Federal Finance MinisterChrystiaԻ’sfirst budget, released in the House of Commons today,containssignificant newpledges to expand affordable housing,fund home retrofits, invest in a green recovery andkick-startthe National Trade CorridorsFund.
Freeland reiterated a February promise totake a long-term approach to investing in public transitand alsopromised new spending on broadband. Sheforecastedthat the government’s deficit will drop by more than half, fromthe latestshortfallof$354.2 billiontoadeficitof$154.7 billionforeseen for the 2021-22 fiscal year.
By 2025-26, the government expects the deficit todeclineto$30.7 billion.
“As Canada pivots to recovery, our economic plan will too,” said Freeland.
“We promised last year to spend up to $100 billion over three years, to get Canada back to work and to ensure the lives and prospects of Canadians are not permanently stunted by this pandemic recession.
“This budget keeps that promise.”
Freeland’s fiscalprogram was titled A Recovery Plan for Jobs, Growth, and Resilience.
Freeland predictsreal GDP growth of 5.8 per cent in 2021,almost two per cent higher thaninherFall Economic Statement, afterarecord decline of5.4 per cent in the first year of the pandemic. Growth is expected to befour per cent in 2022.
Still, Freeland said, federal supports for businesses and individuals willbe needed for most of the year andso the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support will be extended until Sept. 25, 2021, representingan estimated total of $12.1 billion in additional support.
In last fall’s economic statement, Freelandproposed spending between$70 billionand$100 billion over three yearsstartingin 2021 to spur economic recovery. Freelandnow says the government will spend $102.4billion on a growth planthat will“create good jobs and support a resilient and inclusive recovery.”
The green recovery funding of $17.6 billion covers a broad range of new and expanded programs.Canada is ontargettoexceed its Paris climate targets and reduce emissions by 36 per cent below 2005 levels by2030, andmove towards reaching net-zero emissionsby 2050, Freeland said.
The governmentproposes to provide $4.4 billion on a cash basis ($778.7 millionon an accrual basis over five years, starting in 2021-22, with $414.1 million infuture years) to the Canada Mortgage and Housing Corporation toencourage homeowners tocomplete deep home retrofits through interest-free loansworth up to $40,000.
Loans would be available to homeowners and landlordswho undertake retrofits identified through an authorizedEnerGuideenergyassessment.
The government pledges to build, repair and support 35,000 affordable housing units through an investment of $2.5 billion and a reallocation of $1.3 billion in existing funding.
In a nod to the work-from-home trend during the pandemic, the governmentwill reallocate $300 million from the Rental ion Financing Initiative tosupport the conversion of empty office spacesto housing.
Freeland proposes spending of $1.9 billion over four years, starting in 2021-22, to“recapitalize”the National Trade Corridors Fund.The government hopes to leverage private investmenttoboost the impact of the funding, with$2.7 billion from private andother public sector partnerspotentiallyresulting in total investments of $4.6billion.
“This would spur investments in much-needed enhancementsto our roads, rail and shipping routes,andbuild long-term resilience,” thebudget document states.
Other supports for businesses include the new Canada Digital Adoption Program, intended to support160,000 businesses with the cost of new technologyand give work to28,000 young Canadians who will be trained toimplement theplan.
The government will also allowsmall businesses to fully expense up to $1.5 million in capital investmentson a broad range of assets, including digital technology and intellectual property.
Freeland announced a plan to contribute$1.4 billion over 12 years, starting in2021-22, to Infrastructure Canada to top up the Disaster Mitigation andAdaptation Fund, to support projects such as wildfire mitigation activitiesandrehabilitation of storm water systems.
Of that, $670 million would be dedicated to new, small-scale projectsbetween $1 million and $20 million in eligible costs.
Freeland’s transit pledge echoed the plan releasedin February, when the governmentannounced $14.9 billion over eight years to build new public transit, electrify existing transit systems and help connect rural, remote and Indigenous communities.
Rural and remote communities were also recognized with the broadband announcement.The government is committingan additional $1 billion over six yearstothe Universal Broadband Fund.
The government is also taking stepsto advance itshigh–frequency railproposal betweenQuebecand Toronto.
The budget willprovide $4.4 million in 2021-22 for further planning and de–risking, andVia Rail will be allocated 491.2 million over six yearsfor infrastructure improvements to support the project.
Major investments on Indigenous infrastructure needs include$4.3 billion over four yearsforthe IndigenousCommunity Infrastructure Fundand$1.7 billion over five years to cover the operations and maintenance costs of communityinfrastructure in First Nations communities on reserves.
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Federal budget provides funding for new apprenticeship service, supports skilled trades
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