Rapid Policy Update:
2019 Federal Budget
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On March 19, the Government of Canada presented its 2019 Federal Budget entitled
Investing in the Middle Class
, which provides an update on the government’s finances and makes several policy announcements and spending commitments that will impact Canadian businesses and the economy. The following are key highlights from the Ontario Chamber of Commerce.
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Skills
In Budget 2019, the government made several proposals to help Canadians improve their skills. The Canada Training Credit is a benefit intended to help workers pay to upgrade their skills by providing a non-taxable credit to help workers pay for training costs and support workers in training through a new Employment Insurance (EI) Training Support Benefit. To offset the increased costs resulting from EI premiums, the government proposes to introduce an EI Small Business Premium Rebate. The Budget also proposes a number of investments to encourage more young people to consider skilled trades and expand the number of work-integrated learning opportunities, with an aim to create 40,000 work placements for students by 2023-24.
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Pharmacare
In Budget 2019, the government plans to create a Canadian Drug Agency, which would take a coordinated approach to drug assessments, recommendations, and price negotiations. This agency would create a national formulary. Finally, they intend to, in 2022-2023, create a national strategy for drugs for rare diseases.
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Energy and Electricity
Budget 2019 proposes investments to support the manufacturing and purchase of zero-emissions vehicles, expand hydroelectricity and electrical connectivity infrastructure through the Canada Infrastructure Bank, and incent energy-efficiency retrofits to residential and commercial buildings. The Budget also commits $60 million to help municipalities engage in asset management planning.
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Broadband
Budget 2019 sets a national target for broadband expansion: 95 percent of Canadian homes and businesses will have access to internet at speeds of at least 50/10 Mbps by 2026 and 100 percent by 2030. The Budget commits to $5-6 million in funding for rural broadband over the next 10 years, including incentives for private sector investment through the accelerated capital cost allowance, continuation of the Connect to Innovate program, the launch of the Universal Broadband Fund, and partnerships with the Canada Infrastructure Bank.
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Science and Innovation:
The government proposes to eliminate the income threshold for accessing the enhanced Scientific Research & Experimental Development (SR&ED) credit. This supports SMEs experiencing rapid growth in income or with variable income from year to year.
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Forestry:
Starting in 2020–21, the government will invest up to $251.3 million over three years in Natural Resources Canada to extend existing innovation and diversification programs in the forest sector.
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Tourism:
Budget 2019 proposes the following investments to help Canada’s tourism sector innovate and grow:
- $58.5 million over two years, starting in 2019–20, to the Regional Development Agencies for the creation of a Canadian Experiences Fund, which will prioritize tourism for rural and remote communities, Indigenous tourism, winter tourism, inclusive tourism, and farm-to-table tourism.
- $5 million to Destination Canada for a tourism marketing campaign.
- Creation of a seventh Economic Strategy Table dedicated to tourism.
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Regulation
Budget 2019 introduces the first three “Regulatory Roadmaps” to address stakeholder issues and irritants in agri-food and aquaculture, health and bio-sciences, and transportation and infrastructure. These roadmaps, to be released in the coming weeks, will focus on:
- Creating a user-friendly regulatory system;
- Using novel or experimental approaches; and
- Facilitating greater cooperation and reducing duplication.
Budget 2019 will also provide $3.1 million per year to the Treasury Board Secretariat (starting in 2020–21) to support its work on interprovincial and international regulatory cooperation priorities.
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To further combat tax evasion and aggressive tax avoidance, Budget 2019 proposes to invest an additional $150.8 million over the next five years, so that the CRA can hire additional auditors and examiners, and extend programs aimed at fighting non-compliance.
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