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Part 1: 
Finishing the Fight Against COVID-19

On this page:

Chapter 1:
Keeping Canadians Healthy and Safe

For over a year, Canadians have been living through the greatest global public health challenge of our lifetime. Across Canada, governments of all orders have worked tirelessly to prevent outbreaks and protect lives.

Since day one of this crisis, the government moved quickly to provide rapid support to Canadians. Whether with the Canada Emergency Response Benefit, the Canada Emergency Wage Subsidy, or the business support measures, these programs meant that people could stay home and stay safe. At the same time, the government secured the most vaccines per capita of any country, and ensured some of the toughest border rules in the world, including with the U.S., while keeping vital supplies moving. The government also supported domestic manufacturing, including of personal protective equipment, and started to restore bio-manufacturing capabilities that have not been in Canada for decades.

Canada took further action to close its borders, encourage Canadians to avoid non-essential travel, and put in place mandatory testing and quarantine orders, including hotel quarantine when waiting on testing results after arriving by air. Continually informed by the latest evidence and advice, these are some of the toughest border measures in the world. Keeping Canadians healthy and safe has been, and continues to be, the Government of Canada’s top priority.

Nothing is more important than saving lives and keeping Canadians safe. We have witnessed the devastation this virus brought to long-term care homes. And we have seen racialized Canadians and Indigenous communities face higher infection rates.

Nurses, doctors, personal support workers, emergency medical technicians, and other front-line workers have bravely treated patients, putting themselves at risk, and experiencing some of the highest infection rates.

Canadians have made great sacrifices to try to contain the virus. The isolation, stress, economic damage, and disruption to lives has taken its toll on mental health.

While we are in the midst of the virus’ third wave here in Canada, the rollout of safe and effective vaccines is a light at the end of what has been a long, dark tunnel.

The largest immunization campaign in Canada’s history is well underway. Canada is on track to meet the commitment that every Canadian who wants to will be fully vaccinated by September.

While finishing the fight, Canada must also learn lessons and take steps so it can be prepared for future threats. Rebuilding domestic bio-manufacturing capacity is a key part of this work. Better support and protections for our seniors, particularly those in long-term care facilities, is also essential. The past year has been difficult, but better days are ahead. Until then, the Government of Canada will do whatever it takes to keep Canadians safe.

Figure 1.1
Major Federal Investments to Fight COVID-19*
Figure 1.1: Major Federal Investments to Fight COVID-19*

* Does not include proposed Budget 2021 measures.

Text version
Vaccine research, development and production
$3.4B
Top-ups for smaller jurisdictions
$43.7M
Safe Return to Class Fund
$2B
Testing, contact tracing, data management
$4.3B
Safe Restart Agreement: $13.8B went from the nearly $20B Agreement made to support health care
Safe Long-term Care Fund
$1B
Personal protective equipment
$7.5B
Supporting vulnerable populations
$740M
Health care capacity
$1.2B
$500M for critical health care system needs (March 2020)
Proposed $4B to help health care systems recover
Vaccine procurement
Over $9B
Supporting provinces and territories addressing health care system priorities
$4.6B
$284M to deploy COVID-19 vaccines
Vaccine deployment and administration
$1.3B
$ 137M in additional support for the territories
Proposed $1B for Canada's COVID-19 Immunization Plan
Support for Indigenous communities
$2.5B
Public health response in Indigenous communities
$927M
Safe restart in Indigenous communities
$442M
Indigenous Community Support Fund
$1.1B
Personal Protective Equipment (PPE)
$2B
PPE and Related Equipment for Essential Workers
$500M (July 2020)
Additional PPE Procurement for Health Care Sector
Over $1.5B (Fall 2020)

1.1 Providing Access to Vaccines

Canada has secured the most diverse portfolio of vaccines in the world. As vaccine programs accelerate across the country, the government is ensuring that provinces, territories, and Indigenous communities have the resources they need to deliver vaccine doses to people as quickly as possible. Canada is on track to meet the commitment that every Canadian who wants to will be fully vaccinated by September. As a result of the federal government's ongoing efforts to accelerate the delivery of COVID-19 vaccines, Canada received a total of 9.5 million doses by the end of March 2021, 3.5 million more than the initial target of 6 million doses. (Chart 1.1).

Chart 1.1
Expected Supply of Authorized Vaccines (Cumulative)
Chart 1.1: Expected Supply of Authorized Vaccines (Cumulative)

Notes: Initially expected reflects expected deliveries up to the next four quarters as of January 26, 2021, i.e. before approval of the AstraZeneca vaccine and the Johnson and Johnson vaccine. Actual reflects what have been received so far, week of March 29. Currently Expected reflects doses to come as of April 1, 2021.
Currently Expected reflects revised delivery schedules for the Pfizer vaccine. Notably, Pfizer recently committed to advance 1 million doses ahead of schedule in both April and May 2021 (March 5, 2021). This is in addition to another commitment from Pfizer on March 30, 2021, to advance 5 million doses.

Sources: Public Services and Procurement Canada and Public Health Agency of Canada.

