Budget Includes Billions For Daycare, Increased Benefits For Workers And Companies
OTTAWA – With $101.4-billion in new spending committed over the next three years, federal Finance Minister Chrystia Freeland tabled a budget Monday that charts a path to recovery from the pandemic that focuses on parents, small business owners, and young people.
It was the Liberal government’s first budget in two years and the first one since the beginning of the Covid-19 pandemic on Monday. Here are the highlights:
Child Care
The budget includes a substantial amount of funding for child care. It includes a commitment of $30-billion dollars over the next five years and $8.3-billion each following year. It is expected this would cover half of a nationally subsidized program that would offer childcare for an average of $10 a day by 2026. Equal funding from the provinces would be required to proceed.
Ongoing Covid Relief
In ongoing Covid relief, the federal government announced $32.1-billion over the next five years with a commitment to adjust that amount depending on the outlook for vaccines in Canada.
For businesses, $10.1-billion was committed to the Canada Emergency Wage Subsidy (CEWS), $1.9-million for the Canada Emergency Rent Subsidy and Lockdown Support, and $78-million for the Canada Emergency Business Account.
While CEWS is currently set to expire in June, the budget proposes that CEWS continues until September at a declining rate to phase the program out. Right now, the maximum weekly benefit is $847. By the end of the benefit on September 26, the maximum will be $226 per week.
For workers, $178-million was budgeted for waiving the EI waiting period, $5.8-billion for flexible access to EI benefits, $2.5-billion for the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit, $89-million in support for seasonal workers, and $11.3-billion in other recovery and EI benefits.
The government will also commit $595-million to a new program that will run from June to November called the “Canada Recovery Hiring Program.” This program will act as a transition from the federal wage subsidy for the industries hit hardest by the pandemic. Eligible employees would receive a maximum of $1,129 per week over a four-week period and can be used for both new workers and rehired staff.
Increased Minimum Wage
The budget also includes a commitment to present legislation that would establish a $15 per hour federal minimum wage. The government anticipates this would directly benefit over 26,000 federally regulated workers it says currently make less than $15 per hour.It would not affect the people working in jobs that are regulated by the provinces, who would still be paid according to the minimum wages of those jurisdictions.
Digital Adoption Program
The government’s budget also includes support for businesses to help them operate online. The Canada Digital Adoption Program will aim to help up to 160,000 small and medium-sized businesses adopt new digital technologies.
There are two streams for this program: one will help “main street businesses” expand customer bases online and take advantage of e-commerce opportunities. This stream will help businesses with the costs of going digital by providing support from a network of 28,000 young digital trainers. The other stream will help “off-main street businesses” by supporting them with advisory expertise for technology planning and financing options needed to put them to use.
The budget proposes $1.4-billion over four years to Innovation, Science and Economic Development Canada for these programs as well as $2.6-billion over four years to the Business Development Bank of Canada to help small and medium-sized businesses finance technology adoption.
Entrepreneurial Support
The budget proposes $101.4-million over five years to Innovation, Science, and Economic Development Canada for the Small Business and Entrepreneurship Development.
To support women entrepreneurs, the government’s budget includes a commitment to provide up to $146.9-million over four years to strengthen the Women Entrepreneurship Strategy. This would provide affordable financing, increase data, provide mentorship opportunities, and strengthen capacity within the entrepreneurship ecosystem. The budget notes the funding would also support the Women Entrepreneurship Ecosystem Fund and Women Entrepreneurship Knowledge Fund.
The budget also proposes to provide up to $51.7-million over four years for the Black Entrepreneurship Program.
Additionally, the budget proposes an $87.4-million commitment over five years and $18.6-million every year afterward to diversify the government’s supplier base. The funding would focus on procuring from Black-owned businesses, work to meet Canada’s target of 5 percent of federal contracts from Indigenous-owned and led businesses, and incorporate accessibility considerations into federal procurement.
Deficit Recovery
2021’s federal deficit has come in at $354.2-billion. In 2022, the government expects a $154.7-billion deficit. The government does not expect to eliminate the deficit in the next five years, but the end of the fiscal year in 2026 is expected to be an estimated $30.7-billion and demonstrates a potential path forward with more fiscal restraint.
The budget notes that the unemployment rate is expected to decrease from 9.8 percent in 2020 to 6.1 percent in 2025.
Liam Floyd is a reporter for Huddle. Send him story suggestions: [email protected].