A RECOVERY PLAN FOR JOBS,

GROWTH, AND RESILIENCE

BUDGET

2021
 ©Her Majesty the Queen in Right of Canada (2021)
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Table of Contents
Foreword .................................................................................................................. 13
Creating Jobs And Growth. ...................................................................................................... 15
Building a Better, Fairer Canada ............................................................................................. 23
Overview Our Shared Economic and Social Foundations — Challenges and
Opportunities Ahead ............................................................................................. 27
1. The Course of COVID-19 in Canada ................................................................................ 27
An unprecedented global disruption.......................................................................... 27
The recovery path has been uneven over the fall and winter ........................... 28
Canada’s economic performance has exceeded expectations ......................... 29
Canada’s COVID-19 Economic Response has bridged Canadians through
the crisis .................................................................................................................................. 30
Jobs recovery continues to progress at an uneven pace for many
Canadians............................................................................................................................... 34
2. Gaining Economic Momentum through 2021 ............................................................. 37
Progress controlling the virus will determine the path forward ...................... 37
Potential for tailwinds to boost the recovery .......................................................... 38
Economists expect the pace of economic activity to pick-up as vaccination
progresses ............................................................................................................................. 39
3. Securing the Recovery and Building a Stronger Economy ..................................... 41
Securing the recovery ....................................................................................................... 42
Building a stronger economy......................................................................................... 45
4. An Historic Plan for a Stronger and More Resilient Canada .................................. 46
Delivering on the government’s one million jobs commitment ...................... 49
5. A Responsible Fiscal Plan ............................................................................................. 52
Building a stronger and more resilient economy will improve fiscal
sustainability ......................................................................................................................... 54

Part I - Finishing the Fight Against COVID-19 ......................................57

Chapter 1 Keeping Canadians Healthy and Safe ............................................... 59
1.1 Providing Access to Vaccines ........................................................................................... 62
Canada’s COVID-19 Immunization Plan .................................................................... 63
International COVID-19 Response ............................................................................... 64
1.2 Protecting Our Seniors ....................................................................................................... 64
Strengthening Long-term Care and Supportive Care .......................................... 64
Helping Seniors Age Well at Home ............................................................................. 65
1.3 Strengthening Our Health System ................................................................................. 66
Helping Our Health Care Systems Recover .............................................................. 66
Regulatory Cooperation with Trusted International Partners ........................... 66
Renewing the Territorial Health Investment Fund ................................................. 67
1.4 Supporting Mental Health ................................................................................................ 67

III
 National Standards for Mental Health Services ......................................................69
Supporting the Mental Health of Those Most Affected by COVID-19 ..........69
Investing in the Wellness Together Canada Portal ................................................70
Working Towards a New Crisis Hotline ......................................................................70
1.5 Investing in Research and Science .................................................................................71
Strengthening Canada’s Bio-manufacturing and Life Sciences Sector ..........72
Action to Address Antimicrobial Resistance ............................................................73
1.6 A Plan for the Safe Reopening of Our Borders .........................................................73
Supporting Safe Air Travel ...............................................................................................74
Continuing to Protect Air Travellers ............................................................................74
Supporting Temporary Foreign Workers while they Quarantine .....................75
Chapter 2 Seeing Canadians and Businesses Through to Recovery ................79
2.1 Protecting Jobs and Supporting Businesses ..............................................................80
Extending the Canada Emergency Wage Subsidy .................................................83
Extending the Canada Emergency Rent Subsidy and Lockdown Support ...84
Extending the Canada Emergency Business Account ...........................................85
2.2 Supporting Affected Workers ..........................................................................................85
Temporarily Waiving the One-week Waiting Period for Employment
Insurance Claims..................................................................................................................86
Providing Additional Weeks of Recovery Benefits and EI Regular Benefits 87
Maintaining Flexible Access to Employment Insurance Benefits .....................88
Extending Employment Insurance Sickness Benefits to Better Support
Canadians Suffering From Illness or Injury ...............................................................89
Extending Temporary Support for Seasonal Workers Who Continue to be
Affected by the Pandemic ...............................................................................................90

Part II - Creating Jobs and Growth ........................................................ 93

Chapter 3 New Opportunities for Canadians ......................................................95
3.1 Women in the Economy .....................................................................................................96
A Canada-wide Early Learning and Child Care Plan ..............................................97
Establishing a Canada-Wide Early Learning and Child Care System ........... 101
Strengthening Diversity in Corporate Governance............................................. 106
3.2 Opportunities for Canada’s Youth............................................................................... 106
Providing Relief from Student Debt ......................................................................... 107
Doubling the Canada Student Grants for Two Additional Years .................. 108
Expanding Access to Supports for Students and Borrowers with
Disabilities ........................................................................................................................... 109
Supporting Vulnerable Children and Youth During the Recovery ............... 110
Helping Youth and Students Build Job Skills and Connect with
Employers ............................................................................................................................ 110
3.3 Investing in Skills, Training, and Trades .................................................................... 111
Helping Employers Train and Recruit Workers .................................................... 112

IV
 Creating New Opportunities for Skilled Tradespeople ..................................... 113
Supporting Skills for Success ...................................................................................... 113
Ensuring Communities Recover Through Skills Training and Workforce
Planning ............................................................................................................................... 114
Helping Workers Transition to New Jobs............................................................... 114
Extending Federal Supports for Adults Who Return to School Full-Time. 115
Teaching Kids to Code ................................................................................................... 115
3.4 Valuing Canada’s Workers ............................................................................................. 116
Establishing a $15 Federal Minimum Wage .......................................................... 116
Supporting Canada’s Low-Wage Workers ............................................................. 117
Better Labour Protection for Gig Workers ............................................................. 121
Enhancing Protections for Contract Workers in the Air Transportation
Sector.................................................................................................................................... 121
Simplifying Wage Earner Protection Program Payments ................................ 122
Support for Personal Support Workers................................................................... 122
Employee Ownership Trusts ........................................................................................ 123
Taking Action to Address Predatory Lending....................................................... 123
Chapter 4 Helping Canadian Businesses Grow and Succeed ......................... 127
4.1 Helping Canadians Get Back to Work ....................................................................... 128
Helping Hard-hit Businesses Hire More Workers ............................................... 128
Opportunities for Businesses and Young Workers Through Mitacs ........... 130
4.2 Helping Small and Medium-sized Businesses Recover and Grow ................. 130
Helping Small and Medium-sized Businesses Move into the Digital Age 131
Helping Businesses Seize New Technological Opportunities ........................ 133
Supporting Business Investments ............................................................................. 134
Enhancing the Canada Small Business Financing Program ............................ 134
Preparing Canada’s Aerospace Sector for Recovery.......................................... 135
4.3 Investing in Canada’s Entrepreneurs.......................................................................... 136
Supporting Entrepreneurs, Including Equity Deserving Entrepreneurs ..... 136
Supporting Women Entrepreneurs .......................................................................... 136
Supporting Black Entrepreneurs ................................................................................ 137
Leveraging Procurement Opportunities ................................................................. 137
Expanding the Industrial Research Assistance Program .................................. 139
Investing in Canadian Innovators Through a Renewed Venture Capital
Catalyst Initiative .............................................................................................................. 139
To increase venture capital funding and support the continued growth of
Canada’s innovative companies: ................................................................................ 139
Boosting Canada’s Clean Technology Exports ..................................................... 140
4.4 Making it Easier to do Business in Canada .............................................................. 140
Removing Barriers to Internal Trade ........................................................................ 140
Lowering the Cost of Doing Business by Reducing Credit Card Transaction
Fees ....................................................................................................................................... 141
A Fair and Competitive Marketplace........................................................................ 141

V
 Maintaining Momentum on Regulatory Modernization .................................. 142
4.5 Building Infrastructure to Boost Trade ...................................................................... 143
Renewing our National Trade Corridors ................................................................. 143
Strengthening Canada’s Trade Remedy System .................................................. 145
Administration of Trade Controls .............................................................................. 145
Better Supports for Exporters...................................................................................... 145
4.6 Investing in World-leading Research and Innovation ......................................... 146
Supporting Innovation and Industrial Transformation ..................................... 146
Renewing the Pan-Canadian Artificial Intelligence Strategy .......................... 148
Launching a National Quantum Strategy ............................................................... 149
Revitalizing the Canadian Photonics Fabrication Centre ................................. 149
Launching a Pan-Canadian Genomics Strategy ................................................... 150
Conducting Clinical Trials.............................................................................................. 150
Supporting the Innovation Superclusters Initiative ............................................ 151
Promoting Canadian Intellectual Property ............................................................. 151
Capitalizing on Space-based Earth Observation ................................................. 152
Science and Technology Collaboration with Israeli Firms ............................... 152
4.7 Supporting a Digital Economy ...................................................................................... 153
Accelerating Broadband for Everyone ..................................................................... 153
Establishing a New Data Commissioner ................................................................. 154
Enhancing Business Condition Data ......................................................................... 154
Chapter 5 A Healthy Environment for a Healthy Economy ........................... 159
5.1 Growing Our Net-zero Economy ................................................................................. 160
Accelerating Canada’s Net-zero Transformation Through Innovation ....... 160
Propelling Clean Tech Projects ................................................................................... 161
Growing Zero-emission Technology Manufacturing ......................................... 161
Accelerating Investment in Clean Energy Technologies ................................... 162
Enhancing Canada’s Supply of Critical Minerals .................................................. 163
Charging and Fueling Zero-emission Vehicles ..................................................... 164
Federal Clean Electricity Fund ..................................................................................... 164
Reducing Transportation and Landfill Emissions ................................................ 165
Investing in the Forest-based Bio-economy ......................................................... 165
First Federal Green Bond ............................................................................................... 166
5.2 Investing in Our Clean Industry Future ..................................................................... 166
Carbon Capture, Utilization, and Storage ............................................................... 167
Tax Incentive for Carbon Capture, Utilization, and Storage ............................ 168
Advancing Carbon Capture, Utilization, and Storage Technologies............ 169
Cleaner Fuels for a Cleaner Environment ............................................................... 169
Supporting the Production and Use of Clean Fuels ........................................... 170
Low-Carbon Fuel Procurement Program ................................................................ 170
Supporting a Centre for Innovation and Clean Energy in British
Columbia ............................................................................................................................. 171
Investing in Clean Energy in Northern and Indigenous Communities ....... 171

VI
 5.3 Advancing Canada’s Climate Plan ............................................................................... 172
Steering Canada’s Strengthened Climate Plan .................................................... 173
Returning the Proceeds from the Price on Pollution ......................................... 173
Support for Farmers ........................................................................................................ 174
Agricultural Climate Solutions .................................................................................... 174
Integrating Climate into Federal Decisions ........................................................... 175
Strengthening Public Climate-related Disclosures ............................................. 175
Border Carbon Adjustments ........................................................................................ 176
5.4 Building Green Homes and Communities ............................................................... 176
Lower Home Energy Bills Through Interest-free Loans for Retrofits .......... 177
5.5 Adapting to Climate Change for a More Resilient Future ................................. 178
Strengthening Climate Resiliency ............................................................................. 178
Keeping Canadians Safer from Floods .................................................................... 179
Improving Wildfire Resilience and Preparedness ............................................... 179
Supporting Provincial and Territorial Disaster Response and Recovery .... 180
Addressing Climate Change in Yukon ..................................................................... 180
Preserving the HMS Erebus and HMS Terror ......................................................... 180
5.6 Protecting Nature .............................................................................................................. 181
Historic Investments in Canada’s Natural Legacy ............................................... 181
Conserving Canada’s Oceans ...................................................................................... 184
Reducing Ocean Plastics that Threaten Marine Life .......................................... 184
Preserving Wild Pacific Salmon .................................................................................. 185
Developing the Canada Water Agency ................................................................... 186
Better Understanding Our Environment ................................................................. 186
Support for the Polar Continental Shelf Program .............................................. 187
Continuing Canada’s Chemicals Management Regime ................................... 187
Chapter 6 Strengthening the Cities and Communities We Call Home......... 193
6.1 A Place to Call Home ........................................................................................................ 193
More Affordable Housing ............................................................................................ 194
Ending Homelessness .................................................................................................... 198
6.2 Restoring Tourism, Arts, Culture, and Sport ........................................................... 199
Revitalizing Tourism........................................................................................................ 200
Supporting Canada’s Arts, Culture, Heritage, and Sport Organizations and
Workers................................................................................................................................ 202
Supporting Canadian TV and Film Productions through COVID-19 ........... 204
Investing in Telefilm Canada ....................................................................................... 204
Encouraging Diverse Voices in Canadian TV and Film...................................... 204
Support for the Canadian Broadcasting Corporation / Radio-Canada ...... 205
Support for the Canadian Book Industry ............................................................... 205
Protecting Canada’s Historic Places ......................................................................... 205
Memorial to the Victims of Communism ............................................................... 206
6.3 Building Stronger Communities .................................................................................. 206
Helping Charities, Non-profits, and Social Purpose Organizations Grow . 206

VII
 Supporting Community Service Organizations .................................................... 207
Boosting Charitable Spending in Our Communities .......................................... 208
Consulting on a New Canadian Social Bond ......................................................... 209
Improving Food Security ............................................................................................... 209
6.4 Jobs and Growth Through Infrastructure Investments ....................................... 209
Permanent Public Transit Fund ................................................................................... 210
Canada Community-Building Fund........................................................................... 211
National Infrastructure Assessment .......................................................................... 211
Next Step Towards High Frequency Rail in the Toronto-Quebec City
Corridor ................................................................................................................................ 211
Assisting Homeowners Affected by Pyrrhotite .................................................... 212
Bonaventure Expressway ............................................................................................... 212
Canada’s National Capital Region ............................................................................. 213
6.5 Local and Regional Development ............................................................................... 214
Supporting Jobs and Growth in All Communities ............................................... 214
Creating a New Regional Development Agency for British Columbia ....... 215
Canada Community Revitalization Fund ................................................................. 215
Investing in Small Craft Harbours .............................................................................. 215
6.6 Rural and Northern Communities ............................................................................... 216
Extending the Northern Residents Deduction...................................................... 216
Supporting Post-secondary Education in the North .......................................... 217
Ensuring Food Security in the North ........................................................................ 217
Support for Jobs in the Canadian Wine Sector .................................................... 217
Supporting Food Processors Following Ratification of New Trade
Agreements ........................................................................................................................ 218
6.7 Strengthening Canada’s Immigration System ........................................................ 218
Delivering a Modern Immigration Platform .......................................................... 219
Enhancing the Temporary Foreign Worker Program ......................................... 219
Supporting Racialized Newcomer Women ............................................................ 220
Accelerated Pathways to Permanent Residence .................................................. 220
Streamlining Express Entry ........................................................................................... 220

Part III - A Resilient and Inclusive Recovery ..................................... 225

Chapter 7 A More Equal Canada ........................................................................ 227
7.1 Fighting Systemic Racism and Empowering Communities ............................... 227
Strengthening the Canadian Race Relations Foundation and Helping
Communities Respond to an Increase in Racism ................................................ 228
Supporting Black Canadian Communities.............................................................. 229
Better Data for Better Outcomes ............................................................................... 230
Making the Public Service More Diverse ................................................................ 231
7.2 An Economic Recovery that Includes Everyone ..................................................... 232
Increasing Old Age Security for Canadians 75 and Over ................................. 232
Towards a New Disability Benefit .............................................................................. 233

VIII
 Improving Access to the Disability Tax Credit ...................................................... 234
Making Our Communities and Workplaces More Accessible ........................ 235
Supporting Greater Equality for LGBTQ2 Communities ................................... 235
Supporting Our Veterans.............................................................................................. 236
Recognizing the Contributions of Atomic Workers ........................................... 236
7.3 Supporting the Health of Canadians ......................................................................... 237
Addressing the Opioid Crisis and Problematic Substance Use ..................... 237
Moving Forward on National Universal Pharmacare ......................................... 238
Supporting Access to Sexual and Reproductive Health Care Information
and Services ....................................................................................................................... 238
Establishing a National Institute for Women's Health Research................... 239
National Autism Strategy ............................................................................................. 240
Strategic Research on Pediatric Cancer .................................................................. 240
Establishing a National Framework for Diabetes ................................................ 240
Taxation of Vaping Products ....................................................................................... 241
Taxation of Tobacco ....................................................................................................... 241
Support for Canadian Blood Services ...................................................................... 242
Better Palliative Care ...................................................................................................... 242
Ensuring Appropriate Access and Safeguards for Medical Assistance in
Dying..................................................................................................................................... 242
Chapter 8 Strong Indigenous Communities ..................................................... 245
8.1 Healthy and Vibrant Communities ............................................................................. 246
Supporting Indigenous Communities in the Fight Against COVID-19 ...... 246
Improving Health Outcomes in Indigenous Communities ............................. 247
Distinctions-Based Mental Wellness Strategy ...................................................... 248
Supporting Indigenous Children and Families ..................................................... 249
Providing High-quality Education ............................................................................. 250
Supporting Indigenous Post-secondary Education During COVID-19 ...... 251
On-reserve Income Assistance ................................................................................... 251
8.2 Building Infrastructure and Economic Growth ....................................................... 252
Indigenous Infrastructure ............................................................................................. 253
Supporting Indigenous Economies .......................................................................... 253
Support for Indigenous Entrepreneurs ................................................................... 254
Securing Capital for Community Investments ...................................................... 255
Redesigning the Additions to Reserve Policy ....................................................... 256
8.3 Responding to the Tragedy of Missing and Murdered Indigenous Women
and Girls ........................................................................................................................................ 256
Culture .................................................................................................................................. 257
Health and Wellness ....................................................................................................... 258
Human Security and Safety ......................................................................................... 258
Justice ................................................................................................................................... 259
Working with Partners ................................................................................................... 260
8.4 Walking the Path to Reconciliation and Self-determination ............................ 261

IX
 Implementation of Legislation on the United Nations Declaration on the
Rights of Indigenous Peoples ........................................................................................ 261
Escalating 10-Year Grant Funding ............................................................................. 262
Supporting Indigenous Governance and Capacity ............................................. 262
Advancing Specific Claims Settlements .................................................................. 262
Commemorating the Legacy of Residential Schools ......................................... 263
Support for Indigenous-led Data Strategies ......................................................... 263
Engagement with Indigenous Peoples .................................................................... 264
Supporting Self-determination Through Tax Agreements .............................. 264
Supporting First Nations Priorities ............................................................................ 265
Supporting Inuit Priorities ............................................................................................ 268
Supporting Métis Nation Priorities ........................................................................... 270
Chapter 9 Protecting Our Shared Values .......................................................... 275
9.1 Promoting Our Two Official Languages .................................................................... 275
Promoting Official Languages .................................................................................... 276
9.2 Keeping Canadians Safe and Improving Access to Justice ............................... 277
Gun Control ........................................................................................................................ 277
Advancing a National Action Plan to End Gender-Based Violence ............. 278
Preventing Radicalization to Violence ..................................................................... 282
Better Job Protections for Parents of Young Victims of Crime ...................... 282
Diverting Youth Away from the Justice System ................................................... 283
Expanding Access to Drug Treatment Courts ....................................................... 283
Enhancing Legal Support for Vulnerable Communities ................................... 284
Supporting Work to Address Systemic Racism in Public Safety
Institutions .......................................................................................................................... 284
Reforming Canada’s Pardons Process ..................................................................... 285
Reforming the Judicial Conduct Review Process ................................................. 285
Enhancing the Capacity of Superior Courts ........................................................... 286
Maintaining Federal Court Services During COVID-19 ..................................... 286
Re-establishing the Law Commission of Canada ................................................ 286
Preventing the Spread of COVID-19 in Correctional Institutions ................. 287
Enhancing Data Collection on Cyber Security Threats ...................................... 287
Improving How Access to Information Works for Canadians ........................ 287
9.3. Defending Canada and Canadian Values ................................................................ 288
Addressing Sexual Misconduct and Gender-based Violence in the
Military.................................................................................................................................. 288
Supporting NORAD Modernization .......................................................................... 289
Increasing Canada’s Contributions to NATO ........................................................ 290
Advancing the Safer Skies Initiative .......................................................................... 290
Sustaining Health Services for the Canadian Armed Forces ........................... 291
Better Equipping Our Coast Guard and Military .................................................. 291
Ensuring Procurement Partners Respect Canada’s Economic Interests ..... 292
9.4 Building a Safer, Resilient, and Equitable World ................................................... 292

X
 Increasing International Humanitarian Assistance ............................................. 293
Responding to the Rohingya Crisis .......................................................................... 293
Response to the Venezuelan Migrant and Refugee Crisis .............................. 294
Extending Canada’s Middle East Strategy ............................................................. 294
Recapitalization of FinDev Canada ........................................................................... 294
Supporting Developing Economies Through the International Finance
Corporation ........................................................................................................................ 295
Supporting the African Development Bank .......................................................... 295
Canadian Ombudsperson for Responsible Enterprise ...................................... 295

Part IV - Fair and Responsible Government

Chapter 10 Responsible Government ................................................................ 303
10.1 A Tax System that Promotes Fairness ..................................................................... 303
Digital Services Tax ......................................................................................................... 304
Luxury Tax ........................................................................................................................... 304
Tax on Unproductive Use of Canadian Housing by Foreign Non-resident
Owners ................................................................................................................................. 305
Limitations on Excessive Interest Deductions....................................................... 306
Preventing Cross-border Tax Schemes ................................................................... 306
Mandatory Disclosure Rules ........................................................................................ 307
Tackling Tax Avoidance and Evasion ....................................................................... 307
Strengthening the CRA .................................................................................................. 308
Protecting the Fairness and Integrity of Our Tax System ................................ 308
Action Against Money Laundering and Terrorist Financing ........................... 309
Beneficial Ownership Transparency .......................................................................... 309
Combatting Abusive Tax Collection Avoidance Schemes ............................... 310
Improving Duty and Tax Collection on Imported Goods ................................ 310
10.2 A Stable and Robust Financial Sector ..................................................................... 310
Retail Payments Oversight Framework ................................................................... 311
10.3 Better Services for Canadians ..................................................................................... 311
E-payroll to Help Businesses ....................................................................................... 311
Protecting Taxpayer Information ............................................................................... 312
Modernizing CRA Services ........................................................................................... 312
Canadian Digital Service ............................................................................................... 313
10.4 Reinforcing Government of Canada Operations ................................................ 313
Measuring What Matters .............................................................................................. 313
Reducing Government Travel ..................................................................................... 314
Improving and Defending Our Cyber Networks ................................................. 314
Modernizing Critical IT Infrastructure ...................................................................... 315

XI
Annex 1 Details of Economic and Fiscal Projections ...................................... 321
Annex 2 Debt Management Strategy ............................................................... 357
Annex 3 Legislative Measures ............................................................................ 367
Annex 4 Gender, Diversity, and Quality of Life Statement .......................... 377
Annex 5 Budget 2021 Impacts Report .............................................................. 413
Annex 6 Tax Measures: Supplementary Information....................................583
Annex 7 Consultations on Other Tax Measures: Supplementary
Information ........................................................................................................... 731

XII
Foreword
After thirteen months of uncertainty and hardship, Canadians continue to battle
COVID-19, with determination and grit.

We are all tired, frustrated, and sometimes even afraid. Yet, it’s our responsibility
to finish this fight – and to ensure that nothing like it ever threatens our country
in this way again. That is our job.

It’s also our job to tackle the work of recovery, to create the conditions for new
employment and new growth, now and in the years ahead.

This budget is about finishing the fight against COVID. It’s about healing the
economic wounds left by the COVID recession. And it’s about creating more jobs
and prosperity for Canadians in the days – and decades – to come.

It’s about meeting the urgent needs of today, and about building for the long-
term. It is a budget focused on middle class Canadians, and on pulling more
Canadians up into the middle class. It’s a plan that embraces this moment of
global transformation to a green, clean economy.

This budget addresses three fundamental challenges.

First, we need to conquer COVID. That means buying vaccines and supporting
provincial healthcare systems. It means enforcing our quarantine rules at the
border and within the country. It means providing Canadians and Canadian
businesses with the support they need to get through these final, third-wave
lockdowns, and to come roaring back when the economy fully reopens.

Second, we must punch our way out of the COVID recession. That means
ensuring lost jobs are recovered as swiftly as possible, and that hard-hit
businesses rebound quickly and are able to flourish.

It means providing support where COVID has struck hardest – to women and
young people and low-wage workers, and to small and medium-sized businesses,
especially in hospitality and tourism.

The final challenge is to build a better, fairer, more prosperous, more innovative
future. That means investing in Canada's green transition and the green jobs that
go with it; in Canada's digital transformation and Canadian innovation; and in
building infrastructure for a dynamic, growing country.

And it means providing Canadians with social infrastructure – from early learning
and child care, to student grants – so the middle class can flourish and more
Canadians can join it.

Foreword 13
When this global pandemic hit Canada over a year ago, our government made a
covenant with Canadians. We knew that fighting the virus would require all of us
to accept unprecedented restrictions.

In exchange, we pledged to do whatever it takes to support Canadians in the face

of those restrictions and, ultimately, to conquer this disease. We have kept that
pledge. We will continue to do so.

When COVID first struck, we immediately provided $500 million to bolster our
country’s health-care system. Then last summer, we invested nearly $20 billion,
through the Safe Restart Agreement, to support provinces and territories in the
fight against COVID. Last fall we helped children return to school with $2 billion
in the Safe Return to Class agreement.

Just last month, we committed to providing provinces and territories with an

additional $4 billion to shore up the healthcare system as we fight the third wave,
and an additional $1 billion to speed up the roll-out of vaccines.

Our elders have been this virus’s principal victims. The disease has preyed on
them mercilessly, cutting short thousands of lives and forcing all seniors into
fearful isolation, for more than a year.

We have tragically failed so many of those living in long-term care facilities. To

them, and to their families, let me say this: I am so sorry.

We owe you so much better than this. As a country, we must fix what is so clearly
and utterly broken.

That’s why we propose a $3 billion investment to ensure that provinces and

territories provide a high standard of care in their long-term care facilities. We are
delivering today on our promise to increase Old Age Security for Canadians aged
75 and older, which will provide up to $766 more for eligible seniors in the first
year, and that will grow with indexation.

We owe our elders a great debt. This is a partial repayment.

Our government has been urgently procuring vaccines since last spring – and
providing them – at no cost – to Canadians. More than 10 million vaccines were
distributed to provinces and territories by the end of March; a further six million
will be distributed by the end of this month.

And by the end of September, Canada will have received 100 million doses –
more than enough for every adult Canadian to have received two doses of
vaccine.

We need to be ready for new variants of COVID-19, and we must have the
booster shots that will allow us to keep them in check.

14
That is why we must begin to rebuild our national capacity in bio-manufacturing
and vaccine development and production. Making our own vaccines is essential
to our national security. Canada has brilliant scientists and entrepreneurs. We will
support them with an investment of $2.2 billion in Canada’s bio-manufacturing
and life-sciences sector. And, together, we will rebuild this vital industry.

Creating Jobs And Growth.

When COVID-19 first hit, it pushed our country into its deepest recession since
the Great Depression.

But this is an economic shock of a very particular kind. We are not suffering
because of endogenous flaws or imbalances within our economy.

Rather, the COVID recession is driven by an entirely external event – much like
the economic devastation of a flood, blizzard, wildfire or other natural disaster.

That is why an essential part of Canada's fight against COVID-19 has been
unprecedented federal support for Canadians and Canadian businesses. Our
over-riding objective, from the very beginning, has been to prevent the long-
term scarring of Canadian society and the Canadian economy.

And it has worked. Our support helped keep food on the tables of millions of
families

This unprecedented federal action staved off a flood of bankruptcies and

preserved our country's economic muscle.

The government's economic support measures have been a cost-effective

investment – as the IMF has confirmed – averting an economic collapse that
would have been truly devastating.

Indeed, thanks to the investments our government made in averting economic

scarring, the Canadian economy is poised to come roaring back. The rebound has
already started: Canada’s GDP rose by almost 10 percent, annualized, in Q4 of
2020.

We will continue to honour our covenant with Canadians, until COVID-19 is fully
behind us. The government is prepared to extend support measures, as long as
the fight against this virus requires.

But as Canada pivots to recovery, our economic measures will, too. And as we
look to brighter days, our efforts will be relentlessly focused on jobs and growth.

****

Foreword 15
We promised last November to spend up to $100 billion over three years to get
Canada back to work and to ensure the lives and prospects of Canadians are not
permanently stunted by this pandemic recession.

This budget keeps that promise. It is an ambitious plan for jobs and growth that
is precisely designed to heal the specific wounds of the COVID-19 recession, and
to build new economic muscle, creating prosperity for us and for our children, for
years to come.

Altogether, this budget creates nearly 500,000 new training and work experience
opportunities for Canadians.

It will keep our Throne Speech promise of creating one million jobs by the end of
this year.

Some will say our sense of urgency is misplaced.

