After thirteen months of uncertainty and hardship, Canadians continue to battle COVID-19, with determination and grit.
We are all tired, frustrated, and sometimes even afraid. Yet, it's our responsibility to finish this fight – and to ensure that nothing like it ever threatens our country in this way again. That is our job.
It's also our job to tackle the work of recovery, to create the conditions for new employment and new growth, now and in the years ahead.
This budget is about finishing the fight against COVID. It's about healing the economic wounds left by the COVID recession. And it's about creating more jobs and prosperity for Canadians in the days – and decades – to come.
It's about meeting the urgent needs of today, and about building for the long-term. It is a budget focused on middle class Canadians, and on pulling more Canadians up into the middle class. It's a plan that embraces this moment of global transformation to a green, clean economy.
This budget addresses three fundamental challenges.
First, we need to conquer COVID. That means buying vaccines and supporting provincial healthcare systems. It means enforcing our quarantine rules at the border and within the country. It means providing Canadians and Canadian businesses with the support they need to get through these final, third-wave lockdowns, and to come roaring back when the economy fully reopens.
Second, we must punch our way out of the COVID recession. That means ensuring lost jobs are recovered as swiftly as possible, and that hard-hit businesses rebound quickly and are able to flourish.
It means providing support where COVID has struck hardest – to women and young people and low-wage workers, and to small and medium-sized businesses, especially in hospitality and tourism.
The final challenge is to build a better, fairer, more prosperous, more innovative future. That means investing in Canada's green transition and the green jobs that go with it; in Canada's digital transformation and Canadian innovation; and in building infrastructure for a dynamic, growing country.
And it means providing Canadians with social infrastructure – from early learning and child care, to student grants – so the middle class can flourish and more Canadians can join it.
When this global pandemic hit Canada over a year ago, our government made a covenant with Canadians. We knew that fighting the virus would require all of us to accept unprecedented restrictions.
In exchange, we pledged to do whatever it takes to support Canadians in the face of those restrictions and, ultimately, to conquer this disease. We have kept that pledge. We will continue to do so.
When COVID first struck, we immediately provided $500 million to bolster our country's health-care system. Then last summer, we invested nearly $20 billion, through the Safe Restart Agreement, to support provinces and territories in the fight against COVID.. Last fall we helped children return to school with $2 billion in the Safe Return to Class agreement.
Just last month, we committed to providing provinces and territories with an additional $4 billion to shore up the healthcare system as we fight the third wave, and an additional $1 billion to speed up the roll-out of vaccines.
Our elders have been this virus's principal victims. The disease has preyed on them mercilessly, cutting short thousands of lives and forcing all seniors into fearful isolation, for more than a year.
We have tragically failed so many of those living in long-term care facilities. To them, and to their families, let me say this: I am so sorry.
We owe you so much better than this. As a country, we must fix what is so clearly and utterly broken.
That's why we propose a $3 billion investment to ensure that provinces and territories provide a high standard of care in their long-term care facilities. We are delivering today on our promise to increase Old Age Security for Canadians aged 75 and older, which will provide up to $766 more for eligible seniors in the first year, and that will grow with indexation.
We owe our elders a great debt. This is a partial repayment.
Our government has been urgently procuring vaccines since last spring – and providing them – at no cost – to Canadians. More than 10 million vaccines were distributed to provinces and territories by the end of March; a further six million will be distributed by the end of this month.
And by the end of September, Canada will have received 100 million doses – more than enough for every adult Canadian to have received two doses of vaccine.
We need to be ready for new variants of COVID-19, and we must have the booster shots that will allow us to keep them in check.
That is why we must begin to rebuild our national capacity in bio-manufacturing and vaccine development and production. Making our own vaccines is essential to our national security. Canada has brilliant scientists and entrepreneurs. We will support them with an investment of $2.2 billion in Canada's bio-manufacturing and life-sciences sector. And, together, we will rebuild this vital industry.
Creating Jobs And Growth.
When COVID-19 first hit, it pushed our country into its deepest recession since the Great Depression.
