The world we live in today is changing rapidly. Canadian businesses compete in global markets that are increasingly integrated and driven by innovative new technologies. As outlined in Advantage Canada, investments in people, knowledge, modern infrastructure and a sound and efficient financial sector provide the foundation for global success.
Improving Canada’s competitive position means developing the best-educated, most-skilled and most flexible workforce in the world. That is why Budget 2008 is:
Investing in the future means investing in knowledge, science and innovation. Science and technology play important roles in almost every aspect of our lives. That is why Budget 2008 is:
While Canada’s economic fundamentals are solid, some workers and communities face challenges in adjusting to changes in the international economy. In January 2008, the Government announced up to $1 billion for the Community Development Trust to support those experiencing hardship due to international economic volatility. Budget 2008 builds on this initiative by:
Modern, high-quality infrastructure is vital to Canada’s long-term prosperity. That is why Budget 2008 is:
Global and domestic financial sector developments of the past year, including turbulence in global financial markets, have demonstrated more than ever the importance of well-functioning capital markets and a sound and efficient financial sector. This is why Budget 2008 is:
Canadians recognize that the world we live in is changing rapidly, creating remarkable opportunities for Canadians but also bringing new challenges. Canadian businesses compete in global markets that are increasingly integrated and propelled by innovative new technologies. Nations that best combine their human, knowledge and capital resources to create value will prosper.
Advantage Canada, the Government’s long-term economic plan, recognized that Canada must put in place the elements that will enable individuals and businesses to compete effectively with the best in the world. This means ensuring that Canada has access to the right skills, ideas and assets to thrive in a knowledge-based global economy.
Budget 2008 further implements the Advantage Canada plan, and builds on funding announced in the previous two budgets with investments in people, knowledge and business innovation, communities and traditional industries, and infrastructure. It also proposes further steps to promote a sound and efficient financial sector.
Canada is well positioned to compete in the global marketplace. Improving on our competitive position means creating the best-educated, most-skilled and most flexible workforce in the world. Investing in students and better managing Canada’s immigration system are critical to that objective.
Advantage Canada recognized that a high-quality education system— from early childhood development to higher education to ongoing learning —is critical for Canada’s prosperity. The Government’s action to implement the Advantage Canada framework is delivering important benefits through:
The Government knows that a quality education system—from early childhood development to post-secondary education—is critical for Canada’s continued prosperity. In Advantage Canada, the Government committed to making federal student financial assistance more effective. While Canada continues to have the highest post-secondary attainment rates among countries in the Organisation for Economic Co-operation and Development, maintaining this standard of excellence means adapting programs to meet the needs of Canadian students in a modern economy.
The Government has followed through on its Budget 2007 commitment by conducting a comprehensive review of the Canada Student Loans Program in consultation with provinces, territories, students, stakeholders and the public. The review found that the current programs are complex, difficult to understand and unpredictable. It also found that the Canada Millennium Scholarship Foundation bursaries have had limited success in encouraging more people to go to college or university, and did not provide students with predictable funding from one year to the next. The Canada Millennium Scholarship Foundation is also a significant intrusion into provincial jurisdiction. Budget 2008 announces its termination in 2009.
Budget 2008 is launching a new consolidated Canada Student Grant Program to take effect in the fall of 2009, to coincide with the wind-down of the Canada Millennium Scholarship Foundation. All federal grants will be integrated into one program that will provide more effective support to more students for more years of study, assisting Canadian families who struggle with the cost of higher education.
Budget 2008 invests $350 million in 2009–10, rising to $400 million in 2010–11, $415 million in 2011–12 and $430 million in 2012–13. The Canada Student Grant Program will consolidate this funding with approximately $138 million in annual investments currently provided through the patchwork of existing federal grants that go to students eligible for Canada Student Loans.
The new Canada Student Grant Program will be simple, transparent and broad-based, providing certainty and predictability for Canadian families:
This new design is aimed at increasing post-secondary education participation and completion rates—particularly of under-represented groups—so that much-needed talent and energy can be engaged in Canada’s future. For many students, this assistance will provide encouragement to enrol and stay in school and thus the capacity to build a prosperous future.
The Government will ensure that students who receive Canada Millennium Scholarship bursaries in 2008–09 will be unaffected by the wind-down of the Canada Millennium Scholarship Foundation (CMSF) by providing transitional grants.
In contrast to the CMSF, this new approach to providing support to students fully respects provincial jurisdiction. The Government of Canada will work with participating provinces and territories, student associations, and individual students and borrowers to implement this new grant program, thus ensuring that post-secondary education is more affordable and accessible for Canadians. The alternative funding arrangements for non-participating jurisdictions currently in place for the Canada Student Loans Program will apply to the Canada Student Grant.