To them, I ask this: Did you lose your job during a COVID lockdown? Were you
reluctantly let go by your small-business employers who were like a family to you,
but simply could not afford your salary any longer?

Are you a young mother, forced to quit the dream job you fought to get, because
there was no way to keep working while caring for your pre-school children? Did
you graduate from university last spring, and are you still struggling to find work
in the worst job market since the Great Depression?

Is your family business – launched perhaps, by your parents, and which you’d
hoped to pass on to your children – now struggling under a sudden burden of
debt, and fending off bankruptcy through sheer grit, every day?

Yet this is the bitter harvest millions of Canadians have reaped during the
pandemic.

The ravages of COVID have been uneven. Some parts of our economy, and
workers in those sectors – people who work in forests, banks and technology
companies, building homes and selling them, for example – are already doing
better than they were before the pandemic struck. All of us admire their ingenuity
and are grateful for their resilience.

But many others have been grievously hurt by the pandemic and the lockdowns
it has required: women, young people, low wage workers and small businesses.
Very often, these four groups intersect. To support Canadian workers as we finish
our fight against the third wave, and to provide an economic bridge to a fully
reopened economy, we will build on the enhancements we’ve made during the
pandemic to maintain flexible access to EI benefits for another year, until the fall
of 2022The CRB, which we created to support Canadians not covered by EI, will
remain in place until September, offering an additional 12 weeks of benefits, but

16
stepping down to $300 a week after July 17 as our economy fully reopens over
the summer.

About 300,000 Canadians who had a job before the pandemic are still out of
work. This month’s lockdowns are essential, but they may temporarily make
things worse. We need to be there to support Canadian workers – and we will be.

Low-wage workers in Canada work harder than anyone else in this country, for
less pay. In the past year they’ve faced either layoffs or significant infection risks,
and often both in succession. We cannot ignore their contribution and their
hardship – and we will not.

So, Budget 2021 proposes to expand the Canada Workers Benefit, to invest $8.9
billion over six years in additional support for low-wage workers – extending
support to about a million more Canadians and lifting nearly 100,000 people out
of poverty.

I am sure all Canadians would agree that no one working full-time in our great
country should live in poverty. This investment will help make that very Canadian
value a reality. To further support Canadians working hard to join the middle
class, this budget will introduce a $15 an hour federal minimum wage.

And Budget 2021 reiterates the government’s commitment to amend the Canada
Labour Code to improve labour protection for Canadians working in the gig
economy.

We know the pandemic has exacerbated systemic barriers faced by racialized

Canadians. So, Budget 2021 provides additional funding for the Black
Entrepreneurship Program, as well as an investment in a Black-led Philanthropic
Endowment Fund, to help fight anti-Black racism and improve social and
economic outcomes in Black communities.

One of the most striking aspects of the pandemic has been the historic sacrifice
young Canadians have made to protect their parents and grandparents. Our
youth have paid a high price to help keep the rest of us safe.

Unemployment among young people is now 14 per cent, compared to 7.5 per
cent among Canadians as a whole.

And the mental strain on our youth, who have been sequestered at home at a
time of life when people most need to hang out with their friends, has been
extraordinary.

Foreword 17
We will not allow young Canadians to become a lost generation. They need our
support to launch their adult lives and careers in post-COVID Canada – and they
will get it. This budget proposes to invest $5.7 billion over five years in Canada’s
youth. This is an investment in our future and it will yield great dividends.

We will make college and university more accessible and affordable. We will
create job openings in skilled trades and high-tech industries. And we will double
the Canada Student Grant for two more years, extending the waiver of interest on
federal student loans through March 2023.. More than 450,000 low-income
student borrowers will also have access to more generous repayment assistance.

We will help young Canadians launch their careers by helping to create 215,000
additional quality job skills development and work opportunities to help youth
and students join or return to the workforce over the next two years, including
through Canada Summer Jobs, the Youth Employment and Skills Strategy and
through work-integrated learning for students.

COVID has brutally exposed something women have long known: Without
childcare, parents – usually mothers – can’t work. The closing of our schools and
daycares drove women’s participation in the labour force down to its lowest level
in over two decades. Early learning and childcare has long been a feminist issue;
COVID has shown us all that it is an urgent economic issue, too.

This is a cause forward-thinking Canadians have championed for more than 50

years. I was two years old when the Royal Commission on the Status of Women
urged Canada to establish a universal system of early learning and childcare.

My mother was one of Canada’s redoubtable second wave of feminists who

fought – and outside Quebec, failed – to make that recommendation a reality. A
generation after that, another minister, Ken Dryden, almost got this done.

Their long labour is a testament to the difficulty and complexity of this task.

But we are going to do it. This budget is the map and the trailhead.

For there is agreement, across the political spectrum, that early learning and
childcare is the national economic policy we need now.

It delivers a jobs-and-growth hat-trick, allowing both mothers and fathers to

work, thus increasing our workforce and boosting our growth, creating jobs for
mostly women childcare workers, and helping to raise a smarter, better educated
next generation.

18
The evidence from Quebec – which began building a universal early learning and
childcare system more than two decades ago – is incontrovertible. Early learning
and childcare is an investment in social infrastructure that pays for itself. Quebec
has among the highest labour force participation of women with children under
three, in the world. TD Economics has pointed to a range of studies showing that
, for every dollar invested in early learning and childcare in Quebec, between
$1.50 and $2.80 comes back to the broader economy.

Canadians have been fighting for early learning and childcare unsuccessfully for
so long, that some may question whether our government has the determination
and staying power to finally get this done.

To those who doubt us, I say this: This budget commits up to $30 billion over five
years, reaching $8.3 billion on a permanent basis, to build a high-quality,
affordable and accessible early learning and childcare system across Canada.

This funding will allow for a 50 per cent reduction in average fees for regulated
early learning and child care in all provinces outside of Quebec, to be delivered
by the end of 2022. It will also ensure annual growth in quality and affordable
child care spaces across the country in partnership with provinces and territories

That said, this is not an effort that will deliver instant gratification. I am well aware
of the political challenges ahead, particularly given our federal political structure.
We are building something that, of necessity, must be constructed gradually,
collaboratively, and for the long-term.

But I have confidence in us. I have confidence that we are a country that believes
in investing in our future; in our children; and in our young parents. Here is our
goal: That, in the next 5 years, Canadian parents across the country have access
to high quality early learning and child care, for an average of $10 a day.

The truth is that the tragedy of COVID-19 has created a window of opportunity,
which we can open to finally build a system of early learning and childcare across
our country.

This is social infrastructure that will drive jobs and growth. This is feminist
economic policy. This is smart economic policy.

I make this promise to Canadians, speaking as your Minister of Finance and as a

working mother: We will get it done.

Small businesses are the bustling, thriving heart of our economy. They are the
spine of Main Street in every city, town and village in Canada. And while many
big, multinational companies have actually prospered during this low-interest
rate COVID year, our small businesses have been battered.

Healing the wounds of COVID requires a rescue plan for them.

Foreword 19
Budget 2021 proposes to extend the wage subsidy, rent subsidy, and Lockdown
Support for businesses and other employers until September 25, 2021, for an
estimated total of $12.1 billion in additional support.

To help the hardest-hit businesses pivot back to growth, we propose a new

Canada Recovery Hiring Program, which will run from June to November and will
provide $595 million to make it easier for businesses to hire back laid-off workers
or to bring on new ones. We supported Canadian businesses when lockdowns
forced them to shut their doors. And we will continue to provide support as they
come roaring back over the summer and fall.

But our government proposes to do much more than execute a rescue.

With this budget, we will make unprecedented and historic investments in

Canada’s small businesses – helping them invest in new technologies and
innovation.

This will help Canadian small businesses become more productive and
prosperous. It will give them a shot at becoming the Canadian-headquartered
global champions of tomorrow.

The future and resilience of Canada’s small businesses depends on their ability to
adopt new technology. We propose to invest $4 billion in a game-changing new
effort that will help up to 160,000 small and medium-sized businesses buy the
new technologies they need to grow.

The new Canada Digital Adoption Program will also provide these businesses
with the advice and help they need to get the most out of these new
technologies by training 28,000 young Canadians – a Canadian technology corps
– and sending them out to work with our small and medium sized businesses.

This groundbreaking new program will help Canadian small businesses become
more efficient, go digital, take advantage of e-commerce, and become more
competitive in Canada and abroad. Increased funding for the Venture Capital
Catalyst Initiative will help provide financing to innovative Canadian businesses,
so they can grow and create well-paying jobs in Canada.

Budget 2021 also provides an important boost for business investments. It

proposes to allow immediate expensing of up to $1.5 million of eligible
investments by Canadian-controlled private corporations in each of the next
three years. It is estimated that these larger deductions will represent $2.2 billion
in additional support that will help drive growth and create jobs today and in the
future. This will support 325,000 businesses in making critical investments to
grow their output.

Building for the future means investing in innovation and entrepreneurs.

20
This budget proposes to help our innovators turn Canadian research, talent and
discoveries into new products, services and companies.

We propose to invest in the next phase of the Pan-Canadian Artificial Intelligence

Strategy and to launch similar strategies in genomics and quantum science, areas
where Canada is a global leader.

To jumpstart tourism, this budget proposes $1 billion, including to support

festivals and other events that provide jobs and growth, and enhance the life of
our communities.

As we emerge from our COVID lockdowns, let’s spend the next year supporting
each other and exploring our own breathtaking country.

In 2021, job growth means green growth.

Putting a price on carbon was no simple task. But we did it and made it stick,
resulting in the first credible carbon-reduction program put forward by any
Canadian government in history.

The government’s updated climate plan, presented in December, was another

turning point towards the green economy.

Building a net zero economy is no longer a matter of debate. It is not a matter of

right versus left. It is about leaving a healthy planet, with clean water and clean
air, for our children and their children. It is about averting a climate catastrophe.
And it’s about securing jobs today and creating the careers of the future.

This budget sets out a plan to help achieve GHG emissions reductions of 36 per
cent from 2005 levels by 2030, and puts us on a path to achieve net-zero
emissions by 2050. And it puts in place the funding to achieve our 25 per cent
land and marine conservation targets by 2025.

By making targeted investments in transformational technologies, we can ensure

that Canada benefits from the next wave of global investment and growth.
Investing now in areas such as clean fuels and carbon capture, will foster well-
paying middle-class jobs now and for many years into the future.

We can and will foster jobs and growth by building on what we already do well.
The resource and manufacturing sectors that are Canada's traditional economic
pillars – energy, mining, agriculture, forestry, steel, aluminum, autos, aerospace –
will be the foundation of our new, sustainable economy.

That is why we propose a historic investment of a further $5 billion over seven

years, starting in 2021-22, in the Net Zero Accelerator.

With this added support, on top of the $3 billion we committed in December, the
Net Zero Accelerator will help even more companies invest to reduce their

Foreword 21
greenhouse gas emissions, while growing their businesses. This will help build
Canada’s clean industrial advantage and bolster the domestic market for
Canada’s own clean technology innovators.

Budget 2021 further proposes to incentivize the green transformation through

new tax measures, including for zero emissions technology manufacturing,
carbon capture and storage, and green hydrogen.

We are at a pivotal moment. Just as the invention of the steam engine and of the
personal computer triggered transformative economic shifts, today, the global
economy is turning swiftly, decisively and irreversibly green. It is essential for the
prosperity of the next generation of Canadians – and indeed, for those of us
working today – for Canada to be at the forefront of this great transformation.

We can lead, or we can be left behind. Our government knows that the only
choice for Canada is to be in the vanguard.

Throughout this crisis, we’ve found ourselves relying on our devices more than
ever – for grieving and for celebrating, for work, for school and for fun. This is
essential infrastructure. Therefore we propose to provide another $1 billion over
six years for the Universal Broadband Fund, to support access to high-speed
internet by Canadians in rural and remote communities.

This puts us on track to achieve our 98-per-cent high-speed coverage initiative

by 2026.

***

Canadians are the most educated people in the OECD; we are the lucky stewards
of a vast and beautiful land; and in contrast to so much of the rest of the world,
we have built a thriving, multicultural society that embraces new arrivals. Our
growing population is one of our great structural economic strengths.

But a growing country needs to build. We need to build housing. We need to

build public transit. We need to build infrastructure. And we will.

A long-term plan for a faster-growing Canadian economy must include housing

that is plentiful and affordable for working Canadians, especially young families.
So, we propose to invest $2.5 billion and reallocate $1.3 billion in existing funding
in order to help build, repair or support 35,000 housing units.

And we will support the conversion to affordable housing of the empty office
space that has appeared in our downtowns, by reallocating $300 million from the
Rental Construction Financing Initiative.

Making housing affordable for all Canadians will require significant investments.
That is why, on January 1st, 2022, our government will introduce Canada’s first
national tax on vacant property owned by non-residents.

22
Strong, sustained growth also depends on modern transit. That’s why, in
February, we announced $14.9 billion over eight years to build new public transit,
electrify existing transit systems, and develop transit solutions to connect rural,
remote and Indigenous communities.

Once public health allows, we will seize the opportunity to draw even more
talented, highly skilled people to Canada, including international students, to
drive growth and create jobs.

Investments in this budget will support an immigration system that is easier to

navigate, and more efficient in welcoming the dynamic new Canadians who add
to our country’s strength.

Building a Better, Fairer Canada

Our government has made progress in righting the historic wrongs in Canada’s
relationship with Indigenous Peoples. But we have a lot of work still ahead.

It’s important to note that Indigenous peoples have led the way in battling
COVID-19. This success is a credit to Indigenous leadership and self-governance.

This budget proposes more than $18 billion in investments to further narrow
gaps between Indigenous and non-Indigenous peoples, support healthy, safe,
and prosperous Indigenous communities, and advance meaningful reconciliation
with First Nations, Inuit, and the Métis Nation.

That includes more than $6 billion to help close infrastructure gaps in Indigenous
communities, and $2.2 billion for actions to end the national tragedy of missing
and murdered Indigenous women and girls.

This has been a year when we have been reminded of the power of solidarity,
when we have learned that each of us truly is our brother's – and our sister's –
keeper. Solidarity is getting us through this pandemic. And solidarity depends on
fairness, on each of us bearing our share of the collective burden.

That is why, now more than ever, fairness in our tax system – which is the
practical underpinning of so much of our collective ability to support each other
– is essential.

To ensure our system is fair, this budget will invest in the fight against tax
evasion, shine a light on beneficial ownership arrangements, and close significant
tax loopholes that allow multinational corporations to jurisdiction-shop.

Our government is also committed to working with our partners at the OECD to
find multilateral solutions to the dangerous race to the bottom in corporate
taxation. That includes work to conclude a deal on taxing large digital services
companies. We are optimistic that such a deal can be reached this summer. But

Foreword 23
meanwhile, this budget reaffirms our government's commitment to impose such
a tax until an acceptable multilateral approach comes into effect.

The economic impact of COVID has been breathtakingly uneven. While hundreds
of thousands of Canadians have lost their jobs, and small businesses have been
pushed to the brink – and beyond – stock prices have soared, homes are worth
more than ever, and the personal savings of the most affluent Canadians have
surged.

The success of Canadians, and Canadian companies, in such a difficult year is

cause for celebration.

Yet, it is also fair to ask those who have prospered in this bleak year to do a little
more to help those who have not. That is why we are introducing a luxury tax on
new cars and private aircraft worth more than $100,000 and pleasure boats worth
more than $250,000.

If you’ve been lucky enough, or smart enough, or hard-working enough, to afford

to spend $100,000 on a car, or $250,000 on a boat – congratulations! And thank
you for contributing a little bit of that good fortune to help heal the wounds of
COVID and invest in our future collective prosperity.

This budget lives up to our promise to do whatever it takes to support Canadians

in the fight against COVID, and it makes significant investments in our future. It
follows a year when we acted with speed and at scale to support Canadians
during our country's biggest economic shock since the Great Depression. All of
this costs a lot of money.

So it is entirely appropriate to ask: Can we afford it?

We can. And here is why.

First, because this is a budget that invests in growth. The best way to pay our
debts is to grow our economy. The investments this budget makes in early
learning and childcare, in small businesses, in students, in innovation, in public
transit, in housing, in broadband, and in the green transition are all investments
in jobs and growth.

We are building Canada's social infrastructure, and our physical infrastructure. We

are building our human capital, and our physical capital. Canada is a young, vast
country, with a tremendous capacity for growth. This budget will fuel that. These
are investments in our future, and they will yield great dividends.

In today's low interest rate environment, not only can we afford these
investments in Canada's future, it would be short-sighted of us not to make
them.

24
Second, because our decision last year to support Canadians – at great cost, to
be sure – is already paying off. Decisive government action prevented economic
scarring in our businesses and our households, allowing the Canadian economy
to begin strongly rebounding from the COVID recession, even before we have
finished our fight against the virus.

The current, and necessary, lockdowns, are likely, of course, to slow that recovery.
But we know – because we took the decision to preserve our economic capacity –
that we can come roaring back.

Third, because our government has a plan, and we keep our promises. We said in
the Fall Economic Statement that we would spend up to $100 billion over three
years to support Canada's economic recovery – and that is what we are outlining
here today.

We predicted a deficit for 2020/2021 of up to $382 billion dollars. But, thanks to a

stronger-than-expected economic recovery, aided by this government's
investments to support Canadians – and the remarkable ingenuity and resilience
of Canadians across this great country – we have spent less than we provisioned
for. Our deficit for 2020-2021 is $354 billion, significantly below our forecast.

Finally, and crucially, we can afford this ambitious budget because the spending
we propose today is responsible, and sustainable.

We understand that there are limits to our capacity to borrow and that the world
will not write Canada any blank cheques. We don’t expect any.

That’s why this budget shows a declining debt-to-GDP ratio and a declining
deficit, with the debt-to-GDP ratio falling to 49.2 per cent by 2025-2026 and the
deficit falling to 1.1 percent of GDP.

These are important markers. They show that the spending proposed today is
sustainable, and that the extraordinary spending we have undertaken to support
Canadians through this crisis, and to stimulate a rapid recovery in jobs, is
temporary and finite. And our proposed long-term spending on social
infrastructure, physical infrastructure, small and medium sized businesses, new
technology and innovation and the green transition will permanently boost
Canada's economic capacity.

****

Canadians have been profoundly wounded by this virus, and by the recession it
has caused. But we are resilient. We keep on keeping on.

This budget represents a starting point for the healing that will follow our victory
over this pandemic, and invests in a more prosperous future for us all.

Foreword 25
In 2015, this federal government was elected on a promise to help middle class
Canadians, and people working hard to join the middle class.

We offered a plan to invest in workers and their prosperity, in long-term growth

for us all. We did that.

Today, we meet this new challenge, the greatest our country has faced in modern
history, with a renewed promise, built on those earlier ones:

Opportunity is coming.

Growth is coming.

Jobs are coming.

After a long year of retrenchment, Canadians are ready to recover and rebuild.

We will finish the fight against COVID-19. We will put our shoulders to the wheel.
We will bounce back. And we will grow, not just to where we have been before,
but to new heights.

The Honourable Chrystia Freeland, P.C., M.P.

Deputy Prime Minister and Minister of Finance

26
Overview
Our Shared Economic and Social
Foundations — Challenges and
Opportunities Ahead
Canada entered 2020 in the midst of a sustained period of economic expansion.
More than a million jobs had been created since 2015, unemployment was at
historically low rates, wages were on the rise, the labour market was broadening
to include more Canadians traditionally under-represented, over 1.3 million
Canadians had been lifted out of poverty including 400,000 children since 2015,
businesses were reporting above-average profits, and Canada had a strong and
growing middle class. Canada was the second fastest growing economy in the G7
with the enviable position of having the lowest debt-to-GDP ratio in the group.

In the early weeks of 2020, news of a novel coronavirus began to spread. By

March a global pandemic was declared. Canada went into a widespread
lockdown and the global economy was facing unprecedented uncertainty.

1. The Course of COVID-19 in Canada

An unprecedented global disruption
The COVID-19 pandemic brought about the deepest and fastest recession,
worldwide, since the Great Depression (Chart 1). Here at home, real GDP fell by a
record 13 per cent over the first half of 2020. Activity in Canada declined about
three times as much as in the 2008-09 recession, in a much shorter time.

The crisis had an unprecedented impact on the Canadian labour market, with
more than 3 million Canadians losing their jobs and another 2.5 million
Canadians working significantly reduced hours—representing about 30 per cent
of the pre-pandemic workforce. By the end of April, the employment rate for
Canadians aged 15 to 64 fell from record highs to record lows (Chart 2). The
pandemic had its worst impacts on many of the most vulnerable people in
Canada—primarily low-wage workers, young people, racialized workers, and
women. On the disproportionate effects on women in particular, this has led to
what many experts call a “She-cession.”

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 27
 Chart 1 Chart 2
Annual Real GDP Growth Share of Canadians Age 15-64
Employed
per cent
per cent
20
75

15

10
70
5

-5 65
-5.4
-10 April 2020: historical low of 63%

-15
60
Jan Jan Jan Jan Jan
-20 1976 1986 1996 2006 2016
1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
Note: Last data point is 2020. Note: Last data point is April 2020.
Source: Statistics Canada. Source: Statistics Canada.

The recovery path has been uneven over the fall

and winter
Following the first wave of infections, economic activity and employment
rebounded at a faster pace than expected over the summer of 2020 as
restrictions eased, businesses reopened, and Canadians adapted. The Canadian
economy saw a bounce-back in real GDP at over 40 per cent (annualized) in the
third quarter, and over three-quarters of the 3 million jobs lost at the peak of the
pandemic were recovered by the end of September.

Nevertheless, the recovery shifted into a slower gear in the fall and remaining
gains were harder fought, with virus risks still hindering tourism, indoor dining,
and activities involving large gatherings (Chart 3). Restrictions on these activities
intensified over recent months as virus cases surged and hospitalizations
surpassed their earlier peaks. This made for highly uneven impacts across sectors,
with layoffs concentrated once again in contact-sensitive businesses with a larger
share of part-time workers like retail, hotels, entertainment, and restaurants, while
many other industries were virtually unaffected (Chart 4). Many small businesses
in these sectors continue to face acute challenges.

28 Overview
 Chart 3 Chart 4
Real GDP Change in Key Sectors Employment Change by
since February 2020 Employment Status since
February 2020
per cent
per cent
20
0
Other industries Retail trade

0 Full-time

-10
-20 Accommodation and food services

-40
-20
Part-time
-60

Arts, entertainment and recreation

-30
-80
Feb Apr Jun Aug Oct Dec Feb
Feb Apr Jun Aug Oct Dec
2020 2020 2020 2020 2020 2020 2021
2020 2020 2020 2020 2020 2020
Note: Last data point is January 2021. Note: Last data point is March 2021.
Source: Statistics Canada Source: Statistics Canada

Canada’s economic performance has exceeded

expectations
Economic activity during the second wave has proved more resilient than during
the initial wave, showing that Canadians and businesses have adapted to
operating under restrictions. While some peers saw contractions amid the second
wave (Chart 5), Canada closed out 2020 far ahead of forecasters’ mid-2020
predictions (Chart 6).

Early indications suggest that this momentum has carried over to the beginning
of the year. Forecasts point to real GDP increasing for the third quarter in a row,
in stark contrast to expectations for second wave impacts set out in the Fall
Economic Statement.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 29
 Chart 5 Chart 6
Real GDP Growth, Fourth Canadian Real GDP Change
Quarter of 2020 since 2019Q4
per cent

Japan 0

Canada
Actual
-4
United Kingdom

United States
-8

Germany
May 2020
survey of
France -12 economists

Italy

-10 -5 0 5 10 15 -16
per cent, quarter to quarter at annual rates 2019 2020 2020 2020 2020
Q4 Q1 Q2 Q3 Q4
Sources: Haver Analytics; Statistics Canada. Sources: Statistics Canada; Department of Finance
May 2020 survey of private sector economists.

Canada’s COVID-19 Economic Response has bridged

Canadians through the crisis
Canada’s COVID-19 economic response — including job protections through the
Canada Emergency Wage Subsidy, liquidity support through programs like the
Canada Emergency Business Account, and income support through the Canada
Emergency Response Benefit and the suite of Recovery Benefits — has been key
in bridging Canadians and businesses through the COVID-19 shock waves and
stabilized the economy. With fiscal policy support exceeding 23 per cent of GDP,
Canada’s response including Budget 2021 investments has been one of the
largest and fastest among G7 countries (Chart 7).

30 Overview
 Chart 7
Significant Fiscal Policy Support Announced across G7 Countries
per cent of GDP
30 Deferred revenue and accelerated spending
Budget 2021*
Direct fiscal and health measures
25

20

15

10

0
United Canada Japan United Germany France Italy
States Kingdom

Notes: The timeframe for the announced measures is country-specific. Excludes the proposed American Jobs
Plan for the U.S. (unveiled March 31, 2021) and Germany’s supplementary budget for 2021 and Budget 2022
planned net new borrowing (unveiled March 24, 2021).
* Includes commitments made in Chapter 3 of the 2020 Fall Economic Statement and policy actions since,
including Budget 2021.
Source: International Monetary Fund, April 2021 Fiscal Monitor, includes announced measures as at
March 17, 2021; Department of Finance Canada calculations.

Overall, Canada’s comprehensive and flexible response plan has helped engineer
a near-term economic turnaround at a faster-than-anticipated pace compared
with some peers (Charts 8 and 9).

Chart 8 Chart 9
Real GDP Change from 2019Q4 Total Hours Worked by Country
index 2019Q4=100
per cent
100
Japan U.S. Canada Germany France Italy U.K.
0
Canada

95
-5

losses
recouped 90 G7 average
-10

85
-15

80
2020Q4
-20
Peak impact
75
2019 2020 2020 2020 2020
-25 Q4 Q1 Q2 Q3 Q4
Sources: Haver Analytics; Statistics Canada Sources: Haver Analytics; Statistics Canada.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 31
A recent IMF analysis indicates that without direct support measures, Canada’s
real GDP would have declined by about 13.2 per cent in 2020 (versus an actual
decline of 5.4 per cent), a difference of about 8 percentage points (Chart 10).
Further, in its scenario without support measures, the IMF estimates that the
unemployment rate would have risen by an additional 3.2 percentage points in
2020 (Chart 11).

Chart 10 Chart 11
Real GDP Unemployment Rate
billions of chained 2012 dollars per cent
2,300
14

With direct support

measures
2,200
12

Without direct support

measures
2,100
10
Without direct support
measures
2,000 8

1,900 6
With direct support
measures

1,800 4
2017 2018 2019 2020 2021 2022 2023 2024 2025 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: International Monetary Fund, Canada: 2021 Source: International Monetary Fund, Canada: 2021
Article IV Consultation, Staff Report. Article IV Consultation, Staff Report.

32 Overview
While the fiscal costs have been steep, the impact on the government’s fiscal
position would have still been severe if the government had done less. The IMF
analysis suggests that, absent direct support measures, the gross debt-to-GDP
ratio would not have been significantly smaller than the IMF’s baseline projection
(Chart 12).

Chart 12
General Government Gross Debt
per cent of GDP

115
With direct support measures
110

105
Without direct support measures

100

95

90

85
2017 2018 2019 2020 2021 2022 2023 2024 2025

Note: General government includes the federal, provincial/territorial and local/Aboriginal government sectors,
as well as the Canada Pension Plan and the Quebec Pension Plan.
Source: International Monetary Fund, Canada: 2021 Article IV Consultation, Staff Report.

What this means is that a failure to provide support to Canadians and businesses
would have resulted in almost as large a debt burden, greater human misery, and
greater long-term economic scarring.

“…Decisive actions and unprecedented fiscal support helped

to avert an even sharper fall in output. While the fiscal
deficit and public debt have increased sharply, sizeable
fiscal support was necessary to help avert larger economic
and social losses…”
– IMF 2021 Article IV Consultation, Staff Report (March 2021)

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 33
Jobs recovery continues to progress at an uneven pace
for many Canadians
The re-tightening of restrictions has an outsized impact on employment and
exacerbated an already-difficult labour market for many Canadians. Workers in
close-contact sectors once again bore the brunt of second-wave impacts. Youth,
women, and older Canadians, as well as low-wage workers were disproportionally
likely to be laid off or to have their hours worked sharply reduced (Charts 13 and
14). Early in the crisis, women’s labour market outcomes deteriorated more than
men’s, unlike most previous downturns, with larger rises in unemployment rates
and declines in labour force participation.

These uneven impacts across demographic groups — which reflected a

combination of women working in affected sectors and taking on unpaid care
work when schools or child care centres closed – diminished somewhat as we
emerged from the second wave. The risk is exacerbated amidst the latest wave,
highlighting the importance of sustained growth for these groups to recover.

