Federal government tables first budget in two years: A recovery plan for jobs, growth and resilience
On Monday, April 19, the Liberal government tabled a 739-page budget that outlines a national stimulus and recovery plan. The budget proposes $101.4 billion in new spending; spending that will create a $354.2 billion deficit. While much of the budget’s focus is on spending, the Liberals did announce a new suite of taxes that would raise approximately $3.5 billion a year. The budget was a historical one as Chrystia Freeland, Deputy Prime Minister and Minister of Finance, was the first woman to ever table a budget in the House of Commons.
Of potential benefit to the aftermarket industry, the 2021 budget promises to create 500,000 new training and work opportunities over the next five years. There are several streams through which the government intends to meet this goal, including student placements, apprenticeships, skills training or re-tooling and the “Sectoral Workforce Solutions Program.” The program is aimed at helping fill in-demand jobs by working primarily with sector associations and employers to fund the design and delivery of training relevant to the needs of businesses, specifically small and medium-sized businesses. Program funding would also help companies to recruit and retain a diverse and inclusive workforce.
The aftermarket industry could also benefit from the proposed “Canada Digital Adoption Program,” which would help 160,000 businesses with the cost of new technology and provide them with the support of young Canadians who will be trained to set up new e-commerce opportunities.
A significant focus of the budget is on creating a national child-care program that adds new child-care spaces at an accessible price point. The program is intended to counteract the “she-cession” caused by COVID-19 by increasing women’s participation in the workforce. The program could support the aftermarket industry to attract women workers to the industry.
The Liberals plan to bring forward legislation to establish a $15/ hour federal minimum wage. This is significant as public service employment standards can influence general employment standards. The federal government has also extended several COVID-19 support programs for employers and workers, including the wage subsidy program.
The budget also proposes a new suite of taxes, including a digital services tax on foreign digital services like Netflix and Amazon. Currently, these companies do not pay the same level of taxes that Canadian companies do on revenue earned in Canada. The budget proposes hitting owners of luxury vehicles, planes and boats with a one-time sales tax and taxing vacant homes that foreigners own. As well, the budget proposes a series of enforcement measures to close tax loopholes identified by the Canada Revenue Agency (CRA) and an expansion of the CRA’s budget to improve its ability to collect outstanding taxes.