Federal Budget 2021 – Highlights

Federal Budget 2021

The following update was provided the Canada IDA through their Advocacy Partner – Impact Public Affairs

The Fiscal update
Last year’s deficit came in at $354.2 billion, lower than the $400 billion deficit projected in the Fall Economic Statement. The deficit is projected to reach $154.7 billion in 2021-2022 and $59.7 billion in 2022-2023.

Highlights
Extension of the CEWS, CERS and creation of CRHP

  • Extension of the Wage Subsidy until September 25th 2021. There will be a gradual decrease in the subsidy beginning July 4, 2021, in order to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens. It is estimated that the extension of the wage subsidy will cost $10.1 billion in 2021-22.
  • Canada Recovery Hiring program will be offered as an alternative to the wage subsidy that will be available from June 6th to November 20th 2021. If employers apply for both programs they would get the higher amount they are entitled to between the two programs. The Government has allocated $595 million for this program
  • Rent Subsidy program will be extended to September 25th 2021
  • Extending the Canada Emergency Business account application deadline to June 30th, 2021
Supporting Child Care
Budget 2021 proposes new investments totaling up to $30 billion over the next 5 years for Early Learning and Child Care. This includes up to $27.2 billion over five years, starting in 2021-22 will bring the federal government to a 50/50 share of child care costs with provincial and territorial governments, as part of initial 5-year agreements. Future objectives and distribution of funding, starting in year six, would be determined based on an understanding of need and progress achieved as part of this initial plan.The goal is for a 50 per cent reduction in average fees for regulated early learning and child care in all provinces outside of Quebec, to be delivered before or by the end of 2022 and an average of $10 a day by 2025-26 for all regulated child care spaces in Canada. The funding will also support an ongoing annual growth in quality affordable child care spaces across the country, building on the approximately 40,000 new spaces already created through previous federal investments and progress in improving and expanding before- and after-school care in order to provide more flexibility for working parents.

Canada Digital Adoption program
Budget 2021 proposes to provide $1.4 billion over four years, starting in 2021-22, to Innovation, Science and Economic Development Canada, to: Work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program. Provide microgrants 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 on a cash basis over four years, starting in 2021-22, to the Business Development Bank of Canada to help small and medium-sized businesses finance technology adoption.

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