Chart 13 Chart 14
Change in Employment by Workers Affected by COVID-19
Weekly Earnings since February by Age and Sex, March 2021
2020
per cent of February 2020 employment
per cent

8 Lost Hours
0
Layoffs
Over $500
per week
-10 6

-20 4

Under $500
-30 per week 2

-40
Feb Apr Jun Aug Oct Dec Feb 0
2020 2020 2020 2020 2020 2020 2021 Both Men Women 15-24 25-54 Over 55
sexes years years years

Note: This analysis compares the change vs Note: Affected means laid off or working less than
February in 2020 to the average change over the half of their usual hours (including no hours) for
same period in 2015-2019. Last data point is March reasons likely related to COVID-19.
2021. Source: Statistics Canada.
Sources: Statistics Canada; Department of Finance
Canada calculations.

34 Overview
Many vulnerable people remain much more deeply affected than the average
worker. Employment rates of single mothers, less educated Canadians,
Indigenous peoples, and racialized Canadians, which already tend to be at lower
levels, have declined much more than the economy-wide average during this
crisis (Chart 15).

Long unemployment spells mean that many vulnerable workers risk withdrawing
from the workforce or seeing their skills erode, with lasting impacts on their
lifelongs earnings, and on the wider labour market, that could take years to
reverse. Not surprisingly, these vulnerable groups are also those that have seen
the strongest decline in their mental health and life satisfaction.

Chart 15
Change in the Employment Rate, by Selected Groups,
February 2020 to February 2021
percentage points

Non-student High-school grad Off-Reserve

youth Single mothers or less Indigenous Visible minority All Canadians
0

-1

-2

-3

-4

-5
Notes: Off-Reserve Indigenous restricted to those age 25 to 64, others are 15 to 69 due to data availability.
Source: Statistics Canada.

“ A complete recovery is a shared recovery — shared by

working women and men of all ages across Canada.”
–Governor of the Bank of Canada, Tiff Macklem, February 2021

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 35
 Fiscal guardrails continue to guide the policy stance
As announced in the Fall Economic Statement, the government tracks progress
against several economic indicators to assess and gauge the impact of fiscal
policy support, recognizing that no one data point is a perfect representation of
the health of the economy.
These indicators include key measures of labour market conditions like the
employment rate, total hours worked, and the unemployment rate. A
comprehensive range of indicators show that the Canadian economy is still far
from seeing a strong labour market with broadly shared benefits (Charts 16 to
19). Forward looking expectations will also guide the government’s response.
Fiscal Guardrails and Key Labour Market Metrics
Chart 16 Chart 17
Employment Rate Unemployment
index, February 2020 = 100 index, February 2020 = 100 thousands
pre-pandemic level 300
100 Excess unemployment since
280 Feb 2020 (right) 2,000
260 Unemployment rate index (left)
95 240
Now 1.3% below 1,500
pre-pandemic level, 220 Now 371k
meaning about 200 unemployed relative
90 460k jobs shortfall to pre-pandemic level 1,000
180
160
85 500
140
120
80 100 0
Feb May Aug Nov Feb Feb May Aug Nov Feb
2020 2020 2020 2020 2021 2020 2020 2020 2020 2021

Chart 18 Chart 19
Total Hours Worked Additional Labour Market Metrics
index, February 2020 = 100 index, February 2020 = 100
100 pre-pandemic level 300

95 250 Long-term
Now 1.2% below Youth unemployment rate
90
pre-pandemic 200 unemployment
level
85
150 Share of
80 involuntary part-time

100
75 pre-pandemic level

70 50
Feb May Aug Nov Feb Feb May Aug Nov Feb
2020 2020 2020 2020 2021 2020 2020 2020 2020 2021
Notes: Last data point is March 2021. The employment rate is based on the working age population (15-64).
Sources: Statistics Canada; Department of Finance Canada.

36 Overview
2. Gaining Economic Momentum through 2021
Progress controlling the virus will determine the path
forward
Progress controlling the virus and inoculating Canadians are key factors in how
the economic recovery in Canada will unfold in the coming months (Chart 20).
The approval of a number of highly effective vaccines and expectations of a near-
term acceleration in vaccinations has significantly raised the outlook for growth
(Chart 21).

The best way to keep the economy strong is to keep Canadians healthy. Some
restrictions will be necessary to limit the spread of the virus and will continue to
temporarily impact economic activity. This issue is being compounded by the
variant-driven third wave.

Chart 20 Chart 21
Illustrative Vaccination Scenarios Real GDP Path
per cent of population who could receive first dose billions of chained 2012 dollars, annualized

100 2,080

March 2021 survey of 2%

Canadians over 16s
80 economists
vaccinated 2,040

60 2,000
Finance current
expectations
2020 Fall Economic
40 1,960 Statement

20 1,920
Expectations
September 2020
Forecast
0 1,880
Dec Mar Jun Sep Dec Mar Jun Aug Feb Aug Feb Aug
2020 2021 2021 2021 2021 2022 2022 2020 2021 2021 2022 2022

Note: These are illustrative scenarios to calibrate the Note: Last data point is December 2022.
economic forecast. Sources: Statistics Canada; Department of Finance
Source: Department of Finance Canada calculations. Canada September 2020 and March 2021 surveys of
private sector economists.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 37
Potential for tailwinds to boost the recovery
Economic activity could recover faster than in a typical recession due to the fact
that the effects of this crisis on the economy are the result of a public health
emergency rather than an unwillingness to spend. Over the last year, Canadian
households, in particular, have built up significant savings (Chart 22). When the
pandemic recedes, the release of pent-up demand could translate into a tangible
if temporary boost to economic activity. Additional benefits are possible from the
large-scale fiscal support and investment in the U.S., which could have substantial
spillover into the Canadian economy (Chart 23).

Chart 22 Chart 23
Accumulation of Excess Real GDP Impact of the
Household Savings by Country American Rescue Plan
per cent impact over first four quarters
per cent of 2019 nominal GDP
3
8

6
2

1
2

0 0
Canada U.S U.K. Australia Italy France Germany U.S. Canada World Mexico Brazil U.K. Japan Euro China
Area

Note: Excess savings over the 2020Q1 to 2020Q4 Note: Based on lower bound estimates from the
period relative to a baseline where the 2019 OECD.
savings rate is held constant. Source: OECD, March 2021 Economic Outlook,
Sources: Haver Analytics; Department of Finance Interim Report.
Canada calculations.

38 Overview
Economists expect the pace of economic activity to
pick-up as vaccination progresses
Altogether, economists have significantly revised up their views for the recovery
path since the Fall Economic Statement (Chart 24). Following a record decline of
5.4 per cent in 2020, real GDP is expected to grow by 5.8 per cent in 2021 and by
4 per cent in 2022. The projected level of real GDP by the end of 2022 is almost 2
per cent higher than projected in the Fall Economic Statement.

Chart 24
Real GDP Growth Forecasts
per cent, period to period at annual rates
10 Annual
Quarterly

5
actual

actual
-5
Fall Economic Statement - Escalated Restrictions Scenario
March 2021 survey of economists

-10
2020 2021 2021 2021 2021 2020 2021 2022
Q4 Q1 Q2 Q3 Q4

Sources: Statistics Canada; Department of Finance Canada March 2021 survey of private sector economists;
Department of Finance Canada calculations.

Real GDP is expected to reach its pre-pandemic level over the course of 2021,
about six months earlier than previously expected, but there is a high degree of
uncertainty among private sector forecasters with respect to this outcome
(Chart 25).

The recovery of the labour market is expected to lag behind the GDP recovery,
given the scale of disruptions in labour-intensive sectors and the prospect of
workers or businesses facing difficulty reintegrating into the post-pandemic
economy (Chart 26). The unemployment rate is expected to decline over the
course of the year, but will still be around 7 per cent at the end of this year and
6.3 per cent at the end of next year, reaching around 6 per cent only by 2024.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 39
Chart 25 Chart 26
Real GDP Growth Forecast Unemployment Rate Forecast
index, 2019Q4=100 per cent

106 10 Range of private sector forecasts

March 2021 survey
Pre-pandemic trend
104 9

102 8 Employment reaching

its pre-pandemic level

Pre-pandemic GDP level

100 7

98 Range of private sector forecasts 6

Pre-pandemic unemployment rate
March 2021 survey

96 5
2020 2021 2021 2022 2022 2020 2021 2021 2022 2022
Q4 Q2 Q4 Q2 Q4 Q4 Q2 Q4 Q2 Q4

Note: Range represents the highest and lowest Note: Range represents the highest and lowest
forecasted growth rates in each quarter. forecast in each quarter. Labour market figures from
Sources: Statistics Canada; Department of Finance the March survey include actual Labour Force Survey
Canada March 2021 survey of private sector data up to January 2021.
economists. Sources: Statistics Canada; Department of Finance
Canada March 2021 survey of private sector
economists.

Indeed, there remains a high degree of uncertainty around the trajectory of the
recovery, with transmission of more contagious variants of the virus causing
regions to re-tighten restrictions yet again. Consistent with this dynamic
situation, emergency support measures, such as the Canada Emergency Wage
Subsidy and Canada Recovery Benefit, will continue to support workers and
businesses until the pandemic abates.

In this context, to illustrate the consequences of different health outcomes and

the associated responses of households and businesses, the Department of
Finance has also considered two alternative scenarios to the baseline projections:
(i) one scenario where improved health outcomes and the current momentum in
activity is sustained enabling a stronger recovery; and (ii) another scenario where
an acute third wave of infections and delayed, or less effective, vaccination
program lead to a slower recovery.

Under the acute third wave ‘slower recovery’ scenario described above, economic
growth is reduced by 0.7 percentage points in 2021. In this scenario, slower
economic activity would drag on tax revenues, and the costs of the government’s
COVID-19 emergency response programs would be expected to increase due to
necessary extensions of support, resulting in an estimated fiscal impact of
approximately $15 billion in 2021-22. Under the ‘faster recovery’ scenario,
estimated positive fiscal impacts are approximately $10 billion in 2021-22. Details
of these scenarios can be found in Annex 1.

40 Overview
3. Securing the Recovery and Building a Stronger
Economy
The recovery has a long way to go—the longer it takes, the more scars the
pandemic recession will leave. Canadians remain underemployed and business
activity in some sectors remains sluggish. The pandemic’s severe impacts on
investment, immigration, and workers have also placed Canada on a slower long-
term growth path. As we emerge from the crisis, we must make up lost ground
and put Canada’s economy on a stronger footing, both for Canadians today and
future generations. We can build this stronger, more resilient economy by
investing in a green recovery, and making sure that every Canadian can
participate in a growing economy and benefit from it.

The government’s plan is twofold: first, securing the recovery with effective and
time-limited measures; and second, building a stronger economy through smart,
forward-looking investments (Chart 27).

Budget 2021 does this by putting forward a plan that concentrates spending in
the earliest part of the recovery in order to drive as fast of a return to normal as
possible, making long-term investments in initiatives that generate large returns
to society and the economy, and producing a fiscal framework that is far stronger
and more sustainable than forecasted in the Fall Economic Statement.

Chart 27
Impact of COVID-19 on the Canadian Economy
billions of chained 2012 dollars

2,350 2
Pandemic-reduced
2,300 productive capacity Build a
Stronger
2,250 Economy
Pre-pandemic
2,200 productive capacity

2,150

2,100

2,050
Current 1 Securing the Recovery
2,000 growth path
1,950
2017 2018 2019 2020 2021 2022 2023 2024 2025

Sources: Statistics Canada; Department of Finance Canada March 2021 survey of private sector economists;
Department of Finance Canada calculations.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 41
Securing the recovery
While there is evidence that Canada is well positioned for recovery, the risk of
doing too little is very high. Past experience has shown that there are lasting
social and economic consequences from deep recessions and slow recoveries.
Overall, there remain over 500 thousand workers that have been laid off or faced
working hours cuts due to the pandemic, including over 280,000 Canadians who
have been unemployed for at least six months, still much higher than at the worst
of the 2008-09 recession (Chart 28). The impacts of COVID-19 have also been
disproportionate across the population, with adverse labour market outcomes for
those that were vulnerable prior to the pandemic. Young people graduating into
a weak labour market face lower lifetime earnings. This is an even more pointed
concern for young women and racialized communities.
Many businesses remain closed, with the number of active businesses still nearly
4 per cent—or about 30,000 businesses—below pre-crisis levels with closures
disproportionally concentrated among smaller businesses (Chart 29). Many of
these closures are likely temporary, but risk becoming permanent if not enough is
done.
Budget 2021 recognizes that a rapid and sustained economic recovery is the
most reliable way to secure higher employment and income levels, improved and
expanded job opportunities, and narrower economic disparities. That is why the
goverment has a plan for a targeted and robust stimulus.

Chart 28 Chart 29
Change in Long-term Number of Active Businesses
Unemployment Rate
change from start of recession (percentage points) thousands

950
2

COVID-19

900

2008
850

0
800

750
-1 Jan Apr Jul Oct Jan Apr Jul Oct
0 2 4 6 8 10 12 14 16 18 20 2019 2019 2019 2019 2020 2020 2020 2020
months after start of recession

Note: Long-term means 27 weeks or longer. Start Note: Active businesses are those businesses that
month is October for the 2008 recession and reported having one or more employees in a given
February for the 2020 COVID-19 crisis. Last data month. Last data point is December 2020.
point is March 2021. Source: Statistics Canada.
Source: Statistics Canada.

42 Overview
 The Economic and Social Benefits of Investing in a Strong
and Sustained Recovery
There are lessons to be learned from the recent past. After the 2008-09
recession, many Canadians struggled to find work for an extended period of
time, leading many to drop out of the labour force entirely (Charts 30 and
31). Faced with lower demand and an uncertain outlook, businesses
remained reluctant to invest (Chart 32). Economic inequalities widened as
economic growth failed to bring every one along.
A swift and sustained recovery can prevent this type of long-term scarring
and stem rising inequalities by drawing in potential workers who would
otherwise sit on the sidelines. In strong labour markets, the persistent
disparities facing many vulnerable groups like those with lower education,
youth, and recent immigrants, diminish. In fact , just before the pandemic hit,
the labour force participation rate of working-age Canadians reached an all-
time high, reflecting increasing participation of women and vulnerable
groups into the labour market. Many of these gains had emerged only years
after the recession when eventually improved job opportunities provided
more scope for participation to recover. In strong labour markets the
persistent disparities facing many vulnerable groups tend to shrink,
particularly for those with lower education, youth, or who are recent
immigrants (Chart 33).
A strong recovery may also help rebalance the economy in a more
sustainable manner, allowing interest rates to normalize and avoiding
excessive dependence on interest-sensitive activities like consumer spending
and housing to drive growth.
The risks of sustaining strong labour markets may also be lower now than
previously believed. The relationship between the tightness of the labour
market and inflation appears to have weakened in recent decades in many
advanced economies. This suggests that a strong economy with low levels of
unemployment could persist for an extended period before running up
against higher inflation.
Accelerating the recovery would help to keep permanent economic harm to a
minimum. The pandemic was initially expected to lower potential GDP
relative to pre-pandemic by 2 per cent by the end of 2025 – or about $50
billion, meaning more than $2,000 on average for every Canadian aged 15 to
64. Although uncertainty surrounding this estimate remains high, medium-
term GDP losses are now expected to be minimal partly reflecting
extraordinary policy support and additional investments to safeguard a
strong recovery.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 43
 Chart 30 Chart 31
Long-Term Unemployment Rate Deviation from Trend in the
Labour Force Participation Rate
per cent percentage points

4 2

1990
3 1

2 0

2008
2008
1 -1

1990

0 -2
0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10

years from start of recession years from start of recession

Note: Long-term means 27 weeks or longer. Sources: Statistics Canada; Department of Finance
Sources: Statistics Canada; Department of Finance Canada calculations.
Canada calculations.

Chart 32 Chart 33
Real Investment in Machinery and Unemployment Rate Differences
Equipment
index, start of recession = 100 percentage points

100

No college degree
vs college degree

90

1990
Youth vs prime age

80
2008

Recent immigrant
vs born in Canada

70
0 1 2 3 4 5 0 2 4 6 8
years from start of recession Weak labour market Strong labour market*

Sources: Statistics Canada; Department of Finance Note: Strong labour market periods defined as
Canada calculations. those when the unemployment rate is below the
natural unemployment rate.
Sources: Statistics Canada; Department of Finance
Canada calculations.

44 Overview
Building a stronger economy
Securing the recovery is not enough. Budget 2021 recognizes that the
government needs to take action to protect Canada’s long term economic
growth prospects. The challenges and fundamental shifts faced by Canada prior
to the pandemic, such as climate change, population aging, and unrealized
workforce participation by women, will not disappear. These challenges on the
horizon will have longer lasting impacts on our future prosperity if not addressed
(Chart 34).

Chart 34
Potential Real GDP Growth
per cent

6 Improving potential GDP growth by about 1 p.p. per year

would increase per capita GDP by about $6,000
5

3 Average 1970-2019: 2.7%

0
1960- 1970- 1980- 1990- 2000- 2010- 2020-
1969 1979 1989 1999 2009 2019 2029
Sources: Statistics Canada; Department of Finance Canada calculations.

With this context in mind, Budget 2021 will focus on pillars of growth to act as
the foundation on which to build the economic recovery and move the Canadian
economy onto a higher and more inclusive growth path.
Breaking down barriers that prevent people from joining the labour force, such as
child care, creating opportunities for young Canadian workers, and helping
workers find positions that match their skills will help each worker reach their full
potential. Restarting Canada’s immigration system and generating labour market
market momentum for new Canadians will restore this key driver of working-age
population growth.
As the world confronts the climate emergency and the economy shifts,
investments that fight climate change and hasten the development of Canada’s
green economy help to create new industries and jobs now. And, as a result, they
secure the well-being and prosperity of the next generations of Canadians.
Further, massive disruptions over the last year have potentially derailed new
business investments, a critical pillar of Canada’s long-term growth trajectory.
Additional incentives to encourage businesses to invest and to adapt new

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 45
technologies to take advantage of an increasingly digitized economy will help
business compete locally and globally.
The crisis has also demonstrated that not everything that matters to Canadians is
easily measured or described in economic and financial terms. Important issues
such as inequality, housing affordability, access to mental health support and the
existential threat from climate change, are fundamental to Canadians’ quality of
life. To ensure that it continues to broaden the focus of its policy objectives and
takes into account all aspects of Canadians’ quality of life in its decisions, the
government is moving forward in developing and refining a quality of life
framework, further details of which can be found in Annex 4.

4. An Historic Plan for a Stronger and More

Resilient Canada
Budget 2021 outlines a plan that will get Canadians back to work and begin
improving Canada’s growth potential. The actions in this budget will build upon
the commitments made in the 2020 Fall Economic Statement and the Enhanced
Climate Plan, which together comprise a recovery plan that will create shared
prosperity, improve Canadians’ quality of life, and power our green
transformation.
Overall, better-than-expected economic outcomes and revisions to the estimated
costs of some large economic response plan measures since the Fall Economic
Statement have had a positive impact on the projected budgetary balance over
the forecast horizon.
After accounting for Budget 2021 measures, the budgetary balance is expected to
show a deficit of $354.2 billion in 2020-21, improving to $154.7 billion in 2021-22,
and gradually declining to a deficit of $30.7 billion in 2025-26, or approximately
one per cent of GDP. The federal debt is expected to peak at 51.2 per cent of
GDP in 2021-22 before declining to 49.2 per cent of GDP in 2025-26. This balance
includes the cost of incremental investments since FES 2020 of $101.4 billion, or
4.2 per cent of GDP, over the next three fiscal years.
As noted in Table 1, the deficit and the federal debt-to-GDP ratio remain below
levels shown in the 2020 Fall Economic Statement that incorporated the planned
$100 billion in incremental spending and forecasted economic and fiscal impacts
of the second wave.

46 Overview
Table 1
Budget 2021 Fiscal Outlook including Policy Actions and Investments
$billions
Projection

2020- 2021- 2022- 2023- 2024- 2025-

2021 2022 2023 2024 2025 2026

Budgetary balance – FES 2020

-381.6 -121.2 -50.7 -43.3 -30.9 -24.9
(before stimulus)
Economic and fiscal
developments since FES 2020 35.2 15.8 19.3 16.0 12.8 10.3
Table A1.4
Budgetary balance before
policy actions and - 346.4 -105.4 -31.4 -27.3 -18.1 -14.6
investments
Policy actions since FES 2020 0.2 0.3 0.9 -1.1 -0.7 -0.3
Investments in Budget 2021 (by chapter)
1. Keeping Canadians Healthy
-5.0 -1.2 -1.0 -0.9 -0.8 -0.7
and Safe
2. Seeing Canadians and
Businesses Through to -0.2 -27.0 -4.2 -1.0 -0.7 0.7
Recovery
3. New Opportunities for
-0.5 -3.9 -9.0 -7.5 -7.6 -8.8
Canadians
4. Helping Canadian Businesses
0.0 -3.7 -4.5 -5.0 -2.4 -0.8
Grow and Succeed
5. A Healthy Environment for a
0.0 -1.2 -1.9 -2.0 -1.8 -1.9
Healthy Economy
6. Strengthening the Cities and
-2.2 -4.6 -3.3 -2.3 -2.0 -3.1
Communities We Call Home
7. A More Equal Canada 0.0 -1.8 -1.6 -2.1 -2.2 -2.4
8. Strong Indigenous
0.0 -4.3 -3.5 -3.0 -1.3 -1.0
Communities
9. Protecting Our Shared Values -0.1 -1.9 -1.1 -0.7 -0.5 -0.4
10. Responsible Government 0.0 -0.2 0.7 1.8 2.4 2.5
Total – Actions since FES 2020
-7.7 -49.3 -28.3 -23.8 -17.7 -16.1
and Budget 2021 Investments
Budgetary balance -354.2 -154.7 -59.7 -51.0 -35.8 -30.7
Budgetary balance (%GDP) -16.1 -6.4 -2.3 -1.9 -1.3 -1.1
Federal Debt (%GDP) 49.0 51.2 50.7 50.6 50.0 49.2
Note: FES 2020 Escalated Restrictions scenario and $100 billion stimulus
Budgetary balance -398.7 -166.7 -109.6 -71.7 -39.4 -33.4
Budgetary balance (%GDP) -18.2 -7.3 -4.5 -2.9 -1.5 -1.2
Federal Debt (%GDP) 51.4 56.4 58.1 58.5 57.6 56.6

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 47
Accelerating the Rescue and Recovery—International
Comparisons
To address the pandemic, governments across the globe have taken swift fiscal
policy actions totalling more than 16% of the world’s GDP as of March 17, 2021.
The IMF estimates that without such support, the collapse in economic activity
registered in 2020 could have been three times worse.
Similar to Canada, a number of peer countries have mobilized additional fiscal
resources since the 2020 Fall Economic Statement —ranging from 1.9% of GDP to
more than 12% of GDP.
Selected
Country Fiscal Support Announcements Size (% of 2021 GDP)
COVID-19 Response and Relief Act
United States (4.1% of GDP - Dec. 2020) and American 12.3% of GDP
Rescue Plan Act (8.2% of GDP - Mar. 2021)
Commitments made in Chapter 3 of FES 2020
Canada (0.3% of GDP) and policy actions since, 4.6% of GDP
including Budget 2021 (4.2% of GDP)
Supplementary Budget for 2021 and Budget
Germany 4.0% of GDP
2022 net new borrowing for 2022 (Mar. 2021)
Third Supplementary Budget for 2020 – net
new COVID-19 related measures and Budget
Japan 3.6% of GDP
2021 – Additional COVID-19 Contingency Fund
(Dec. 2020)
Budget 2021 - net borrowing impact of policy
UK decisions over 2020-21 and 2021-22 2.9% of GDP
(Mar. 2021)
Additional fiscal room through rise in
Italy 1.9% of GDP
borrowing limit (Jan. 2021)
Sources: Committee for a Responsible Federal Budget; UK Treasury, Bundesministerium der Finanzen; Ministero
dell’Economia e delle Finanze; Japan Ministry of Finance; Australian Treasury; Department of Finance Canada
calculations.
NOTE: For the United States, the table excludes the proposed American Jobs Plan unveiled on March 31, 2021.
Announcements above are not directly comparable as they can cover multiple years (largely focused on 2021 and
2022) and include varying combinations of on-budget items, additional COVID-19 health spending, the extension
of existing support measures, off-budget items, as well as contingency or reserve funds yet to be allocated to
specific measures. They also generally exclude offsetting financing measures. Totals may not add due to rounding

48 Overview
Delivering on the government’s one million jobs
commitment
In last fall’s Speech from the Throne, the government announced its commitment
to create one million jobs and restore employment to previous levels. Despite the
severe impacts of the second wave on Canadian workers and businesses, we are
on path to create one million jobs by the end of the year (Chart 35)—ahead of
the schedule predicted in the 2020 Fall Economic Statement. The plan outlined in
Budget 2021 will continue to support a strong recovery creating more good jobs
in the years to come.

Even once this goal is reached there will still be work to do. Population growth
means that we will still be short of our pre-pandemic employment rate level. The
investments announced in this budget have put us on a path to reach this overall
objective by early 2022, almost two years earlier than if the government had
failed to make the extraordinary investments that get Canadians back to work
and level-up Canada’s growth potential.

Chart 35
Path to One Million Jobs
millions, cumulative change in employment since August 2020 Working age (15-64) trend employment
rate reached (early 2022)
1.6
One million jobs created, restoring With government
1.4 pre-pandemic employment level investment
(summer 2021)
1.2

1.0

0.8
Without government
0.6 investment

0.4

0.2

0.0
Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec
2020 2020 2020 2021 2021 2021 2021 2021 2021 2022 2022 2022 2022 2022 2022

Sources: Statistics Canada; Department of Finance Canada calculations.

Note: Last actual data point is March 2021.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 49
 Estimated Short-Term Economic Impacts
Government investments in the Fall Economic Statement, the Enhanced
Climate Plan, and Budget 2021 are expected to raise the level of real GDP
by 2.0 per cent by the second year (Table 2). This is expected to translate
into an increase in employment of more than 330 thousand jobs created
or maintained by 2022-2023 (Charts 36 and 37). Details of these estimates
can be found in Annex 1.
Most forecasters see the Canadian economy having a material amount of
slack over the medium term—providing some indication that a full recovery
will take time. Based on the current track, the output gap is expected to
remain open over the near term. Accordingly, while the unemployment rate
is expected to decline from where it sits today, it is still expected to be
above its pre-crisis level for some time (Charts 38 and 39).
Table 2
Impacts on Real GDP and Employment
per cent, unless otherwise indicated
2021– 2022– 2023–
2022 2023 2024
Real GDP (per cent) 1.6 2.0 1.9
Employment (jobs created or maintained,
thousands) 315 334 280

Chart 36 Chart 37
Real GDP Projections Employment Projections
index, 2019 Q4 = 100 millions

108.0 2% 19.9
With government With government more than
boost investment
investment 330k jobs
to GDP
created or
106.0 maintained
Pre-pandemic by the
19.5 Pre-pandemic
growth track second
level
104.0 year
Without government
investment
102.0 19.1

Without government
100.0 investment
18.7

98.0

96.0 18.3
2020 2021 2022 2023 2020 2021 2022 2023
Q4 Q4 Q4 Q4 Q4 Q4 Q4 Q4

Sources: Statistics Canada; Department of Finance Sources: Statistics Canada; Department of Finance
Canada calculations. Canada calculations.

50 Overview
Chart 38 Chart 39
Range of Output Gap Expectations Unemployment Rate Expectations
per cent per cent

2 10

0 9

Range with
government
-2 investment 8

Without
government
-4 7 investment

-6 6
With government
investment
-8 5
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Note: Given how hard it is to project potential output Source: Department of Finance Canada.
following recessions and at time of government
investment, caution needs to be taken about putting too
much emphasis on the projected output gap.
Source: Department of Finance Canada.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 51
5. A Responsible Fiscal Plan
Canada entered this crisis in a strong fiscal position, allowing the government to
take decisive action to put in place the support necessary for people and
businesses to weather the storm and support a robust and inclusive recovery of
the Canadian economy.

However, those actions, combined with lower revenues due to the recession, have
increased public debt sharply. Canada’s history of prudent fiscal management
means that, despite the unprecedented actions we took to fight the virus, we
continue to have, by far, the lowest net debt-to-GDP balance relative to
international peers (Chart 40).

Chart 40
General Government Net Debt, G7 Countries
per cent of GDP
200

2019 2020

150

100

50

0
Canada Germany United United France Italy Japan
Kingdom States

Note: The general government definition includes the central, state, and local levels of government, as well as
social security funds. For Canada, this includes the federal, provincial/territorial, and local government sectors,
as well as the Canada Pension Plan and the Quebec Pension Plan.
Source: IMF, April 2021 Fiscal Monitor; Department of Finance Canada calculations.

The government is committed to responsible fiscal policy. Budget 2021 deficits and
the federal debt-to-GDP ratio remain below levels shown in FES 2020 that
incorporated the planned $100 billion in incremental spending and forecasted
economic and fiscal impacts of the second wave (Charts 41 and 42).