Canadian students and their families need simple, effective financial assistance programs. The complexities and gaps in the current system are preventing students from obtaining financial help and affecting their decision to pursue post-secondary education. Budget 2008 commits $123 million over four years starting in 2009–10 to streamline and modernize the Canada Student Loans Program.
Measures will be put in place to improve service for students through a new service delivery vision, more equitable supports for part-time and married students, a new in-study interest-free period for reservists, and enhanced flexibility for those experiencing difficulty in debt repayment that is more reflective of the study-to-work transition of young graduates and the needs of students with disabilities.
New investments include:
Over the next year, the Government will work with provinces and territories to implement these new measures and ensure effective coordination with existing programs.
The combination of the new Canada Student Grant Program and measures to streamline and modernize the Canada Student Loans Program will contribute to Canada’s Knowledge Advantage by helping to develop a highly educated workforce well equipped to take on the challenges of a fast-paced global economy.
Current Registered Education Savings Plan (RESP) termination limits may be constraining, particularly for plans with more than one beneficiary or for students who pursue their post-secondary studies over an extended period of time. Budget 2008 proposes to enhance the flexibility of RESPs by raising the maximum time limit that an RESP may remain open from 25 to 35 years and by extending the maximum contribution period by 10 years. Corresponding changes will be made to individual RESPs for beneficiaries who are eligible for the Disability Tax Credit.
Budget 2008 also proposes to introduce a six-month grace period for making a withdrawal from an RESP, to ensure that students who are delayed in their application are still able to receive Educational Assistance Payments.
The changes to the plan termination limits and maximum contribution period for RESPs will apply to all existing and future RESPs, effective January 1, 2008. The six-month grace period will apply to students whose periods of study end after December 31, 2007. It is estimated that these measures will have a small fiscal impact in 2007–08 and in subsequent years.
The Government of Canada’s support for post-secondary education will rise to $9.7 billion in 2008–09 through transfers, direct spending and tax measures:
Please visit www.canlearn.ca for more information on planning and saving for post-secondary education, including material on Budget 2008 initiatives.
Canadian universities are recognized internationally for providing a world-class education. Students from other countries bring unique knowledge and ideas that enrich our learning and research environments, and help build linkages and networks with institutions in their home nations. All countries compete to attract the top students in the world.
The Government supports Canada’s top graduate students through the Canada Graduate Scholarships Program. Budget 2008 establishes a new prestigious Canada Graduate Scholarship award that when fully in place will support 500 top Canadian and international doctoral students a year. The new scholarships will be dedicated to the memory of Georges Philias Vanier, decorated soldier, distinguished ambassador, and Governor General of Canada. The new award is designed to attract the world’s best doctoral students to Canadian universities, and will be worth $50,000 per year for up to three years. Budget 2008 provides $25 million over two years to establish this program.
International experience and knowledge forge stronger ties between Canada and the world that translate into future research and commercial advantages.
Canadian recipients of Canada Graduate Scholarships (CGSs) will now be able to pursue exceptional research opportunities at institutions outside Canada for a portion of their studies. Recognizing the added costs associated with foreign study, Budget 2008 provides $3 million over the next two years to the granting councils to establish a new study stipend for Canadian CGS recipients who study at institutions outside the country. These new stipends will be worth up to $6,000, and will be available to 250 CGS recipients each year for one semester of foreign studies.
Canada’s strengths in post-secondary research make it a destination of choice, and Canadian institutions have attracted some of the world’s best researchers. To be at the leading edge of scientific and technological breakthroughs in the future, Canada’s universities must continue to attract the keenest minds in the world.
To strengthen the ability of Canadian universities to attract and retain the world’s top science leaders, Budget 2008 provides an additional $21 million over two years to establish up to 20 prestigious Canada Global Excellence Research Chairs. The new research chairs will be offered in the four priority areas targeted in the Government’s science and technology strategy: the environment, natural resources and energy, health, and information and communication technologies. Research in these areas will contribute to the competitiveness of our industries, including manufacturing, and help generate other economic and social benefits for Canadians.
The new research chairs will be competitively awarded to institutions on the basis of a candidate’s research excellence, standing in the international science community, and potential to place an institution at the forefront of global research in a selected field. Each Canada Global Excellence Research Chair will receive up to $10 million over seven years to provide competitive salaries, assemble outstanding research teams and undertake cutting-edge research in areas of strategic importance to Canada.
The Gairdner International Awards, first given in 1958 through the generosity of the late James Arthur Gairdner of Toronto, are one of the three most prestigious awards in medical science, along with the Swedish Nobel Prize in Medicine and the American Albert Lasker Medical Research Awards. The Gairdner Foundation also promotes and diffuses scientific achievement by connecting award winners with Canadian scientists, and inspires Canadian youth across the country through scientific symposia and outreach events.
