Canadian Federal Government releases 2021 Budget

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The 2021 Budget, entitled “A Recovery Plan for Jobs, Growth, and Resilience,” was the first federal budget released since COVID-19 came to Canada.

Ottawa, ON — Greater emphasis should have been put on the trades in the Federal Government’s 2021 Budget, according to several skilled trades associations. The 2021 Budget, entitled “A Recovery Plan for Jobs, Growth, and Resilience,” was the first federal budget released in more than two years as the country fights against the coronavirus. Overall, the Budget proposes over $100 billion in stimulus spending in various programs and investments. Canada’s deficit for 2020-2021 was $354 billion, according to the budget released on April 19 by the minister of finance, Chrystia Freeland.

“The trade contracting sector employs more than 80 per cent of workers in the construction industry across Canada, so any additional support for the skilled trades is welcomes,” said Tania Johnston, CEO of the Mechanical Contractors Association of Canada (MCAC). “However, cash flow and project funding is critical for our members to have the confidence to hire workers and apprentices. We look forward to engaging with the government on what mechanisms may be available to provide mechanical contractors with that confidence.”

The 739-page document focuses primarily on the health of Canadians, the Budget devotes a good chunk of support for social, environmental and economic priorities. “At the heart of the plan is a commitment to create one million jobs by the end of 2021, supported by investments in skills training and youth employment,” said Martin Luymes, vice president of government and stakeholder relations at the Heating, Refrigeration, and Air Conditioning Institute of Canada (HRAI). Every year, the federal government provides around $90 million through 60,000 grants to support apprentices.

Speaking about youth employment, the 2021 Budget has pledged $470 million over three years, beginning in 2021-2022, to Employment and Social Development Canada to establish a new Apprenticeship Service. The program is expected to help around 55,000 first-year apprentices in construction and manufacturing Red Seal trades connect with small- and medium-sized employers.

“We applaud the government’s efforts to encourage young people to seek careers in the trades, and the steps being taken to encourage employers to hire apprentices,” said Andrew Pariser, vice president at the Residential Construction Council of Ontario (RESCON). “Our industry is at risk of a sharp labour deficit and we need to get more youth in to the industry. These programs will certainly help with that effort.”

Employers would be eligible to receive up to $5,000 for all first-year apprenticeship opportunities to pay for upfront costs such as salaries and training. This incentive is doubled to $10,000 for employers who hire those underrepresented, including women, racialized Canadians, and persons with disabilities.

Down the pipeline

The federal government proposes to extend the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) until September, while also implementing a new program to temporarily subsidize new hiring, providing $1,100 per month for every new employee.

“Sadly, the budget does not help address the rising debt burden many small firms are facing due to the pandemic. The average business has inherited $170,000 in new, COVID-related debt, but there was no action on our recommendation to expand the Canada Emergency Business Account (CEBA) to $80,000 with 50% forgivable, and no extension of repayment terms for loans,” reports the Canadian Federation of Independent Business (CFIB).

An investment of $960 million over three years has been proposed to the Employment and Social Development Canada for a new Sectoral Workforce Solutions Program. The program will work with associations and employers to fund the design and delivery of relevant training to the needs of the business. This will include skilled workers in the construction industry.

The federal government is looking to diversify the skilled sector by ensuring 40 per cent of funding goes towards supporting workers from underrepresented groups.

Retrofit market

The retrofit market received some additional funding. To speed up the construction, repair, and support of affordable housing, the federal government included the reallocation of $1.3 billion towards 35,000 units. In 2021-2022 and 2022-2023, $300 million in funding from the Rental Construction Financing Initiative will be allocated to support the conversion of vacant commercial property into housing.

An additional $17.6 billion was included in the 2021 Budget towards “green recovery.”

The budget also proposes $22.6 million over four years to Infrastructure Canada to conduct a National Infrastructure Assessment. On a cash basis, the 2021 Budget will also provide $4.4 billion to the Canada Mortgage and Housing Corporation (CMHC) to help homeowners complete “deep home retrofits” through interest-free loans worth up to $40,000. This was initially promised by the Trudeau government during the 2019 campaign, reports Luymes. This would be available to homeowners and landlords who undertake retrofits identified through an authorized EnerGuide energy assessment. The program would be available beginning this summer.

“While we would have liked to see additional investments in infrastructure to address the gaps caused by reduced private sector investment, we are committed to working closely with the Government to ensure infrastructure dollars get out the door, quickly,” said Sean Strickland, executive director of Building Trades Unions.

Both RESCON and the Residential and Civil Construction Alliance of Ontario (RCCAO) expressed disappointment that no new money was announced to assist municipalities with funding state-of-good-repair projects.

“Investing in infrastructure is one of the best ways to help Ontario recover from the effects of COVID-19, as it will create jobs and spur economic growth,” said Nadia Todorova, executive director at RCCAO. “Every dollar spent on infrastructure has a positive multiplier spinoff effect on the economy as it tends to be more labour intensive, and the impacts are more immediate.”

Proposed amendments were also made to the Immigration and Refugee Protection Act that would allow for prioritization of candidates in the “Express Entry System” who can support Canada’s labour market demands, which includes the construction industry.

In addition, the Government of Canada plans to introduce legislation that will establish a federal minimum wage of $15 per hour. This will directly impact over 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.

Budget 2021 proposes the removal of certain fossil-fueled related items from the capital cost allowance (CCA) including fossil-fuelled enhanced combined cycle systems, fossil-fuelled enhanced combined cycle systems, and producer gas generating equipment for when more than one-quarter of the total fuel energy input is from fossil fuels (determined on an annualized basis).

“This year’s federal budget will ultimately be judged on how well it balances ongoing support for Canadians at a time of serious need with the desire chart a sustainable path to economic recovery,” reports Luymes. “This government seems to be wagering that it can attract public support with a budget that sets a new high bar for spending and has something for everyone—including the HVAC/R sector. Canadian voters know, however, that debts must eventually be paid back so it is an open question as to whether these investments will pay off, in terms of meeting long-term policy objectives, and in terms of more immediate-term returns at the ballot box.”

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