52 Overview
The government is committed to unwinding COVID-related deficits and
reducing the federal debt as a share of the economy over the medium-term.
This fiscal anchor will continue to protect Canada’s low debt advantage so that
borrowing costs remain low, and future generations are not burdened with COVID-
19-related debt. Budget 2021 meets this test, by providing a prudent and
sustainable path forward for public finances, as demonstrated by several important
indicators:

 After rising over the next year to support concentrated investments to kickstart
the recovery, the federal debt-to-GDP ratio returns to a downward track over
the following years, and is forecast to be approximately 49 per cent in 2025-26
(Chart 41);

 The deficit-to-GDP ratio, which measures the size of the deficit in relation to
the economy, is on a path to fall to 1.1 per cent over the planning horizon
(Chart 42), a level that is lower than the forecasted size of the deficit for 2019-
20 and 2020-21 when the government tabled its Economic and Fiscal Update
in December 2019.

Notwithstanding the sharp increase in the federal debt-to-GDP ratio, public debt
charges are projected to remain historically low. Despite recent increases in interest
rates in Canada and elsewhere due to a stronger and faster-than-expected
recovery (Chart 43), public debt charges as a per cent of GDP are expected to stay
near their lowest level in over a century over the forecast horizon (Chart 44).

Chart 41 Chart 42
Federal Debt Budgetary Balance
per cent of GDP per cent of GDP
65 2019- 2020- 2021- 2022- 2023- 2024- 2025-
20 21 22 23 24 25 26
60 Fall Economic Statement 2020* 0

55

50 -5
Budget 2021
45

40 -10

35

30 -15

25 Fall Economic Statement 2020*

2019- 2020- 2021- 2022- 2023- 2024- 2025- Budget 2021
20 21 22 23 24 25 26 -20
*FES 2020 is including the escalated restrictions *FES 2020 is including the escalated restrictions
outlook and incremental $100 billion (Scenario 4) outlook and incremental $100 billion (Scenario 4)
Sources: Fiscal Reference Tables; Department of Sources: Fiscal Reference Tables; Department of
Finance Canada. Finance Canada.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 53
 Chart 43 Chart 44
10-Year Yields on Government of Public Debt Charges, 1870-71 to
Canada Bonds 2025-26
per cent per cent of GDP

12 7

6
10

5
8

4
6
3

4
2

2
1

0 0
1990 1995 2000 2005 2010 2015 2020 1870 1900 1930 1960 1990 2020

Note: Last observation is April 13, 2021. Sources: Statistics Canada; Fiscal Reference Tables,
Source: Bank of Canada. Jordà-Schularick-Taylor Macrohistory Database;
Department of Finance Canada calculations.

Building a stronger and more resilient economy will

improve fiscal sustainability
In the current low-interest rate environment, growth-enhancing investments can
help improve fiscal sustainability by raising GDP growth more than they raise
costs in terms of increased debt service over the longer term. Budget 2021 is a
plan that uses public investment to address these challenges head-on, by making
investments in key measures that will drive future growth and prosperity,
including:

 Building Opportunities and Investing in People: Budget 2021 aims at

making it easier for parents to fully participate in the labour market by
introducing a National Early Learning and Child Care Plan. The addition of
240,000 workers in the labour force stemming from greater access to high
quality day care could raise real GDP by as much as 1.2 per cent over the
next two decades, boosting real GDP growth by 0.05 p.p. per year over that
period. This is one of the most significant actions taken since the
introduction of North American Free Trade Agreements to expand economic
opportunity for Canadians.

54 Overview
 Connecting People and Businesses and Unleashing Innovation: Budget 2021
supports investments in infrastructure, including public transit and trade
infrastructure, and supports firms, particularly SMEs, in innovating and investing in
technology so that they grow and take advantage of the new opportunities.
Efforts to boost the productivity of Canadian workers will pay long-term
dividends. For instance, working to reduce Canada’s productivity gap with the U.S.
by just one tenth could raise real GDP by 3 per cent over the next two decades,
boosting real GDP growth by 0.15 p.p. per year over that period.
While no single initiative in this budget accomplishes the government’s mission,
the potential payoff from acting now in a broad range of policy areas is
substantial, as measures tend to reinforce themselves over time and build
momentum for further action to boost Canada’s growth trajectory.

Investing to Grow the Economy

Long-term fiscal and economic projections can help assess whether the
current fiscal policy trajectory is sustainable or whether fiscal policy
adjustments are required. These estimates are not predictions of the
future, but useful indicators of how economic and fiscal variables
interact under specific conditions and assumptions.
They also help to illustrate that Canada’s long-term fiscal sustainability
depends not only on sound fiscal policies as exemplified through a
declining debt-to-GDP ratio but also on strong economic policies and
growth enhancing investments that contribute to sustained increases in
economic growth over the longer term.

Chart 45
Impact of Higher Economic Growth Scenarios on Federal Debt
per cent of GDP

60

50 Fiscal track without growth-enhancing investments

40

30 Economic growth higher

by 0.20 p.p. per year

20

10

0
2018 2023 2028 2033 2038 2043 2048 2053

Note: Alternative simulation assumes a gradual increase in growth over the 2021 to 2025 period
before reaching the longer term higher growth rate starting in 2026. Last data point is 2055.
Sources: Statistics Canada; Department of Finance Canada calculations.

Our Shared Economic and Social Foundations — Challenges and Opportunities Ahead 55
 Part I

Finishing the
Fight Against
COVID-19
Chapter 1
Keeping Canadians Healthy and Safe
For over a year, Canadians have been living through the greatest global public
health challenge of our lifetime. Across Canada, governments of all orders have
worked tirelessly to prevent outbreaks and protect lives.

Since day one of this crisis, the government moved quickly to provide rapid
support to Canadians. Whether with the Canada Emergency Response Benefit,
the Canada Emergency Wage Subsidy, or the business support measures, these
programs meant that people could stay home and stay safe. At the same time,
the government secured the most vaccines per capita of any country, and
ensured some of the toughest border rules in the world, including with the U.S.,
while keeping vital supplies moving. The government also supported domestic
manufacturing, including of personal protective equipment, and started to
restore bio-manufacturing capabilities that have not been in Canada for decades.

Canada took further action to close its borders, encourage Canadians to avoid
non-essential travel, and put in place mandatory testing and quarantine orders,
including hotel quarantine when waiting on testing results after arriving by air.
Continually informed by the latest evidence and advice, these are some of the
toughest border measures in the world. Keeping Canadians healthy and safe has
been, and continues to be, the Government of Canada’s top priority.

Nothing is more important than saving lives and keeping Canadians safe. We
have witnessed the devastation this virus brought to long-term care homes. And
we have seen racialized Canadians and Indigenous communities face higher
infection rates.

Nurses, doctors, personal support workers, emergency medical technicians, and

other front-line workers have bravely treated patients, putting themselves at risk,
and experiencing some of the highest infection rates.

Canadians have made great sacrifices to try to contain the virus. The isolation,
stress, economic damage, and disruption to lives has taken its toll on
mental health.

Keeping Canadians Healthy and Safe 59

While we are in the midst of the virus’ third wave here in Canada, the rollout of
safe and effective vaccines is a light at the end of what has been a long, dark
tunnel.

The largest immunization campaign in Canada’s history is well underway. Canada

is on track to meet the commitment that every Canadian who wants to will be
fully vaccinated by September.

While finishing the fight, Canada must also learn lessons and take steps so it can
be prepared for future threats. Rebuilding domestic bio-manufacturing capacity
is a key part of this work. Better support and protections for our seniors,
particularly those in long-term care facilities, is also essential.

The past year has been difficult, but better days are ahead. Until then, the
Government of Canada will do whatever it takes to keep Canadians safe.

60 Chapter 1
Figure 1.1
Major Federal Investments to Fight COVID-19*

* Does not include proposed Budget 2021 measures.

Keeping Canadians Healthy and Safe 61

1.1 Providing Access to Vaccines
Canada has secured the most diverse portfolio of vaccines in the world. As
vaccine programs accelerate across the country, the government is ensuring that
provinces, territories, and Indigenous communities have the resources they need
to deliver vaccine doses to people as quickly as possible. Canada is on track to
meet the commitment that every Canadian who wants to will be fully vaccinated
by September. As a result of the federal government's ongoing efforts to
accelerate the delivery of COVID-19 vaccines, Canada received a total of
9.5 million doses by the end of March 2021, 3.5 million more than the initial
target of 6 million doses. (Chart 1.1).

Chart 1.1
Expected Supply of Authorized Vaccines (Cumulative)
million of doses
120.0
Initially expected
100.0 Currently Expected
Actual

80.0

60.0

40.0

20.0

0.0
Q4 Q1 Q2 Q3
2020 2021 2021 2021

Notes: Initially expected reflects expected deliveries up to the next four quarters as of January 26, 2021, i.e.
before approval of the AstraZeneca vaccine and the Johnson and Johnson vaccine. Actual reflects what have
been received so far, week of March 29. Currently Expected reflects doses to come as of April 1, 2021.
Currently Expected reflects revised delivery schedules for the Pfizer vaccine. Notably, Pfizer recently committed
to advance 1 million doses ahead of schedule in both April and May 2021 (March 5, 2021). This is in addition
to another commitment from Pfizer on March 30, 2021, to advance 5 million doses.
Sources: Public Services and Procurement Canada and Public Health Agency of Canada.

62 Chapter 1
Bilateral Agreements with COVID-19 Vaccine Suppliers
Vaccines (Authorized by Health Canada) Type of Vaccine Number of Doses
Pfizer mRNA Up to 76 million

Moderna mRNA 44 million

AstraZeneca Viral vector 20 million

Verity Pharmaceuticals Canada/ Serum Viral vector 2 million

Institute of India (in collaboration with
AstraZeneca Canada Inc)
Janssen Viral vector Up to 38 million

Vaccines (Yet to be authorized by Health Canada)

Medicago Virus-like particle Up to 76 million

Novavax Protein subunit Up to 76 million

Sanofi and GlaxoSmithKline Protein subunit Up to 72 million

International

International COVAX Facility - Up to 15 million

Canada’s COVID-19 Immunization Plan

The Government of Canada is covering the full cost of vaccines we procure, and
ensuring they are free of charge to every person in Canada. On the rollout, the
government is coordinating delivery with all provinces and territories, providing
nationwide logistical support, warehousing services to supplement provincial and
territorial capacity, and providing support for vaccine rollout campaigns. In
addition, the Canadian Armed Forces are assisting with vaccination efforts in
remote communities.

On March 25, 2021, the government tabled legislation in the House of Commons
in order to provide a one-time payment of up to $1 billion to the provinces and
territories, on an equal per capita basis, to help get shots into arms as quickly
as possible.

Provinces and territories, with the support of municipalities, will be able to use
this funding for a variety of vaccine-related costs, such as to recruit and train
immunizers, establish mass vaccination clinics, set up mobile vaccination units,
engage Indigenous communities to advance vaccine rollout, and reach vulnerable
populations through community-based vaccination efforts.

Keeping Canadians Healthy and Safe 63

International COVID-19 Response
To end this pandemic anywhere, we have to end it everywhere. Canada is part of
the robust global pandemic response and has committed more than $2 billion, to
date, to international efforts to fight and address the impacts of the virus. Canada
is a founding member of the Access to COVID-19 Tools (ACT) Accelerator and the
COVID-19 Vaccines Global Access Facility (COVAX), and plays a major role within
the Advance Market Commitment initiative.

To ensure we prevail in the global fight against COVID-19:

Budget 2021 proposes to provide up to $375 million, in 2021-22, to Global

Affairs Canada to support Canada’s international COVID-19 response, with a
focus on addressing the health needs of developing countries. This would
facilitate the world’s poorest countries to access the tools necessary to help
contain the spread of COVID-19.

1.2 Protecting Our Seniors

The COVID-19 pandemic has been devastating for Canada’s seniors.

Many have spent the past thirteen months isolated from family and friends. For
far too many seniors who live in long-term care, this year has been tragic; they
have been the overwhelming casualties of this pandemic. Every senior in Canada
deserves to live in dignity, safety, and comfort, regardless of which province or
territory they call home.

It is essential that we protect the health and well-being of our seniors, and the
personal support workers who care for them—many of whom are women, many
of whom are racialized—through this difficult time and into the future.

The government is taking action, including through the $1 billion Safe Long-term
Care Fund announced in the 2020 Fall Economic Statement, to ensure seniors, and
those who help them, are well protected and well supported through the
pandemic and for years to come.

Strengthening Long-term Care and Supportive Care

The pandemic has shone a light on systemic issues affecting long-term care
facilities across the country. The government welcomes the news that the Heath
Standards Organization and Canadian Standards Association are launching a
process to help address those issues in Canada. The Health Standards
Organization’s and Canadian Standards Association’s work with governments,
stakeholders, and Canadians to develop national standards will help inform our
ongoing discussions with provinces and territories on improving the quality of life
of seniors in long-term care.

64 Chapter 1
To protect seniors across Canada and build on this work:
Budget 2021 proposes to provide $3 billion over five years, starting in 2022-23,
to Health Canada to support provinces and territories in ensuring standards for
long-term care are applied and permanent changes are made. To keep seniors
safe and improve their quality of life, the federal government will work
collaboratively with provinces and territories, while respecting their jurisdiction
over health care, including long-term care. This work would ensure seniors and
those in care live in safe and dignified conditions.
Budget 2021 proposes to provide $41.3 million over six years, and
$7.7 million ongoing, starting in 2021-22, for Statistics Canada to improve
data infrastructure and data collection on supportive care, primary care,
and pharmaceuticals.

Helping Seniors Age Well at Home

After a lifetime of hard work, seniors want to live healthy, safe, and independent
lives. Seniors want to stay at home, in the communities that support them, for as
long as possible. But that can become difficult as they age. This leads to many
vulnerable seniors transitioning to supportive care before they would otherwise
need to if they were better supported at home. To look at new ways to support
seniors in their homes for longer:

Budget 2021 proposes to provide $90 million over three years, starting in
2021-22, to Employment and Social Development Canada to launch the Age
Well at Home initiative. Age Well at Home would assist community-based
organizations in providing practical support that helps low-income and
otherwise vulnerable seniors age in place, such as matching seniors with
volunteers who can help with meal preparations, home maintenance, daily
errands, yard work, and transportation. This initiative would also support
regional and national projects that help expand services that have already
demonstrated results in helping seniors stay in their homes. For example,
knowledge hubs can help seniors access the local services available to them or
provide information, resources, and training to community-based
organizations delivering practical supports to seniors.

The government is also proposing to increase Old Age Security for seniors 75 and
over, beginning in 2022. Details are outlined in Chapter 7.

Keeping Canadians Healthy and Safe 65

1.3 Strengthening Our Health System
Throughout the pandemic, public health officials, hospital administrators, and
health care workers have worked hard to protect Canadians and save lives. But
the pandemic has put health care under enormous strain.

The federal government is making investments to shore up public health systems

so that they can continue to provide world-class care to Canadians throughout
the COVID-19 pandemic.

Every year, the federal government provides significant support to provincial and
territorial health care systems through the Canada Health Transfer. For 2021-22,
this amounts to $43.1 billion. This is in addition to other supports for the health
care system provided during the pandemic, such as procurement of vaccines and
personal protective equipment, and more (see Figure 1.1).

Helping Our Health Care Systems Recover

In the fight against COVID-19, doctors and patients have deferred many
procedures. Health care systems are facing substantial backlogs that require time
and resources to clear. The federal government continues to support provinces
and territories, including addressing urgent health care needs.

As announced in March 2021, the federal government is proposing to provide

provinces and territories with $4 billion through a one-time top-up to the Canada
Health Transfer. This will help health systems ensure Canadians get the
procedures and treatments they need to stay healthy and clear through the
backlog of delayed procedures. The government has been clear that it will be
there to support provinces’ increasing health care needs in the long term, once
we get through the COVID crisis.

Regulatory Cooperation with Trusted International

Partners
The government is committed to enhancing Canada’s drug approval process by
promoting alignment and collaboration with trusted regulators in other countries.
Regulatory cooperation with trusted authorities will make accessing life-saving
medicines faster and simpler, ensuring that safe and effective drugs are available
to Canadians more quickly.

66 Chapter 1
Renewing the Territorial Health Investment Fund
No matter where anyone lives in Canada, they should be confident that they have
access to reliable, well-funded public health care. To support the territories in
overcoming the challenges of delivering health care services in the North:

Budget 2021 proposes to provide $54 million over two years, starting in
2021-22, to renew the Territorial Health Investment Fund. Of this amount,
$27 million would be allocated to Nunavut, $12.8 million would be allocated
to Yukon, and $14.2 million would be allocated to the Northwest Territories.

1.4 Supporting Mental Health

Forty per cent of Canadians reported that their mental health deteriorated last
year, and for those with pre-existing mental health conditions that number rose
to 61 per cent.

Since 2015, the government has provided funding to the provinces and territories
to improve mental health services, made significant investments to support
Indigenous mental health services, and has launched innovative virtual mental
health care tools throughout the pandemic.

The federal government understands that supporting mental health requires a

comprehensive approach. The many investments the government is making to foster
a strong and inclusive recovery recognize the social and economic factors of mental
health, will support better mental well-being among all Canadians, and will
complement investments to improve mental health services.

Keeping Canadians Healthy and Safe 67

Figure 1.2
Budget 2021 Measures that Address the Social and Economic Factors of
Mental Health

*Please see Chapter 8 for information on broader measures on action to address the tragedy of missing and
murdered Indigenous women and girls.
*Please note that total amounts are over a five-year period.

68 Chapter 1
National Standards for Mental Health Services
Before the pandemic began, almost one in ten Canadians reported that their
mental health care needs were not met. A set of clear national standards is
needed so that Canadians can access timely care, treatment, and support. To
move forward on establishing national mental health standards:

Budget 2021 proposes to provide $45 million over two years, starting in
2021-22, to Health Canada, the Public Health Agency of Canada, and
the Canadian Institutes of Health Research to help develop national
mental health service standards, in collaboration with provinces and
territories, health organizations, and key stakeholders.

Supporting the Mental Health of Those Most Affected

by COVID-19
Young people have seen the greatest decline in good mental health compared to
pre-pandemic levels. Seven in ten health care workers reported worsening mental
health during the pandemic. Sixty-four per cent of Indigenous people said their
mental health had worsened. Racialized and Black Canadians can also face
distinct challenges with mental health including structural racism and inequities
in access to care.

To support populations most affected by COVID-19 in dealing with mental health

challenges:

Budget 2021 proposes to provide $100 million over three years, starting in
2021-22, to the Public Health Agency of Canada to support projects for
innovative mental health interventions for populations disproportionately
impacted by COVID-19, including health care workers, front-line workers,
youth, seniors, Indigenous people, and racialized and Black Canadians.

Budget 2021 proposes to provide $50 million over two years, starting in
2021-22, to Health Canada to support a trauma and post-traumatic stress
disorder (PTSD) stream of mental health programming for populations at
high risk of experiencing COVID-19 trauma and those exposed to various
trauma brought about by COVID-19.

Additional support for veterans’ mental health is outlined in Chapter 7. Investments

to support mental health in First Nations, Inuit, and Métis Nation communities are
outlined in Chapter 8.

Keeping Canadians Healthy and Safe 69

Investing in the Wellness Together Canada Portal
In April of last year, the Government of Canada launched the Wellness Together
Canada portal to provide Canadians with free access to live support, treatment, and
credible information. Wellness Together Canada is available in all provinces and
territories and to date over 1.1 million individuals have accessed the portal in over
3.5 million web sessions.

Budget 2021 proposes to provide $62 million, in 2021-22, to Health Canada for
the Wellness Together Canada portal so that it can continue to provide
Canadians with tools and services to support mental health and well-being.

Since 2015, the federal government has invested over $8 billion to provide
Canadians with better mental health care services.

Past Investments in Mental Health Care

As part of the 2017 Agreements on Home Care and Mental Health, the federal
government provided $5 billion over 10 years to provinces and territories to
improve access to mental health and addiction services.
Over this period, nearly $1.9 billion has been invested to support Indigenous
mental health services, including $1 billion in Budget 2021 (more details can be
found in Chapter 8). These investments are on top of existing mental wellness
programs as well as supports available under Jordan’s Principle for Indigenous
youth and the Non-Insured Health Benefits Program.
Since the start of the pandemic, the government has invested nearly
$250 million to develop virtual care and mental health tools and support the
Kids Help Phone. Proposed funding would provide further support to the
Wellness Together Canada portal.

Working Towards a New Crisis Hotline

The COVID-19 pandemic has exacerbated existing mental health challenges for
Canadians and increased the number of Canadians in crisis. Making mental health
services easier to access will have substantial benefits for Canadians and help
save lives. The funding for the Kids Help Line that was initially provided in 2020-
21 was extended into 2021-22 to ensure that it can continue to deliver
counselling services to youth during the COVID-19 pandemic.

70 Chapter 1
The Public Health Agency of Canada is continuing to work with the Centre for
Addiction and Mental Health and partners to implement and sustain an
expanded pan-Canadian suicide prevention service. Once fully implemented,
people across Canada will have bilingual access to 24 hours a day, 7 days a week,
crisis support using the technology of their choice: voice, text, or online chat.

The Canadian Radio-television and Telecommunications Commission is launching

a regulatory proceeding to consult on a proposed three-digit hotline so
Canadians have a memorable number they can call when they need help. The
government is supportive of these efforts including ensuring funds are available
to support the creation of this hotline.

Support for Canadians in Distress

In addition to the Wellness Together Canada portal (wellnesstogether.ca), if you
or someone you know is in distress, call the Canada Suicide Prevention Service
at 1-833-456-4566. Canadians aged 5 to 29 can call the Kids Help Phone at
1-800-668-6868.

Indigenous peoples can also reach out to Hope for Wellness at

1-855-242-3310.

1.5 Investing in Research and Science

A resilient and long-lasting recovery must include a plan for future pandemic
preparedness. Strategic investments in cutting edge life sciences research and
biotechnology is a critical part of that. These growing fields are not only critical to
our safety, but are fast-growing sectors that support well-paying jobs and attract
investment.

From the start of the pandemic, the government has funded and coordinated our
biomedical and scientific response. From the National Microbiology Laboratory in
Winnipeg, which leads dozens of COVID-19 response projects in its Level 4 labs;
to investing in AbCellera in Vancouver, which helped create a leading antibody
therapeutic; to Quebec City’s Medicago working to develop a leading vaccine
candidate; to building the Biologics Manufacturing Centre at the National
Research Council to manufacture vaccines, Canada has been building on its
strengths to respond to this pandemic.

Raising the bar on our domestic life sciences and bio-manufacturing capacity will
provide Canada with a more secure pipeline for vaccines in the future.

Keeping Canadians Healthy and Safe 71

Strengthening Canada’s Bio-manufacturing and Life
Sciences Sector
Growing Canada’s life sciences and bio-manufacturing sector is a priority that
goes beyond responding to COVID-19. This is a growing sector that supports
thousands of good, middle class jobs.

Budget 2021 proposes to provide a total $2.2 billion over seven years
towards growing a vibrant domestic life sciences sector. This support would
provide foundational investments to help build Canada’s talent pipeline and
research systems, and support the growth of Canadian life sciences
firms, including:

- $500 million over four years, starting in 2021-22, for the Canada
Foundation for Innovation to support the bio-science capital and
infrastructure needs of post-secondary institutions and research hospitals.
- $250 million over four years, starting in 2021-22, for the federal research
granting councils to create a new tri-council biomedical research fund.
- $92 million over four years, starting in 2021-22, for adMare to support
company creation, scale up, and training activities in the life sciences sector.
- $59.2 million over three years, starting in 2021-22, for the Vaccine and
Infectious Disease Organization to support the development of its vaccine
candidates and expand its facility in Saskatoon.
- $45 million over three years, starting in 2022-23, to the Stem Cell Network
to support stem cell and regenerative medicine research.
Several other initiatives proposed in Budget 2021 also include targeted support
for the life sciences and bio-manufacturing sector. These measures form an
important part of the government’s investment in the sector and include:

 $1 billion on a cash basis over seven years, starting in 2021-22, of support

through the Strategic Innovation Fund would be targeted toward promising
domestic life sciences and bio-manufacturing firms. This is a key component
of the total investment in the Strategic Innovation Fund proposed in
Chapter 4.
 $250 million over three years, starting in 2021-22, to increase clinical research
capacity through a new Canadian Institutes of Health Research Clinical Trials
Fund, as proposed in Chapter 4.
 $50 million on a cash basis over five years, starting in 2021-22, to create a life
sciences stream in the Venture Capital Catalyst Initiative, as part of a larger
venture capital investment proposed in Chapter 4.

72 Chapter 1
These investments would be reinforced by other measures proposed in Budget
2021, including: the Pan-Canadian Genomics Strategy; the Pan-Canadian Artificial
Intelligence Strategy; the expansion of the Industrial Research Assistance
Program; support to help firms tap intellectual property expertise; efforts to
upskill and attract workers; as well as the expansion of work-integrated learning
opportunities. These investments offer support to firms at various stages of
maturity, and allow Canada’s research and development efforts to be more
closely connected to commercialization and business development supports.
More details can be found in Chapters 3 and 4.

Action to Address Antimicrobial Resistance

The World Health Organization has declared that antimicrobial resistance is one of
the top 10 global public health threats facing humanity. It occurs when bacteria,
viruses, fungi, and parasites mutate and no longer respond to medicines. By 2050,
it is estimated that as many as 396,000 lives in Canada could be lost to
antimicrobial resistance if the phenomenon is not addressed.

Budget 2021 proposes to provide $28.6 million over five years, beginning in
2021-22, with $5.7 million per year ongoing, to the Public Health Agency of
Canada, Health Canada, and the Canadian Food Inspection Agency, to help
address antimicrobial resistance. Investments would support efforts to
prevent the inappropriate use of antimicrobials and expand efforts to
monitor the emergence of antimicrobial resistance in Canada.

1.6 A Plan for the Safe Reopening of Our Borders

The government has implemented stringent travel restrictions and strict
public health measures at border crossings and airports to slow the spread of
COVID-19. At this time, the government continues to strongly advise against
all non-essential travel.

Ahead of any reopening of borders, the government is working to improve the

safety and efficiency of our borders so that Canada is ready for a strong and
safe recovery.

Keeping Canadians Healthy and Safe 73

Supporting Safe Air Travel
Air travel has declined sharply due to the COVID-19 pandemic. To facilitate the
safe restart of air travel, when conditions allow, in a way that limits transmission
of COVID-19 and protects travellers:

Budget 2021 proposes to provide $82.5 million in 2021-22 to Transport

Canada to support major Canadian airports in making investments in COVID-
19 testing infrastructure.
Budget 2021 also proposes to provide $105.3 million over five years, starting in
2021-22, with $28.7 million in remaining amortization and $10.2 million per year
ongoing to Transport Canada to collaborate with international partners to
further advance the Known Traveller Digital Identity pilot project, which will test
advanced technologies to facilitate touchless and secure air travel.
To improve sanitization at screening checkpoints:
Budget 2021 proposes to provide $6.7 million in 2021-22 to the Canadian Air
Transport Security Authority to acquire and operate sanitization equipment.
These measures would help restore Canadians’ confidence in the safety of air
travel when public health restrictions and border measures are adjusted and
would support the recovery of Canada’s hard-hit air and tourism sectors, which
so many Canadians rely on for their jobs and livelihoods.

Continuing to Protect Air Travellers

The Canadian Air Transport Security Authority (CATSA) plays a critical role in
ensuring the safety of air travel by screening travellers and their baggage (as well
as airport workers). CATSA has adopted additional screening practices, such as
temperature checks at Canada’s busiest airports, to help prevent the transmission
of COVID-19. To help protect air travellers:
Budget 2021 proposes to provide $271.1 million in 2021-22 to CATSA to
maintain operations and enhanced screening services at the 89 airports
where it works.

74 Chapter 1
Supporting Temporary Foreign Workers while they
Quarantine
Approximately 4,000 Canadian employers in the farming, fish harvesting, and
food production and processing sectors rely on temporary foreign workers each
year to fill up to 60,000 jobs and address domestic labour shortages. These
workers are important to ensure critical operations of the agriculture sector and
help to safeguard Canadian food production. These workers must follow isolation
requirements under the Quarantine Act, which is a cost for employers.

Budget 2021 proposes to provide $57.6 million in 2021-22 to extend the

Mandatory Isolation Support for Temporary Foreign Workers Program to help
employers offset costs associated with temporary foreign workers fulfilling
isolation requirements upon entering Canada. Support of up to $1,500 per
worker would be provided to employers until June 15, 2021 for costs of the
14-day isolation period. If workers are required to quarantine at a government
approved facility, due to a lack of suitable facilities at their employers’
facilities, employers can receive up to $2,000 per worker for costs associated
with mandatory isolation requirements.