Text version
  million of doses
  Q4
2020
Q1
2021
Q2
2021
Q3
2021
Initially expected 0.4 6.0 26.0 71.0
Actual  0.4 9.5 44.0 110.1
Currently Expected 0.4 9.5 44.0 110.1
Bilateral Agreements with COVID-19 Vaccine Suppliers
Vaccines (Authorized by Health Canada) Type of Vaccine Number of Doses
Pfizer mRNA Up to 76 million
Moderna mRNA 44 million
AstraZeneca Viral vector 20 million
Verity Pharmaceuticals Canada/ Serum Institute of India (in collaboration with AstraZeneca Canada Inc) Viral vector 2 million
Janssen Viral vector Up to 38 million
Vaccines (Yet to be authorized by Health Canada)
Medicago Virus-like particle Up to 76 million
Novavax Protein subunit Up to 76 million
Sanofi and GlaxoSmithKline Protein subunit Up to 72 million
International  
International COVAX Facility - Up to 15 million

Canada’s COVID-19 Immunization Plan

The Government of Canada is covering the full cost of vaccines we procure, and ensuring they are free of charge to every person in Canada. On the rollout, the government is coordinating delivery with all provinces and territories, providing nationwide logistical support, warehousing services to supplement provincial and territorial capacity, and providing support for vaccine rollout campaigns. In addition, the Canadian Armed Forces are assisting with vaccination efforts in remote communities.

On March 25, 2021, the government tabled legislation in the House of Commons in order to provide a one-time payment of up to $1 billion to the provinces and territories, on an equal per capita basis, to help get shots into arms as quickly as possible.

Provinces and territories, with the support of municipalities, will be able to use this funding for a variety of vaccine-related costs, such as to recruit and train immunizers, establish mass vaccination clinics, set up mobile vaccination units, engage Indigenous communities to advance vaccine rollout, and reach vulnerable populations through community-based vaccination efforts.

International COVID-19 Response

To end this pandemic anywhere, we have to end it everywhere. Canada is part of the robust global pandemic response and has committed more than $2 billion, to date, to international efforts to fight and address the impacts of the virus. Canada is a founding member of the Access to COVID-19 Tools (ACT) Accelerator and the COVID-19 Vaccines Global Access Facility (COVAX), and plays a major role within the Advance Market Commitment initiative.

To ensure we prevail in the global fight against COVID-19:

1.2 Protecting Our Seniors

The COVID-19 pandemic has been devastating for Canada’s seniors.

Many have spent the past thirteen months isolated from family and friends. For far too many seniors who live in long-term care, this year has been tragic; they have been the overwhelming casualties of this pandemic. Every senior in Canada deserves to live in dignity, safety, and comfort, regardless of which province or territory they call home.

It is essential that we protect the health and well-being of our seniors, and the personal support workers who care for them—many of whom are women, many of whom are racialized—through this difficult time and into the future.

The government is taking action, including through the $1 billion Safe Long-term Care Fund announced in the 2020 Fall Economic Statement, to ensure seniors, and those who help them, are well protected and well supported through the pandemic and for years to come.

Strengthening Long-term Care and Supportive Care

The pandemic has shone a light on systemic issues affecting long-term care facilities across the country. The government welcomes the news that the Heath Standards Organization and Canadian Standards Association are launching a process to help address those issues in Canada. The Health Standards Organization’s and Canadian Standards Association’s work with governments, stakeholders, and Canadians to develop national standards will help inform our ongoing discussions with provinces and territories on improving the quality of life of seniors in long-term care.

To protect seniors across Canada and build on this work:

Helping Seniors Age Well at Home

After a lifetime of hard work, seniors want to live healthy, safe, and independent lives. Seniors want to stay at home, in the communities that support them, for as long as possible. But that can become difficult as they age. This leads to many vulnerable seniors transitioning to supportive care before they would otherwise need to if they were better supported at home. To look at new ways to support seniors in their homes for longer:

The government is also proposing to increase Old Age Security for seniors 75 and over, beginning in 2022. Details are outlined in Chapter 7.

1.3 Strengthening Our Health System

Throughout the pandemic, public health officials, hospital administrators, and health care workers have worked hard to protect Canadians and save lives. But the pandemic has put health care under enormous strain.

The federal government is making investments to shore up public health systems so that they can continue to provide world-class care to Canadians throughout the COVID-19 pandemic.

Every year, the federal government provides significant support to provincial and territorial health care systems through the Canada Health Transfer. For 2021-22, this amounts to $43.1 billion. This is in addition to other supports for the health care system provided during the pandemic, such as procurement of vaccines and personal protective equipment, and more (see Figure 1.1).

Helping Our Health Care Systems Recover

In the fight against COVID-19, doctors and patients have deferred many procedures. Health care systems are facing substantial backlogs that require time and resources to clear. The federal government continues to support provinces and territories, including addressing urgent health care needs.

As announced in March 2021, the federal government is proposing to provide provinces and territories with $4 billion through a one-time top-up to the Canada Health Transfer. This will help health systems ensure Canadians get the procedures and treatments they need to stay healthy and clear through the backlog of delayed procedures. The government has been clear that it will be there to support provinces’ increasing health care needs in the long term, once we get through the COVID crisis.

Regulatory Cooperation with Trusted International Partners

The government is committed to enhancing Canada’s drug approval process by promoting alignment and collaboration with trusted regulators in other countries. Regulatory cooperation with trusted authorities will make accessing life-saving medicines faster and simpler, ensuring that safe and effective drugs are available to Canadians more quickly.

