Government of Canada’s Budget 2021 Highlights
The Government of Canada’s has released its plan to repair the damage to the economy caused by COVID-19, and to ensure a resilient recovery that creates jobs and growth for Canadians.
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Business Support Programs
- Budget 2021 proposes to extend the Canada Emergency Wage Subsidy Program until September 25, 2021. It proposes to gradually decrease rent subsidy rates, beginning July 4, 2021, but includes the ability to further extend the wage subsidy program through regulations until November 20, 2021.
- Budget 2021 proposes to extend the Canada Rent Subsidy Program and Lockdown Support until September 25, 2021. It also proposes to gradually decrease the rate of the rent subsidy, beginning July 4, 2021, but includes the ability to further extend the wage subsidy program through regulations until November 20, 2021.
- The Canada Emergency Business Account (CEBA) has provided interest-free, partially forgivable loans. In December 2020, the Government of Canada increased the value of the loan from $40,000 to $60,000 and recently extended the application deadline to June 30, 2021. Budget 2021 proposes to extend the application deadline for similar support under the Regional Relief and Recovery Fund and the Indigenous Business Initiative until June 30, 2021.
- Budget 2021 proposes changes to the Canada Small Business Financing Program through amendments to the Canada Small Business Financing Act and its regulations. These proposed amendments are projected to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses. Proposed amendments include:
- Expanding loan class eligibility to include lending against intellectual property and start-up assets and expenses;
- Increasing the maximum loan amount from $350,000 to $500,000 and extending the loan coverage period from 10 to 15 years for equipment and leasehold improvements;
- Expanding borrower eligibility to include non-profit and charitable social enterprises; and
- Introducing a new line of credit product to help with liquidity and cover short-term working capital needs.
- Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or hiring more staff. This support would only be available for active employees and will be available from June 6 to November 20, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy.
Digitalization/Technology Adaptation Programs
- Budget 2021 proposes launching the Canada Digital Adoption Program. The program will provide businesses with two streams of support. Eligible businesses will receive micro-grants to help offset the costs of going digital—and provide support to digital trainers from a network of up to 28,000 well trained young Canadians. Budget 2021 proposes to provide $1.4 billion over four years, starting in 2021-22, to:
- Work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program.
- Provide micro-grants to smaller, main street businesses to support costs associated with technology adoption.
- Create training and work opportunities for as many as 28,000 young people to help small- and medium-sized businesses across Canada adopt new technology.
- Budget 2021 proposes to provide $2.6 billion over four years, on a cash basis, starting in 2021-22, to the Business Development Bank of Canada to help small- and medium-sized businesses finance technology adoption.
Canada Mortgage and Housing Corporation (CMHC) Retrofit Program
- Budget 2021 proposes to provide $4.4 billion on a cash basis ($778.7 million on an accrual basis over five years, starting in 2021-22, with $414.1 million in future years), to the CMHC to help homeowners complete deep home retrofits through interest-free loans worth up to $40,000. The program would be available by summer 2021 and support retrofits for up to 200,000 households.
Clean Technology Programs
- Budget 2021 proposes to introduce an investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects, beginning in 2022.
- Budget 2021 proposes to provide $319 million over seven years, starting in 2021-22, to Natural Resources Canada to support research and development that would improve the commercial viability of carbon capture, utilization, and storage technologies.
- Budget 2021 proposes to reduce—by 50 per cent—the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies. The reductions would go into effect on January 1, 2022 and would be gradually phased out starting January 1, 2029 and eliminated by January 1, 2032.
Workforce Development Funding
- Budget 2021 proposes to provide $55 million over three years, starting in 2021-22, to Employment and Social Development Canada for a Community Workforce Development Program. Funding would be delivered through calls for proposals under two streams: A national stream focused on priority areas, like de-carbonization and supporting a just transition for workers in transforming sectors like energy, which would dedicate 75 per cent of funding to projects that support underrepresented groups; and a regional stream delivered by Service Canada regional offices, in partnership with regional development agencies, and focused on regional priorities.
Regulatory Initiatives
- Budget 2021 proposes to provide up to $6.1 million over two years, starting in 2021-22, to renew the External Advisory Committee on Regulatory Competitiveness.
- Since 2018, the Government of Canada has been conducting targeted regulatory reviews to identify and eliminate regulatory barriers to economic growth. Budget 2021 states that the second round of regulatory roadmaps will be released in the coming weeks on digitization and technology neutral regulations, international standards, and clean technology.
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