To celebrate the 50th anniversary of the Gairdner International Awards and promote exceptional achievement in health research, Budget 2008 provides the Gairdner Foundation with a $20-million endowment in 2007–08. This endowment will allow the Gairdner Foundation to enhance its awards and expand its outreach activities. Recognizing the significant endowment from the Government of Canada, the Foundation will rename its awards the Canada Gairdner International Awards, helping to brand Canada internationally as a global leader in health research.
Advantage Canada recognized that in a modern global economy, Canada’s immigration policies need to be closely aligned with our labour market needs. Budget 2007 took action to make the immigration system more responsive to the new labour market realities in Canada. The Temporary Foreign Worker Program was streamlined to enable employers to bring in workers more quickly to address their immediate labour shortages. The Government also introduced the new Canadian Experience Class to expedite the process for skilled temporary foreign workers and foreign students with Canadian credentials and work experience to remain in Canada as permanent residents, under certain conditions.
Canada must maintain the ability to compete globally for the best and the brightest by creating the optimal conditions to attract immigrants who can contribute fully to Canada’s prosperity. A well-managed and efficient immigration system is critical to achieving this objective. The Government will continue to modernize Canada’s immigration system.
Budget 2008 builds on Advantage Canada priorities with additional measures to improve the immigration system’s capacity and flexibility to respond to Canada’s dynamic and evolving labour market needs. Concrete measures will be initiated to expedite the processing of permanent resident applications. Combined with the recent improvements to the Temporary Foreign Worker Program, the expansion of the Provincial Nominee Program and the new Canadian Experience Class announced in Budget 2007, these measures will ensure that the labour needs of employers in all provinces and territories are met in a more timely fashion.
To complement these actions, changes will be made to the Immigration and Refugee Protection Act to improve the immigration process. It is not fair for prospective immigrants to wait for years before being considered, and it is not desirable to wait that long for the immigrants the country needs. The measures proposed in Budget 2008 will expedite the processing of permanent residents to ensure that skilled immigrants can get to Canada when their skills are in demand. The proposed legislative changes will provide flexibility for concrete measures, as required, to more effectively manage the future growth in the inventory, such as addressing the number of applications accepted and processed in a year. The end result will be reduced wait times and improved service. These changes will allow Canada to take the first steps towards establishing a "just-in-time" competitive immigration system which will quickly process skilled immigrants who can make an immediate contribution to the economy.
Action will also be taken to help address the growing demand at Canadian missions abroad for temporary resident visas for students and skilled workers. In particular, the Government will focus on helping post-secondary educational institutions attract foreign students and on facilitating their arrival in Canada. For example, an online application system, as well as other measures to improve service and speed up processing, will be implemented for student visas. These initiatives, combined with new Canada Graduate Scholarships for Canadian and international students, will enhance Canada’s ability to compete with other countries to attract and retain the best foreign students.
Taken together, these initiatives will ensure the ongoing integrity of the immigration program. They will enable Canada to respond to growing demand and to admit more highly-skilled immigrants and their families, including foreign students. At the same time, Canada’s social and humanitarian objectives will be preserved and continue to be balanced with Canada’s labour market needs.
Budget 2008 provides $22 million over the next two years, rising to $37 million per year by 2012–13, to implement this next critical stage of modernizing the immigration system.
Budget 2007 increased the Women’s Program budget to $20 million. Over the next year, the Government will build on this achievement through the development of an Action Plan that will advance the equality of women across Canada through the improvement of their economic and social conditions and their participation in democratic life.
Today’s seniors are living longer and healthier lives. Their participation in the labour market is growing. To further encourage this labour market participation, Budget 2008 is investing $60 million per year to ensure that low-income seniors who work can realize greater benefits from their earnings through an increase in the Guaranteed Income Supplement (GIS) exemption.
The GIS is a monthly benefit provided to low-income seniors who receive the Old Age Security benefit, which is provided to all Canadians aged 65 and over who meet residence requirements. To ensure that the GIS is targeted to seniors most in need, it is income-tested and reduced by 50 cents for every dollar of other income individuals receive. There is an exemption for employment earnings to encourage labour market participation. The exemption is currently 20 per cent of earned income up to $2,500, providing a maximum exemption of $500.
Budget 2008 is proposing to fully exempt the first $3,500 of earnings— the average amount of earned income by seniors in receipt of the GIS. This means the typical GIS recipient will be able to keep more of her or his hard-earned money without any reduction in GIS benefits, encouraging labour market participation and providing support for low-income seniors.
Investing in the future means investing in knowledge, science and innovation. Science and technology play important roles in almost every aspect of our lives, and can provide solutions to many of the issues that are most important to Canadians, such as improved health, a cleaner environment and a stronger society. Knowledge is also a critical driver of Canada’s economy. Firms that successfully translate knowledge into innovative products, services and technologies are able to compete and win in the global marketplace. Budget 2008 continues to implement the commitment in Advantage Canada for the Government to invest on its own, and in partnership with the private sector, in strategic areas such as primary research and a cleaner environment.