This program was launched to stabilize the labour market and the food supply
chain and make sure there was food on the shelves for Canadians when the
pandemic first hit. It also ensures that migrant workers do not unfairly carry the
costs of their quarantine period.

After June 15, 2021, employers would receive $750 per worker until the wind-
down of the program on August 31, 2021. After August 31st, the government
intends on phasing-out this program and will consult with employers on the
transition to ensure that migrant workers are similarly compensated through
their quarantine period by their employers.

Further measures that propose to reform the Temporary Foreign Worker

Program can be found in Chapter 6.

Keeping Canadians Healthy and Safe 75

Chapter 1
Protecting Canadians’ Health
millions of dollars
2020– 2021– 2022– 2023– 2024– 2025– Total
2021 2022 2023 2024 2025 2026
1.1. Providing
Access to Vaccines 1,000 375 0 0 0 0 1,375
Canada’s COVID-19
Immunization Plan* 1,000 0 0 0 0 0 1,000
International COVID-
19 Response 0 375 0 0 0 0 375
1.2. Protecting Our
Seniors 0 17 639 653 609 607 2,525
Strengthening Long-
term Care and
Supportive Care 0 2 609 608 609 607 2,435
Helping Seniors Age
Well at Home 0 15 30 45 0 0 90
1.3. Strengthening
Our Health System 4,000 27 27 0 0 0 4,054
Helping our Health
Care Systems
Recover* 4,000 0 0 0 0 0 4,000
Renewing the
Territorial Health
Investment Fund 0 27 27 0 0 0 54
1.4. Supporting
Mental Health 0 140 83 35 0 0 257
National Standards
for Mental Health
Services 0 48 48 0 0 0 95
Supporting the
Mental Health of
Those Most Affected
by COVID-19 0 30 35 35 0 0 100
Investing in the
Wellness Together
Canada Portal 0 62 0 0 0 0 62
1.5. Investing in
Research and
Science 0 237 275 199 198 6 916
Strengthening
Canada's Bio-
manufacturing and
Life Sciences Sector 0 251 297 206 192 0 946
Less: Funds Sourced
From Existing 0 -15 -29 -14 0 0 -59

76 Chapter 1
 2020– 2021– 2022– 2023– 2024– 2025– Total
2021 2022 2023 2024 2025 2026
Departmental
Resources
Action to Address
Antimicrobial
Resistance 0 2 7 7 6 6 29
1.6. A Plan for the
Safe Reopening of
Our Borders 0 424 10 10 39 39 523
Supporting Safe Air
Travel 0 96 10 10 39 39 194
Continuing to Protect
Air Travellers 0 271 0 0 0 0 271
Supporting
Temporary Foreign
Workers while they
Quarantine 0 58 0 0 0 0 58
Additional
Investments –
Protecting
Canadians' Health 0 9 0 0 0 0 9
Maintaining Federal
COVID-19 Digital
Tools to Inform
Canadians 0 9 0 0 0 0 9
Funding for Health Canada to ensure the continued availability of federal digital tools for COVID-19 that provide
up-to-date information and valuable resources to Canadians throughout the pandemic, including the Canada
COVID-19 mobile app and the federal COVID self-assessment tool. Together, these tools help Canadians and
their families to stay informed about COVID-19.
Chapter 1 – Net 5,000 1,229 1,033 897 847 652 9,658
Fiscal Impact
Note: Numbers may not add due to rounding.
*Announced in March 2021.

Keeping Canadians Healthy and Safe 77

Chapter 2
Seeing Canadians and Businesses
Through to Recovery
In the face of the COVID-19 pandemic, the government acted swiftly to protect
Canadians and support people and businesses, adapting as the pandemic evolved.

The government’s broad suite of support measures has helped families,

protected jobs, and supported businesses across Canada. More than eight of
every ten dollars spent to fight COVID-19 and support Canadians continues to
come from the federal government.

Table 2.1
Canada’s COVID-19 Economic Response – Federal, Provincial, and
Territorial Support
Provincial
Federal and Territorial Total
Impact ($ billions)
Direct Measures to Fight COVID-19 and 345.6 77.6 423.2
Support People
Tax and Payment Deferrals 85.1 31.5 116.6
Credit Support 81.9 2.6 84.5
Total 512.6 111.6 624.2
Share of Spending (per cent)
Direct Measures to Fight COVID-19 and 81.7 18.3 100
Support People
Tax and Payment Deferrals 73.0 27.0 100
Credit Support 96.9 3.1 100
Total 82.1 17.9 100
Notes: Provincial and territorial government announcements; Department of Finance Canada calculations. As of
April 9, 2021. For federal totals, the data reflects the total impact which differs from fiscal cost on an accrual
basis. Totals may not add due to rounding.

Thanks to Canadians’ hard work and sacrifice over the past year, these measures
have worked effectively to stabilize the economy and prevent scarring. There
have been early signs that we will have a robust recovery. So far, Canada’s
economic rebound has outpaced forecasters’ expectations and compares
favourably with that of peers. Canada saw record gains of about 40 per cent
annualized real GDP in the third quarter of 2020, and 10 per cent annualized
GDP growth in the fourth quarter, which was the second highest in the G7.
Canada has also recovered about 90 per cent of jobs lost during the pandemic
and is outpacing the United States in this respect, where less than two-thirds of
lost jobs have been recouped.

Seeing Canadians and Businesses Through to Recovery 79

Despite these encouraging signs, the virus remains a serious threat to
Canadians. Public health restrictions are ongoing and new variants of COVID-19
make economic conditions uncertain for the months ahead.

Today, over half a million Canadians who had a job before the crisis are still out
of work or working sharply reduced hours, worse than in the depths of the 2008
recession. Many businesses, particularly those that rely on close in-person
contact or travel, continue to struggle.

The government will do whatever it takes to see Canadians through to recovery.

To this end, the government has developed a framework to guide key decisions
on how temporary programs such as the recovery benefits, the wage subsidy,
and the rent subsidy are transitioned as we move from crisis to recovery. These
economic support measures will remain in place without change until at least
July 2021, after which they will begin a gradual but purposeful transition
through the early fall.

This timing is based on continued progress in vaccine roll-out through the

spring and early summer, and that by September, all Canadians who want to be
vaccinated, will be fully vaccinated. Should there be a change in the course of
the pandemic, the government will take a flexible approach to ensure that
Canadians and Canadian businesses have the support they need.

The government recognizes that some harder-hit industries will require support
beyond the fall, which is why Budget 2021 proposes a series of investments to
continue supporting the hardest-hit workers and employers.

2.1 Protecting Jobs and Supporting Businesses

The economic situation remains uneven in different sectors across the country.

Close contact businesses, such as retail, restaurants, and performing arts face
intermittent restrictions and weak demand as Canadians continue to stay home.
These businesses, many of them small businesses, employ women, young
people, and racialized Canadians in greater proportion—and they have faced
severe and ongoing revenue declines (Chart 2.1). In sectors less affected by
restrictions, such as professional services and construction, the number of fully
open businesses has rebounded sharply (Chart 2.2).

Overall, business confidence is markedly up, buoyed by the prospect of mass

vaccination and a gradual return to normal. But a complete recovery will
take time.

80 Chapter 2
Chart 2.1 Chart 2.2
Share of Businesses Losing at Least Share of Small Businesses Fully
20% of Revenue in 2020, by Firm Open, Selected Industries
Size and Selected Sectors
All Businesses per cent
100 or more employees
100 Construction
20 to 99 employees
Professional
Services
5 to 19 employees 80

1 to 4 employees

60
Arts, Rec. & Info.
Accomm. & food
40
Arts, entertain. & rec. Retail

Other personal services

20
Transportation Hospitality

Information & culture

0
0 20 40 60 80 Mar Jun Sep Dec Mar
2020 2020 2020 2020 2021
per cent

Source: Statistics Canada. Note: For months where there was more than one
survey, results were averaged. Last data point is
April 2021 and is subject to revision once the CFIB
completes its April survey.
Source: Canadian Federation of Independent
Business.

Seeing Canadians and Businesses Through to Recovery 81

Federal support measures have protected jobs and helped limit the number of
permanent business closings. By preventing scarring the government has made
it easier for Canada to quickly rebound. The Canada Emergency Wage Subsidy
has, at times, supported over a quarter of private sector employment, and an
even higher share in some hard-hit industries like accommodation and food
services (Chart 2.3). Business insolvencies have, so far, remained low and below
historical levels (Chart 2.4).

Chart 2.3 Chart 2.4

Share of Private Sector Workers Monthly Business Insolvencies
Covered by the Canada Emergency
Wage Subsidy, by Industry,
November 2020
Accomm. & food Number of insolvencies

Education 400

Arts, culture & rec.

Other services 350
Manufacturing
Oil & gas
300 2019
All industries
Constr. & transp.
Retail & wholesale 250
Health & social asst.
Ag., for., fish. & hunt.
200
Professional serv. 2020

Utilities

0 10 20 30 40 50 60 70 150
Jan Mar May Jul Sep Nov
per cent

Note: Private sector workers include the incorporated Note: Seasonally adjusted by Haver Analytics.
self-employed. Other services includes business and Includes both bankruptcies and proposals.
building support. Professional services includes Source: Office of the Superintendent of Bankruptcy.
finance and real estate.
Sources: Canada Revenue Agency; Department of
Finance Canada calculations.

82 Chapter 2
Extending the Canada Emergency Wage Subsidy
The Canada Emergency Wage Subsidy has helped more than 5.3 million
Canadians keep their jobs and provided more than $73 billion in support to the
Canadian economy.

The wage subsidy program is currently set to expire in June 2021. In order to
bridge Canadians through the rest of this crisis to recovery, continued support
is needed. To give workers and employers certainty and stability over the
coming months:

Budget 2021 proposes to extend the wage subsidy until September 25, 2021.
It also proposes to gradually decrease the subsidy rate, beginning July 4, 2021,
in order to ensure an orderly phase-out of the program as vaccinations are
completed and the economy reopens.

Extending this support will mean that millions of jobs will continue to be
protected. In addition, the government is proposing to introduce the new
Canada Recovery Hiring Program, outlined later in Chapter 4. This would
provide an alternative support for businesses affected by the pandemic to help
them hire more workers as the economy reopens. The hiring program would be
in place from June until November 2021, allowing firms to shift from the
Canada Emergency Wage Subsidy to this new support.

It is estimated that the extension of the wage subsidy will cost $10.1 billion in
2021-22.

The government will seek the legislative authority to have the ability to further
extend the wage subsidy program through regulations until November 20,
2021, should the economic and public health situation require it beyond
September 2021.

For more information, please see Annex 6.

Ensuring the Canada Emergency Wage Subsidy Supports

Workers
The intention of the wage subsidy has always been to preserve and protect
Canadians’ jobs. It was designed to do this by making sure employers who
had suffered revenue declines during the pandemic had the support they
needed to keep employees on the payroll and encourage them to re-hire laid
off employees. Canadians expect businesses that use government support for
their operations—especially at a time of widespread personal difficulty—to
not increase the compensation of their top executives.

Seeing Canadians and Businesses Through to Recovery 83

Any publicly listed corporation that decides to increase executive pay during this
difficult time, while receiving taxpayer support, may have their wage subsidy
funds clawed back.

Budget 2021 proposes to require that any publicly listed corporation

receiving the wage subsidy and found to be paying its top executives more
in 2021 than in 2019 will need to repay the equivalent in wage subsidy
amounts received for any qualifying period starting after June 5, 2021 and
until the end of the wage subsidy program.

This is in recognition that the program is meant to serve workers and that,
during recovery, businesses boosting top executive pay have clearly
demonstrated that they have the resources to support workers.

Extending the Canada Emergency Rent Subsidy and

Lockdown Support
The Canada Emergency Rent Subsidy and Lockdown Support have helped more
than 154,000 organizations with rent, mortgage, and other expenses. The rent
subsidy provides eligible organizations with direct and easy-to-access rent
support. Importantly, it is available directly to tenants. Lockdown Support
provides organizations eligible for the rent subsidy with additional support if
they are subject to a lockdown or must significantly restrict their activities under
a public health order. To date, these measures have provided $2.6 billion in
support to Canadian businesses.

The program is set to expire in June 2021. To bridge Canadians through the rest
of this crisis to recovery, continued support is needed.
Budget 2021 proposes to extend the rent subsidy and Lockdown Support
until September 25, 2021. It also proposes to gradually decrease the rate of
the rent subsidy, beginning July 4, 2021, in order to ensure an orderly
phase-out of this program as vaccinations are completed and the economy
reopens.

It is estimated the extension of the rent subsidy and Lockdown Support will cost
$1.9 billion in 2021-22.

The government will seek the legislative authority to have the ability to extend
further the program through regulations until November 20, 2021, should the
economic and public health situation require further support beyond
September 2021.

For more information, please see Annex 6.

84 Chapter 2
Extending the Canada Emergency Business Account
The Canada Emergency Business Account (CEBA) has provided interest-free,
partially forgivable loans to more than 850,000 Canadian small businesses. In
December 2020, the government increased the value of the loan from $40,000
to $60,000 to help small businesses bridge to recovery. If a business repays
their loans by December 31, 2022, up to a third of the value of their loans
(meaning up to $20,000) will be forgiven. In further recognition of the ongoing
pandemic, the government recently extended the application deadline for CEBA
to June 30, 2021.

A small number of businesses have faced challenges accessing the program,

including Indigenous and rural businesses. To make sure these businesses are
not left behind, the government provides similar support through the Regional
Relief and Recovery Fund and Indigenous Business Initiative. To make sure
these businesses can continue to access support:

Budget 2021 proposes to extend the application deadline for similar

support under the Regional Relief and Recovery Fund and the Indigenous
Business Initiative until June 30, 2021.

Budget 2021 proposes to provide up to $80 million in 2021-22, on a cash

basis, for the Community Futures Network of Canada and regional
development agencies, and to shift remaining funds under the Indigenous
Business Initiative into 2021-22, to support an extended application
deadline for the Regional Relief and Recovery Fund and Indigenous
Business Initiative until June 30, 2021. This would support small businesses
in rural communities so they can continue to serve local populations.

2.2 Supporting Affected Workers

More than two and a half million Canadians have returned to work since the
pandemic began, but the uneven and evolving public health environment
means many workers continue to face challenges finding and keeping work.
The virulent third wave of the virus and the unpredictable impact of new
variants add to the uncertainty for Canadian workers.

Some jobs lost during the pandemic may also be lost for good because
businesses have found new ways to operate. That means that roughly half the
Canadians out of work now may not be returning to their previous jobs when
restrictions lift—they may have been permanently laid off (Chart 2.5). These
workers are disproportionately women, young people, and racialized workers. If
they are not supported, this could have long-term impacts on the economy’s
potential, and, most importantly, on the livelihoods of people and their families.

Seeing Canadians and Businesses Through to Recovery 85

Capable and willing workers are at risk of being underemployed, underpaid, or
even withdrawing from the workforce entirely. Chapters 3 and 4 outline key
measures the government is taking to help workers retrain, reskill, and re-
establish their careers to help accelerate recovery and ensure all workers are
brought along.

But until enough people are vaccinated and the economy reopens, withdrawing
income support programs too rapidly would be counterproductive and costly.

Chart 2.5
Number of Canadians Laid off or Seeing Sharply Reduced Hours
Since February 2020
Millions
6

4 Hours cuts

3
Temporary
2 layoffs

1 Permanent
layoffs
0
Feb Apr Jun Aug Oct Dec Feb
2020 2020 2020 2020 2020 2020 2021

Note: Sharply reduced hours means less than half of usual hours, including zero hours. Last data point
March 2021.
Sources: Statistics Canada; Department of Finance Canada calculations.

Temporarily Waiving the One-week Waiting Period

for Employment Insurance Claims
Last fall, the government made temporary changes to Employment Insurance
(EI) to support Canadians during the pandemic. The changes have ensured that
Canadians who continue to face challenges in finding and keeping work have
the support they need.

In response to ongoing restrictions in many parts of the country this winter, the
government announced that the waiting period would be waived for EI
beneficiaries who establish a new claim between January 31, 2021, and
September 25, 2021. This includes claims for regular, fishing, and special
benefits. This temporary change allows people who apply for benefits to be
paid their first week of unemployment, helping ease their financial stress.

86 Chapter 2
Providing Additional Weeks of Recovery Benefits and
EI Regular Benefits
Despite temporary changes to the Employment Insurance system, the
government recognized that certain workers who did not qualify for EI regular
benefits needed support during the pandemic. These include self-employed
workers, particularly gig workers, Canadians who have small amounts of part-
time work, and those who cannot take jobs because the pandemic has forced
them to shoulder greater-than-usual caregiving duties (Chart 2.6). After the
creation of the Canada Emergency Response Benefit, which supported over
8 million Canadians, the government transitioned the support to a suite of new
temporary benefits: the Canada Recovery Benefit, the Canada Recovery
Caregiving Benefit, and the Canada Recovery Sickness Benefit. In March 2021,
about 3.5 million Canadians received income support through the recovery
benefits and EI (Chart 2.7).

Chart 2.6 Chart 2.7

Change in Employment by Class of Income Support Beneficiaries
Worker, Feb 2020 to Mar 2021 by Program
per cent millions

4
Other Self-
Employees Gig Workers Employed
0 Other Programs

3 CRB
-0.9
-2

2
-4
-4.3
EI
-6
1

-8

-8.5 0
Feb 2020 Mar 2021
-10

Note: Gig workers defined as unincorporated self- Note: CRB = Canada Recovery Benefit. Other
employed without paid help. Seasonally adjusted by Programs are the Canada Recovery Caregiving
the Department of Finance. Benefit and the Canada Recovery Sickness Benefit.
Source: Statistics Canada; Department of Finance Sources: Employment and Social Development
calculations. Canada; Canada Revenue Agency; Statistics Canada.

In February 2021, to ensure continued support for Canadians, the government

increased the number of weeks available under the Canada Recovery Benefit
and the Canada Recovery Caregiving Benefit by 12 weeks to a total of 38 weeks,
the number of weeks available under the Canada Recovery Sickness Benefit from
2 weeks to 4 weeks, and the number of weeks of EI regular benefits available by
24 weeks up to a maximum of 50 weeks. These previously announced changes
are expected to cost an estimated $12.1 billion over three years.

Seeing Canadians and Businesses Through to Recovery 87

 To continue to support workers through a transition away from emergency
income supports and position Canadians for the recovery, the government
proposes to provide up to 12 additional weeks of Canada Recovery Benefit
to a maximum of 50 weeks. The first four of these additional 12 weeks will
be paid at $500 per week. As the economy reopens over the coming
months, the government intends that the remaining 8 weeks of this
extension will be paid at a lower amount of $300 per week claimed. All new
Canada Recovery Benefit claimants after July 17, 2021 would also receive
the $300 per week benefit, available up until September 25, 2021.
Budget 2021 also proposes to extend the Canada Recovery Caregiving
Benefit an additional 4 weeks, to a maximum of 42 weeks, at $500 per
week, in the event that caregiving options, particularly for those supporting
children, are not sufficiently available in the interim as the economy begins
to safely reopen.
It is estimated that the Budget 2021 extension of the Canada Recovery Benefit
and the Canada Recovery Caregiving Benefit will cost $2.5 billion over two
years, starting in 2021-22.

If additional flexibility is required based on public health considerations later

this year, the government will continue to do whatever it takes to be there for
Canadians. To ensure this flexibility:

Budget 2021 proposes legislative amendments to provide authority for

additional potential extensions of the Canada Recovery Benefit and its
associated suite of sickness and caregiving benefits, as well as regular EI
benefits until no later than November 20, 2021, should they be needed.

Maintaining Flexible Access to Employment

Insurance Benefits
Following the end of the Canada Emergency Response Benefit last fall, over
3.3 million Canadians have accessed EI and $25.3 billion in benefits have been
paid since.
As the economy reopens, the EI system must remain responsive to the needs of
Canadians.
Budget 2021 proposes $3.9 billion over three years, starting in 2021-22, for a
suite of legislative changes to make EI more accessible and simple for
Canadians over the coming year while the job market begins to improve.
The changes would:
- Maintain uniform access to EI benefits across all regions, including
through a 420-hour entrance requirement for regular and special
benefits, with a 14-week minimum entitlement for regular benefits, and a
new common earnings threshold for fishing benefits.

88 Chapter 2
- Support multiple job holders and those who switch jobs to improve their
situation as the recovery firms up, by ensuring that all insurable hours and
employment count towards a claimant’s eligibility, as long as the last job
separation is found to be valid.
- Allow claimants to start receiving EI benefits sooner by simplifying rules
around the treatment of severance, vacation pay, and other monies paid on
separation.
- Extend the temporary enhancements to the Work-Sharing program such as
the possibility to establish longer work-sharing agreements and a
streamlined application process, which will continue to help employers and
workers avoid layoffs.
As has been identified by the International Monetary Fund, the Organisation for
Economic Co-operation and Development, and other experts, the pandemic has
shown that Canada needs a more effective income support system for the
21st century. For this reason:

Budget 2021 announces forthcoming consultations on future, long-term

reforms to EI. To support this effort, the government proposes to provide
$5 million over two years, starting in 2021-22, to Employment and Social
Development Canada to conduct targeted consultations with Canadians,
employers, and other stakeholders from across the country. Consultations
will examine systemic gaps exposed by COVID-19, such as the need for
income support for self-employed and gig workers; how best to support
Canadians through different life events such as adoption; and how to
provide more consistent and reliable benefits to workers in seasonal
industries. Any permanent changes to further improve access to EI will be
made following these consultations and once the recovery is fully underway.

Extending Employment Insurance Sickness Benefits

to Better Support Canadians Suffering From Illness
or Injury
When Canadians are facing illness or injury, they should feel confident that they
are supported and that their jobs are protected as they recover. However, for
some Canadians, the 15 weeks of sickness benefits available under EI is simply
not enough. Workers receiving cancer treatments or requiring a longer period
to recover from an illness or injury can face a stressful income gap between the
time they exhaust their EI sickness benefits and when they are healthy enough
to return to work.

Seeing Canadians and Businesses Through to Recovery 89

 Budget 2021 proposes funding of $3.0 billion over five years, starting in
2021-22, and $966.9 million per year ongoing to enhance sickness benefits
from 15 to 26 weeks, as previously committed to in the Minister of
Employment, Workforce Development and Disability Inclusion’s mandate
letter. This extension, which would take effect in summer 2022, would
provide approximately 169,000 Canadians every year with additional time
and flexibility to recover and return to work.

Budget 2021 also proposes to make amendments to the Employment

Insurance Act, as well as corresponding changes to the Canada Labour
Code to ensure that workers in federally regulated industries have the job
protection they need while receiving EI sickness benefits.

The government also intends to launch consultations with employers, labour

organizations and private insurers regarding improvements that may be
required to the EI Premium Reduction Program. Under the Premium Reduction
Program, employers who provide short-term disability plans to their employees
can obtain a reduction in EI premiums.

Extending Temporary Support for Seasonal Workers

Who Continue to be Affected by the Pandemic
Self-employed fishers and seasonal workers have shown incredible resilience
throughout the COVID-19 pandemic. Federal income support has been a lifeline
to approximately 20,000 fishers and thousands of seasonal workers since
September, especially in Atlantic Canada. With restrictions ongoing and
recovery only just underway, these Canadians continue to need support. To
better support fishers and seasonal workers and ensure they do not lose access
to needed financial support:
Budget 2021 proposes legislative changes to ensure that all self-employed
fishers who submit an Employment Insurance (EI) claim for the winter 2021
fishing benefit period are treated equally, by extending temporary eligibility
changes for the entire benefit period.
Budget 2021 also proposes legislative changes and funding of $99.9 million
over three years, starting in 2021-22, to extend the rules of an existing EI
seasonal pilot project for an additional year, until October 2022. The
measure would provide up to 5 additional weeks of EI regular benefits to
seasonal claimants in 13 regions of Atlantic Canada, Quebec, and Yukon.

90 Chapter 2
Chapter 2
Seeing Canadians and Businesses Through to Recovery
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
2.1. Protecting Jobs
and Supporting
Businesses -70 12,208 0 0 0 0 12,138
Extending the Canada
Emergency Wage
Subsidy 0 10,140 0 0 0 0 10,140
Extending the Canada
Emergency Rent
Subsidy and the
Lockdown Support 0 1,920 0 0 0 0 1,920
Extending the
Application Deadline
for CEBA Gap-Filling
Programs 0 148 0 0 0 0 148
Less: Funds Previously
Provisioned in the
Fiscal Framework -70 0 0 0 0 0 -70
2.2. Supporting
Affected Workers 312 14,622 4,195 1,006 662 -683 20,112
Temporarily Waiving
the One-week Waiting
Period for
Employment Insurance
Claims1 106 214 0 0 0 0 320
Less: Projected
Revenues 0 0 0 0 0 -36 -36
Providing Additional
Weeks of Recovery
Benefits and EI Regular
Benefits2 206 9,596 2,207 109 0 0 12,118
Less: Projected
Revenues 0 0 0 0 0 -610 -610
Providing Additional
Weeks of the Canada
Recovery Benefit and
Canada Recovery
Caregiving Benefit 0 2,449 27 0 0 0 2,476
Maintaining Flexible
Access to Employment
Insurance Benefits 0 2,364 1,898 864 866 915 6,906
Less: Funds Previously
Provisioned in the
Fiscal Framework 0 -4 0 0 0 0 -4

Seeing Canadians and Businesses Through to Recovery 91

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Less: Projected
Revenues 0 0 0 0 -204 -941 -1,145
Extending Temporary
Support for Seasonal
Workers Who
Continue to be
Affected by the
Pandemic 0 4 63 33 0 0 100
Less: Projected
Revenues 0 0 0 0 0 -11 -11
Additional
Investments – Seeing
Canadians and
Businesses Through
to Recovery 0 130 0 0 0 0 130
Support to the
Government of
Quebec to align the
Quebec Parental
Insurance Plan with
Temporary EI Changes 0 130 0 0 0 0 130
Budget 2021 proposes funding and a legislative change to support the Government of Quebec in ensuring
that benefits offered under the Quebec Parental Insurance Plan reflect the temporary changes in place
between September 2020 and September 2021 that have made Employment Insurance maternity and
parental benefits more generous for some claimants.
Chapter 2 - Net Fiscal 242 26,960 4,195 1,006 662 -683 32,380
Impact
Note: Numbers may not add due to rounding.
1
Announced in January 2021
2
Announced in February 2021

92 Chapter 2
 Part II

Creating Jobs
and Growth

New Opportunities for Canadians 93

Chapter 3
New Opportunities for Canadians
In planning for Canada’s economic recovery, the government’s first order of
business is to heal the specific wounds of the COVID-19 recession.

The impact has been even more uneven than previous recessions. Some sectors,
many large businesses, and many wealthier Canadians have done quite well. They
have managed to keep working during the pandemic, have absorbed the
customers from locked-down small business competitors, and have seen their
homes and other assets grow in value.

The COVID-19 recession has had its worst impact on many of the most vulnerable
people in Canada—primarily low-wage workers, young people, racialized
workers, and women. It has affected businesses that disproportionately employ
these people.

Chart 3.1
Change in the Unemployment Rate, by Age and Sex,
February 2020 to March 2021
percentage points

0
15 to 24 25 to 54 55 to 64 15 to 24 25 to 54 55 to 64
Males Females
Source: Statistics Canada.

Today, about 296,000 people are still out of work, and 247,000 are facing sharply
reduced work hours, and with that reduced wages, and reduced access to
opportunities.

“The labour market is a long way from recovery, with

employment still well below pre-COVID levels. Low-wage
workers, young people and women have borne the brunt of
jobs losses.”
— Bank of Canada, March 10, 2021

New Opportunities for Canadians 95

Lessons from recessions of the past make it clear that a recovery that focuses on
GDP alone is one that risks leaving people behind.

The government’s COVID-19 recovery plan puts people first. It is targeted at the
groups that have been most affected, to make sure they are part of our recovery.
It does so by making higher education more affordable and reducing the burden
of student debt for more Canadians in need. It does so by improving conditions
for workers struggling to make ends meet—or those trying to rejoin the
workforce after a difficult time. It is about supporting the middle class and
helping more people join the middle class.

In the 2020 Speech from the Throne, the Government of Canada launched a
campaign to create over one million jobs, restoring employment to pre-
pandemic levels including through historic investments in training that will skill
up workers.

Budget 2021 will create almost 500,000 new job and training opportunities for
workers over coming years—including 215,000 new opportunities for youth.

Most importantly, Budget 2021 makes a generational investment in a Canada-

wide system of affordable child care.

3.1 Women in the Economy

COVID-19 has affected all Canadians, but women have been disproportionately
affected.

In the labour market, women were hit earlier and harder, and their jobs continue
to recover more slowly.

The closure of schools and child care centres has exacerbated work-life balance
challenges for women as they have overwhelmingly borne the burdens of unpaid
care work. This has made it more difficult for some women to work full time, for
some to work at all, and for many women it has worsened their mental health.