Renewing the Territorial Health Investment Fund

No matter where anyone lives in Canada, they should be confident that they have access to reliable, well-funded public health care. To support the territories in overcoming the challenges of delivering health care services in the North:

1.4 Supporting Mental Health

Forty per cent of Canadians reported that their mental health deteriorated last year, and for those with pre-existing mental health conditions that number rose to 61 per cent.

Since 2015, the government has provided funding to the provinces and territories to improve mental health services, made significant investments to support Indigenous mental health services, and has launched innovative virtual mental health care tools throughout the pandemic.

The federal government understands that supporting mental health requires a comprehensive approach. The many investments the government is making to foster a strong and inclusive recovery recognize the social and economic factors of mental health, will support better mental well-being among all Canadians, and will complement investments to improve mental health services.

Figure 1.2
Budget 2021 Measures that Address the Social and Economic Factors of Mental Health
Figure 1.2: Budget 2021 Measures that Address the Social and Economic Factors of Mental Health

*Please see Chapter 8 for information on broader measures on action to address the tragedy of missing and murdered Indigenous women and girls.
*Please note that total amounts are over a five-year period.

Text version
Education
$4.7B to make post-secondary education more affordable and provide relief from student debt
$1.2B for First Nations education programs
Good Jobs
$10.1B to extend the Canada Emergency Wage Subsidy and protect millions of jobs
500,000 new work and training opportunities for Canadians, including 215,000 new opportunities for youth
Environment
$3.52B to adapt to climate change$3.56B to protect Canada's nature, including conserving 25% of our lands and oceans by 2025
$200M for natural infrastructure, including in urban areas
High-quality Health Care
Up to $1B for Canada's COVID-19 Immunization Plan
Up to $5.4B to support our health care systems
$994.6M for mental health care, including for veterans and Indigenous peoples
$3B to have safer long-term care homes
$116M to address opioids and substance use
$52.6M to improve the sexual and reproductive health of Canadians
Safe and Supportive Communities
$855M for charities and community organizations
$90M to help seniors age at home
$612M to fight homelessness
$1.26B for responsive policing and actions to address systemic racism in the justice system
Healthy and Engaged Lifestyles
$94.3M for sports
$886.9M for arts and culture
$400M for festivals and events
Social Inclusion and Gender Equality
$29.8B to establish a Canada-Wide Early Learning and Child Care System
$601.3M to advance a National Action Plan to End Gender-Based Violence
$56.6M for Indigenous women's organizations and to support work with partners in response to the MMIWG Calls for Justice*
$11M for the Canadian Race Relations Foundation
Income Equality
Federal minimum wage of $15 per hour
$8.9B for Canada Workers Benefit, which could lift almost 100,000 out of poverty
$99.9M for additional Employment Insurance support for seasonal workers
$2.6B to help vulnerable people find affordable housing

National Standards for Mental Health Services

Before the pandemic began, almost one in ten Canadians reported that their mental health care needs were not met. A set of clear national standards is needed so that Canadians can access timely care, treatment, and support. To move forward on establishing national mental health standards:

Supporting the Mental Health of Those Most Affected by COVID-19

Young people have seen the greatest decline in good mental health compared to pre-pandemic levels. Seven in ten health care workers reported worsening mental health during the pandemic. Sixty-four per cent of Indigenous people said their mental health had worsened. Racialized and Black Canadians can also face distinct challenges with mental health including structural racism and inequities in access to care.

To support populations most affected by COVID-19 in dealing with mental health challenges:

Additional support for veterans’ mental health is outlined in Chapter 7. Investments to support mental health in First Nations, Inuit, and Métis Nation communities are outlined in Chapter 8.

Investing in the Wellness Together Canada Portal

In April of last year, the Government of Canada launched the Wellness Together Canada portal to provide Canadians with free access to live support, treatment, and credible information. Wellness Together Canada is available in all provinces and territories and to date over 1.1 million individuals have accessed the portal in over 3.5 million web sessions.

Since 2015, the federal government has invested over $8 billion to provide Canadians with better mental health care services.

Past Investments in Mental Health Care

As part of the 2017 Agreements on Home Care and Mental Health, the federal government provided $5 billion over 10 years to provinces and territories to improve access to mental health and addiction services.

Over this period, nearly $1.9 billion has been invested to support Indigenous mental health services, including $1 billion in Budget 2021 (more details can be found in Chapter 8). These investments are on top of existing mental wellness programs as well as supports available under Jordan’s Principle for Indigenous youth and the Non-Insured Health Benefits Program.

Since the start of the pandemic, the government has invested nearly $250 million to develop virtual care and mental health tools and support the Kids Help Phone. Proposed funding would provide further support to the Wellness Together Canada portal.

Working Towards a New Crisis Hotline

The COVID-19 pandemic has exacerbated existing mental health challenges for Canadians and increased the number of Canadians in crisis. Making mental health services easier to access will have substantial benefits for Canadians and help save lives. The funding for the Kids Help Line that was initially provided in 2020-21 was extended into 2021-22 to ensure that it can continue to deliver counselling services to youth during the COVID-19 pandemic.

The Public Health Agency of Canada is continuing to work with the Centre for Addiction and Mental Health and partners to implement and sustain an expanded pan-Canadian suicide prevention service. Once fully implemented, people across Canada will have bilingual access to 24 hours a day, 7 days a week, crisis support using the technology of their choice: voice, text, or online chat.

The Canadian Radio-television and Telecommunications Commission is launching a regulatory proceeding to consult on a proposed three-digit hotline so Canadians have a memorable number they can call when they need help. The government is supportive of these efforts including ensuring funds are available to support the creation of this hotline.