In May 2007, the Government released Mobilizing Science and Technology to Canada’s Advantage, a forward-looking strategy aimed at positioning Canada for global knowledge leadership. The strategy recognized that the advanced discoveries and ideas flowing from science and technology are increasingly critical to economic competitiveness, while contributing to a higher quality of life for Canadians through new and improved goods and services.
As a result of this and the previous two budgets, the Government will invest an additional $850 million in 2009–10 in support of the objectives of the strategy, including improvements to the scientific research and experimental development tax incentive program.
The Natural Sciences and Engineering Research Council of Canada (NSERC), the Canadian Institutes of Health Research (CIHR) and the Social Sciences and Humanities Research Council of Canada (SSHRC) are the primary agencies through which the federal government supports research at Canada’s universities and research hospitals. They award research grants on a competitive basis, support the work of graduate students and help accelerate the translation of knowledge into practical applications.
Budget 2008 provides an additional $80 million per year for the three granting councils, targeted to the priorities of Canadians. The granting councils will jointly support multidisciplinary and internationally peer-reviewed research in priority areas, and partner with public and private stakeholders to ensure that practical solutions are found.
Post-secondary researchers need to have access to modern facilities, well-maintained equipment, top-notch journals and libraries, and strong administrative and technical support. The Indirect Costs of Research program provides $315 million per year to post-secondary institutions to create the productive and stimulating environments that enable world-class research.
Budget 2008 provides an additional $15 million per year to the Indirect Costs of Research program to help institutions support the research activities made possible by the new resources provided to the granting councils.
Genome Canada is a not-for-profit corporation dedicated to establishing Canada as a research leader in genomics, a multidisciplinary science with the potential to improve lives through better health and a cleaner environment. Through its investments in six regional genome centres across the country and through domestic and international partnerships, Genome Canada has funded world-class research, established cutting-edge technology platforms and helped train the next generation of researchers. The Government’s contributions to Genome Canada will result in over $1.5 billion in genomics research in Canada, including funding from other partners.
To build on Canada’s knowledge and people advantage in genomics, Budget 2008 provides an additional $140 million to Genome Canada in 2007–08. This funding will enable Genome Canada to launch a new targeted competition in a priority area, sustain the regional genome centres, and support the participation of Canadian researchers in a major collaborative international genomics project.
The Canadian Light Source research synchrotron, located at the University of Saskatchewan, is among the most advanced in the world. This facility enables Canadian researchers from industry and academia to observe matter down to the atomic level, with applications in a wide range of fields, including advanced materials and the detection of environmental pollutants.
Budget 2008 builds on the current funding of $16.5 million provided each year to the Canadian Light Source through the university research granting councils and the National Research Council Canada by providing it with an additional $10 million above current funding over the next two years to strengthen its operations.
A high level of business innovation is a key feature of leading economies. Investments by companies in research and development (R&D) lead to better machinery, products and breakthrough technologies that create a leadership position in the marketplace. Canada’s tax and business environment are helping companies to become R&D and innovation leaders. Additional measures in Budget 2008 will accelerate progress toward this objective.
Manufacturers and processors are major contributors to Canada’s economy and employ Canadians in many communities across the country. The Government’s actions to implement the Advantage Canada framework have delivered important benefits for manufacturers and processors by helping them to better invest and compete, specifically through:
The automotive sector is the largest manufacturing industry in Canada. Canada’s automotive sector has a proven global reputation for quality and productivity, helping Canada rank as one of the top vehicle-producing countries in the world.
To maintain its leadership and competitive advantage, Canada’s automotive sector will need to become more innovative and adapt to new environmental standards. This will require a highly skilled workforce and increased investments in research and innovation to develop new process technologies and products that are more fuel-efficient and environmentally sustainable.
Budget 2008 provides $250 million over five years to support strategic, large-scale research and development projects in the automotive sector to develop innovative, greener and more fuel-efficient vehicles. This funding will contribute to a more competitive Canadian automotive sector and help Canada achieve its environmental objectives, as outlined in Chapter 4.
Recognizing the challenges currently faced by the manufacturing sector, Export Development Canada (EDC) is working in partnership with financial institutions to develop financing and insurance solutions aimed at improving access to capital. EDC is proposing enhancements to its financial products to help small and medium-sized manufacturing companies, including automotive suppliers, obtain access to credit facilities to fulfill export contracts.
Specifically, EDC will enhance its existing Export Guarantee Program by increasing the guarantee coverage from 75 to 90 per cent for loans up to $500,000. In addition, EDC is working closely with Canadian financial institutions to strengthen its financial guarantees by enhancing the coverage available for larger transactions. These enhancements to EDC’s guarantee programs are particularly important to the automotive sector, where EDC has over 400 clients.
