance has highlighted several budget items that could be of most interest to its members. CTA will be working with its Board to review these items in more detail and provide the Government of Canada with feedback from the trucking sector.
COVID Recovery Programs
- Budget 2021 proposes to extend the wage subsidy until September 25, 2021. It also proposes to gradually decrease the subsidy rate, beginning July 4, 2021, in order to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens.
- Any publicly listed corporation receiving the wage subsidy and found to be paying its top executives more in 2021 than in 2019 would need to repay the equivalent in wage subsidy amounts received for any qualifying period starting after June 5, 2021 and until the end of the wage subsidy program.
- Extending the rent subsidy and lockdown support until September 25, 2021. It also proposes to gradually decrease the rate of the rent subsidy, beginning July 4, 2021, in order to ensure an orderly phase-out of this program as vaccinations are completed and the economy reopens.
Training & Immigration Issues
- The Government of Canada intends to propose amendments to the Immigration and Refugee Protection Act to provide the Minister of Immigration, Refugees and Citizenship Canada with authority to use Ministerial Instructions to help select those candidates who best meet Canada’s labour market needs from among the growing pool of candidates who wish to become permanent residents through the Express Entry System.
- Proposal to provide $960 million over three years, beginning in 2021-22, to Employment and Social Development Canada for a new Sectoral Workforce Solutions Program. Working primarily with sector associations and employers, funding would help design and deliver training that is relevant to the needs of businesses, especially small and medium-sized businesses, and to their employees. This funding would also help businesses recruit and retain a diverse and inclusive workforce.
- $470 million over three years to establish a new Apprenticeship Service, which would help 55,000 first year apprentices in construction and manufacturing Red Seal trades connect with opportunities at small and medium-sized employers.
- $298 million over three years in a new Skills for Success program that would help Canadians at all skills levels improve their foundational and transferable skills.
- $55 million over three years for a Community Workforce Development Program. The program will support communities to develop local plans that identify high potential growth organizations and connect these employers with training providers to develop and deliver training and work placements to upskill and reskill jobseekers to fill jobs in demand.
- $250 million over three years for an initiative to scale-up proven industry-led, third-party delivered approaches to upskill and redeploy workers to meet the needs of growing industries.
Labour
- 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 apply to 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.
- Proposed funding of $3.0 billion over five years, starting in 2021-22, and $966.9 million per year ongoing to enhance sickness benefits from 15 to 26 weeks, as previously committed to in the Minister of Employment, Workforce Development and Disability Inclusion’s mandate letter. This extension, which would take effect in summer 2022, would provide approximately 169,000 Canadians every year with additional time and flexibility to recover and return to work.
- Forthcoming consultations on future, long-term reforms to EI. To support this effort, the government proposes to provide $5 million over two years, starting in 2021-22, to Employment and Social Development Canada to conduct targeted consultations with Canadians, employers, and other stakeholders from across the country. Consultations will examine systemic gaps exposed by COVID-19, such as the need for income support for self-employed and gig workers; how best to support Canadians through different life events such as adoption; and how to provide more consistent and reliable benefits to workers in seasonal industries. Any permanent changes to further improve access to EI will be made following these consultations and once the recovery is fully underway.
Workers
- Expanding the Canada Workers Benefit to support about $1 million additional Canadians in low-wage jobs. Supporting businesses with hiring new workers through economic reopening, the Budget also proposed to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic.
Infrastructure & Border Funding
- Investment of $1.9 billion over four years, starting in 2021-22, to recapitalize the National Trade Corridors Fund. This funding could attract approximately $2.7 billion from private and other public sector partners, resulting in total investments of $4.6 billion. This would spur investments in much-needed enhancements to our roads, rail, and shipping routes, build long-term resilience for the Canadian economy, and support internal trade. It would make Canada’s transportation system more fluid, supporting economic recovery and increasing prosperity across Canada. Alleviating bottlenecks and congestion will also reduce greenhouse gas emissions in Canada.
- Proposal to provide $656.1 million over five years, beginning in 2021-22, and $123.8 million ongoing, to the Canada Border Services Agency (CBSA) to 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 Sates that would enable customs and immigration inspections to be completed before goods and travellers enter Canada.
Environment
- Providing $104.6 million over five years, starting in 2021–22, with $2.8 million in remaining amortization, to Environment and Climate Change Canada to strengthen greenhouse gas emissions regulations for light- and heavy-duty vehicles and off-road residential equipment, establish national methane regulations for large landfills, and undertake additional actions to reduce and better use waste at these sites.
- To implement and administer the Clean Fuel Standard, Budget 2021 proposes to provide $67.2 million over seven years, starting in 2021-22, with $0.05 million in remaining amortization, to Environment and Climate Change Canada. This standard creates new economic opportunities for Canada’s biofuel producers, including farmers and foresters, who are part of the diverse supply chain for low-carbon fuels. Making this investment now will secure Canada’s future competitiveness in the global transition to a low-carbon economy.
Tax
- Starting in 2023, the proposed amount of interest that certain businesses can deduct be limited to 40 per cent of their earnings in the first year of the measure and 30 per cent thereafter. Relief will be provided for small businesses and for other situations that do not represent significant tax base erosion risks. The government expects to release draft legislation this summer and will seek stakeholder input on the new rules.
- An additional $304.1 million over five years, starting in 2021–22, to allow the CRA to fund new initiatives and extend existing programs, including:
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- Increasing GST/HST audits of large businesses where risk assessment models have found the greatest risk of non-compliance;
- Modernizing the CRA’s risk assessment process to prevent unwarranted and fraudulent GST/HST refund and rebate claims at the outset and improve the ability to issue refunds for compliant businesses as quickly as possible;
- Enhancing capacity to identify tax evasion involving trusts and provide better service to executors and trustees.
- These measures to combat tax evasion and aggressive tax avoidance will recover $810 million in revenues over five years, according to estimates. Additional gains will be realized by provinces and territories, whose tax revenues will also increase as a result of these initiatives.