173325
170293

Canada  

Liberals bank on child care, e-commerce for growth

Federal Budget 2021

UPDATE 1:29 p.m.

Highlights from the federal Liberal budget tabled Monday by Finance Minister Chrystia Freeland:

— $30 billion over the next five years, and $8.3 billion ongoing for early learning and child care and Indigenous early learning and child care. The plan would aim to see an average drop in fees next year by 50 per cent for preschooler daycare spaces and an average of $10-a-day care by 2026.

— $3 billion over five years, starting in 2022-23, to Health Canada to support provinces and territories in improving standards for long-term care. The government says this funding will keep seniors safe and improve their quality of life.

— $2.2 billion in Canada’s bio-manufacturing and life-sciences sector to rebuild Canada’s national capacity in bio-manufacturing and vaccine development and production.

— Introducing legislation to 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.

— A new Canada Recovery Hiring Program to provide eligible employers with a subsidy of up to 50 per cent on the incremental remuneration paid to eligible employees between June 6 and November 20. The program will provide $595 million to make it easier for businesses to hire back laid-off workers or to bring in new ones.

— $17.6 billion towards a green recovery to create jobs, build a clean economy, and fight and protect against climate change.

— $1 billion over six years, starting in 2021-22, to the Universal Broadband Fund to support a more rapid rollout of broadband projects in collaboration with provinces and territories and other partners.

— $18 billion over the next five years to try to narrow the socio-economic gap between Indigenous and non-Indigenous people, including $6 billion for infrastructure in Indigenous communities, and $2.2 billion to help end the tragedy of missing and murdered Indigenous women and girls.

— $2.5 billion and reallocate $1.3 billion in existing funding in order to help build, repair or support 35,000 housing units.

— Introduce Canada’s first national tax on vacant property owned by non-residents.

— Introducing a new tax on the sales, for personal use, of luxury cars and personal aircraft with a retail sales price over $100,000, and boats, for personal use, over $250,000.

— Includes $100 million in new spending over the next three years.

— Records a $155 billion deficit for 2021-22.


UPDATE 1:18 p.m.

The first federal budget in more than two years extends Ottawa’s COVID-19 “lifeline” for workers and struggling businesses another few months as it aims to pull Canada through the pandemic once and for all.

Finance Minister Chrystia Freeland’s first crack at a budget plan is also widely viewed as a pre-election platform with more than $100 million in new spending over the next three years amid record-smashing deficits.

Canada’s debt is now over $1 trillion for the first time ever, after a $354 billion deficit for the pandemic year just over, and an expected deficit of $155 billion for fiscal 2021-22.

That is driven in part by more than $100 million in new spending over the next three years, including costs to maintain federal wage and rent subsidies and aid for laid-off workers, until September now, instead of cutting them off in June.

Freeland is also looking ahead to the post-pandemic Canada the Liberals want to see, one that has $10-a-day childcare, the ability to produce its own vaccines, national long-term care standards and small- and medium-sized businesses equipped with the workers and technology they need to survive.

All of it comes with a pandemic-sized asterisk that things could still change drastically if vaccine supplies are delayed or they prove not to work that well against emerging variants of the virus.

The federal Liberals are introducing a new tax on luxury cars and expensive boats in the budget.

Starting next year, Ottawa wants to charge a luxury tax on new cars and personal aircraft priced over $100,000, and boats, for personal use, priced over $250,000.

The proposed new tax is in addition to the GST/HST that is already charged on the pricey purchases.

Smokers are also going to pay more under the budget. The budget increases the tobacco excise duty rate by $4 per carton of 200 cigarettes, along with corresponding increases on other tobacco products.

The Liberals also want to put more money in the pockets of older Canadians with an increased Old Age Security payment for those 75 and older.

In addition to a proposed one-time payment of $500 in August to OAS pensioners who will be 75 or older as of June 2022, Ottawa says it wants to increase OAS payments for those over 75 by 10 per cent on an ongoing basis.


ORIGINAL 1:07 p.m.

The federal Liberals are betting that billions more in debt will pay itself back in economic growth by helping thousands of workers find jobs and small businesses adapt to shifting consumer behaviour.

The government’s budget today estimates all the spending should create or maintain some 330,000 jobs next year and add about two percentage points to economic growth.

The largest contributor is $30 billion over five years on top of existing planned child-care spending to drive down fees in licensed daycares and eventually get to $10 a day by 2026.

There is also more money for broadband infrastructure and over $1.6 billion in funding for small and medium-sized businesses to make sure they aren’t left behind by the dash to online shopping.

All that extra spending with few new taxes will send the deficit to $154.7 billion this fiscal year, one year after a record-smashing $354.2 billion deficit induced by the pandemic.

But first, the Liberals plan to keep open the taps of emergency aid until at least the fall as the labour market and businesses continue to struggle under the weight of COVID-19.



More Canada News

173471