Support for Canadians in Distress

In addition to the Wellness Together Canada portal (wellnesstogether.ca), if you or someone you know is in distress, call the Canada Suicide Prevention Service at 1-833-456-4566. Canadians aged 5 to 29 can call the Kids Help Phone at 1-800-668-6868.

Indigenous peoples can also reach out to Hope for Wellness at 1-855-242-3310.

1.5 Investing in Research and Science

A resilient and long-lasting recovery must include a plan for future pandemic preparedness. Strategic investments in cutting edge life sciences research and biotechnology is a critical part of that. These growing fields are not only critical to our safety, but are fast-growing sectors that support well-paying jobs and attract investment.

From the start of the pandemic, the government has funded and coordinated our biomedical and scientific response. From the National Microbiology Laboratory in Winnipeg, which leads dozens of COVID-19 response projects in its Level 4 labs; to investing in AbCellera in Vancouver, which helped create a leading antibody therapeutic; to Quebec City’s Medicago working to develop a leading vaccine candidate; to building the Biologics Manufacturing Centre at the National Research Council to manufacture vaccines, Canada has been building on its strengths to respond to this pandemic.

Raising the bar on our domestic life sciences and bio-manufacturing capacity will provide Canada with a more secure pipeline for vaccines in the future.

Strengthening Canada’s Bio-manufacturing and Life Sciences Sector

Growing Canada’s life sciences and bio-manufacturing sector is a priority that goes beyond responding to COVID-19. This is a growing sector that supports thousands of good, middle class jobs.

Several other initiatives proposed in Budget 2021 also include targeted support for the life sciences and bio-manufacturing sector. These measures form an important part of the government’s investment in the sector and include:

These investments would be reinforced by other measures proposed in Budget 2021, including: the Pan-Canadian Genomics Strategy; the Pan-Canadian Artificial Intelligence Strategy; the expansion of the Industrial Research Assistance Program; support to help firms tap intellectual property expertise; efforts to upskill and attract workers; as well as the expansion of work-integrated learning opportunities. These investments offer support to firms at various stages of maturity, and allow Canada’s research and development efforts to be more closely connected to commercialization and business development supports. More details can be found in Chapters 3 and 4.

Action to Address Antimicrobial Resistance

The World Health Organization has declared that antimicrobial resistance is one of the top 10 global public health threats facing humanity. It occurs when bacteria, viruses, fungi, and parasites mutate and no longer respond to medicines. By 2050, it is estimated that as many as 396,000 lives in Canada could be lost to antimicrobial resistance if the phenomenon is not addressed.

1.6 A Plan for the Safe Reopening of Our Borders

The government has implemented stringent travel restrictions and strict public health measures at border crossings and airports to slow the spread of COVID-19. At this time, the government continues to strongly advise against all non-essential travel.

Ahead of any reopening of borders, the government is working to improve the safety and efficiency of our borders so that Canada is ready for a strong and safe recovery.

Supporting Safe Air Travel

Air travel has declined sharply due to the COVID-19 pandemic. To facilitate the safe restart of air travel, when conditions allow, in a way that limits transmission of COVID-19 and protects travellers:

To improve sanitization at screening checkpoints:

These measures would help restore Canadians’ confidence in the safety of air travel when public health restrictions and border measures are adjusted and would support the recovery of Canada’s hard-hit air and tourism sectors, which so many Canadians rely on for their jobs and livelihoods.

Continuing to Protect Air Travellers

The Canadian Air Transport Security Authority (CATSA) plays a critical role in ensuring the safety of air travel by screening travellers and their baggage (as well as airport workers). CATSA has adopted additional screening practices, such as temperature checks at Canada’s busiest airports, to help prevent the transmission of COVID-19. To help protect air travellers:

Supporting Temporary Foreign Workers while they Quarantine

Approximately 4,000 Canadian employers in the farming, fish harvesting, and food production and processing sectors rely on temporary foreign workers each year to fill up to 60,000 jobs and address domestic labour shortages. These workers are important to ensure critical operations of the agriculture sector and help to safeguard Canadian food production. These workers must follow isolation requirements under the Quarantine Act, which is a cost for employers.

This program was launched to stabilize the labour market and the food supply chain and make sure there was food on the shelves for Canadians when the pandemic first hit. It also ensures that migrant workers do not unfairly carry the costs of their quarantine period.

Further measures that propose to reform the Temporary Foreign Worker Program can be found in Chapter 6.

