Today, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, released Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience, the Government of Canada’s plan to finish the fight against COVID-19 and ensure a robust economic recovery that brings all Canadians along.
COVID-19 has disproportionately affected low-wage workers, young people, women, and racialized Canadians. For businesses, it has been a two-speed recession, with some finding ways to prosper and grow, but many businesses—especially small businesses—fighting to survive.
Budget 2021 is a historic investment to address the specific wounds of the COVID-19 recession, put people first, create jobs, grow the middle class, set businesses on a track for long-term growth, and ensure that Canada’s future will be healthier, more equitable, greener, and more prosperous.
Take a look at some of the highlights from the budget below.
The pandemic has made access to early learning and child care a universal issue that is resonating across sectors, regions, and income brackets. School and child care centre closures have been difficult for parents. Some have had to leave their jobs, or reduce their hours significantly. Without access to child care, parents cannot fully participate in our economy.
That is why our government is creating a National Child Care program with $30 billion provided over five years and $8.3 billion per year after that. This program will aim to reduce fees for parents with children in regulated child care by 50 percent on average, by 2022, with a goal of reaching $10 per day on average by 2026, everywhere outside of Quebec.
This would allow for ongoing annual growth in quality affordable child care spaces across the country, building on the approximately 40,000 new spaces already created through previous federal investments. Also, to make immediate progress for children with disabilities, Budget 2021 proposes to provide $29.2 million over two years, starting in 2021-22, to Employment and Social Development Canada through the Enabling Accessibility Fund to support child care centres as they improve their physical accessibility. This funding, which could benefit over 400 child care centres, would support improvements such as the construction of ramps and accessible doors, washrooms, and play structures.
Budget 2021 is about finishing the fight against COVID. It’s about healing the economic wounds left by the COVID recession. Overall, there remain over 500 thousand workers that have been laid off or faced working hours cuts due to the pandemic, including over 280,000 additional Canadians that have been unemployed for at least six months, still much higher than at the worst of the 2008-09 recession. Budget 2021 recognizes that a rapid and sustained economic recovery is the most reliable way to secure higher employment and income levels, improved and expanded job opportunities, and narrower economic disparities.
In last fall’s Speech from the Throne, the government announced its commitment to create one million jobs and restore employment to previous levels. Despite the severe impacts of the second wave on Canadian workers and businesses, we are on path to create one million jobs by the end of the year—ahead of the schedule predicted in the 2020 Fall Economic Statement.
Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or hiring more staff.
In the face of the COVID-19 pandemic, the government acted swiftly to provide support to protect Canadians and support people and businesses, adapting its response 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.
Budget 2021 is a plan to make targeted investments in Canada’s businesses so they can hire and train Canada’s workers, who will then have more money to spend, spurring our recovery and growing an economy with more opportunities for everyone.
Budget 2021 proposes to extend the wage subsidy, the rent subsidy, and Lockdown Support until September 25, 2021. It also proposes to gradually decrease the rates for the wage subsidy and rent subsidy, beginning July 4, 2021, in order to ensure an orderly phase-out of the programs as vaccinations are completed and the economy reopens. The Canada Emergency Business Account (CEBA) has provided interest-free, partially forgivable loans to more than 850,000 Canadian small businesses. In further recognition of the ongoing pandemic, the government recently extended the application deadline for CEBA to June 30, 2021.
To support businesses enter the digital age, Budget 2021 proposes to provide $1.4 billion over four years, starting in 2021-22, to work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program, Provide micro-grants to smaller businesses to support technology adoption, and create training and work opportunities for as many as 28,000 young people to help small- and medium-sized businesses across Canada adopt new technology.
Budget 2021 takes the next steps towards long-term, foundational change to address systemic racism. Canada can and will do more to support racialized communities, improve understanding of racial inequities and barriers, build a more diverse and inclusive federal public service, and work with partners to build a more equal and just future.
Budget 2021 proposes to provide $200 million in 2021-22 to Employment and Social Development Canada to establish a new Black-led Philanthropic Endowment Fund. This fund would be led by Black Canadians and would create a sustainable source of funding, including for Black youth and social purpose organizations, and help combat anti-Black racism and improve social and economic outcomes in Black communities. The budget is also proposing to provide $100 million in 2021-22 to the Supporting Black Canadian Communities Initiative at Employment and Social Development Canada.
Through this budget, the federal government is proposing a historic, new investment of over $18 billion over the next five years, to improve the quality of life and create new opportunities for people living in Indigenous communities.