Each year, EDC provides billions of dollars in financial support to the manufacturing and automotive sectors through a range of financing facilities, including loans, guarantees, insurance and equity-based investments. With these program enhancements, EDC will be able to do even more to support Canadian exporters.
Canada’s automotive industry has a track record of excellence and is among our leading employers and exporters. This industry is currently facing a number of challenges, including the stronger dollar, increasing competition from other jurisdictions, and the need to adjust to new North American environmental regulations. Recognizing the importance of this sector to our continued economic success, the Government has committed over $1.6 billion to measures that will help the automotive industry successfully meet these challenges, including:
Innovative businesses play a crucial role in translating knowledge into world-leading products and services, opening new markets and creating high-value jobs for Canadians. Budget 2008 sets aside $75 million for the Business Development Bank of Canada to support the creation of a new privately run venture capital fund.
While Canada’s strong economic fundamentals set the stage for long-term growth and prosperity, economic adjustments pose significant challenges for some workers and communities. Certain communities are vulnerable because of their dependence on a single employer or a sector facing difficulties due to such factors as exchange rate fluctuations, increased competition and declining demand in key markets.
On January 10, 2008, the Prime Minister announced the establishment of the Community Development Trust, which will provide up to $1 billion for provincial and territorial initiatives to assist workers and communities that are experiencing hardship due to international economic volatility. Recognizing the need for rapid action, the Government received timely parliamentary approval to provide funding.
The trust will support such activities as job training to create opportunities for workers, community transition plans that foster economic development and create new jobs, and infrastructure investments that stimulate economic diversification.
The Government is working with provinces and territories to identify initiatives to be supported with this funding. Funding will be accounted for in 2007–08, and paid into a trust for those provinces and territories that identify initiatives before March 31, 2008. A base amount of $10 million will be provided to each province and $3 million to each territory, with the balance of the funding allocated on a per capita basis. Provincial and territorial governments will have the flexibility to draw down the funding as they require over the next three years. They are encouraged to report directly to their residents on the expenditures financed and outcomes achieved with the funding provided through the trust.
Being competitive in the modern economy means having the skills and training to adapt to a changing global market. Following through on Advantage Canada commitments, the Government has taken decisive action so that employees and employers have access to the skills and training they need to participate fully in the labour market, including:
The Government recognizes the particular challenges faced by unemployed older workers in vulnerable communities, where jobs are harder to find and which are often reliant on a single employer or industry. At a time when Canada is facing labour shortages, the experience of older workers represents an increasingly valuable asset that must not be overlooked. That is why in October 2006 the Government committed $70 million over two years to put in place the Targeted Initiative for Older Workers (TIOW). The TIOW is a federal-provincial employment program that provides a range of employment activities for unemployed older workers who live in vulnerable communities and helps them stay in the workforce.
Budget 2008 provides an additional $90 million over three years to extend the TIOW until March 2012 to help more older workers remain active and productive participants in the labour market.
On January 23, 2007, the Government appointed an expert panel to study the labour market conditions affecting older workers and to report back on ways to facilitate their labour market adjustment. The Government will be responding to this report in 2008.
Canada’s forestry sector is among the world leaders in sustainable management and environmentally responsible practices. It has invested in innovative processes and upgrades to significantly reduce its dependence on fossil fuels and curb its greenhouse gas emissions and waste by-products. In October 2007, the forest products industry committed to becoming carbon-neutral by 2015, making a significant contribution to meeting Canada’s environmental and climate change objectives.
Budget 2008 provides $10 million over two years to Natural Resources Canada for an initiative to promote Canada’s forestry sector in international markets as a model for environmental innovation and sustainability. The Government will work with the forestry sector and interested provinces and territories to implement this initiative.
The forestry sector has faced a number of challenges in recent years, including the prolonged softwood lumber dispute with the United States, the stronger Canadian dollar, the mountain pine beetle infestation in western Canada and competition from low-cost foreign producers. The Government has taken important steps to help the sector adjust to these challenges, including by:
The tourism industry contributes to the strength of the Canadian economy. Building on the success of the cruise ship terminal in Québec City, Budget 2008 is investing $24 million over two years to assist with the further development of tourism-related infrastructure at strategic ports of call along the St. Lawrence and Saguenay Rivers to enhance their appeal as destinations for the global cruise ship market.
Canada’s agricultural producers strive to provide Canadians and the world with high-quality food. The operating environment for producers has evolved rapidly, providing opportunities for some sectors while others, such as cattle and hog producers, continue to face challenges.
Over the past two years, the Government has introduced major improvements to the suite of business risk management programs to ensure that producers have access to more responsive, predictable and bankable farm income stabilization programs. The Government’s new integrated approach towards farm support provides producers with comprehensive income protection against various hazards ranging from income variability (AgriStability and AgriInvest), to natural hazards (AgriInsurance) and disasters (AgriRecovery) as well as easier access to credit through cash advances (the Advance Payments Program). The Government has provided an additional $4.5 billion to farmers through Budget 2006 and Budget 2007 to fund the improved suite of programs, facilitate the transition for producers and help address rising costs of production.
