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

· by c.dambrosio@hamiltonchamber.ca

On Monday, April 19 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.

The COVID-19 recession is the steepest and fastest economic contraction since the Great Depression. It has disproportionately affected low-wage workers, young people, women, and racialized Canadians. For businesses, it has been a two-speed recession, with some finding ways to prosper and grow, but many businesses—especially small businesses—fighting to survive.

The Government of Canada’s top priority remains protecting Canadians’ health and safety, particularly during this third, aggressive wave of the virus and its variants. Vaccine rollout is underway across Canada, with federal government support in every province and territory.

Budget 2021 includes $101.4 billion over three years in proposed investments as part of the Government of Canada’s growth plan that will create good jobs and support a resilient and inclusive recovery.

Key measures include:

  • Establishing a Canada-wide early learning and child care system, in partnership with provincial, territorial, and Indigenous partners, which will help all families access affordable, high-quality, and flexible child care no matter where they live, and no longer shoulder the burden of high child care costs
  • Extending emergency supports to bridge Canadians and Canadian businesses through to recovery, including:
    • Extending the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until September 25, 2021
    • Extending the number of weeks available for important income support for Canadians such as the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit
  • Enhancing Employment Insurance sickness benefits from 15 to 26 weeks.
  • Supporting small and medium-sized businesses through several transformative programs, such as:
    • 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
    • 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
  • Revitalizing Canada’s tourism sector through $1 billion to help 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
  • Enriching the Canada Workers Benefit, which will support about 1 million more Canadians and lift nearly 100,000 people out of poverty
  • Helping to build, repair, and support 35,000 affordable housing units for vulnerable Canadians through an investment of $2.5 billion and a reallocation of $1.3 billion in existing funding
  • Propose a new Canada Recovery Hiring Program, which will run from June to November and will provide $595 million to make it easier for businesses to hire back laid-off workers or to bring on new ones
  • Investing $17.6 billion in a green recovery that will help Canada to reach its target to conserve 25 per cent of Canada’s lands and oceans by 2025, exceed its Paris climate targets and reduce emissions by 36 per cent below 2005 levels by 2030, and move forward on a path to reach net-zero emission by 2050

Click here to read the full News Release.

Supporting Small Businesses

In the face of the COVID-19 pandemic, the government acted swiftly to provide support to protect Canadians and support people and businesses, adapting its response as the pandemic evolved. The government’s broad suite of support measures has helped families, protected jobs, and supported businesses across Canada.

Budget 2021 contains updates to many of the funding programs available to small businesses and has provided a backgrounder detailing the extension of these programs, as well as the introduction of new initiatives to support small businesses through third wave and beyond.

Click here to review all updates to small business support programs.

Supporting Tourism, Hospitality, Arts and Culture

The impact of COVID-19 on workers and businesses in tourism, arts, and culture has been severe. With the rollout of vaccines underway, businesses in the tourism, arts, and culture sectors are getting ready to welcome Canadians back to experience the great places and activities this country has to offer—when it is safe to do so.

The government’s plan will support our economic recovery, restoring and creating jobs in these sectors, drawing visitors to towns and cities across the country, and unleashing spending that stimulates local economies.

Click here to learn more about how the government plans to support tourism, hospitality, arts and culture sectors.

A Healthy Environment for a Healthy Economy

Climate change is the challenge of our times, and it is also one of our greatest opportunities. Climate action creates new opportunities for engineers, scientists, farmers, construction workers, tradespeople, resource workers, energy workers, researchers, and more.

Since 2015, Canada has invested roughly $60 billion toward climate action and clean growth. In 2020, the government announced an additional investment of $15 billion for Canada’s strengthened climate plan, along with nearly $15 billion for public transit in February 2021.

Building on these recent investments, Budget 2021 proposes to provide $17.6 billion towards a green recovery to create jobs, build a clean economy, and fight and protect against climate change.

Click here to learn more about Canada’s green recovery.

Supporting Women

COVID-19 has affected all Canadians, but women have been disproportionately affected. In the labour market, women were hit earlier and harder, and their jobs continue to recover more slowly. Long-standing gender inequities have only been amplified over the course of the pandemic—and it has put decades of hard-fought gains for women in the workplace at risk. Today, more than 16,000 women have dropped out of the labour force completely, while the male labour force has grown by 91,000.

The work of creating a more inclusive, sustainable, feminist, and resilient economy that values women’s work will take time. The government will continue its progress to build a feminist, intersectional Action Plan for Women in the Economy that will work to push past systemic barriers and inequities, for good. This will create an economy that works for everyone and build a stronger middle class.

Click here to read about the government’s proposed investment to women’s health and economic participation.

Job Creation

Overall, there remain over 500 thousand workers that have been laid off or faced working hours cuts due to the pandemic, including over 280,000 additional Canadians that have been unemployed for at least six months, still much higher than at the worst of the 2008-09 recession. Budget 2021 recognizes that a rapid and sustained economic recovery is the most reliable way to secure higher employment and income levels, improved and expanded job opportunities, and narrower economic disparities.

All together, Budget 2021 investments will create or maintain 330,000 jobs in Canada by 2022-23. This budget also creates almost 500,000 new training and work experience opportunities for Canadians.

Click here to see the government’s plan to ensure steady job creation.

Building an Innovation Economy of the Future

A plan for a long-term recovery must look to challenges and opportunities that lie ahead in the years and decades to come. It must be led by a growth strategy that builds on the unique competitive advantages of the Canadian economy, and make sure that Canada is well-positioned to meet the demands of the next century. This work begins with innovation. 

Click here to read more about the government’s plan to build our innovation economy of the future.

If you have any questions or comments, please don’t hesitate to reach out to our Policy & Government Relations Advisor, Paul Szachlewicz, at p.szachlewicz@hamiltonchamber.ca