But this is an economic shock of a very particular kind. We are not suffering because of endogenous flaws or imbalances within our economy.
Rather, the COVID recession is driven by an entirely external event – much like the economic devastation of a flood, blizzard, wildfire or other natural disaster.
That is why an essential part of Canada's fight against COVID-19 has been unprecedented federal support for Canadians and Canadian businesses. Our over-riding objective, from the very beginning, has been to prevent the long-term scarring of Canadian society and the Canadian economy.
And it has worked. Our support helped keep food on the tables of millions of families
This unprecedented federal action staved off a flood of bankruptcies and preserved our country's economic muscle.
The government's economic support measures have been a cost-effective investment – as the IMF has confirmed – averting an economic collapse that would have been truly devastating.
Indeed, thanks to the investments our government made in averting economic scarring, the Canadian economy is poised to come roaring back. The rebound has already started: Canada's GDP rose by almost 10 percent, annualized, in Q4 of 2020.
We will continue to honour our covenant with Canadians, until COVID-19 is fully behind us. The government is prepared to extend support measures, as long as the fight against this virus requires.
But as Canada pivots to recovery, our economic measures will, too. And as we look to brighter days, our efforts will be relentlessly focused on jobs and growth.
We promised last November 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. It is an ambitious plan for jobs and growth that is precisely designed to heal the specific wounds of the COVID-19 recession, and to build new economic muscle, creating prosperity for us and for our children, for years to come.
Altogether, this budget creates nearly 500,000 new training and work experience opportunities for Canadians.
It will keep our Throne Speech promise of creating one million jobs by the end of this year.
Some will say our sense of urgency is misplaced.
To them, I ask this: Did you lose your job during a COVID lockdown? Were you reluctantly let go by your small-business employers who were like a family to you, but simply could not afford your salary any longer?
Are you a young mother, forced to quit the dream job you fought to get, because there was no way to keep working while caring for your pre-school children? Did you graduate from university last spring, and are you still struggling to find work in the worst job market since the Great Depression?
Is your family business – launched perhaps, by your parents, and which you'd hoped to pass on to your children – now struggling under a sudden burden of debt, and fending off bankruptcy through sheer grit, every day?
Yet this is the bitter harvest millions of Canadians have reaped during the pandemic.
The ravages of COVID have been uneven. Some parts of our economy, and workers in those sectors – people who work in forests, banks and technology companies, building homes and selling them, for example – are already doing better than they were before the pandemic struck. All of us admire their ingenuity and are grateful for their resilience.
But many others have been grievously hurt by the pandemic and the lockdowns it has required: women, young people, low wage workers and small businesses. Very often, these four groups intersect. To support Canadian workers as we finish our fight against the third wave, and to provide an economic bridge to a fully reopened economy, we will build on the enhancements we've made during the pandemic to maintain flexible access to EI benefits for another year, until the fall of 2022. The CRB, which we created to support Canadians not covered by EI, will remain in place until September, offering an additional 12 weeks of benefits, but stepping down to $300 a week after July 17 as our economy fully reopens over the summer.
About 300,000 Canadians who had a job before the pandemic are still out of work. This month's lockdowns are essential, but they may temporarily make things worse. We need to be there to support Canadian workers – and we will be.
Low-wage workers in Canada work harder than anyone else in this country, for less pay. In the past year they've faced either layoffs or significant infection risks, and often both in succession. We cannot ignore their contribution and their hardship – and we will not.
So, Budget 2021 proposes to expand the Canada Workers Benefit, to invest $8.9 billion over six years in additional support for low-wage workers – extending support to about a million more Canadians and lifting nearly 100,000 people out of poverty.
I am sure all Canadians would agree that no one working full-time in our great country should live in poverty. This investment will help make that very Canadian value a reality. To further support Canadians working hard to join the middle class, this budget will introduce a $15 an hour federal minimum wage.
And Budget 2021 reiterates the government's commitment to amend the Canada Labour Code to improve labour protection for Canadians working in the gig economy.