For far too long, the work women do, paid and unpaid, has been systematically
devalued by our economy and by our society. Long-standing gender inequities
have only been amplified over the course of the pandemic—and it has put
decades of hard-fought gains for women in the workplace at risk. Today, more
than 16,000 women have dropped out of the labour force completely, while the
male labour force has grown by 91,000. This is a she-cession.

Budget 2021 lays out an expansive jobs and growth plan that is very much a
feminist plan. It seeks to build a recovery that gives all women in Canada the
ability to fully participate in our economy.

96 Chapter 3
The government recognizes the many different lived experiences of women—
experiences shaped by racial identity, income level, disabilities, geography, and
more. Budget 2021 seeks to build a recovery that acknowledges that many
women start from a position of disadvantage in the workforce, in the demands
placed upon them in the care economy, in their access to resources and capital as
entrepreneurs, in their access to health care, and in the threat of violence they
disproportionately face.

In March, the Government of Canada created a Task Force on Women in the

Economy to help guide a robust, inclusive, and feminist recovery and to help
address long-standing systemic barriers. Composed of a diverse group of experts
and leading voices, the task force has begun advising the government on policies
and measures to support women’s employment and address issues of gender
equality in the wake of the pandemic. In particular, the task force has provided
advice on early learning and child care, support for youth, and women who work
in low-wage jobs. The members provide feedback with an intersectional lens that
is instrumental in this budget and will continue to provide advice on the path
forward.

The work of creating a more inclusive, sustainable, feminist, and resilient

economy that values women’s work will take time. The government will continue
its progress to build a feminist, intersectional Action Plan for Women in the
Economy that will work to push past systemic barriers and inequities, for good.
This will create an economy that works for everyone and build a stronger middle
class.

A Canada-wide Early Learning and Child Care Plan

More than 50 years ago, the Royal Commission on the Status of Women in
Canada called on the federal government to immediately begin working with
provinces and territories to establish a national daycare plan. Generations of
Canadians have waited for their government to answer this call.

The pandemic has made access to early learning and child care a universal issue
that is resonating across sectors, regions, and income brackets. School and child
care centre closures have been difficult for parents. Some have had to leave their
jobs, or reduce their hours significantly. Without access to child care, parents
cannot fully participate in our economy.

This is an economic issue as much as it is a social issue. Child care is essential

social infrastructure. It is the care work that is the backbone of our economy. Just
as roads and transit support our economic growth, so too does child care.

Investing in early learning and child care offers a jobs-and-growth hat trick: it
provides jobs for workers, the majority of whom are women; it enables parents,

New Opportunities for Canadians 97

particularly mothers, to reach their full economic potential; and it creates a
generation of engaged and well prepared young learners.

Studies by Canadians Dr. Fraser Mustard and the Honourable Margaret McCain
have shown that early learning is at least as important to lifelong development as
elementary, secondary, and post-secondary education—it improves graduation
rates, promotes lifelong well-being, boosts lifetime earnings, and increases social
equity.

Figure 3.1
Benefits of Early Learning and Child Care for Children

Source: Barnett, 1992; Jenkins, Boivin, Akbari, 2015 (as summarized in Honourable Margaret Norrie McCain (2020),
Early Years Study 4: Thriving Kids, Thriving Society.)

Yet, early learning and child care can be more expensive than university tuition in
some cities—something families have decades longer to save up for. The
pandemic has shifted the public understanding of how access to child care
supports children, their families, and our economy. The clear benefits of early
learning and child care should not be a luxury for only the Canadian families that
can afford it. Lack of access is not a choice, nor are unaffordable fees. The current
system is leaving too many children and families behind, particularly low-income
and racialized families. Every child deserves a fair start.

98 Chapter 3
The high cost of child care—in some urban centres fees for one child can be as
much as rent or mortgage payments—is a tax on a segment of the population
that Canada requires to drive economic growth. Young families are juggling sky
high housing costs, the increasing cost of living, expected to save up for their
retirements, while managing child care fees.

Chart 3.2
Median Toddler Fees in 2020 (gross, monthly)

Québec City 181

Montréal 181
Gatineau 181
Winnipeg 451
Charlottetown 608
Regina 675
St. John`s 716
Fredericton 716
Moncton 716
Saint John 716
Saskatoon 810
Whitehorse 850
Halifax 853
Windsor 868
Lethbridge 900
Kelowna 925
Edmonton 950
Yellowknife 990
Burnaby 1,000
Hamilton 1,027
Surrey 1,050
Ottawa 1,140
Kitchener 1,149
Vancouver 1,165
London 1,191
Iqaluit 1,215
Vaughan 1,250
Calgary 1,250
Brampton 1,269
Oakville 1,280
Mississauga 1,284
Markham 1,300
Richmond 1,300
Richmond Hill 1,327
Toronto 1,578

0 200 400 600 800 1000 1200 1400 1600

Note: These data represent gross child care fees and do not include reductions from means-tested child care
subsidies or tax-based supports.
Source: Canadian Centre for Policy Alternatives (2021).

The very best example of the economic power of an affordable, well-run early
learning and child care system is Quebec. At the time the Québec Educational
Childcare Act was instituted in 1997, women’s labour force participation rate in
Quebec was four percentage points lower than the rest of Canada. Today it is
four points higher. And Quebec women with children under three have some of
the highest employment rates in the world. Furthermore, studies show that child
care alone has raised Quebec’s GDP by 1.7 per cent.

New Opportunities for Canadians 99

Furthermore, TD Economics has pointed to a range of studies that have shown
that for every dollar spent on early childhood education, the broader economy
receives between $1.50 and $2.80 in return.

Beyond the simple economic facts, it is also a question about the kind of Canada
we want. Early learning and child care represents a chance for the country to offer
each and every child the best start in life. It represents an equalizer, a way to
build communities, a bold feminist policy, and the most effective step we can
take to support our economy in the short, medium and long term. It is about
making sure that everyone has the same access to opportunities, even from their
youngest age.

It is time for the rest of Canada to learn from Quebec’s example. A Canada-wide
early learning and child care plan is a plan to drive economic growth, a plan to
secure women’s place in the workforce, and a plan to give every Canadian child
the same head start. It is a plan to build an economy that is more productive,
more competitive, and more dynamic. It is a plan to grow the middle class and
help people working hard to join it.

Figure 3.2
The Dividends of Investing in Early Learning and Child Care

100 Chapter 3
Establishing a Canada-Wide Early Learning and Child
Care System
The federal government will work with provincial, territorial, and Indigenous
partners to build a Canada-wide, community-based system of quality child care.
This will be a transformative project on a scale with the work of previous
generations of Canadians, who built a public school system and public health
care. This is a legacy investment for today’s children who will not only benefit
from, but also inherit this system.

Just as public school provides children with quality education in their

neighbourhoods, the government’s goal is to ensure that all families have access
to high-quality, affordable and flexible early learning and child care no matter
where they live. The government will also ensure that families in Canada are no
longer burdened by high child care costs—with the goal of bringing fees for
regulated child care down to $10 per day on average within the next five years.
By the end of 2022, the government is aiming to achieve a 50 per cent reduction
in average fees for regulated early learning and child care to make it more
affordable for families. These targets would apply everywhere outside of Quebec,
where prices are already affordable through its well-established system.

To support this vision, Budget 2021 proposes new investments totaling up to

$30 billion over the next 5 years, and $8.3 billion ongoing for Early Learning
and Child Care and Indigenous Early Learning and Child Care, as outlined below.

The government’s plan ensures that gains are secured for generations to come by
making this historic commitment a lasting one, while also recognizing that
building the quality system we want will take time.

Combined with previous investments announced since 2015, a minimum of

$9.2 billion per year ongoing will be invested in child care, including Indigenous
Early Learning and Child Care, starting in 2025-26.

New Opportunities for Canadians 101

 Chart 3.3
A Historic, Permanent Federal Financial Commitment to Early
Learning and Child Care
$ Billions Previous Investments since 2015 Budget 2021 Investments
10
9.2
9
An increase in permanent, annual funding of over $8 billion, for 8.0
8 a total financial commitment of at least $9.2 billion annually
7.0
7
6 5.6

5 Includes $625 million for Safe

Restart Agreement and 4.1
4 $120 million for one-time
Indigenous Early Learning and
3 Child Care support
2
1.3
1 0.5 0.5

0
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26

This once-in-a-generation transformation will take time and hard work from all
orders of government—and that is why the next five years are focused on
meaningful goals for families and setting the right foundations for success.

Up to $27.2 billion over five years, starting in 2021-22 will bring the federal
government to a 50/50 share of child care costs with provincial and territorial
governments, as part of initial 5-year agreements. Future objectives and
distribution of funding, starting in year six, would be determined based on an
understanding of need and progress achieved as part of this initial plan.

Over the next five years, the government will work with provinces and territories
to make meaningful progress towards a system that works for families. The
aforementioned federal funding would allow for:

 A 50 per cent reduction in average fees for regulated early learning and child
care in all provinces outside of Quebec, to be delivered before or by the end
of 2022.
 An average of $10 a day by 2025-26 for all regulated child care spaces in
Canada.
 Ongoing annual growth in quality affordable child care spaces across the
country, building on the approximately 40,000 new spaces already created
through previous federal investments.
 Meaningful progress in improving and expanding before- and after-school
care in order to provide more flexibility for working parents.

102 Chapter 3
 Figure 3.3
Real Progress Towards the Goal of $10 Per Day Average

The next five years of the plan will also focus on building the right foundations
for a community-based and truly Canada-wide system of child care. This includes:

 Working with provinces and territories to support primarily not-for-profit

sector child care providers to grow quality spaces across the country while
ensuring that families in all licensed spaces benefit from more affordable
child care.

 A growing, qualified workforce—with provincial and territorial partners, the

government will work to ensure that early childhood educators are at the
heart of the system, by valuing their work and providing them with the
training and development opportunities needed to support their growth and
the growth of a quality system of child care. Over 95 per cent of child care
workers are women, many of whom are making low wages, with a median
wage of $19.20 per hour.

 A strong basis for accountability to Canadians—the government will work

with provincial and territorial partners to build a strong baseline of common,
publicly available data on which to measure progress, report to Canadians,
and help continuously improve the system.

Quebec has been a pioneer of early learning and child care in Canada, with
outcomes for children and families that have been studied around the world.
However, the Quebec experience has also illustrated that building a system is
complex, and that phased and sustained investments are required to ensure
that everyone has access to the same quality of care at affordable prices. These
are valuable lessons for a pan-Canadian system. To build on the current
bilateral agreements:

New Opportunities for Canadians 103

 Budget 2021 proposes to proceed with an asymmetrical agreement with the
province of Quebec that will allow for further improvements to their system,
which the people of Quebec are rightly proud of.

In addition, the federal government will authorize the transfer of 2021-22 funding
as soon as bilateral agreements are reached with the provinces and territories,
enabled by a proposed statutory appropriation.

Supporting Accessible Child Care Spaces

For families that have children with disabilities, it is often challenging to find
affordable and accessible child care spaces that meet their needs.

To make immediate progress for children with disabilities, Budget 2021

proposes to provide $29.2 million over two years, starting in 2021-22, to
Employment and Social Development Canada through the Enabling
Accessibility Fund to support child care centres as they improve their physical
accessibility. This funding, which could benefit over 400 child care centres,
would support improvements such as the construction of ramps and
accessible doors, washrooms, and play structures.

Addressing the Needs of Indigenous Families and

Communities
Early learning and child care programs designed by and with Indigenous families
and communities give Indigenous children the best start in life. This is a critical
part of reconciliation.
Canada’s Indigenous Early Learning and Child Care Framework, co-developed
with Indigenous partners in 2018, adopts a distinctions-based approach to
strengthening high-quality, culturally appropriate child care for Indigenous
children guided by Indigenous priorities.
Budget 2021 builds on this framework, and on recent investments in the 2020
Fall Economic Statement, to continue the progress towards an early learning
and child care system that meets the needs of Indigenous families, wherever
they live. A proposed investment of $2.5 billion over the next five years in
Indigenous Early Learning and Child Care will include:

- $1.4 billion over five years, starting in 2021-22, and $385 million ongoing,
to ensure that more Indigenous families have access to high-quality
programming. Guided by Indigenous priorities and distinctions-based
envelopes, this investment will build Indigenous governance capacity and
allow providers to offer more flexible and full-time hours of care, build,
train and retain a skilled workforce, and create up to 3,300 new spaces.
This will include new investments in Aboriginal Head Start in Urban and
Northern Communities.

104 Chapter 3
 - $515 million over five years, starting in 2021-22, and $112 million
ongoing, to support before and after-school care for First Nations
children on reserve.
- $264 million over four years, starting in 2022-23, and $24 million
ongoing, to repair and renovate existing Indigenous early learning and
child care centres, ensuring a safe and healthy environment for children
and staff.
- $420 million over three years, starting in 2023-24, and $21 million
ongoing, to build and maintain new centres in additional communities.
The government will work with Indigenous partners to identify new
infrastructure priorities.

To ensure these vital programs continue to grow along with the

communities they serve, program funding will increase by 3 per cent each
year starting in 2027-28.

Bringing Partners Together to Build and Maintain a

Canada-Wide Child Care System
This ambitious plan requires strong leadership from the federal government—
built on an open and collaborative relationship with partners and stakeholders in
order to meet the needs of families. Early learning and child care investments in
Budget 2017 brought all provinces and territories into bilateral agreements that
have been successfully delivering results driven by quality, accessibility, and
affordability. These shared priorities will be the platform for the development of
a quality pan-Canadian system.
Building on recent investments in the 2020 Fall Economic Statement, an
additional $34.5 million over five years, starting in 2021-22, and $3.5 million
ongoing, would be provided to Employment and Social Development Canada
to strengthen capacity within the new Federal Secretariat on Early Learning
and Child Care.

This will include, in the coming months, the creation of a new National Advisory
Council to provide expert advice and a forum for consultation on issues and
challenges facing the early learning and child care sector. This council would
reflect Canada’s geographic, cultural, linguistic, and socio-economic diversity and
would include experts from across the sector.

To further support a lasting federal commitment over time, the government is

committed to tabling federal early learning and child care legislation in fall
2021—following consultations with stakeholders, provincial, territorial, and
Indigenous partners—to enshrine the principles of a Canada-wide child care
system in law.

New Opportunities for Canadians 105

Strengthening Diversity in Corporate Governance
To foster inclusivity in the financial sector and ensure Canada’s financial
institutions are responding to changing social and economic conditions:

Budget 2021 proposes a public consultation on measures that would

adapt and apply the Canada Business Corporations Act diversity
requirements to federally regulated financial institutions. This objective
is to promote greater gender, racial, ethnic, and Indigenous diversity
among senior ranks of the financial sector and ensure more Canadians
have access to these opportunities. Details on the consultation will be
announced in the near future.

In addition, Budget 2021 proposes that Crown corporations will be required to

implement gender and diversity reporting, starting in 2022.

3.2 Opportunities for Canada’s Youth

In many ways, the COVID-19 recession has been a sacrifice of younger
generations to protect their elders. Young people have been isolated at a time of
life normally marked by studying, vibrant and growing social lives, travel, and a
variety of crucial work experiences that help them find their path.

Instead, young people have stayed home—and many have lost their jobs.

Young people were among the hardest and fastest hit when the pandemic
struck—experiencing more job losses than any other age demographic. They
have also experienced the worst decline in mental health of any age group. And
even through these challenges, young people stepped up to advocate, volunteer,
and serve in their communities, helping them get through the pandemic.

We cannot let them be a lost generation. Young Canadians must be at the centre
of our recovery not only to help them rebound today, but to invest in their future
success and the future success of our economy.

Since the start of the pandemic, the government has had young people’s backs,
providing over $7.4 billion to support young Canadians through this difficult
time. This included a six-month moratorium on student loan payments at the
start of the pandemic, doubling the Canada Student Grants for the 2020-2021
school year, supporting almost 200,000 new youth work opportunities and
experiences, and providing income support to over 700,000 students through the
Canada Emergency Student Benefit.

106 Chapter 3
Budget 2021 builds on Canada’s investments in youth with over $5.7 billion over
the next five years to help young Canadians—including from low-income
households—pursue and complete their education, to provide additional relief
from student loan debt for young graduates, and to create 215,000 new job skills
development and work opportunities.

Taken together, the Government of Canada’s response to the current crisis

represents the largest ever investment in young Canadians—totaling $13.1 billion
over six years. This represents one of the largest youth support packages from
around the world. Canada’s growth and prosperity well into the future depends
on new opportunities for young people today.

Providing Relief from Student Debt

Education is the smartest investment anyone can make. To ease new grads into
working life and make sure they are not prematurely burdened by loan
repayments, Budget 2019 made the six-month grace period after leaving studies
interest free. And during the pandemic, the government imposed a six-month
moratorium on all student loan repayment, and committed to a one-year
suspension of interest accrual on student loans in 2021-22.

To provide even further support to students and recent graduates, Budget 2021
is reforming the Canada Student Loans Program. The new Canada Student
Financial Assistance Program will make student debt easier to pay down and
provide direct support to students with the greatest need.

Provinces and territories that do not currently participate in the Canada Student
Loans Program will continue to receive equivalent compensation from the
Government of Canada for their own student financial assistance programs that
offer comparable benefits to the Canada Student Financial Assistance Program.

Waiving Interest on Student Loans for an Additional Year

To ensure that the cost of post-secondary education in Canada remains
predictable and affordable for everyone during the economic recovery:

The government proposes to introduce legislation that would extend the

waiver of interest accrual on Canada Student Loans and Canada Apprentice
Loans until March 31, 2023. This change has an estimated cost of
$392.7 million in 2022-23.

This action would mean savings for approximately 1.5 million Canadians repaying
student loans, the majority of whom are women.

New Opportunities for Canadians 107

Enhancing Repayment Assistance
Every year, the Government of Canada provides repayment assistance to
approximately 350,000 borrowers with low incomes. Currently, the threshold for
this support is earning $25,000 per year or less, for a single borrower. To ensure
that no federal student loan borrower ever has to make a payment they
cannot afford:
Budget 2021 proposes to increase the threshold for repayment
assistance to $40,000 for borrowers living alone, so that nobody earning
$40,000 per year or less will need to make any payments on their
student loans.

- This will support an estimated 121,000 additional Canadians with

student loan debt each year.
- For students from larger households the threshold will be modified
to match the Canada Student Grants. For example, for a household
with four individuals, the 2020-21 Canada Student Grant cut-off is
$63,735, which rises with inflation, while the current repayment
assistance threshold is $59,508.
- Additionally, the cap on monthly student loan payments will be
reduced from 20 per cent of household income to 10 per cent.
- To ensure that the eligibility for repayment assistance keeps pace
with the cost of living, the new income cut-offs will be indexed to
inflation.
- Beginning in 2022-23, these changes will cost an estimated
$203.5 million over four years, and $64.2 million per year ongoing.

Doubling the Canada Student Grants for Two

Additional Years
Over 580,000 students each year rely on federal grants and loans to help them
cover the cost of their tuition, school supplies, and living expenses. When the
pandemic caused other sources of income for students—such as part-time jobs—
to dry up, the Government of Canada helped out by doubling Canada Student
Grants for the 2020-2021 school year, providing an additional $2,600, on average,
of non-repayable aid to students in need. This effectively covered 90 per cent of
the average undergraduate tuition in Canada for low-income students during the
pandemic.

108 Chapter 3
Table 3.1
Canada Student Grants
Maximum Maximum Maximum
Amount in 2014 Amount in 2019 Amount in 2021
Full-Time Students $2,000 $3,000 $6,000
Part-Time Students $1,200 $1,800 $3,600
Students with Dependants (Full-Time) $1,600 $1,600 $3,200
(per dependant) (per dependant) (per dependant)
Students with Dependants (Part-Time) $1,920 $1,920 $3,840
Students with Disabilities $2,000 $2,000 $4,000

To ensure students from low-income households remain supported throughout

COVID-19 and continue to have access to this opportunity as the economy recovers:
The government is announcing its intention to extend the doubling of
the Canada Student Grants until the end of July 2023.
The cost of this measure is estimated at $3.1 billion over two years starting in
2021-22.
Provinces and territories that do not currently participate in the Canada Student
Loans Program will continue to receive equivalent compensation from the
Government of Canada for their own student financial assistance programs that
offer comparable benefits to the Canada Student Financial Assistance Program.

Expanding Access to Supports for Students and

Borrowers with Disabilities
Students with disabilities face some of the highest costs and most significant
barriers to long-term success. Every year, the Canada Student Loans Program
supports over 75,000 students and borrowers with permanent disabilities through
enhanced grants and repayment assistance. But these supports are not available
to students whose disabilities are not lifelong.
The government is announcing its intention to extend disability supports
under the Canada Student Loans Program to recipients whose disabilities are
persistent or prolonged, but not necessarily permanent.
This change will benefit an estimated 40,000 recipients with non-permanent
disabilities each year through access to up to $22,000 in grants, in-study
supports, and specialized repayment assistance on their loans. Beginning in
2022-23, the estimated cost of this measure will be $428.9 million over four
years, and $118.6 million per year ongoing.

New Opportunities for Canadians 109

Supporting Vulnerable Children and Youth During the
Recovery
COVID-19 has made life especially difficult for students at risk of dropping out of
school. These students rely on local after-school programs for tutoring,
counselling, and other social supports that help them stay in school, graduate on-
time, and access post-secondary education. As the pandemic drives education
online and dries up private donations, these organizations continue to rely on
their government to bridge the gap and support their vital missions.
Budget 2021 proposes to provide $118.4 million over two years starting in
2021-22, for Employment and Social Development Canada to conduct a two-
year pilot expansion of federal investments in after-school programming
under the Supports for Student Learning Program. These funds would
support national and local after-school organizations who work to ensure
that vulnerable children and youth can graduate high school and do not
become further marginalized because of the pandemic. Of this amount,
$20 million will be reallocated from internal resources within the department.

Helping Youth and Students Build Job Skills and

Connect with Employers
Young Canadians have seen more job losses due to COVID-19 than any other age
demographic. This not only deprives them of income that could be used to pay
for schooling, build their savings, or cover basic living expenses, but can also lead
to long-term consequences by disrupting important experiences in the crucial
early years of their working lives. These impacts are often more severe for youth
facing multiple barriers to employment such as Indigenous youth, racialized and
Black youth, and newcomers to Canada.

To ensure youth and students can access valuable job skills and experience,
Budget 2021 is proposing to invest $721 million in the next two years to help
connect them with employers and provide them with quality job opportunities.

Student Work Placement Program

Budget 2021 proposes to invest $239.8 million in the Student Work Placement
Program in 2021-22 to support work-integrated learning opportunities for
post-secondary students. This funding would increase the wage subsidy
available for employers to 75 per cent, up to $7,500 per student, while also
increasing employers’ ability to access the program. This is expected to
provide 50,000 young people (an increase of 20,000) with valuable experience-
building opportunities in 2021-22.

110 Chapter 3
Youth Employment and Skills Strategy
Budget 2021 proposes to invest $109.3 million in 2022-23 for the Youth
Employment and Skills Strategy to better meet the needs of vulnerable youth
facing multiple barriers to employment, while also supporting over 7,000
additional job placements for youth. This builds on funding announced in the
2020 Fall Economic Statement, which is expected to result in over 30,600 new
placements in 2021-22. This will make it easier for young people to get good
jobs.

Canada Summer Jobs

Budget 2021 proposes to invest $371.8 million in new funding for Canada
Summer Jobs in 2022-23 to support approximately 75,000 new job
placements in the summer of 2022. This is in addition to 2020 Fall
Economic Statement funding for approximately 94,000 additional job
placements in 2021-22. In total, the Canada Summer Jobs program will
support around 220,000 summer jobs over the next two years.

3.3 Investing in Skills, Training, and Trades

COVID-19 laid bare the inequalities in our workforce. From single mothers, to
newcomers, to racialized Canadians, to young Canadians gaining their first job
experience, many who could not work from home were those who faced barriers to
work in the first place.

As the economy reopens, those opportunities will come back, but our need to
adapt to the changing nature of work—including new technologies, industries,
and ways of working—will only increase.

Getting Canadians back to work means giving workers in all sectors—from energy,
to manufacturing, to construction, to customer service—the skills they need for
good jobs. COVID-19 has changed the way many employers do business,
eliminating certain jobs, and growing the need for new skills. Investing in new skills
gives Canadians opportunities to find good jobs, in growing fields, and strengthen
the middle class.

Every year, the federal government transfers around $3 billion to the provinces and
territories so they can support workers and help them develop the in-demand skills
for their economies.

Budget 2021 looks to the future by better connecting workers to good jobs in
growing sectors, by creating new opportunities and increasing diversity in the
trades, and helping Canadians gain the foundational skills needed to succeed in
today’s economy.

New Opportunities for Canadians 111

Table 3.2
Almost 500,000 New Training and Work Opportunities for Canadians,
starting 2021
Number of new opportunites
Measure (5 year timeframe)
For Youth
Student Work Placement Program 20,000
Youth Employment and Skills Strategy 7,000
Canada Summer Jobs 75,000
Mitacs (see Chapter 4) 85,000
Canada Digital Adoption Program (see Chapter 4) 28,000
For Core Working Age
Sectoral Workforce Solutions Program 90,000
Apprenticeship Service 55,000
Skills for Success 90,000
Community Workforce Development Program 25,000
Transitioning Workers to New Jobs 15,500

Helping Employers Train and Recruit Workers

Certain sectors like health, clean tech, and construction have grown and are
struggling to find workers with the right skills to fill jobs. The government wants
these sectors to keep growing so that Canada can build a healthy and clean
economy. That is why it is taking action to help employers train and reskill people
and help the workforce grow and meet demand. To help Canadians gain skills for
good jobs in growing sectors:

Budget 2021 proposes to provide $960 million over three years,

beginning in 2021-22, to Employment and Social Development Canada
for a new Sectoral Workforce Solutions Program. Working primarily with
sector associations and employers, funding would help design and
deliver training that is relevant to the needs of businesses, especially
small and medium-sized businesses, and to their employees. This
funding would also help businesses recruit and retain a diverse and
inclusive workforce.

This investment will help connect up to 90,000 Canadians with the training they
need to access good jobs in sectors where employers are looking for skilled
workers. This includes sectors like health, including the need for more accredited
personal support workers, clean energy, as well as construction. It will also help
diversify sectors by ensuring that 40 per cent of supported workers are from
underrepresented groups, including women, persons with disabilities, and
Indigenous people.

112 Chapter 3
Creating New Opportunities for Skilled Tradespeople
The skilled trades are vital to our economy, and apprenticeships are the bridge
that help skilled workers, especially young people starting their careers, connect
with businesses and find well-paying jobs. Since 2014, Canada has seen a decline
in new apprentices for well-paying middle class jobs. In 2019, it was estimated
Canada needs to attract 167,000 new apprentices over the next five years just to
align with existing levels of demand.

Every year, the Government of Canada provides about $90 million through 60,000
grants to support apprentices—but more is needed to ensure that those
apprentices can find valuable work experiences and that employers can tap into
this pool of skilled workers.

Budget 2021 proposes to provide $470 million over three years, beginning in
2021-22, to Employment and Social Development Canada to establish a new
Apprenticeship Service. The Apprenticeship Service would help 55,000 first-
year apprentices in construction and manufacturing Red Seal trades connect
with opportunities at small and medium-sized employers.

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.

In addition, to boost diversity in the construction and manufacturing Red Seal

trades, this incentive will be doubled to $10,000 for employers who hire those
underrepresented, including women, racialized Canadians, and persons with
disabilities.

Supporting Skills for Success

The skills needs of businesses are changing as they adopt new technologies and
new ways of doing things. Yet, today, 45 per cent of Canadians lack the literacy,
numeracy, and digital skills that are increasingly necessary to succeed in jobs in
the knowledge economy.

Budget 2021 proposes to invest $298 million over three years, beginning in
2021-22, through Employment and Social Development Canada, in a new
Skills for Success program that would help Canadians at all skills levels
improve their foundational and transferable skills.

The program will fund organizations to design and deliver training to enhance
foundational skills such as literacy and numeracy, as well as transferable and soft
skills. This could include helping employers deliver training to increase
communication and teamwork skills of their employees, or community
organizations looking to strengthen basic literacy and numeracy of marginalized

New Opportunities for Canadians 113

groups. Additionally, funding will support the creation of assessments and
training resources available online to all Canadians at no cost.
Approximately 90,000 Canadians will be able to improve their literacy and
essential skills to better prepare for, get and keep a job, and adapt and succeed
at work.

Ensuring Communities Recover Through Skills

Training and Workforce Planning
For the recovery to succeed, communities must be at the heart of determining
their economic futures by diversifying their economies and improving resilience.