Chapter 1
Protecting Canadians’ Health
millions of dollars
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
Total
1.1. Providing Access to Vaccines 1,000 375 0 0 0 0 1,375
Canada’s COVID-19 Immunization Plan* 1,000 0 0 0 0 0 1,000
International COVID-19 Response 0 375 0 0 0 0 375
1.2. Protecting Our Seniors 0 17 639 653 609 607 2,525
Strengthening Long-term Care and Supportive Care 0 2 609 608 609 607 2,435
Helping Seniors Age Well at Home 0 15 30 45 0 0 90
1.3. Strengthening Our Health System 4,000 27 27 0 0 0 4,054
Helping our Health Care Systems Recover* 4,000 0 0 0 0 0 4,000
Renewing the Territorial Health Investment Fund 0 27 27 0 0 0 54
1.4. Supporting Mental Health 0 140 83 35 0 0 257
National Standards for Mental Health Services 0 48 48 0 0 0 95
Supporting the Mental Health of Those Most Affected by COVID-19 0 30 35 35 0 0 100
Investing in the Wellness Together Canada Portal 0 62 0 0 0 0 62
1.5. Investing in Research and Science 0 237 275 199 198 6 916
Strengthening Canada's Bio-manufacturing and Life Sciences Sector 0 251 297 206 192 0 946
Less: Funds Sourced From Existing Departmental Resources
0 -15 -29 -14 0 0 -59
Action to Address Antimicrobial Resistance 0 2 7 7 6 6 29
1.6. A Plan for the Safe Reopening of Our Borders 0 424 10 10 39 39 523
Supporting Safe Air Travel 0 96 10 10 39 39 194
Continuing to Protect Air Travellers 0 271 0 0 0 0 271
Supporting Temporary Foreign Workers while they Quarantine 0 58 0 0 0 0 58
Additional Investments – Protecting Canadians' Health 0 9 0 0 0 0 9
Maintaining Federal COVID-19 Digital Tools to Inform Canadians 0 9 0 0 0 0 9
Funding for Health Canada to ensure the continued availability of federal digital tools for COVID-19 that provide up-to-date information and valuable resources to Canadians throughout the pandemic, including the Canada COVID-19 mobile app and the federal COVID self-assessment tool. Together, these tools help Canadians and their families to stay informed about COVID-19.
Chapter 1 – Net Fiscal Impact 5,000 1,229 1,033 897 847 652 9,658
Note: Numbers may not add due to rounding.
*Announced in March 2021.

Chapter 2 :
Seeing Canadians and Businesses Through to Recovery

In the face of the COVID-19 pandemic, the government acted swiftly to protect Canadians and support people and businesses, adapting as the pandemic evolved.

The government’s broad suite of support measures has helped families, protected jobs, and supported businesses across Canada. More than eight of every ten dollars spent to fight COVID-19 and support Canadians continues to come from the federal government.

Table 2.1
Canada’s COVID-19 Economic Response – Federal, Provincial, and Territorial Support
Federal Provincial and Territorial Total
Impact ($ billions)
Direct Measures to Fight COVID-19 and Support People 345.6 77.6 423.2
Tax and Payment Deferrals 85.1 31.5 116.6
Credit Support 81.9 2.6 84.5
Total 512.6 111.6 624.2
Share of Spending (per cent)
Direct Measures to Fight COVID-19 and Support People 81.7 18.3 100
Tax and Payment Deferrals 73.0 27.0 100
Credit Support 96.9 3.1 100
Total 82.1 17.9 100
Notes: Provincial and territorial government announcements; Department of Finance Canadacalculations.
As of April 9, 2021. For federal totals, the data reflects the total impact which differs from fiscal cost on an accrual basis. Totals may not add due to rounding.

Thanks to Canadians’ hard work and sacrifice over the past year, these measures have worked effectively to stabilize the economy and prevent scarring. There have been early signs that we will have a robust recovery. So far, Canada’s economic rebound has outpaced forecasters’ expectations and compares favourably with that of peers. Canada saw record gains of about 40 per cent annualized real GDP in the third quarter of 2020, and 10 per cent annualized GDP growth in the fourth quarter, which was the second highest in the G7. Canada has also recovered about 90 per cent of jobs lost during the pandemic and is outpacing the United States in this respect, where less than two-thirds of lost jobs have been recouped.

Despite these encouraging signs, the virus remains a serious threat to Canadians. Public health restrictions are ongoing and new variants of COVID-19 make economic conditions uncertain for the months ahead.

Today, over half a million Canadians who had a job before the crisis are still out of work or working sharply reduced hours, worse than in the depths of the 2008 recession. Many businesses, particularly those that rely on close in-person contact or travel, continue to struggle.

The government will do whatever it takes to see Canadians through to recovery. To this end, the government has developed a framework to guide key decisions on how temporary programs such as the recovery benefits, the wage subsidy, and the rent subsidy are transitioned as we move from crisis to recovery. These economic support measures will remain in place without change until at least July 2021, after which they will begin a gradual but purposeful transition through the early fall.

This timing is based on continued progress in vaccine roll-out through the spring and early summer, and that by September, all Canadians who want to be vaccinated, will be fully vaccinated. Should there be a change in the course of the pandemic, the government will take a flexible approach to ensure that Canadians and Canadian businesses have the support they need.

The government recognizes that some harder-hit industries will require support beyond the fall, which is why Budget 2021 proposes a series of investments to continue supporting the hardest-hit workers and employers.

2.1 Protecting Jobs and Supporting Businesses

The economic situation remains uneven in different sectors across the country.

Close contact businesses, such as retail, restaurants, and performing arts face intermittent restrictions and weak demand as Canadians continue to stay home. These businesses, many of them small businesses, employ women, young people, and racialized Canadians in greater proportion—and they have faced severe and ongoing revenue declines (Chart 2.1). In sectors less affected by restrictions, such as professional services and construction, the number of fully open businesses has rebounded sharply (Chart 2.2).

Overall, business confidence is markedly up, buoyed by the prospect of mass vaccination and a gradual return to normal. But a complete recovery will take time.

