How the 2021 federal budget impacts you
OTTAWA -- The federal government unveiled its long-awaited spring budget on Monday, with a focus on navigating taxpayers out of the third wave of the COVID-19 pandemic and embarking on the long road to economic recovery, with specific attention paid to the most vulnerable.
CTVNews.ca has analyzed the document and identified the key items that, if passed in Parliament, will impact Canadian businesses, workers, families, students, and seniors.
Here’s how the Liberals’ pandemic exit strategy impacts you:
IS THE COST OF CHILD CARE A FINANCIAL STRAIN?
Canadian families across the country, aside from Quebecers, continue to grapple with the increasingly high costs of child care. While child care remains a provincial issue, the federal government is promising measures to help its provincial counterparts establish a more consistent and affordable framework.
- The government is proposing to cut down on the costs of regulated child care in the country to $10 per day on average within the next five years. By the end of 2022, the government is aiming to see a 50 per cent decrease in average fees.
- Support from Ottawa to the provinces would focus on enhancing training and boosting wages for early childhood educators, creating more affordable child-care spaces, and funding not-for-profit sector child-care providers. Part of this work would also include supporting the needs of Indigenous families, including improving before- and after-school learning for First Nations children on reserve.
- The government is proposing to put money aside to see the capacity of the Federal Secretariat on Early Learning and Child Care role strengthened, one of the main objectives being the development of a new National Advisory Council to dig into any new challenges facing the early learning and child-care sector.
SEARCHING FOR AFFORDABLE HOUSING?
Low interest rates and a lack of housing supply have meant a surge in the cost to purchase a home. The pandemic has also reinforced wealth gaps and left many having to turn to public housing options. The Liberals are proposing to make affordable housing more available.
- A sizable chunk of money is set aside for the Canada Mortgage and Housing Corporation over seven years to: ramp up the Rapid Housing Initiative, of which 25 per cent of funding will go specifically to service women-focused housing needs; invest in the Affordable Housing Innovation Fund; prop up the Canada Housing Benefit; and bolster the Federal Community Housing Initiative. The government is also proposing to reallocate previously announced funding through the National Housing Co-Investment Fund and the Rental Construction Financing Initiative.
- The budget earmarks money specifically for the construction of 30 new public housing units across the Northwest Territories and approximately 100 new housing units in Nunavut.
- The Liberals are also committing to ending “chronic” homelessness in Canada, with millions going to Reaching Home – the government’s strategy combat homelessness – and another chunk going to the creation of a pilot program to reduce veteran-specific homelessness.
- Following on their announcement in the fall economic statement, the government is promising to put the steps in motion to implement a national, annual one per cent tax on “the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused, effective January 1, 2022.”
ARE YOU A SENIOR IN LONG-TERM CARE OR STRUGGLING TO MAKE ENDS MEET?
The disastrous living conditions within long-term care facilities, and the way COVID-19 tore through those facilities, is widely seen as one of the more eye-opening social injustices of the pandemic. The government acknowledged this reality in the budget and has proposed some solutions to ensure better treatment of our elders.
- The budget sees billions going to Health Canada to support the provinces and territories to develop national standards of long-term care. Millions will also go to Statistics Canada to improve data collection and infrastructure on “supportive care, primary care, and pharmaceuticals.”
- The government is also proposing a new initiative dubbed the Age Well at Home initiative to make it easier for seniors to age where they are through community supports.
- To help with immediate pandemic needs, the Liberals are pitching to deliver a one-time payment of $500 in August to those who will be 75 and over as of June 2022. In the long-term, they will introduce legislation to raise Old Age Security payments by 10 per cent “on an ongoing basis” as of July 2022.
ARE YOU A STUDENT RACKING UP DEBT?
As the budget reads, young people were among the “hardest and fastest hit” by pandemic unemployment, “experiencing more job losses than any other age demographic.” Couple that with pre-pandemic student debt and the situation becomes worse. It’s for this reason the government is prioritizing support to this group.
- The government is proposing to transition students and recent grads from the Canada Student Loans Program to a new Canada Student Financial Assistance Program that will “make student debt easier to pay down and provide direct support to students with the greatest need.” The budget also details a legislative plan to absorb interest accrued from the student loans and Canada Apprentice Loans programs until March 31, 2023.
- Through the pandemic, the Liberals doubled the amount of money accessible through the Canada Student Grants initiative for the 2020-21 school year. Their intention is to extend the amount until the end of July 2023.
- The government plans to extend disability supports under the Canada Student Loans Program to cover individuals whose disabilities are prolonged but not permanent.
- The budget sees millions going toward connecting students to jobs, with money going to the Student Work Placement Program, which the government expects would provide approximately 50,000 young people work opportunities over the next several years. It also proposes to dish over money to build up the Youth Employment and Skills Strategy, namely to support vulnerable youth and it plans to invest in the Canada Summer Jobs program to produce approximately 75,000 new job placements in the summer of 2022.
IS THE PANDEMIC KEEPING YOU JOBLESS?
If you are still out of a job due to the pandemic, which applies to approximately 300,000 Canadians, and the likelihood of returning to permanent work looks grim, the government is promising to prolong some of its key income supports through to the fall.
- The government is proposing to tack on 12 additional weeks to the Canada Recovery Benefit application period, to a maximum of 50 weeks. To eventually wean recipients off of the emergency support, the first four weeks would be paid out at the regular $500 per week amount but would decrease to $300 per week for the remaining eight weeks.
- A similar extension would be applied to the Canada Recovery Caregiving Benefit, which would be stretched out for an additional four weeks, to a maximum of 42 weeks at $500 per week.
- The government is also proposing to make immediate legislative changes to Canada’s Employment Insurance (EI) program to ensure it remains easy to access over the coming years. They also set aside money for future, long-term EI reform consultations, such as “the need for income support for self-employed and gig workers.”
- The budget proposes to pour billions into extending sickness benefits, available under EI, from 15 to 26 weeks, which would come into effect in the summer of 2022. It also promises to make amendments to the Employment Insurance Act and the Canadian Labour Code to ensure job protection while accessing those sickness benefits.
IS YOUR BUSINESS STILL STRUGGLING?
If you are one of the many business owners still reliant on the government’s suite of job protection benefits, the budget pledges that support will continue to at least July, and for some until early fall. The exact timing of the phasing-out will be based on the efficiency of the vaccine rollout, the government says.
- The Canada Emergency Wage Subsidy will be extended to Sept. 25, but the subsidy rate would gradually decrease beginning on July 4. It will be replaced eventually with the new Canada Recovery Hiring Program, which is proposed to span from June to November. To encourage corporations, charities, non-profits and others to hire new or previously laid-off workers as the economy rebounds, this initiative would “offset a portion of the extra costs employers take on as they reopen.”
“It’s an effort on our part to begin the process of moving from the protecting of jobs – a very important objective during the pandemic, the protecting of jobs and the protecting of the link between workers and their employers – to helping businesses now create jobs,” said a senior government official about the new hiring initiative during the budget briefing.
- The Canada Emergency Rent Subsidy and Lockdown Support, set to expire in June, will also continue to run until the same September end date. Similar to the CEWS, that support will gradually decrease as vaccinations ramp up and the economy reopens.
- The government recently extended the application deadline for the Canada Emergency Business Account (CEBA) to June 30, given the continued financial strain of the pandemic. The budget proposes to do the same for the Regional Relief and Recovery Fund and the Indigenous Business Initiative.