In December 2007, the Government took further steps to ensure that the new suite of business risk management programs provides timely support to cattle and hog producers. Producers’ access to program payouts for the 2006 and 2007 program years was accelerated, which will provide a total of $1.5 billion before the end of 2008 to cattle and hog producers.
Building on these measures, the Government is proposing changes to the Advance Payments Program’s security requirements, administrative terms and conditions, and emergency advances component to enhance the effectiveness of the program. These changes would ensure that security requirements for livestock are consistent with those of other products that are sh as grains, and that producers have access to larger emergency advances under a broader set addressing current limitations, and expanding the ability to make emergency advances, these measures would significantly improve access to $3.3 billion in potential cash advances to livestock producers. The Government allocates $22.1 million in 2008–09 for the changes to the Advance Payments Program.
The Government is also allocating $50 million in 2007–08 for a Cull Breeding Swine Program to be delivered through the Canadian Pork Council to alleviate financial pressures faced by the Canadian hog industry. The Cull Breeding Swine Program would provide a payment to Canadian producers to reduce the supply of breeding stock in Canada and ease the transition for producers wishing to exit the hog industry. The payment would be based on a per head amount and reimbursement of costs of humane slaughter and carcass disposal. It is expected that the funding would support a 10-per-cent reduction of the Canadian swine breeding inventory.
In total, these measures would cost $72 million over two years.
Since 2006, the Government has committed nearly $860 million to help the fishing industry. Funded initiatives include an enhanced capital gains exemption; the Health of the Oceans initiative; reinvestment in fisheries science; and integration of Aboriginal fishermen and fisherwoman into Atlantic and Pacific commercial fisheries.
Aquaculture is an important and growing component 2006, the value of the aquaculture sector was $912 million, representing approximately 25 per cent of the value of Canada’s total fish production. The sector is also a growing source of employment for workers in rural and coastal communities. Expanding and sustaining the sector’s growth requires that environmental and food safety standards be maintained while reasonable regulatory timelines are provided for aquaculturalists and potential investors. Budget 2008 provides $22 million over two years to improve regulatory certainty through greater coordination between federal and provincial-territorial regulatory authorities, to improve federal regulatory science in order to establish performance-based environmental standards for aquaculture operations, and to spur research and innovation to enhance the sector’s competitiveness and productivity. This funding will also assist the industry in developing a certification scheme that will ensure that the fish produced in Canada meets rigorous food safety and quality standards and international market requirements.
The importance of an Infrastructure Advantage to Canada’s long-term prosperity is highlighted in the Government’s economic plan, Advantage Canada. Investments in infrastructure help to reduce road congestion and travel times and ensure t he efficient movement of goods to market. Quality infrastructure, such as reliable water systems and public transit, also helps in the achievement of environmental goals. Infrastructure is critical to maintaining the high quality of life that Canadians enjoy.
The Government recognizes the need for long-term funding for infrastructure to help drive economic growth and productivity, to achieve our environmental goals, and to build strong, competitive communities.
To this end, in Budget 2007 the Government announced the historic seven-year $33-billion Building Canada Plan. More than half of this investment under the plan will flow to municipalities. For example, municipalities can access the $8.8-billion Building Canada Fund and benefit from the increase from 57.14 per cent to 100 per cent in the rebate of the Goods and Services Tax they pay.
The largest component of the Building Canada plan is the Gas Tax Fund, which provides municipalities with funding for priorities such as public transit, water and wastewater infrastructure, and local roads. Under the plan, the Gas Tax Fund will grow and reach $2 billion by 2009–10 and stay at that level through 2013–14.
In response to ongoing requests for stable, long-term funding, the Government announces that the Gas Tax Fund will be extended at $2 billion per year beyond 2013–14 and become a permanent measure. This will allow all municipalities, both large and small, to better plan and finance their long-term infrastructure needs. A permanent $2-billion-per-year Gas Tax Fund will help put in place the world-class infrastructure Canada needs.
Public transit plays an important role in easing traffic congestion in urban areas and contributing to cleaner air and lower greenhouse gas emissions. In Budget 2006, the Government set aside $1.3 billion in support of public transit infrastructure and introduced a new tax credit for public transit passes.
Budget 2008 sets aside up to $500 million in 2007–08 to be paid into a third-party trust, allocated on a provincial-territorial per capita basis, for public transit infrastructure. Funding will be paid into the trust, once legislation has been passed, for only those beneficiaries that have made public commitments before March 31, 2008 to undertake investments in public transit. The beneficiaries of the trust will have the flexibility to draw down the funding as they require over the next two years. They are encouraged to report publicly on the expenditures financed and outcomes achieved.