Young people were among the hardest and fastest hit when the pandemic struck, experiencing more job losses than any other age demographic. They have also experienced the worst decline in mental-health of any age group. Young Canadians must be at the centre of Canada’s recovery not only to help them rebound today, but to invest in their future success and the future success of our economy. That is why Budget 2021 builds on Canada’s investments in youth with over $5.7 billion over the next five years to help young Canadians pursue and complete their education, and to create 215,000 new job skills development and work opportunities. It also works towards a green recovery and fights against climate change, benefitting today’s and tomorrow’s youth.
Budget 2021 proposes to invest $4.1 billion to make student debt easier to pay down, and to provide direct support to students with the greatest need. This includes waiving interest on student loans, enhancing repayment assistance, doubling of the Canada Student Grants, and extending disability supports.
To ensure youth and students can access valuable job skills and experience, Budget 2021 is proposing to invest $721 million over the next two years to help connect them with employers and provide them with quality job opportunities. This includes the Student Work Placement Program, Youth Employment Skills Strategy, and the Canada Summer Jobs Program.
Young people have seen the greatest decline in good mental health compared to pre- pandemic levels. Budget 2021 proposes to provide $100 million over three years, starting in 2021-22, to support projects for innovative mental health interventions for populations disproportionately impacted by COVID-19, including health care workers, front-line workers, youth, seniors, Indigenous peoples, and racialized and Black Canadians. The funding for the Kids Help Line has been extended into 2021-22 to ensure that it can continue to deliver counselling services to youth during the pandemic.
Climate change is real and COVID-19 has shown us how Canadians have what it takes to come together, to mobilize, and to take action in the face of a crisis. The climate crisis is just as great a challenge. That's why Budget 2021 proposes to provide $17.6 billion towards a green recovery to create jobs, build a clean economy, and fight and protect against climate change.
Budget 2021 proposes to provide $5 billion over seven years, to the Net Zero Accelerator. Building on the support for the Net Zero Accelerator announced in the strengthened climate plan, this funding would allow the government to provide up to $8 billion of support for projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.
The Budget has also proposed to provide $976.8 million over five years, starting in 2021–22, with $80 million in remaining amortization, to help Canada reach its 25 per cent by 2025 target to protect the health of our oceans, commercial fishing stocks, and Canadians’ quality of life, especially in coastal communities.
The worst economic impacts of the pandemic have been suffered by those who could least afford it. Low-wage workers have been up to six times more likely to suffer layoffs than wealthy Canadians. Estimates suggest that today there have been about 268,000 net job losses among low-wage workers since February of 2020, compared to about 40,000 over the same time period during the Great Recession, adjusting for population growth. Racialized and Black Canadians have much higher representation in low-wage work.
To support low-wage workers in the federally regulated private sector the Government of Canada is announcing its intention to introduce legislation that will establish a federal minimum wage of $15 per hour, rising with inflation, with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail. This will directly benefit over 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.
To support those who have been most negatively affected by the pandemic and make our workforce stronger Budget 2021 proposes to expand the Canada Workers Benefit to support about 1 million additional Canadians in low-wage jobs, helping them return to work and increasing benefits for Canada’s most vulnerable.
To continue to support workers through a transition away from emergency income supports and position Canadians for the recovery, the government proposes to provide up to 12 additional weeks of Canada Recovery Benefit to a maximum of 50 weeks. The first four of these additional 12 weeks will be paid at $500 per week. As the economy reopens over the coming months, the government intends that the remaining 8 weeks of this extension will be paid at a lower amount of $300 per week claimed. Budget 2021 also proposes to extend the Canada Recovery Caregiving Benefit an additional 4 weeks, to a maximum of 42 weeks, at $500 per week, in the event that caregiving options, particularly for those supporting children, are not sufficiently available in the interim as the economy begins to safely reopen.
Budget 2021 also proposes $3.9 billion over three years, starting in 2021-22, for a suite of legislative changes to make EI more accessible and simple for Canadians over the coming year while the job market begins to improve.
High housing costs, especially in urban centres, continue to place middle class and low-income Canadians under huge financial pressure. A long-term plan for a faster-growing Canadian economy must include housing that is affordable for working Canadians, especially young families. Stable housing is critical for communities and for a strong middle class.
To help Canadians find affordable housing, spur job creation and local economic recovery, alleviate cost pressure in the housing market overall, and grow the middle class Budget 2021 proposes to provide an additional $2.5 billion over seven years to Canada Mortgage and Housing Corporation, including:
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