Chart 2.1
Share of Businesses Losing at Least 20% of Revenue in 2020, by Firm Size and Selected Sectors
Chart 2.1: Share of Businesses Losing at Least 20% of Revenue in 2020, by Firm Size and Selected Sectors

Source: Statistics Canada.

Text version
  per cent
100 or more employees 27.2
20 to 99 employees 38.0
5 to 19 employees 45.0
1 to 4 employees 44.4
Accomm. & food 74.1
Arts, entertain. & rec. 68.3
Other personal services 58.7
Transportation 48.4
Information & culture 46.8
Chart 2.2
Share of Small Businesses Fully Open, Selected Industries
Chart 2.2: Share of Small Businesses Fully Open Selected Industries

Note: For months where there was more than one survey, results were averaged. Last data point is April 2021 and is subject to revision once the CFIB completes its April survey.
Source: Canadian Federation of Independent Business.

Text version
  per cent
   Retail Construction Professional Services Arts, Rec. & Info. Hospitality
Mar
2020
35.6 47.6 38.4 12.2 7.4
Apr
2020
14.5 24.7 31.7 8.6 4.6
May
2020
22.3 43.2 39.9 11.1 5.1
Jun
2020
47.6 74.1 60.2 22.1 16.8
Jul
2020
57.1 83.5 66.4 32.5 29.4
Aug
2020
60.7 88.5 71.6 42.6 35.4
Sep
2020
63.2 87.1 72.9 43.9 32.4
Oct
2020
67.6 86.9 74.0 42.7 37.0
Nov
2020
67.4 87.2 75.4 35.1 29.9
Dec
2020
65.3 84.0 74.2 28.8 25.2
Jan
2021
37.2 65.7 66.2 19.0 11.6
Feb
2021
49.5 71.0 69.1 18.5 12.7
Mar
2021
64.4 82.0 73.6 30.1 17.3
Apr
2021
47.7 81.4 64.3 19.9 14.0

Federal support measures have protected jobs and helped limit the number of permanent business closings. By preventing scarring the government has made it easier for Canada to quickly rebound. The Canada Emergency Wage Subsidy has, at times, supported over a quarter of private sector employment, and an even higher share in some hard-hit industries like accommodation and food services (Chart 2.3). Business insolvencies have, so far, remained low and below historical levels (Chart 2.4).

Chart 2.3
Share of Private Sector Workers Covered by the Canada Emergency Wage Subsidy, by Industry, November 2020
Chart 2.3: Share of Private Sector Workers Covered by the Canada Emergency Wage Subsidy, by Industry, November 2020

Note: Private sector workers include the incorporated self-employed. Other services includes business and building support. Professional services includes finance and real estate.
Sources: Canada Revenue Agency; Department of Finance Canada calculations.

Text version
  per cent
Accomm. & food 69.7
Education 50.0
Arts, culture & rec. 47.0
Other services 41.9
Manufacturing 33.5
Oil & gas 31.8
All industries 30.7
Constr. & transp. 28.5
Retail & wholesale 23.0
Health & social asst. 22.6
Ag., for., fish. & hunt. 21.2
Professional serv. 15.7
Utilities 6.7
Chart 2.4
Monthly Business Insolvencies
Chart 2.4: Monthly Business Insolvencies

Note: Seasonally adjusted by Haver Analytics. Includes both bankruptcies and proposals.
Source: Office of the Superintendent of Bankruptcy.

Text version
  Number of insolvencies
  2019 2020
Jan 327 345
Feb 287 294
Mar 322 225
Apr 343 155
May 305 187
Jun 315 270
Jul 378 242
Aug 274 207
Sep 273 250
Oct 288 220
Nov 282 197
Dec 286 211

Extending the Canada Emergency Wage Subsidy

The Canada Emergency Wage Subsidy has helped more than 5.3 million Canadians keep their jobs and provided more than $73 billion in support to the Canadian economy.

The wage subsidy program is currently set to expire in June 2021. In order to bridge Canadians through the rest of this crisis to recovery, continued support is needed. To give workers and employers certainty and stability over the coming months:

Extending this support will mean that millions of jobs will continue to be protected. In addition, the government is proposing to introduce the new Canada Recovery Hiring Program, outlined later in Chapter 4. This would provide an alternative support for businesses affected by the pandemic to help them hire more workers as the economy reopens. The hiring program would be in place from June until November 2021, allowing firms to shift from the Canada Emergency Wage Subsidy to this new support.

It is estimated that the extension of the wage subsidy will cost $10.1 billion in 2021-22.

The government will seek the legislative authority to have the ability to further extend the wage subsidy program through regulations until November 20, 2021, should the economic and public health situation require it beyond September 2021.

For more information, please see Annex 6.

Ensuring the Canada Emergency Wage Subsidy Supports Workers

The intention of the wage subsidy has always been to preserve and protect Canadians’ jobs. It was designed to do this by making sure employers who had suffered revenue declines during the pandemic had the support they needed to keep employees on the payroll and encourage them to re-hire laid off employees. Canadians expect businesses that use government support for their operations—especially at a time of widespread personal difficulty—to not increase the compensation of their top executives.

Any publicly listed corporation that decides to increase executive pay during this difficult time, while receiving taxpayer support, may have their wage subsidy funds clawed back.

This is in recognition that the program is meant to serve workers and that, during recovery, businesses boosting top executive pay have clearly demonstrated that they have the resources to support workers.