Budget 2021 proposes to provide $55 million over three years, starting
in 2021-22, to Employment and Social Development Canada for a
Community Workforce Development Program. The program will
support communities to develop local plans that identify high potential
growth organizations and connect these employers with training
providers to develop and deliver training and work placements to
upskill and reskill jobseekers to fill jobs in demand.

Funding would be delivered through calls for proposals under two streams: A
national stream focused on priority areas, like de-carbonization and supporting a
just transition for workers in transforming sectors like energy, which would
dedicate 75 per cent of funding to projects that support underrepresented groups;
and a regional stream delivered by Service Canada regional offices, in partnership
with regional development agencies, and focused on regional priorities.

This initiative will benefit approximately 25,000 workers, 250 businesses, and
25 communities, by accelerating job creation and the re-employment and
deployment of workers to growth areas to meet employers’ needs.

Helping Workers Transition to New Jobs

As the economy reopens, many people will return to their previous jobs. But for
some, shifts in the economy mean that they need to find new jobs. To address this
need, and help Canadians find new jobs as quickly and as easily as possible,
workers need to be able to rapidly adapt and upgrade their transferable skills for
newer industries.

Budget 2021 proposes to provide $250 million over three years, starting in
2021-22, to Innovation, Science and Economic Development Canada for an
initiative to scale-up proven industry-led, third-party delivered approaches to
upskill and redeploy workers to meet the needs of growing industries.

This initiative will help approximately 15,500 Canadians connect with new work
opportunities.

114 Chapter 3
Extending Federal Supports for Adults Who Return to
School Full-Time
In 2018, the government launched Skills Boost, a three-year pilot program to help
working adults afford the cost of returning to school full-time to upgrade their skills.

The government intends to extend the $1,600 adult learner top-up to the
full-time Canada Student Grant for an additional two school years—until
July 2023. This will ensure that benefits to adult students are not interrupted.

Additionally, the government intends to make permanent the flexibility to

use current year income instead of the previous year’s to determine eligibility
for Canada Student Grants, so students with financial need won’t have their
previous workforce participation count against them.

Together, these measures are expected to cost $365.8 million over the next five
years, and $26.7 million per year ongoing.

Teaching Kids to Code

The CanCode program helps young people gain coding and digital skills needed
to succeed in a 21st century economy. It provides training support for their
teachers, and has a special focus on reaching young people who are traditionally
underrepresented in science, technology, engineering and mathematics, such as
girls and Indigenous youth.

Budget 2021 proposes to provide $80 million over three years, starting in
2021-22, to Innovation, Science and Economic Development Canada, to help
CanCode reach 3 million more students—with an even greater focus on
underrepresented groups—and 120,000 more teachers.

With more opportunities to acquire and develop digital skills, young Canadians—
from kindergarten to grade 12—will have a head start in building the skills they
need for good jobs in the future.

New Opportunities for Canadians 115

3.4 Valuing Canada’s Workers
The pandemic exposed what we already knew: Too many Canadians work in
precarious jobs and have barely enough to make ends meet.

Many of these workers are young people, new Canadians, racialized and Black
Canadians, and women.

Recovery must start with improving working wages and addressing income
inequality in Canada. Measures like an enhanced Canada Workers Benefit, a new
$15 federal minimum wage, and better protections for vulnerable workers will lift
more Canadians out of poverty, improve the lives of workers, and protect the
resilience of our workforce well into the future.

Establishing a $15 Federal Minimum Wage

Canada’s prosperity and stability depend on every Canadian having a fair chance
to join the middle class. Yet some Canadians struggle to do so while supporting
families in part-time, temporary, and low-wage jobs—often working several jobs
to make ends meet. The COVID-19 pandemic has also increased focus on the
essential work done by a large proportion of minimum wage-earning workers. To
support low-wage workers in the federally regulated private sector:

The Government of Canada is announcing its intention to introduce

legislation that will 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. This will directly benefit
over 26,000 workers who currently make less than $15 per hour in the
federally regulated private sector.

116 Chapter 3
Supporting Canada’s Low-Wage Workers
Chart 3.4
Average Monthly Layoff Rates of Employees, by Wage Decile,

Average monthly layoff rates (%)

8
2009 2020
7

0
Bottom 2nd 3rd 4th 5th 6th 7th 8th 9th Top decile
decile

2009 and 20201

1
January to February, February to March, up to November to December 2020; all pairs of months for 2009.
Source: Statistics Canada, Labour Force Survey.

The worst economic impacts of the pandemic have been suffered by those who
could least afford it. Low-wage workers have been up to six times more likely to
suffer layoffs than wealthy Canadians. Not only that, estimates suggest that today
there have been about 268,000 net job losses among low-wage workers since
February of 2020, compared to about 40,000 over the same time period during
the Great Recession, adjusting for population growth.

Our economic recovery plan must address the unique challenges of the
pandemic recession—and must include all Canadians. Racialized and Black
Canadians have much higher representation in low-wage work. The pandemic has
shown everyone just how essential many of the lowest-paying jobs in Canada are
to our economy and our health—the grocery clerks, cleaners, caregivers, truck
loaders, and more.

If we are to have a full and fair recovery, Canada needs all of these workers to
rejoin the workforce and to make sure they earn a decent living. The full
participation of all Canadians in the labour market generates economic growth,
and improves the standard of living and quality of life for everyone.

New Opportunities for Canadians 117

Enhancing the Canada Workers Benefit
The Canada Workers Benefit was designed to reduce barriers to employment for
low-income workers by providing them with a sizable tax refund—up to almost
$1,400 for single individuals without children and $2,400 for families—delivered
through the tax system.

But currently, the threshold of eligibility leaves many of Canada’s low-wage

workers out of the program; a person earning minimum wage and working full-
time can still be living in poverty, but receive nothing from the Canada Workers
Benefit.

In Canada, hard-working people with full-time, low-wage jobs should be able to

make ends meet for themselves and their families. To support low-wage workers
who have been most negatively affected by the pandemic and make our
workforce stronger:

Budget 2021 proposes to expand the Canada Workers Benefit to support

about 1 million additional Canadians in low-wage jobs, helping them return
to work and increasing benefits for Canada’s most vulnerable.

The government would raise the income level at which the benefit starts being
reduced to $22,944 for single individuals without children and to $26,177 for
families. This means that for the first time, most full-time workers earning
minimum wage will receive significant support from this important benefit.

Benefit to Full-Time Workers

A single, full-time, minimum wage worker could receive about $1,000 more in
benefits than they would under the current system, and could continue to
receive the benefit at up to $32,000 of net income in 2021.

The proposed enhancement will especially benefit single workers without

children. These are workers who often have few other federal supports
available to them. For example, a typical worker living in Toronto working full
time at the minimum wage does not receive any Canada Workers Benefit
under the current system. By raising their entitlement to $1,100, the proposed
enhancement would lift this worker out of poverty.

118 Chapter 3
 Chart 3.5
Entitlements for Single Individuals Without Children Under the Former
Working Income Tax Benefit, the Current Canada Workers Benefit, and
the Proposed Canada Workers Benefit, 2021
Entitlements ($)
1,600 WITB
Current CWB
1,395
1,400 Proposed CWB
1,113
1,200

1,000

800

600

400

200
20,058 24,819 32,244
0
0 10,000 20,000 30,000
Working Income / Net Income ($)

Note: Budget 2018 introduced the Canada Workers Benefit, a strengthened and more accessible benefit that
replaced the Working Income Tax Benefit starting in 2019.

The government also recognizes that benefits targeted on the basis of family
income can deter secondary earners in couples from going back to work. More
often than not, this impacts women. An inclusive recovery is a feminist recovery,
and the Canadian economy cannot be competitive when everyone does not have
the chance to succeed. To further boost workforce participation by reducing
these barriers:

Budget 2021 proposes to allow secondary earners to exclude up to

$14,000 of their working income when income-testing the Canada
Workers Benefit.

Example
Maria’s partner earns $25,000 per year. Because of the pandemic, Maria was
out of work for some time, but she has found a job and will earn $20,000 this
year. Without the proposed secondary earner exemption, Maria’s family’s
entitlement to the Canada Workers Benefit (CWB) would be reduced from
$2,403 to $0 when Maria goes back to work. With the secondary earner
exemption, $14,000 is excluded from Maria’s family’s net income, which means
Maria’s family’s net income is about $31,000, and her family’s CWB entitlement
is $1,708.

New Opportunities for Canadians 119

 Chart 3.6
Entitlements for Families Under the Former Working Income Tax Benefit,
the Current Canada Workers Benefit, and the Proposed Canada Workers
Benefit, 2021
Entitlements ($)
3,000 WITB
Current CWB
2,403 Proposed CWB
2,500

2,022
2,000

1,500

1,000

500

30,933 37,547 42,197

0
0 10,000 20,000 30,000 40,000
Working Income / Net Income ($)
Note: Budget 2018 introduced the Canada Workers Benefit, a strengthened and more accessible benefit that
replaced the Working Income Tax Benefit starting in 2019. Under the proposed CWB, family net income
excludes up to $14,000 of a secondary earner’s working income.

Increasing support through the Canada Workers Benefit will provide incentives
for more workers to rejoin the workforce, and ensure that they have more
disposable income to spend, stimulating the broader economy. Raising the
Canada Workers Benefit raises low-wage workers’ quality of life, and raises
prosperity for everyone.

These changes will extend support to about 1 million more Canadians, helping
them return to work and increasing benefits for Canada’s most vulnerable.
Combined, these actions would provide $8.9 billion of support to low-income
workers over six years, and $1.7 billion per year ongoing.

Almost 100,000 people will be lifted out of poverty by this investment. Because
lower-wage work is often done by younger Canadians, it is estimated that about
45 per cent of adults raised out of poverty as a result of this measure will be
those under age 35.

This is a key part of the government’s plan to make sure Canada’s recovery
addresses those most impacted by the COVID-19 pandemic and that it is a plan
for a recovery that includes everyone. This is good economic policy. It is also the
right thing to do. No Canadian working full time should live in poverty.

120 Chapter 3
Better Labour Protection for Gig Workers
As demand for gig work (short-term contracts with firms or individuals to
complete specific and often one-off tasks) increases with the rise in new digital
platforms, more and more Canadians are relying on jobs that do not come with
the same level of job protection as other employees in the economy. The
COVID-19 pandemic has exposed the vulnerability of these workers to income
shocks when demand for their services suddenly drops. For this reason:

Budget 2021 reiterates the government’s commitment to making legislative

changes to improve labour protection for gig workers, including those who
work through digital platforms. Following the conclusion of consultations
recently launched on this topic by the Minister of Labour, the government
will bring forward amendments to the Canada Labour Code to make these
new, modernized protections a reality.

Enhancing Protections for Contract Workers in the Air

Transportation Sector
The pandemic has highlighted the importance of protecting employees,
particularly those who provide essential services to Canadians. Many employees
in the air transportation sector have continued to work through the pandemic,
deep cleaning aircraft, safely handling baggage, and performing the other critical
services that have allowed necessary air travel to continue safely.

Many of the services provided by these employees are contracted out by airports
and air carriers. When these contracts change hands, workers are at risk of
earning less money for the same job.

To better protect these employees, the government is announcing its

intention to introduce legislation that would extend equal remuneration
protection to more employees in the air transportation sector. This would
ensure that, when a service contract changes hands, affected employees are
not paid less, if they are laid off and rehired to do the same work they were
doing before.

New Opportunities for Canadians 121

Simplifying Wage Earner Protection Program Payments
The Wage Earner Protection Program provides financial support to Canadian
workers who have lost their job and are owed wages by their insolvent employer.
Since 2008, the Program has paid more than $337 million in wages to nearly
129,000 Canadian workers. Currently, all payments through the Program are
subject to a 6.82 per cent deduction that represents the deductions at source a
worker would normally see on their pay. However, given that there is a cap to
overall payments, the amount received in relation to owed wages varies from
worker to worker.

In order to simplify payments, and ensure that Canadian workers are paid
more of what they’re owed when they need it most, Budget 2021 proposes to
eliminate the 6.82 per cent deduction applied to all Wage Earner Protection
Program payments. This change is estimated to cost $16.2 million over five
years, starting in 2021-22, and $3.3 million ongoing.

The removal of this offset would put an average of $300 more in the pockets of
Canadians who have lost their job and are owed wages by their employer.

Support for Personal Support Workers

The caring economy is an economic engine of Canada. As our population ages it
will become even more important. Throughout the pandemic, this largely female
and disproportionately racialized workforce did essential and heroic work, often
at great personal cost.

Personal support workers have had to stand in for family members as our parents
and grandparents have been isolated, lonely, and afraid. Personal support
workers perform jobs that are mentally and physically exhausting, and do not
enjoy the same job protections, compensation, and benefits of their peers in the
health care sector. They are the backbone of long-term care for elders and adults
with disabilities who are unable to live on their own.

As the work around national standards for long-term care unfolds, Budget 2021
proposes to address a key issue for these workers to whom we owe a debt of
gratitude. Care workers deserve more financial security, and better options for
retirement savings to give them the certainty that after a life of hard work caring
for others, they will be cared for, too.

122 Chapter 3
The 2020 Fall Economic Statement announced that, to support personal support
workers, homecare workers and essential workers involved in senior care, the
government would work with labour and healthcare unions, among others, to
seek solutions to improve retention, recruitment, and retirement savings options
for low and modest-income workers, particularly those without existing
workplace pension coverage.

To follow through on this commitment:

Budget 2021 proposes to provide funding of $27.6 million over three years
for my65+, a Group Tax-Free Savings Account offered by the Service
Employees International Union Healthcare.

The funding will support incentives for worker participation. The Service
Employees International Union Healthcare will work with other unions and
employers across the country to make this portable savings tool available to
other workers in the elder care sector. The government also remains open to
engaging with other interested unions and employer sponsors who wish to come
forward with other targeted, kick-start options to strengthen retirement security
for those involved in senior care who do not currently have workplace retirement
security coverage.

Employee Ownership Trusts

Employee ownership trusts encourage employee ownership of a business, and
facilitate the transition of privately owned businesses to employees. Both the
United States and the United Kingdom support and encourage employee
ownership though these types of arrangements.

Budget 2021 announces that the government will engage with stakeholders
to examine what barriers exist to the creation of employee ownership trusts
in Canada, and how workers and owners of private businesses in Canada
could benefit from the use of employee ownership trusts.

Taking Action to Address Predatory Lending

Many lower and modest-income Canadians rely on high-interest short-term loans
to make ends meet, such as paying for everyday living expenses, or for
unanticipated emergencies. This leaves some Canadians living in a cycle of debt.

To help fight predatory lending, the Government of Canada will launch a

consultation on lowering the criminal rate of interest in the Criminal Code of
Canada applicable to, among other things, installment loans offered by
payday lenders.

New Opportunities for Canadians 123

Chapter 3
New Opportunities for Canadians
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
3.1. Action Plan for
Women in the Economy 0 3,065 4,906 6,208 7,237 8,383 29,800
Establishing a Canada-Wide
Early Learning and Child
Care System 0 3,065 4,906 6,208 7,237 8,383 29,800
3.2. Opportunities for
Canada’s Youth 0 1,553 2,890 160 175 182 4,959
Providing Relief from
Student Debt 0 0 424 50 59 64 596
Less: Savings from Fewer
claims of the Student Loan
Interest Tax Credit 0 0 -12 -6 -1 -1 -20
Doubling the Canada
Student Grants for Two
Additional Years 0 1,263 1,872 0 0 0 3,135
Expanding Access to
Supports for Students and
Borrowers with Disabilities 0 0 77 116 117 119 429
Supporting Vulnerable
Children and Youth During
the Recovery 0 60 58 0 0 0 118
Less: Funds Sourced From
Existing Departmental
Resources 0 -10 -10 0 0 0 -20
Helping Youth and Students
Build Job Skills and Connect
with Employers 0 240 483 0 0 0 723
Less: Funds Previously
Provisioned in the Fiscal
Framework 0 0 -1 0 0 0 -1
Less: Funds Sourced From
Existing Departmental
Resources 0 0 -1 0 0 0 -1

124 Chapter 3
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
3.3. Investing in Skills,
Training, and Trades 0 535 974 916 26 27 2,479
Helping Employers Train
and Recruit Workers 0 235 360 365 0 0 960
Creating New Opportunities
for Skilled Tradespeople 0 36 217 217 0 0 470
Supporting Skills for Success 0 65 108 125 0 0 298
Ensuring Communities
Recover Through Skills
Training and Workforce
Planning 0 5 15 35 0 0 55
Helping Workers Transition
to New Jobs 0 25 100 125 0 0 250
Extending Federal Supports
for Adults Who Return to
School Full-Time 0 139 147 26 26 27 366
Teaching Kids to Code 0 30 27 23 0 0 80
3.4. Valuing Canada’s
Workers 460 1,804 1,682 1,681 1,668 1,678 8,974
Enhancing the Canada
Workers Benefit 460 1,795 1,670 1,665 1,665 1,675 8,930
Simplifying Wage Earner
Protection Program
Payments 0 4 4 4 4 4 19
Less: Costs to be Recovered 0 -1 -1 -1 -1 -1 -3
Support for Personal
Support Workers 0 6 9 13 0 0 28
Chapter 3 – Sub-total 460 6,957 10,452 8,965 9,107 10,270 46,211
Less: Provisions for
Anticipated Cabinet
Decisions Not Yet Made
Included in Previous
Budgets or Updates 0 -3,083 -1,500 -1,500 -1,500 -1,500 -9,083
Chapter 3 – Net Fiscal
Impact 460 3,874 8,952 7,465 7,607 8,770 37,128
Note: Numbers may not add due to rounding.

New Opportunities for Canadians 125

Chapter 4
Helping Canadian Businesses Grow and
Succeed
Canadian businesses have been resilient through the pandemic, adapting and
reinventing themselves in tough times. The government has provided a suite of
measures that have helped, and are still helping, support Canadian businesses
and Canadian workers through the crisis. As we look to turn the page from crisis
to recovery, the government has a plan to restore business confidence, create
jobs, and ensure that growth is being sustained through innovation and greater
productivity for the long-term.

To do this requires an approach that takes specific aim at the businesses that
have been hardest hit by the pandemic.

This has, in many ways, been a two speed recession. There have been
businesses that have managed to adapt to the pandemic and to prosper. But
others have been shut down outright by necessary public health restrictions or
deeply limited in what they can do—and many of these highly affected
businesses have been our small businesses. We need them to get back on their
feet. They are the backbone of our economy, our main streets, and our
communities.

Restoring permanent and long-term economic growth means that we must

help our businesses to come back stronger than ever before. We must make
sure we go where the puck is going—that we are investing strategically in
emerging technologies, whether clean technologies, net-zero technologies,
quantum technologies, or more. This is where many of the jobs of the future lie,
and we will bring people from across Canada along. And we must do things
better. We must support the growth of start-ups and scale-ups. We must make
sure that entrepreneurs from disadvantaged communities are able to access the
same financing and growth opportunities as every other entrepreneur and
business owner in Canada.

Budget 2021 is a plan to make targeted investments in Canada’s businesses so

they can hire and train Canada’s workers, who will then have more money to
spend, spurring our recovery and growing an economy with more opportunities
for everyone. It is a plan to help our businesses, especially small businesses,
adopt new technologies. And it is a plan to invest in Canadian innovation, for
long-term growth.

Helping Canadian Businesses Grow and Succeed 127

4.1 Helping Canadians Get Back to Work
COVID-19 has shaken the foundations of the Canadian economy and cost
millions of Canadians their jobs. While the majority of job losses across most
sectors have been recouped, many Canadians are still struggling to find steady
work.

Getting the Canadian economy quickly back to its full potential, and stimulating
robust growth, is critical to preventing long-term damage, and making sure that
workers and communities are not left behind, as they were in previous
recessions. Budget 2021 takes timely action to help businesses and other
employers drive growth by hiring more workers and developing their talent to
its fullest potential.

Helping Hard-hit Businesses Hire More Workers

For businesses that have been hit hardest by the pandemic, hiring the workers
they need to grow is a cost they may worry about taking on. The government
wants these businesses to be able to recover and grow by hiring more people
so that workers are at the forefront of our recovery:

Budget 2021 proposes to introduce the new Canada Recovery Hiring

Program for eligible employers that continue to experience qualifying
declines in revenues relative to before the pandemic. The proposed subsidy
would offset a portion of the extra costs employers take on as they reopen,
either by increasing wages or hours worked, or hiring more staff. This
support would only be available for active employees and will be available
from June 6 to November 20, 2021. Eligible employers would claim the
higher of the Canada Emergency Wage Subsidy or the new proposed
subsidy. The aim is to make it as easy as possible for businesses to hire new
workers as the economy reopens.

As the rates for both the wage subsidy and the hiring program will slowly ramp
down over time, employers will have a strong incentive to begin hiring as soon
as possible and maximize their benefit. Further details can be found in Annex 6.

The Canada Recovery Hiring Program will help Canadian-controlled private

corporations, individuals, charities, and non-profits hire the workers they need
so that the economy can fully recover, more quickly and without leaving people
behind. It is estimated that this program will cost $595 million in 2021-22.

128 Chapter 4
Dorothy and Stan run a bookstore whose storefront was shut down
sporadically through the winter and spring due to public health restrictions.
While their business survived, they had to lay off three of their 10 employees,
whom they pay $600 per week. Their baseline payroll from March 14 to April
10 was $16,800 (i.e., 7 employees x $600 x 4 weeks).
As public health restrictions are lifted and the vaccination campaign
continues, their business begins to recover. In May, their revenues are still
down 50 per cent from their level before the pandemic, but are only down 20
per cent in June, and by July are close to their pre-pandemic level. As a result,
they are able to hire back their three laid-off employees starting June 6, and
are even able to add an additional employee starting July 4.
As a result of measures proposed in this Budget, Dorothy and Stan’s business
will benefit from either the extended Canada Emergency Wage Subsidy or
the new Canada Recovery Hiring Program:
 For June 6 to July 3, their payroll is $24,000. Their business would be
eligible for a wage subsidy rate of 40 per cent (based on a 50-per-
cent revenue decline), resulting in a wage subsidy of $9,600.
Alternatively, the business would be eligible for a hiring subsidy rate
of 50 per cent, which would be applied to the difference between its
current payroll and its baseline payroll, resulting in a hiring incentive
of $3,600. They are better off claiming the wage subsidy of $9,600
for this period.
 For July 4 to July 31, their payroll is $26,400. Their business would
be eligible for a wage subsidy rate of 8.75 per cent (based on a 20-
per-cent revenue decline), resulting in a wage subsidy of $2,310.
Alternatively, the business would be eligible for a hiring subsidy rate
of 50 per cent, which would be applied to the difference between its
current payroll and its baseline payroll, resulting in a hiring incentive
of $4,800. In this instance, they are better off claiming the hiring
incentive of $4,800 for this period.
In total, Dorothy and Stan will be eligible for at least $14,400 in support from
these two measures to help their business rebuild as the economy recovers.

Helping Canadian Businesses Grow and Succeed 129

Opportunities for Businesses and Young Workers
Through Mitacs
Mitacs is a not-for-profit organization that connects young workers with
innovative businesses for research and training opportunities. Mitacs focusses on
supporting research-based innovation in industry and developing a talent stream
of highly educated students and graduates through its internship programs.
These students bring cutting-edge scientific and technical knowledge from
universities and colleges that will strengthen the innovation capabilities of
industry. This combination of innovation and skill development for the next
generation of leaders will help drive growth now and ensure long-term
competitiveness and prosperity.

Budget 2021 proposes to provide $708 million over five years, starting
in 2021-22, to Mitacs to create at least 85,000 work-integrated
learning placements that provide on-the-job learning and provide
businesses with support to develop talent and grow.

4.2 Helping Small and Medium-sized Businesses

Recover and Grow
Small and medium-sized businesses have been hit hard by the pandemic.
Successful, innovative, and competitive small businesses are what drive a strong
and growing middle class. Canada needs them to recover and grow. To do this,
they need well trained employees, stable and accessible financing, and support
to help them keep up with the digitization of our economy.
The government has a plan to help small businesses grow and expand to new
markets locally, regionally, and beyond. These investments will encourage small
businesses to scale up, hire more workers, and embrace new technologies that
make them more productive and competitive.

130 Chapter 4
Helping Small and Medium-sized Businesses Move
into the Digital Age
The pandemic has hastened the economy’s digital transformation as companies,
workers, and consumers conduct more and more business online. From 2002 to
2019, labour productivity in digitally intensive industries grew 3.5 times faster
than in non-digitally intensive industries. And over the course of the pandemic,
digitally intensive businesses actually grew, even though hours worked were
down. Building a digital economy is critical to growing a more prosperous
economy.

Canadian businesses need to adopt new technologies and digitize to meet

customer needs and stay competitive. Embracing these changes also makes our
businesses more efficient and more productive, and therefore more
prosperous—and able to create more Canadian good middle class jobs.

Digital Main Street

In June 2020, the federal government in partnership with the Province of
Ontario supported the province-wide expansion of Digital Main Street, which
helps main street small businesses adopt e-commerce tools and move their
business online. The program is built around an online learning platform,
structured training programs, and a “Digital Service Squad,” which is a team
of recent graduates who help small businesses grow and manage their
businesses through the adoption of digital tools and technology.

To fuel the recovery, jobs, and growth, the government is launching the Canada
Digital Adoption Program, which will create thousands of jobs for young
Canadians and help as many as 160,000 small and medium-sized businesses
adopt new digital technologies.
This program will provide businesses with two streams of support.

 To help main street businesses expand their customer bases online, they can
access support to digitize and take advantage of e-commerce opportunities.
Eligible businesses will receive microgrants to help offset the costs of going
digital—and support to digital trainers from a network of up to 28,000 well
trained young Canadians.

 Some businesses will require more comprehensive support to adopt new

technology, and a second stream will be in place for “off-main street”
businesses, such as small manufacturing and food processing operations.
Support for these businesses will emphasize advisory expertise for technology
planning and financing options needed to put these technologies to use.

Helping Canadian Businesses Grow and Succeed 131

 Canada Digital Adoption Program
Tim owns a fine foods shop that has specialty imported and domestic
products such as meats, cheeses, pasta, and coffee that has been operating at
reduced capacity for the past year because of public health guidance. To get
his products to his customers and to expand his customer base, Tim is ready
to build an online store, but does not know how best to do so. Through the
Canada Digital Adoption Program, Tim is able to connect with a trained,
young person to help him understand the tools available to him, has access to
support to develop an e-commerce strategy, and is eligible for a grant to help
cover the costs associated with implementation.
Margot owns a t-shirt manufacturing company. She has been turning down
orders that she cannot fill and wants to grow her business and hire more
people but is unsure where to start. Through support from the Canada Digital
Adoption Program, Margot has access to a local business advisor. The
business advisor and Margot review her business plan and develop an
investment plan. Working with her advisor, Margot determines that investing
in an inventory management system and packaging automation would allow
her to increase the number of t-shirts she can produce and ship each month.
To help with the costs associated with this new technology, Margot is
connected with the Business Development Bank of Canada to access a zero-
interest loan. Through the program, Margot also has access to a talent pool of
young Canadians to help ensure a smooth rollout of the new technology, and
the digital enhancement of her business.

Budget 2021 proposes to provide $1.4 billion over four years, starting in
2021-22, to Innovation, Science and Economic Development Canada, to:
- Work with organizations across Canada to provide access to skills,
training, and advisory services for all businesses accessing this program.
- Provide microgrants to smaller, main street businesses to support costs
associated with technology adoption.
- Create training and work opportunities for as many as 28,000 young
people to help small and medium-sized businesses across Canada
adopt new technology.

Budget 2021 proposes to provide $2.6 billion on a cash basis over four
years, starting in 2021-22, to the Business Development Bank of Canada to
help small and medium-sized businesses finance technology adoption.

132 Chapter 4
 Figure 4.1
Technology adoption to accelerate productivity and growth

Helping Businesses Seize New Technological

Opportunities
Small and medium-sized businesses sometimes require unique technological or
process solutions for their businesses that cannot be achieved through the
purchase and installation of available “off-the-shelf” solutions. These businesses
can seize new opportunities by applying new research and technologies or
developing them into useful new products and services. This real-world
innovation and technical development helps businesses grow and become
more competitive.

Much of this applied research is happening at Canada’s colleges, CEGEPs, and

polytechnic institutes—institutions that have a strong presence in Canada’s
small and rural communities.

To support applied research and development projects led by Canadian

businesses in collaboration with colleges, CEGEPs, and polytechnics:
Budget 2021 proposes to provide $46.9 million over two years, starting in
2021-22, to support additional research partnerships between colleges,
CEGEPs, polytechnics, and businesses through the Natural Sciences and
Engineering Research Council’s College and Community Innovation Program.
Budget 2021 proposes to invest $5.7 million over two years, starting in
2021-22, to provide more businesses with access to the National Research
Council’s Industrial Research Assistance Program’s Interactive Visits, where
firms can access equipment, facilities, and expertise at college-affiliated
Technology Access Centres.