We know the pandemic has exacerbated systemic barriers faced by racialized Canadians. So, Budget 2021 provides additional funding for the Black Entrepreneurship Program, as well as an investment in a Black-led Philanthropic Endowment Fund, to help fight anti-Black racism and improve social and economic outcomes in Black communities.
One of the most striking aspects of the pandemic has been the historic sacrifice young Canadians have made to protect their parents and grandparents. Our youth have paid a high price to help keep the rest of us safe.
Unemployment among young people is now 14 per cent, compared to 7.5 per cent among Canadians as a whole.
And the mental strain on our youth, who have been sequestered at home at a time of life when people most need to hang out with their friends, has been extraordinary.
We will not allow young Canadians to become a lost generation. They need our support to launch their adult lives and careers in post-COVID Canada – and they will get it. This budget proposes to invest $5.7 billion over five years in Canada's youth. This is an investment in our future and it will yield great dividends.
We will make college and university more accessible and affordable. We will create job openings in skilled trades and high-tech industries. And we will double the Canada Student Grant for two more years, extending the waiver of interest on federal student loans through March 2023.. More than 450,000 low-income student borrowers will also have access to more generous repayment assistance.
We will help young Canadians launch their careers by helping to create 215,000 additional quality job skills development and work opportunities to help youth and students join or return to the workforce over the next two years, including through Canada Summer Jobs, the Youth Employment and Skills Strategy and through work-integrated learning for students.
COVID has brutally exposed something women have long known: Without childcare, parents – usually mothers – can't work. The closing of our schools and daycares drove women's participation in the labour force down to its lowest level in over two decades. Early learning and childcare has long been a feminist issue; COVID has shown us all that it is an urgent economic issue, too.
This is a cause forward-thinking Canadians have championed for more than 50 years. I was two years old when the Royal Commission on the Status of Women urged Canada to establish a universal system of early learning and childcare.
My mother was one of Canada's redoubtable second wave of feminists who fought – and outside Quebec, failed – to make that recommendation a reality. A generation after that, another minister, Ken Dryden, almost got this done.
Their long labour is a testament to the difficulty and complexity of this task.
But we are going to do it. This budget is the map and the trailhead.
For there is agreement, across the political spectrum, that early learning and childcare is the national economic policy we need now.
It delivers a jobs-and-growth hat-trick, allowing both mothers and fathers to work, thus increasing our workforce and boosting our growth, creating jobs for mostly women childcare workers, and helping to raise a smarter, better educated next generation.
The evidence from Quebec – which began building a universal early learning and childcare system more than two decades ago – is incontrovertible. Early learning and childcare is an investment in social infrastructure that pays for itself. Quebec has among the highest labour force participation of women with children under three, in the world. TD Economics has pointed to a range of studies showing that , for every dollar invested in early learning and childcare in Quebec, between $1.50 and $2.80 comes back to the broader economy.
Canadians have been fighting for early learning and childcare unsuccessfully for so long, that some may question whether our government has the determination and staying power to finally get this done.
To those who doubt us, I say this: This budget commits up to $30 billion over five years, reaching $8.3 billion on a permanent basis, to build a high-quality, affordable and accessible early learning and childcare system across Canada.
This funding will allow 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 by the end of 2022. It will also ensure annual growth in quality and affordable child care spaces across the country in partnership with provinces and territories
That said, this is not an effort that will deliver instant gratification. I am well aware of the political challenges ahead, particularly given our federal political structure. We are building something that, of necessity, must be constructed gradually, collaboratively, and for the long-term.
But I have confidence in us. I have confidence that we are a country that believes in investing in our future; in our children; and in our young parents. Here is our goal: That, in the next 5 years, Canadian parents across the country have access to high quality early learning and child care, for an average of $10 a day.
The truth is that the tragedy of COVID-19 has created a window of opportunity, which we can open to finally build a system of early learning and childcare across our country.
This is social infrastructure that will drive jobs and growth. This is feminist economic policy. This is smart economic policy.
I make this promise to Canadians, speaking as your Minister of Finance and as a working mother: We will get it done.
Small businesses are the bustling, thriving heart of our economy. They are the spine of Main Street in every city, town and village in Canada. And while many big, multinational companies have actually prospered during this low-interest rate COVID year, our small businesses have been battered.