Extending the Canada Emergency Rent Subsidy and Lockdown Support

The Canada Emergency Rent Subsidy and Lockdown Support have helped more than 154,000 organizations with rent, mortgage, and other expenses. The rent subsidy provides eligible organizations with direct and easy-to-access rent support. Importantly, it is available directly to tenants. Lockdown Support provides organizations eligible for the rent subsidy with additional support if they are subject to a lockdown or must significantly restrict their activities under a public health order. To date, these measures have provided $2.6 billion in support to Canadian businesses.

The program is set to expire in June 2021. To bridge Canadians through the rest of this crisis to recovery, continued support is needed.

It is estimated the extension of the rent subsidy and Lockdown Support will cost $1.9 billion in 2021-22.

The government will seek the legislative authority to have the ability to extend further the program through regulations until November 20, 2021, should the economic and public health situation require further support beyond September 2021.

For more information, please see Annex 6.

Extending the Canada Emergency Business Account

The Canada Emergency Business Account (CEBA) has provided interest-free, partially forgivable loans to more than 850,000 Canadian small businesses. In December 2020, the government increased the value of the loan from $40,000 to $60,000 to help small businesses bridge to recovery. If a business repays their loans by December 31, 2022, up to a third of the value of their loans (meaning up to $20,000) will be forgiven. In further recognition of the ongoing pandemic, the government recently extended the application deadline for CEBA to June 30, 2021.

A small number of businesses have faced challenges accessing the program, including Indigenous and rural businesses. To make sure these businesses are not left behind, the government provides similar support through the Regional Relief and Recovery Fund and Indigenous Business Initiative. To make sure these businesses can continue to access support:

2.2 Supporting Affected Workers

More than two and a half million Canadians have returned to work since the pandemic began, but the uneven and evolving public health environment means many workers continue to face challenges finding and keeping work. The virulent third wave of the virus and the unpredictable impact of new variants add to the uncertainty for Canadian workers.

Some jobs lost during the pandemic may also be lost for good because businesses have found new ways to operate. That means that roughly half the Canadians out of work now may not be returning to their previous jobs when restrictions lift—they may have been permanently laid off (Chart 2.5). These workers are disproportionately women, young people, and racialized workers. If they are not supported, this could have long-term impacts on the economy’s potential, and, most importantly, on the livelihoods of people and their families.

Capable and willing workers are at risk of being underemployed, underpaid, or even withdrawing from the workforce entirely. Chapters 3 and 4 outline key measures the government is taking to help workers retrain, reskill, and re-establish their careers to help accelerate recovery and ensure all workers are brought along.

But until enough people are vaccinated and the economy reopens, withdrawing income support programs too rapidly would be counterproductive and costly.

Chart 2.5
Number of Canadians Laid off or Seeing Sharply Reduced Hours Since February 2020
Chart 2.5: Number of Canadians Laid off or Seeing Sharply Reduced Hours Since February 2020

Note: Sharply reduced hours means less than half of usual hours, including zero hours. Last data point March 2021.
Sources: Statistics Canada; Department of Finance Canada calculations.

Text version
  Millions
  Hours Cuts Permanent Layoff Temporary Layoff
Feb-2020 0.00 0.00 0.00
Mar-2020 2.20 0.65 0.34
Apr-2020 2.48 1.92 1.07
May-2020 2.17 1.63 1.05
Jun-2020 1.34 1.03 0.71
Jul-2020 0.94 1.00 0.33
Aug-2020 0.68 1.01 0.11
Sep-2020 0.57 0.53 0.21
Oct-2020 0.43 0.51 0.14
Nov-2020 0.44 0.48 0.11
Dec-2020 0.49 0.50 0.14
Jan-2021 0.53 0.66 0.20
Feb-2021 0.41 0.49 0.11
Mar-2021 0.25 0.27 0.02

Temporarily Waiving the One-week Waiting Period for Employment Insurance Claims

Last fall, the government made temporary changes to Employment Insurance (EI) to support Canadians during the pandemic. The changes have ensured that Canadians who continue to face challenges in finding and keeping work have the support they need.

In response to ongoing restrictions in many parts of the country this winter, the government announced that the waiting period would be waived for EI beneficiaries who establish a new claim between January 31, 2021, and September 25, 2021. This includes claims for regular, fishing, and special benefits. This temporary change allows people who apply for benefits to be paid their first week of unemployment, helping ease their financial stress.

Providing Additional Weeks of Recovery Benefits and EI Regular Benefits

Despite temporary changes to the Employment Insurance system, the government recognized that certain workers who did not qualify for EI regular benefits needed support during the pandemic. These include self-employed workers, particularly gig workers, Canadians who have small amounts of part-time work, and those who cannot take jobs because the pandemic has forced them to shoulder greater-than-usual caregiving duties (Chart 2.6). After the creation of the Canada Emergency Response Benefit, which supported over 8 million Canadians, the government transitioned the support to a suite of new temporary benefits: the Canada Recovery Benefit, the Canada Recovery Caregiving Benefit, and the Canada Recovery Sickness Benefit. In March 2021, about 3.5 million Canadians received income support through the recovery benefits and EI (Chart 2.7).

Chart 2.6
Change in Employment by Class of Worker, Feb 2020 to Mar 2021
Chart 2.6: Change in Employment by Class of Worker, Feb 2020 to Mar 2021

Note: Gig workers defined as unincorporated self-employed without paid help. Seasonally adjusted by the Department of Finance.
Source: Statistics Canada; Department of Finance calculations.