The trust will be used for specific projects of capital infrastructure such as rapid transit, rail, transit buses, and high occupancy vehicle and bicycle lanes.
Recognizing the need to look beyond traditional approaches to infrastructure financing and delivery, Budget 2007 announced measures to transform Canada into a leader for public-private partnerships, including:
The Government has made significant progress in implementing these measures. Key milestones include:
Continuing risk in aviation as a target for terrorist attacks underlies the importance of a secure air transportation system. A federal Crown corporation, the Canadian Air Transport Security Authority (CATSA), is responsible for the security screening of air passengers and their baggage at Canada’s airports. Significant operational pressures, including continuous growth in air traffic, will challenge CATSA’s ability to deliver on its screening responsibilities over future years. Budget 2008 provides funding of $147 million in 2008–09 to help CATSA address such pressures.
The Air Travellers Security Charge (ATSC) will continue to provide funds for air travel security. ATSC rates will be reviewed and adjusted in future years, consistent with funding decisions for air travel security, to ensure that revenues from the ATSC and expenses for air travel security balance over time.
Marine Atlantic Inc., a federal Crown corporation, provides ferry services between the island of Newfoundland and Nova Scotia. These services form a virtual extension of the Trans-Canada Highway and provide an important transportation link to Newfoundland and Labrador for many travellers and businesses. Budget 2008 provides $17 million over two years so Marine Atlantic Inc. can secure a new vessel to address growing traffic.
The Government operates and maintains a national system of small craft harbours to provide commercial fisheries and recreational boaters with safe and accessible facilities. Over the past 10 years, the Government has focused its resources on harbour infrastructure critical to commercial fisheries. At the same time, it has begun the process of divesting a large number of recreational and non-core fishing harbours to interested parties such as local municipalities, non-profit associations or First Nations. Many local communities across Canada have shown a strong interest in acquiring and operating non-core fishing and recreational small craft harbours.
Budget 2008 provides $10 million over two years to enable the necessary harbour repairs and environmental cleanup to permit more harbours to be transferred to interested parties.
Over the past year, global and domestic financial sector developments have demonstrated more than ever the importance of well-functioning capital markets and a sound and efficient financial sector. Competition to host global securities trading grew more intense, and regulators around the world reinforced efforts to establish more competitive capital markets regulation. Concurrently, the turbulence in global financial markets drew attention to the need for transparency and appropriate disclosure, and highlighted financial stability as an overarching objective of financial sector policy and regulation.
In 2007–2008, Canada participated in the International Monetary Fund’s (IMF) Financial Sector Assessment Program. The IMF concluded that "Canada’s financial system is mature, sophisticated, and well-managed. Financial stability is underpinned by sound macroeconomic policies and strong prudential regulation and supervision."
The Government is committed to further fostering a financial sector regulatory framework that promotes soundness and efficiency, is anchored in well-understood principles, is responsive and innovative, and gives Canada a strong international voice.
In March 2007, the Government published Creating a Canadian Advantage in Global Capital Markets, which established a Capital Markets Plan for Canada based on four building blocks:
The plan focuses on giving enterprises better access to capital, providing investors with increased investment choices, and creating more highly-skilled, well-paying jobs.
Progress has been made in all areas of the plan. In some areas the Government has been able to act alone, while in areas of shared responsibility it is pursuing collaborative efforts with provinces and territories.
To enhance regulatory efficiency, the Government has:
To strengthen market integrity, the Government has:
To create greater opportunity for businesses and investors, the Government has:
In particular the Government has:
To improve investor information, the Government has:
The Capital Markets Plan is being implemented against the backdrop of ongoing evolution in the global capital markets. Over the past year, competition to host global securities trading intensified, as the planned mergers of the TSX Group and the Montréal Exchange followed several other mergers of major exchanges. At the same time, the European Union, the United States and the United Kingdom reinforced efforts to establish more competitive capital markets regulation. In the coming year, the Government will continue to advance the Capital Markets Plan in focused areas to contribute to a Canadian advantage in global capital markets.
The Government is committed to working with provinces and territories to move toward a common securities regulator that will deliver proportionate, more principles-based regulation and strong enforcement. A common securities regulator for Canada has been endorsed by numerous organizations and private sector leaders in recent years. Most recently, the IMF concluded that while significant improvements to the securities regulatory system have been made, "moving further to a single regulator would allow policy development to be streamlined, reduce compliance costs, and improve enforcement."
On February 21, 2008, the Government announced the establishment of the Expert Panel on Securities Regulation to advise on ways to enhance the effectiveness, content and structure of securities regulation. The panel will present to the Minister of Finance and provincial and territorial ministers responsible for securities regulation a report and a model common securities act by the end of the year. The Government will ensure it is in a position to act promptly on the report’s recommendations and to engage with market participants and provincial and territorial partners on next steps.