Healing the wounds of COVID requires a rescue plan for them.
Budget 2021 proposes to extend the wage subsidy, rent subsidy, and Lockdown Support for businesses and other employers until September 25, 2021, for an estimated total of $12.1 billion in additional support.
To help the hardest-hit businesses pivot back to growth, we propose a new Canada Recovery Hiring Program, which will run from June to November and will provide $595 million to make it easier for businesses to hire back laid-off workers or to bring on new ones. We supported Canadian businesses when lockdowns forced them to shut their doors. And we will continue to provide support as they come roaring back over the summer and fall.
But our government proposes to do much more than execute a rescue.
With this budget, we will make unprecedented and historic investments in Canada's small businesses – helping them invest in new technologies and innovation.
This will help Canadian small businesses become more productive and prosperous. It will give them a shot at becoming the Canadian-headquartered global champions of tomorrow.
The future and resilience of Canada's small businesses depends on their ability to adopt new technology. We propose to invest $4 billion in a game-changing new effort that will help up to 160,000 small and medium-sized businesses buy the new technologies they need to grow.
The new Canada Digital Adoption Program will also provide these businesses with the advice and help they need to get the most out of these new technologies by training 28,000 young Canadians – a Canadian technology corps – and sending them out to work with our small and medium sized businesses.
This groundbreaking new program will help Canadian small businesses become more efficient, go digital, take advantage of e-commerce, and become more competitive in Canada and abroad. Increased funding for the Venture Capital Catalyst Initiative will help provide financing to innovative Canadian businesses, so they can grow and create well-paying jobs in Canada.
Budget 2021 also provides an important boost for business investments. It proposes to allow immediate expensing of up to $1.5 million of eligible investments by Canadian-controlled private corporations in each of the next three years. It is estimated that these larger deductions will represent $2.2 billion in additional support that will help drive growth and create jobs today and in the future. This will support 325,000 businesses in making critical investments to grow their output.
Building for the future means investing in innovation and entrepreneurs.
This budget proposes to help our innovators turn Canadian research, talent and discoveries into new products, services and companies.
We propose to invest in the next phase of the Pan-Canadian Artificial Intelligence Strategy and to launch similar strategies in genomics and quantum science, areas where Canada is a global leader.
To jumpstart tourism, this budget proposes $1 billion, including to support festivals and other events that provide jobs and growth, and enhance the life of our communities.
As we emerge from our COVID lockdowns, let's spend the next year supporting each other and exploring our own breathtaking country.
In 2021, job growth means green growth.
Putting a price on carbon was no simple task. But we did it and made it stick, resulting in the first credible carbon-reduction program put forward by any Canadian government in history.
The government's updated climate plan, presented in December, was another turning point towards the green economy.
Building a net zero economy is no longer a matter of debate. It is not a matter of right versus left. It is about leaving a healthy planet, with clean water and clean air, for our children and their children. It is about averting a climate catastrophe. And it's about securing jobs today and creating the careers of the future.
This budget sets out a plan to help achieve GHG emissions reductions of 36 per cent from 2005 levels by 2030, and puts us on a path to achieve net-zero emissions by 2050. And it puts in place the funding to achieve our 25 per cent land and marine conservation targets by 2025.
By making targeted investments in transformational technologies, we can ensure that Canada benefits from the next wave of global investment and growth. Investing now in areas such as clean fuels and carbon capture, will foster well-paying middle-class jobs now and for many years into the future.
We can and will foster jobs and growth by building on what we already do well. The resource and manufacturing sectors that are Canada's traditional economic pillars – energy, mining, agriculture, forestry, steel, aluminum, autos, aerospace – will be the foundation of our new, sustainable economy.
That is why we propose a historic investment of a further $5 billion over seven years, starting in 2021-22, in the Net Zero Accelerator.
With this added support, on top of the $3 billion we committed in December, the Net Zero Accelerator will help even more companies invest to reduce their greenhouse gas emissions, while growing their businesses. This will help build Canada's clean industrial advantage and bolster the domestic market for Canada's own clean technology innovators.