Text version
per cent
Employees Gig Workers Other Self-Employed
-0.9 -4.3 -8.5
Chart 2.7
Income Support Beneficiaries by Program
Chart 2.7: Income Support Beneficiaries by Program

Note: CRB = Canada Recovery Benefit. Other Programs are the Canada Recovery Caregiving Benefit and the Canada Recovery Sickness Benefit.
Sources: Employment and Social Development Canada; Canada Revenue Agency; Statistics Canada.

Text version
  Millions
  EI CRB Other Benefits
Feb-2020 0.88    
Mar-2021 2.32 1.06 0.15

In February 2021, to ensure continued support for Canadians, the government increased the number of weeks available under the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit by 12 weeks to a total of 38 weeks, the number of weeks available under the Canada Recovery Sickness Benefit from 2 weeks to 4 weeks, and the number of weeks of EI regular benefits available by 24 weeks up to a maximum of 50 weeks. These previously announced changes are expected to cost an estimated $12.1 billion over three years.

It is estimated that the Budget 2021 extension of the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit will cost $2.5 billion over two years, starting in 2021-22.

If additional flexibility is required based on public health considerations later this year, the government will continue to do whatever it takes to be there for Canadians. To ensure this flexibility:

Maintaining Flexible Access to Employment Insurance Benefits

Following the end of the Canada Emergency Response Benefit last fall, over 3.3 million Canadians have accessed EI and $25.3 billion in benefits have been paid since.

As the economy reopens, the EI system must remain responsive to the needs of Canadians.

As has been identified by the International Monetary Fund, the Organisation for Economic Co-operation and Development, and other experts, the pandemic has shown that Canada needs a more effective income support system for the 21st century. For this reason:

Extending Employment Insurance Sickness Benefits to Better Support Canadians Suffering From Illness or Injury

When Canadians are facing illness or injury, they should feel confident that they are supported and that their jobs are protected as they recover. However, for some Canadians, the 15 weeks of sickness benefits available under EI is simply not enough. Workers receiving cancer treatments or requiring a longer period to recover from an illness or injury can face a stressful income gap between the time they exhaust their EI sickness benefits and when they are healthy enough to return to work.

The government also intends to launch consultations with employers, labour organizations and private insurers regarding improvements that may be required to the EI Premium Reduction Program. Under the Premium Reduction Program, employers who provide short-term disability plans to their employees can obtain a reduction in EI premiums.

Extending Temporary Support for Seasonal Workers Who Continue to be Affected by the Pandemic

Self-employed fishers and seasonal workers have shown incredible resilience throughout the COVID-19 pandemic. Federal income support has been a lifeline to approximately 20,000 fishers and thousands of seasonal workers since September, especially in Atlantic Canada. With restrictions ongoing and recovery only just underway, these Canadians continue to need support. To better support fishers and seasonal workers and ensure they do not lose access to needed financial support:

Chapter 2
Seeing Canadians and Businesses Through to Recovery
millions of dollars
2020-
2021
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
Total
2.1. Protecting Jobs and Supporting Businesses -70 12,208 0 0 0 0 12,138
Extending the Canada Emergency Wage Subsidy 0 10,140 0 0 0 0 10,140
Extending the Canada Emergency Rent Subsidy and the Lockdown Support 0 1,920 0 0 0 0 1,920
Extending the Application Deadline for CEBA Gap-Filling Programs 0 148 0 0 0 0 148
Less: Funds Previously Provisioned in the Fiscal Framework
-70 0 0 0 0 0 -70
2.2. Supporting Affected Workers 312 14,622 4,195 1,006 662 -683 20,112
Temporarily Waiving the One-week Waiting Period for Employment Insurance Claims1 106 214 0 0 0 0 320
Less: Projected Revenues
0 0 0 0 0 -36 -36
Providing Additional Weeks of Recovery Benefits and EI Regular Benefits2 206 9,596 2,207 109 0 0 12,118
Less: Projected Revenues
0 0 0 0 0 -610 -610
Providing Additional Weeks of the Canada Recovery Benefit and Canada Recovery Caregiving Benefit 0 2,449 27 0 0 0 2,476
Maintaining Flexible Access to Employment Insurance Benefits 0 2,364 1,898 864 866 915 6,906
Less: Funds Previously Provisioned in the Fiscal Framework
0 -4 0 0 0 0 -4
Less: Projected Revenues
0 0 0 0 -204 -941 -1,145
Extending Temporary Support for Seasonal Workers Who Continue to be Affected by the Pandemic 0 4 63 33 0 0 100
Less: Projected Revenues
0 0 0 0 0 -11 -11
Additional Investments – Seeing Canadians and Businesses Through to Recovery 0 130 0 0 0 0 130
Support to the Government of Quebec to align the Quebec Parental Insurance Plan with Temporary EI Changes 0 130 0 0 0 0 130
Budget 2021 proposes funding and a legislative change to support the Government of Quebec in ensuring that benefits offered under the Quebec Parental Insurance Plan reflect the temporary changes in place between September 2020 and September 2021 that have made Employment Insurance maternity and parental benefits more generous for some claimants.
Chapter 2 - Net Fiscal Impact 242 26,960 4,195 1,006 662 -683 32,380
Note: Numbers may not add due to rounding.
1 Announced in January 2021
2 Announced in February 2021

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