Continued challenges with securities fraud enforcement in Canada underscore that further effort is needed to secure the integrity of our capital markets. The Government is working with provincial and territorial authorities to strengthen enforcement through an approach that encompasses all aspects of this issue, both regulatory and criminal.
In this context, the senior expert advisor to the Integrated Market Enforcement Teams and a federal-provincial-territorial securities fraud working group observed that the power to compel third-party witnesses to testify in respect of capital market criminal offences could contribute to strengthening enforcement. This is a complex issue that requires careful study. Therefore, federal and provincial-territorial experts will be examining this proposal and other enforcement measures for the consideration of federal and provincial-territorial ministers responsible for Justice later this year.
The Government will continue to assess the need for further legislative measures to protect the integrity of Canada’s financial system. This includes taking action, as appropriate, in response to the evaluation of Canada’s anti-money-laundering and anti-terrorist-financing regime by the international Financial Action Task Force, expected shortly. Furthermore, in order to bolster existing capacities to combat terrorist financing, the Government is announcing funding of $10 million over two years for the Canadian Security Intelligence Service and the Canada Revenue Agency’s Charities Directorate.
Over the past year, turbulence in global financial markets has focused attention on the stability and resilience of the international financial system. Against the backdrop of a strong global economy and rapid innovation in the financial marketplace, the turmoil has revealed weaknesses in market discipline and transparency.
The market is adjusting as investors and financial institutions recognize losses and draw corresponding lessons. Investors will demand greater transparency and disclosure from issuers and from rating agencies, and step up their own due diligence. Financial institutions are also strengthening their risk management policies and practices.
Governments must encourage and reinforce this market-driven response with a view to enhancing the resilience of the financial system. The G7 finance ministers have launched a coordinated work program, under the auspices of the Financial Stability Forum (FSF), to examine recent events and advise on policy responses. At their meeting in Tokyo on February 9, G7 ministers reviewed an interim report of the FSF and identified key areas of priority attention, including disclosure of losses and risk exposures by financial institutions, the management of liquidity risk, incentive structures in the financial services industry, credit rating agencies, and capital adequacy under the Basel II framework. G7 ministers pledged to take action as needed, drawing on the FSF’s final report to be issued in April 2008.
Against this background, the Government is committed to enhancing its core instruments for promoting financial system resilience and stability within a framework founded on open and competitive markets. It proposes to modernize the statutory authorities of the Bank of Canada to support the stability of the financial system and the conduct of monetary policy. It will also ensure that responsible federal agencies have continued capacity to safeguard financial stability through diligent oversight of financial institutions and a range of flexible and up-to-date regulatory tools.
The Government of Canada is a major participant in the capital markets. Consistent with leading practices, the Government has policies that require its exposures to financial risks to be identified, measured, monitored, controlled and disclosed in a transparent manner. The Minister of Finance also establishes treasury risk guidelines for major financial Crown corporations to support a common standard. The guidelines and their scope of application will be reviewed and updated to ensure that federal entities continue to adhere to leading practices in financial risk management.
Investing in the Future
(millions of dollars)
|Investing in People|
|Enhancing support for Canadian students:|
|Canada Student Grant Program||350||350|
| Streamlining and modernizing the
Student Loans Program
|Attracting the best students
to Canadian institutions:
|Canada Graduate Scholarships (CGSs)||8||17||25|
|Study stipend for CGS recipients||2||2||3|
|Canada Global Excellence Research Chairs||7||14||21|
|The Canada Gairdner International Awards||20||20|
|Modernizing the immigration system||8||14||22|
|Removing disincentives for
|Subtotal—Investing in People||20||85||501||606|
|Investing in Knowledge|
|Indirect Costs of Research||15||15||30|
|Canadian Light Source||5||5||10|
|Automotive Innovation Fund||50||50||100|
|Subtotal—Investing in Knowledge||140||150||150||440|
and Traditional Industries
|Community Development Trust||1,000||1,000|
|Supporting the labour market
adjustment of older workers
|Promoting Canada’s forestry sector||5||5||10|
|Promoting tourism along St.
and Saguenay rivers
|Support for Canada’s agricultural producers||50||22||72|
|Strengthening the aquaculture sector||11||11||22|
and Traditional Industries
|Investing in Infrastructure|
|Strengthening public transit||500||500|
|Canadian Air Transport Security Authority||147||147|
|Small craft harbour divestiture||5||5||10|
|Subtotal—Investing in Infrastructure||500||159||15||674|
|A Sound and Efficient Financial Sector|
|Combatting terrorist financing||3||6||10|
|Subtotal—A Sound and Efficient Financial Sector||3||6||10|
|Total—Investing in the Future||1,710||448||730||2,888|
|Note: Totals may not add due to rounding.|
3 IMF Financial System Stability Assessment, 2008. [Return]
4 IMF Financial System Stability Assessment, 2008. [Return]Table of Contents - Previous - Next