Budget 2021 further proposes to incentivize the green transformation through new tax measures, including for zero emissions technology manufacturing, carbon capture and storage, and green hydrogen.
We are at a pivotal moment. Just as the invention of the steam engine and of the personal computer triggered transformative economic shifts, today, the global economy is turning swiftly, decisively and irreversibly green. It is essential for the prosperity of the next generation of Canadians – and indeed, for those of us working today – for Canada to be at the forefront of this great transformation.
We can lead, or we can be left behind. Our government knows that the only choice for Canada is to be in the vanguard.
Throughout this crisis, we've found ourselves relying on our devices more than ever – for grieving and for celebrating, for work, for school and for fun. This is essential infrastructure. Therefore we propose to provide another $1 billion over six years for the Universal Broadband Fund, to support access to high-speed internet by Canadians in rural and remote communities.
This puts us on track to achieve our 98-per-cent high-speed coverage initiative by 2026.
Canadians are the most educated people in the OECD; we are the lucky stewards of a vast and beautiful land; and in contrast to so much of the rest of the world, we have built a thriving, multicultural society that embraces new arrivals. Our growing population is one of our great structural economic strengths.
But a growing country needs to build. We need to build housing. We need to build public transit. We need to build infrastructure. And we will.
A long-term plan for a faster-growing Canadian economy must include housing that is plentiful and affordable for working Canadians, especially young families. So, we propose to invest $2.5 billion and reallocate $1.3 billion in existing funding in order to help build, repair or support 35,000 housing units.
And we will support the conversion to affordable housing of the empty office space that has appeared in our downtowns, by reallocating $300 million from the Rental Construction Financing Initiative.
Making housing affordable for all Canadians will require significant investments. That is why, on January 1st, 2022, our government will introduce Canada's first national tax on vacant property owned by non-residents.
Strong, sustained growth also depends on modern transit. That's why, in February, we announced $14.9 billion over eight years to build new public transit, electrify existing transit systems, and develop transit solutions to connect rural, remote and Indigenous communities.
Once public health allows, we will seize the opportunity to draw even more talented, highly skilled people to Canada, including international students, to drive growth and create jobs.
Investments in this budget will support an immigration system that is easier to navigate, and more efficient in welcoming the dynamic new Canadians who add to our country's strength.
Building a Better, Fairer Canada
Our government has made progress in righting the historic wrongs in Canada's relationship with Indigenous Peoples. But we have a lot of work still ahead.
It's important to note that Indigenous peoples have led the way in battling COVID-19. This success is a credit to Indigenous leadership and self-governance.
This budget proposes more than $18 billion in investments to further narrow gaps between Indigenous and non-Indigenous peoples, support healthy, safe, and prosperous Indigenous communities, and advance meaningful reconciliation with First Nations, Inuit, and the Métis Nation.
That includes more than $6 billion to help close infrastructure gaps in Indigenous communities, and $2.2 billion for actions to end the national tragedy of missing and murdered Indigenous women and girls.
This has been a year when we have been reminded of the power of solidarity, when we have learned that each of us truly is our brother's – and our sister's – keeper. Solidarity is getting us through this pandemic. And solidarity depends on fairness, on each of us bearing our share of the collective burden.
That is why, now more than ever, fairness in our tax system – which is the practical underpinning of so much of our collective ability to support each other – is essential.
To ensure our system is fair, this budget will invest in the fight against tax evasion, shine a light on beneficial ownership arrangements, and close significant tax loopholes that allow multinational corporations to jurisdiction-shop.
Our government is also committed to working with our partners at the OECD to find multilateral solutions to the dangerous race to the bottom in corporate taxation. That includes work to conclude a deal on taxing large digital services companies. We are optimistic that such a deal can be reached this summer. But meanwhile, this budget reaffirms our government's commitment to impose such a tax until an acceptable multilateral approach comes into effect.
The economic impact of COVID has been breathtakingly uneven. While hundreds of thousands of Canadians have lost their jobs, and small businesses have been pushed to the brink – and beyond – stock prices have soared, homes are worth more than ever, and the personal savings of the most affluent Canadians have surged.
The success of Canadians, and Canadian companies, in such a difficult year is cause for celebration.
Yet, it is also fair to ask those who have prospered in this bleak year to do a little more to help those who have not. That is why we are introducing a luxury tax on new cars and private aircraft worth more than $100,000 and pleasure boats worth more than $250,000.
If you've been lucky enough, or smart enough, or hard-working enough, to afford to spend $100,000 on a car, or $250,000 on a boat – congratulations! And thank you for contributing a little bit of that good fortune to help heal the wounds of COVID and invest in our future collective prosperity.
This budget lives up to our promise to do whatever it takes to support Canadians in the fight against COVID, and it makes significant investments in our future. It follows a year when we acted with speed and at scale to support Canadians during our country's biggest economic shock since the Great Depression. All of this costs a lot of money.
So it is entirely appropriate to ask: Can we afford it?
We can. And here is why.
First, because this is a budget that invests in growth. The best way to pay our debts is to grow our economy. The investments this budget makes in early learning and childcare, in small businesses, in students, in innovation, in public transit, in housing, in broadband, and in the green transition are all investments in jobs and growth.
We are building Canada's social infrastructure, and our physical infrastructure. We are building our human capital, and our physical capital. Canada is a young, vast country, with a tremendous capacity for growth. This budget will fuel that. These are investments in our future, and they will yield great dividends.
In today's low interest rate environment, not only can we afford these investments in Canada's future, it would be short-sighted of us not to make them.
Second, because our decision last year to support Canadians – at great cost, to be sure – is already paying off. Decisive government action prevented economic scarring in our businesses and our households, allowing the Canadian economy to begin strongly rebounding from the COVID recession, even before we have finished our fight against the virus.
The current, and necessary, lockdowns, are likely, of course, to slow that recovery. But we know – because we took the decision to preserve our economic capacity – that we can come roaring back.
Third, because our government has a plan, and we keep our promises. We said in the Fall Economic Statement that we would spend up to $100 billion over three years to support Canada's economic recovery – and that is what we are outlining here today.
We predicted a deficit for 2020/2021 of up to $382 billion dollars. But, thanks to a stronger-than-expected economic recovery, aided by this government's investments to support Canadians – and the remarkable ingenuity and resilience of Canadians across this great country – we have spent less than we provisioned for. Our deficit for 2020-2021 is $354 billion, significantly below our forecast.
Finally, and crucially, we can afford this ambitious budget because the spending we propose today is responsible, and sustainable.
We understand that there are limits to our capacity to borrow and that the world will not write Canada any blank cheques. We don't expect any.
That's why this budget shows a declining debt-to-GDP ratio and a declining deficit, with the debt-to-GDP ratio falling to 49.2 per cent by 2025-2026 and the deficit falling to 1.1 percent of GDP.
These are important markers. They show that the spending proposed today is sustainable, and that the extraordinary spending we have undertaken to support Canadians through this crisis, and to stimulate a rapid recovery in jobs, is temporary and finite. And our proposed long-term spending on social infrastructure, physical infrastructure, small and medium sized businesses, new technology and innovation and the green transition will permanently boost Canada's economic capacity.
Canadians have been profoundly wounded by this virus, and by the recession it has caused. But we are resilient. We keep on keeping on.
This budget represents a starting point for the healing that will follow our victory over this pandemic, and invests in a more prosperous future for us all.
In 2015, this federal government was elected on a promise to help middle class Canadians, and people working hard to join the middle class.
We offered a plan to invest in workers and their prosperity, in long-term growth for us all. We did that.
Today, we meet this new challenge, the greatest our country has faced in modern history, with a renewed promise, built on those earlier ones:
Opportunity is coming.
Growth is coming.
Jobs are coming.
After a long year of retrenchment, Canadians are ready to recover and rebuild.
We will finish the fight against COVID-19. We will put our shoulders to the wheel. We will bounce back. And we will grow, not just to where we have been before, but to new heights.
The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance
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