Helping Canadian Businesses Grow and Succeed 133

The program design will ensure that businesses owned by underrepresented
groups that may face barriers to entering Canada’s innovation pipeline have
greater access to this support.

Supporting Business Investments

For Canada’s economic recovery to take root, businesses will need to invest in
new technologies and move forward with capital projects. Building on the
significant tax incentives introduced in the 2018 Fall Economic Statement,
additional support is needed to further boost business investments that will
create jobs today and in the future.

Budget 2021 proposes to allow immediate expensing of up to $1.5

million of eligible investments by Canadian-controlled private
corporations made on or after Budget Day and before 2024. Eligible
investments will cover over 60 per cent of capital investments typically
made by Canadian-controlled private corporations.

This incentive targets short- and medium-term capital investments that can
accelerate our recovery. This includes investments in a broad range of assets,
including, helping to further incentivize businesses to transition to a more
productive, knowledge-intensive economy and will include digital assets and
intellectual property.

These larger deductions will help businesses—particularly small and medium-

sized businesses—by making it more attractive to invest in assets that drive
growth. Larger deductions will also free up capital that businesses can use to
create more good middle class jobs.

It is estimated that this measure will reduce federal revenues by $2.2 billion over
five years starting in 2021-22.

Enhancing the Canada Small Business Financing

Program
Small businesses need access to financing in order to invest in people and
innovation, and to have the space to operate and grow. But many small
businesses are facing financing challenges, especially Canada’s innovative,
entrepreneurial start-ups that are built on intellectual property and other
intangibles that could be the next world-changing ideas.

134 Chapter 4
To make sure small business and independent entrepreneurs can access the
capital they need to recover, innovate, and grow in the long-term:

Budget 2021 proposes to improve the Canada Small Business Financing

Program through amendments to the Canada Small Business Financing Act
and its regulations. These proposed amendments are projected to increase
annual financing by $560 million, supporting approximately 2,900 additional
small businesses. They include:
- Expanding loan class eligibility to include lending against intellectual
property and start-up assets and expenses.
- Increasing the maximum loan amount from $350,000 to $500,000 and
extending the loan coverage period from 10 to 15 years for equipment
and leasehold improvements.
- Expanding borrower eligibility to include non-profit and charitable
social enterprises.
- Introducing a new line of credit product to help with liquidity and cover
short-term working capital needs.

Preparing Canada’s Aerospace Sector for Recovery

In 2019, aerospace contributed more than $28 billion to Canada’s GDP, directly
and indirectly supporting 234,500 jobs. As one of the most research intensive
manufacturing industries, aerospace is an important driver of Canada’s
innovation economy. Highly dependent on purchases from airlines hit hard by
the pandemic, the sector is facing reduced demand and a longer path to
recovery, relative to other sectors of the economy. To help position Canada’s
aerospace sector once restrictions on travel are lifted and the industry begins to
recover:

Budget 2021 proposes to provide $250 million over three years, on a cash
basis, starting in 2021-22, for the regional development agencies to deliver an
Aerospace Regional Recovery Initiative, which would support small and
medium-sized firms in improving productivity, strengthening
commercialization, and greening their operations and products.

This is in addition to the $1.75 billion in the Strategic Innovation Fund, outlined
in section 4.6, providing a combined support of $2 billion to help this innovative
sector recover and grow out of the crisis.

Helping Canadian Businesses Grow and Succeed 135

4.3 Investing in Canada’s Entrepreneurs
Reinvigorating our entrepreneurial spirit is critical to the revitalization of our
economy. The women and men who start and grow business, who create jobs
and seize new opportunities, face enormous risks. There is enormous potential
for their businesses to grow and create jobs in the recovery, but they need
access to the right type of support, at the right time. In looking forward to
recovery, it is important that it be inclusive, with all Canadians having an equal
opportunity to succeed.
These measures are complemented by investments to support Indigenous
entrepreneurs, outlined in Chapter 8.

Supporting Entrepreneurs, Including Equity

Deserving Entrepreneurs
Entrepreneurs, especially those from equity deserving groups such as racialized
Canadians, young people, LGBTQ2 people, and more, face barriers to starting
and growing a business. This holds our economy back. To help simplify and
streamline the government’s support programs, and to help equity deserving
entrepreneurs access funding and capital, mentorship, financial planning
services, and business training, the government will launch the Small Business
and Entrepreneurship Development Program. This will help all Canadians have
an equal chance to succeed and contribute to economic recovery and growth:

Budget 2021 proposes to provide up to $101.4 million over five years,

starting in 2021-22, to Innovation, Science and Economic Development
Canada for the Small Business and Entrepreneurship Development Program.

Supporting Women Entrepreneurs

Canadian women entrepreneurs are important to Canada’s economic success,
but women still face unique and systemic barriers to starting and growing a
business, and they remain underrepresented in the economy. The pandemic has
disproportionately impacted women and the government is committed to
supporting Canadian women entrepreneurs.

To provide affordable financing, increase data, and strengthen capacity

within the entrepreneurship ecosystem, Budget 2021 proposes to provide
up to $146.9 million over four years, starting in 2021-22, to strengthen the
Women Entrepreneurship Strategy. Women entrepreneurs would have
greater access to financing, mentorship, and training. Funding would also
further support the Women Entrepreneurship Ecosystem Fund and the
Women Entrepreneurship Knowledge Hub.

136 Chapter 4
 The government will work with financial institutions to develop a voluntary
code to help support the inclusion of women and other underrepresented
entrepreneurs as clients in the financial sector.

Since 2018, the government’s support to the Women Entrepreneurship Strategy

is close to $5 billion, which includes $1.4 billion of lending through the Business
Development Bank of Canada and $2 billion in facilitated trade through Export
Development Canada. Moving forward, the Business Development Bank of
Canada will seek to support 19,000 direct women-owned businesses in 2024, an
increase of nearly 7,000.
Supporting Black Entrepreneurs
The pandemic has highlighted and exacerbated systemic barriers faced by Black
entrepreneurs and owners of small and medium-sized businesses in Canada.
Black business owners make invaluable contributions to communities across the
country, and their success will contribute to Canada’s economic recovery. In
September 2020, the Government of Canada, in partnership with financial
institutions, announced an investment of up to $221 million—including up to
$93 million from the government—to launch Canada’s first ever Black
Entrepreneurship Program.

Budget 2021 proposes to provide up to an additional $51.7 million over

four years, starting in 2021-22, to Innovation, Science and Economic
Development Canada and the regional development agencies for the Black
Entrepreneurship Program.

Leveraging Procurement Opportunities

Since the Government of Canada is one of the largest public buyers of goods and
services in the country, procurement policy is a fundamental lever to achieve
social and economic objectives. Purchasing domestically sourced or manufactured
goods helps to strengthen our supply chains and secure domestic supply of
goods. For example, government procurement investments at the start of the
pandemic have spurred a made-in-Canada pipeline of personal protective
equipment.

COVID-19 has had a pronounced impact on businesses owned by racialized

Canadians. As of November 2020, businesses that are majority-owned by
racialized Canadians were more likely than other businesses to see lower
revenues compared to August 2019. Almost one-quarter of businesses that are
majority-owned by racialized Canadians reported a decrease in revenue of
40 per cent or more, compared to one-fifth of all businesses in Canada.

Helping Canadian Businesses Grow and Succeed 137

To increase diversity in procurement, economically empower historically
disadvantaged businesses, support small businesses and our supply chains,
improve fairness in procurement opportunities for Canadian suppliers, create
jobs, and contribute to a more inclusive economy:

Budget 2021 proposes to provide Public Services and Procurement Canada

$87.4 million over five years starting in 2021-22, and $18.6 million ongoing.
This funding will be used to modernize federal procurement and create
opportunities for specific communities by diversifying the federal supplier
base. Specifically, Public Services and Procurement Canada would:
- Implement a program focused on procuring from Black-owned businesses.
- Continue work to meet Canada’s target of 5 per cent of federal contracts
being awarded to businesses managed and led by Indigenous peoples.
- Improve data capture, analytics, and reporting.
- Incorporate accessibility considerations into federal procurement,
ensuring goods and services are accessible by design. Public Services
and Procurement Canada will develop new tools, guidance, awareness,
and training for federal departments.

Budget 2021 also proposes to leverage supplier diversity opportunities

through domestic procurement, such as running competitions open to
businesses run by Canadians from equity deserving groups. This would help
build a more inclusive economy and boost the competitiveness of these
businesses, and all Canadian businesses.

In addition, in order to demonstrate to Canada’s trading partners the

importance of balanced procurement opportunities, the government will
pursue reciprocal procurement policies to ensure that goods and services are
only procured from countries that grant Canadian businesses a similar level
of market access. This will protect Canadian supply chains and ensure that
Canada’s trading relationships are mutually beneficial economic relationships.

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Expanding the Industrial Research Assistance
Program
Canada’s most innovative small and medium-sized businesses have an outsized
impact on job creation and economic growth. But they need access to expertise
and capital to grow. For several decades, the National Research Council’s
Industrial Research Assistance Program has provided expertise and capital and
has helped business to scale up.

Budget 2021 proposes to provide $500 million over five years, starting in
2021-22, and $100 million per year ongoing, to expand the Industrial
Research Assistance Program to support up to 2,500 additional innovative
small and medium-sized firms.

Investing in Canadian Innovators Through a Renewed

Venture Capital Catalyst Initiative
Canadian start-ups and businesses need access to financing to grow and create
high-quality jobs. Venture capital financing takes educated risks on great ideas
and smart people, giving young companies the opportunity to take their ideas
to market, and grow. A healthy venture capital network allows businesses and
entrepreneurs to scale up, create well-paying Canadian jobs, invest in
innovation, and be globally competitive. The government has made $390
million available through the Venture Capital Action Plan and $450 million
through the Venture Capital Catalyst Initiative. This federal investment has
helped to provide a total of over $3 billion to grow Canadian companies and
support thousands of middle class jobs.

To increase venture capital funding and support the continued growth of

Canada’s innovative companies:

Budget 2021 proposes to make available up to $450 million on a cash basis

over five years, starting in 2021-22, for a renewed Venture Capital Catalyst
Initiative that would increase venture capital available to entrepreneurs.
- $50 million of this amount would be dedicated to support venture
capital investments in life science technologies.
- $50 million of this amount would support a new Inclusive Growth
Stream to increase access to venture capital for underrepresented
groups, such as women and racialized communities.

Helping Canadian Businesses Grow and Succeed 139

Boosting Canada’s Clean Technology Exports
Canadian firms are leading the way in the development of the clean
technologies and climate solutions the world is seeking. Reaching beyond
the Canadian market and scaling up internationally can help these firms to
grow and meet their full potential, and help fight climate change. A pilot
phase of the International Business Development Strategy for Clean
Technology has proven successful at helping Canadian firms tap into
export opportunities and the rapidly growing pools of global climate
finance.
Budget 2021 proposes to provide $21.3 million over five years, starting in
2021-22, and $4.3 million per year ongoing, to Global Affairs Canada for
the continuation of the International Business Development Strategy for
Clean Technology.

More details on Budget 2021’s plan to invest in a green recovery and clean
technologies can be found in Chapter 5.

4.4 Making it Easier to do Business in Canada

The government is investing to ensure the Canadian marketplace is efficient
and fair. Renewed efforts to eliminate internal trade barriers will help support
the economic recovery and lay the groundwork for long-term growth. As the
economy becomes increasingly digital, new measures to enhance competition
will protect consumers, lower prices, and spur innovation. Together, these
measures will ensure Canada becomes an even better place to do business.

Removing Barriers to Internal Trade

For too long, trade barriers within our own country have held back Canadian
businesses from reaching the full force of the Canadian market. Removing
barriers to trade between provinces and territories will help build a more
prosperous economy—creating jobs, fueling business expansion, expanding
consumer choice of Canadian goods and services, and helping regional
economies grow.
In Budget 2019, the federal government removed all federal restrictions on the
interprovincial trade of liquor. The federal government remains steadfast in its
efforts to remove internal trade barriers and continues to work closely with
provincial, territorial, and industry partners to accelerate action on this front.

140 Chapter 4
 Budget 2021 proposes to allocate $21 million over three years, starting
in 2021-22, to:
- Work with provincial and territorial partners to enhance the
capacity of the Internal Trade Secretariat that supports the
Canadian Free Trade Agreement in order to accelerate the
reduction of trade barriers within Canada.

- Advance work with willing partners towards creating a repository of

open and accessible pan-Canadian internal trade data to identify
barriers, including licensing and professional certification requirements,
so that we can work together to reduce them.
- Pursue internal trade objectives through new or renewed discretionary
federal transfers to provinces and territories.

Lowering the Cost of Doing Business by Reducing

Credit Card Transaction Fees
The pandemic has brought a rapid and significant increase in electronic
payments and online transactions. Small and medium-sized businesses, which
have been hard hit by COVID-19, incur fees for these transactions also known as
interchange fees, which are amongst the highest in the world.

The government will engage with key stakeholders to work towards three
objectives:

 Lower the average overall cost of interchange fees for merchants

 Ensure that small businesses benefit from pricing that is similar to large
businesses
 Protect existing rewards points of consumers

Following consultations with stakeholders, detailed next steps will be outlined

as part of the 2021 Fall Economic Statement, including legislative amendments
to the Payment Card Networks Act that would provide authority to regulate
interchange fees, if necessary.

A Fair and Competitive Marketplace

Empowering the Competition Bureau through increased capacity and new
digital tools will help ensure a competitive marketplace that Canadians can
trust.

Budget 2021 proposes to provide $96 million over five years, starting in
2021-22, and $27.5 million ongoing, to enhance the Competition Bureau’s
enforcement capacity and ensure it is equipped with the necessary digital
tools for today’s economy.

Helping Canadian Businesses Grow and Succeed 141

Maintaining Momentum on Regulatory
Modernization
As Canada recovers from the pandemic, regulatory modernization will reduce
unnecessary burdens on businesses in order to unleash innovation and
accelerate economic growth.

Targeted Regulatory Reviews

Since 2018, the government has been conducting targeted regulatory reviews to
identify and eliminate bottlenecks to economic growth. The first round of
reviews led to the publication of Regulatory Roadmaps on the high-growth
sectors of agri-food and aquaculture, health and bio-sciences, and
transportation and infrastructure.

The second round of Regulatory Roadmaps on digitization and technology

neutral regulations, international standards, and clean technology will be
released in the coming weeks.

Later this year, the government will launch a third round of targeted regulatory
reviews focused on how regulations can accelerate Canada’s recovery from the
pandemic.

Regulatory Competitiveness
The Annual Regulatory Modernization Bill helps implement improvements and
removes outdated and redundant requirements across multiple regulations.
Informed by consultation with Canadians, the government intends to table in
Parliament the second Annual Regulatory Modernization Bill.

The External Advisory Committee on Regulatory Competitiveness provides

expert advice on a wide range of initiatives, ensuring that regulatory
modernization is informed by affected businesses and Canadians, including
targeted regulatory reviews and the Annual Regulatory Modernization Bill.

To maintain momentum on strengthening Canada’s regulatory systems,

Budget 2021 proposes to provide up to $6.1 million over two years,
starting in 2021-22, to renew the External Advisory Committee on
Regulatory Competitiveness and to continue targeted regulatory reviews.

142 Chapter 4
4.5 Building Infrastructure to Boost Trade
Canada is a trading nation. The free and efficient flow of goods, services, and
people, internationally and between provinces and territories, is critical to our
prosperity. In order for Canadian businesses to grow and for the Canadian
economy to be a part of the global recovery from the COVID-19 recession,
trade with international partners needs to be open, efficient, and fair.

Budget 2021 proposes investments in physical and digital infrastructure and

other measures to transform our borders and ensure that trade and travel
continue to drive Canada’s economy.

Renewing our National Trade Corridors

To support a robust and quick recovery, Canada needs to address capacity
constraints, bottlenecks, and inefficiencies in our own transportation
infrastructure. This will support businesses across our supply chains and boost
the potential for small and medium-sized businesses in all regions, including
rural and remote communities.
The National Trade Corridors Fund is well-positioned to spur private-sector
investment in Canada’s transportation system. To reduce barriers to trade, help
our businesses grow, create jobs, and ensure our businesses are competitive in
the recovery:
Budget 2021 proposes to invest $1.9 billion over four years, starting in
2021-22, to recapitalize the National Trade Corridors Fund. This
funding could attract approximately $2.7 billion from private and
other public sector partners, resulting in total investments of $4.6
billion. This would spur investments in much-needed enhancements
to our roads, rail, and shipping routes, build long-term resilience for
the Canadian economy, and support internal trade. It would make
Canada’s transportation system more fluid, supporting economic
recovery and increasing prosperity across Canada. Alleviating
bottlenecks and congestion will also reduce greenhouse gas emissions
in Canada.

- Of this total funding, 15 per cent would be dedicated to building and

improving transportation networks in Canada’s North. Investments will
bring growth and jobs to northern communities, and help more of our
resources and goods get to markets in faster, cleaner, more cost-
efficient ways.

Helping Canadian Businesses Grow and Succeed 143

 Investments Made Through the National Trade Corridors Fund
Since its inception in 2017, the National Trade Corridors Fund has invested in
transportation infrastructure across Canada, for example:

 Western Canada: Projects in the Lower Mainland of British Columbia,

including new overpasses, upgrades to existing rail tracks, and expansion of
port terminals, to improve the flow of passenger and freight traffic.
 Eastern Canada: Projects at the Port of Montreal, including construction of
new roads and the development of an intelligent communications network,
to increase the port’s capacity and optimize its rail network.
 Northern Canada: Improvement of the Mackenzie Valley Highway between
Yellowknife and the Arctic Ocean to ensure reliable, year-round road access
to isolated communities and support the economic development of the
region’s mineral-rich resources.

Modernizing Travel and Trade at Our Borders

The safe and timely flow of people and goods across our borders is integral to
Canada’s economic recovery. In the years ahead, a modern border should
facilitate seamless and safe travel and trade, while protecting Canada from
public health and security threats.

Budget 2021 proposes to provide $656.1 million over five years,

beginning in 2021-22, and $123.8 million ongoing, to the Canada
Border Services Agency (CBSA) to modernize our borders. Funding will
transform the border experience for travellers through touchless and
automated interactions, enhance CBSA’s ability to detect contraband,
and help protect the integrity of our border infrastructure. Funding
will also support three Canadian preclearance pilots in the United
Sates that would enable customs and immigration inspections to be
completed before goods and travellers enter Canada.

These initiatives will help preserve the security and integrity of Canada’s
borders while expediting the flow of legitimate travel and trade.

144 Chapter 4
Strengthening Canada’s Trade Remedy System
Maintaining a robust trade remedy system will ensure Canadian businesses can
fully participate in the economic recovery and mitigate the impacts of unfairly
traded imports.

Budget 2021 announces the government’s intention to launch public

consultations on measures to strengthen Canada’s trade remedy system
and to improve access for workers and small and medium-sized enterprises
(SMEs). This may result in proposed amendments to the Special Import
Measures Act and the Canadian International Trade Tribunal Act.

Administration of Trade Controls

The government has been taking steps to bolster its system of trade controls to
ensure that Canada effectively manages the cross-border flow of sensitive
goods. This includes strengthening Canada’s oversight of the movement of
prohibited firearms and arms exports. It also includes additional monitoring and
controls for imports of certain steel and aluminum products and supply-
managed goods to better monitor trade flows.

Budget 2021 proposes to provide $38.2 million over five years, starting in
2021–22, and $7.9 million per year ongoing, to Global Affairs Canada, as
additional resourcing to support Canada’s trade controls regime.

Better Supports for Exporters

Export Development Canada (EDC) helps Canadian companies of all sizes
compete and succeed in the global marketplace. EDC recognizes its
responsibility to uphold Canadian values and human rights when doing
business.

Budget 2021 announces the government’s intention to work with Export

Development Canada to enhance supports to small and medium-sized
exporters and to strengthen human rights considerations in export supports.
The government may propose amendments to the Export Development Act.

Helping Canadian Businesses Grow and Succeed 145

4.6 Investing in World-leading Research and
Innovation
A plan for a long-term recovery must look to challenges and opportunities that
lie ahead in the years and decades to come. It must be led by a growth strategy
that builds on the unique competitive advantages of the Canadian economy,
and make sure that Canada is well-positioned to meet the demands of the next
century. This work begins with innovation.
To drive growth and create good, well-paying jobs, entrepreneurs and
businesses need to be able to translate Canada’s world-class leadership in
research into innovative products and services for Canadians, and for the world.
These investments will help cement Canada’s position as a world leader in
research and innovation, building a global brand that will attract talent and
capital for years to come.

Supporting Innovation and Industrial Transformation

Since its launch in 2017, the Strategic Innovation Fund has been helping
businesses invest, grow, and innovate in Canada. Through its efforts to help
businesses make the investments they need to succeed, the fund is well-placed
to support growth and the creation of good jobs across the Canadian
economy—both now and in the future.

Budget 2021 proposes to provide the Strategic Innovation Fund with an

incremental $7.2 billion over seven years on a cash basis, starting in 2021-22,
and $511.4 million ongoing. This funding will be directed as follows:
- $2.2 billion over seven years, and $511.4 million ongoing to support
innovative projects across the economy—including in the life sciences,
automotive, aerospace, and agriculture sectors.
- $5 billion over seven years to increase funding for the Strategic
Innovation Fund’s Net Zero Accelerator, as detailed in Chapter 5.
Through the Net Zero Accelerator the fund would scale up its support
for projects that will help decarbonize heavy industry, support clean
technologies and help meaningfully accelerate domestic greenhouse
gas emissions reductions by 2030.
The funding proposed in Budget 2021 will build on the Strategic Innovation Fund’s
existing resources, including the $3 billion over five years announced in December
2020 for the Net Zero Accelerator. With this additional support, the Strategic
Innovation Fund will target investments in important areas of future growth over
the coming years to advance multiple strategic objectives for the Canadian
economy:

146 Chapter 4
 $1.75 billion in support over seven years would be targeted toward aerospace
in recognition of the longer-lasting impacts to this sector following COVID-
19. This is in addition to the $250 million Aerospace Regional Recovery
Initiative, outlined in section 4.2, providing a combined support of $2 billion
to help this innovative sector recover and grow out of the crisis.

 $1 billion of support over seven years would be targeted toward growing

Canada’s life sciences and bio-manufacturing sector, restoring capabilities
that have been lost and supporting the innovative Canadian firms and jobs
in this sector. This is an important component of Canada's plan to build
domestic resilience and improve long-term pandemic preparedness
proposed in Chapter 1, providing a combined $2.2 billion over seven years.
 $8 billion over seven years for the Net Zero Accelerator to support projects
that will help reduce Canada’s greenhouse gas emissions by expediting
decarbonization projects, scaling-up clean technology, and accelerating
Canada’s industrial transformation. More details are in Chapter 5.

Strategic Innovation Fund Support Strategic Objective

 Invest $8 billion through the  Help achieve net-zero greenhouse

Net Zero Accelerator gas emissions by 2050 and support
 Target $1.75 billion to the economic transformation
aerospace sector  Support sector recovery and
 Target $1 billion to the bio- sustainable growth
manufacturing and life  Build domestic resilience and improve
sciences sector long-term pandemic preparedness
 Leverage all other resources  Promote growth and the creation of
to target strategic investments good jobs across the Canadian
in innovative and dynamic economy
projects, including in
traditional areas of Canadian
strength.

It is important that the Strategic Innovation Fund has the right tools to support
businesses across Canada. To this end, the government will explore potential
opportunities to add new investment structures to the Strategic Innovation
Fund’s toolkit.

Helping Canadian Businesses Grow and Succeed 147

Renewing the Pan-Canadian Artificial Intelligence
Strategy
Artificial intelligence is one of the greatest technological transformations of our
age. Canada has communities of research, homegrown talent, and a diverse
ecosystem of start-ups and scale-ups. But these Canadian innovators need
investment in order to ensure our economy takes advantage of the enormous
growth opportunities ahead in this sector. By leveraging our position of
strength, we can also ensure that Canadian values are embedded across widely
used, global platforms.
Budget 2021 proposes to provide up to $443.8 million over ten years,
starting in 2021-22, in support of the Pan-Canadian Artificial Intelligence
Strategy, including:
- $185 million over five years, starting in 2021-22, to support the
commercialization of artificial intelligence innovations and research
in Canada.
- $162.2 million over ten years, starting in 2021-22, to help retain and
attract top academic talent across Canada—including in Alberta, British
Columbia, Ontario, and Quebec. This programming will be delivered by
the Canadian Institute for Advanced Research.
- $48 million over five years, starting in 2021-22, for the Canadian Institute
for Advanced Research to renew and enhance its research, training, and
knowledge mobilization programs.
- $40 million over five years, starting in 2022-23, to provide dedicated
computing capacity for researchers at the national artificial intelligence
institutes in Edmonton, Toronto, and Montréal.
- $8.6 million over five years, starting in 2021-22, to advance the
development and adoption of standards related to artificial intelligence.

148 Chapter 4
Launching a National Quantum Strategy
Quantum technology is at the very leading edge of science and innovation
today, with enormous potential for commercialization. This emerging field will
transform how we develop and design everything from life-saving drugs to next
generation batteries, and Canadian scientists and entrepreneurs are well-
positioned to take advantage of these opportunities. But they need investments
to be competitive in this fast growing global market.

Budget 2021 proposes to provide $360 million over seven years, starting in
2021-22, to launch a National Quantum Strategy. The strategy will amplify
Canada’s significant strength in quantum research; grow our quantum-ready
technologies, companies, and talent; and solidify Canada’s global leadership in
this area. This funding will also establish a secretariat at the Department of
Innovation, Science and Economic Development to coordinate this work.
The government will provide further details on the rollout of the strategy in the
coming months.

Revitalizing the Canadian Photonics Fabrication

Centre
Canada is a world leader in photonics, the technology of generating and
harnessing the power of light. This is the science behind fibre optics, advanced
semi-conductors, and other cutting-edge technologies, and there is a strong
history of Canadian companies bringing this expertise to the world. The
National Research Council’s Canadian Photonics Fabrication Centre supplies
photonics research, testing, prototyping, and pilot-scale manufacturing services
to academics and large, small and medium-sized photonics businesses in
Canada. But its aging facility puts this critical research and development at risk.

Budget 2021 proposes to provide $90 million over five years on a cash basis,
starting in 2021-22, to the National Research Council to retool and
modernize the Canadian Photonics Fabrication Centre. This would allow the
centre to continue helping Canadian researchers and companies grow and
support highly skilled jobs.

Helping Canadian Businesses Grow and Succeed 149

Launching a Pan-Canadian Genomics Strategy
Genomics research is developing cutting-edge therapeutics and is helping
Canada track and fight COVID-19. Canada was an early mover in advancing
genomics science and is now a global leader in the field. A national approach to
support genomics research can lead to breakthroughs that have real world
applications. There is an opportunity to improve Canadians’ health and well-
being while also creating good jobs and economic growth. Leveraging and
commercializing this advantage will give Canadian companies, researchers, and
workers a competitive edge in this growing field.
Budget 2021 proposes to provide $400 million over six years, starting in
2021-22, in support of a Pan-Canadian Genomics Strategy. This funding
would provide $136.7 million over five years, starting in 2022-23, for
mission-driven programming delivered by Genome Canada to kick-start the
new Strategy and complement the government’s existing genomics
research and innovation programming.
Further investments to grow Canada’s strengths in genomics under the
Strategy will be announced in the future.

Conducting Clinical Trials

Canadian scientists are among the best in the world at conducting high-quality
clinical trials. Clinical trials lead to the development of new scientifically proven
treatments and cures, and improved health outcomes for Canadians. They also
create good jobs in the health research sector, including the pharmaceutical
sector, and support the creation of new companies, drugs, medical devices, and
other health products.
Budget 2021 proposes to provide $250 million over three years,
starting in 2021-22, to the Canadian Institutes of Health Research to
implement a new Clinical Trials Fund.

150 Chapter 4
Supporting the Innovation Superclusters Initiative
Since it was launched in 2017, the Innovation Superclusters Initiative has helped
Canada build successful innovation ecosystems in important areas of the
economy. Drawing on the strength and breadth of their networks, the
superclusters were able to quickly pivot their operations and played an
important role in Canada’s COVID-19 response. For example, the Digital
Technology Supercluster allocated resources to projects that used digital
technologies and artificial intelligence to help facilitate faster, more accurate
diagnosis, treatment, and care of COVID-19 patients.
To help ensure those superclusters that made emergency investments to
support Canada’s COVID-19 response and others can continue supporting
innovative Canadian projects:

Budget 2021 proposes to provide $60 million over two years, starting
in 2021-22, to the Innovation Superclusters Initiative.

Promoting Canadian Intellectual Property

As the most highly educated country in the OECD, Canada is full of innovative
and entrepreneurial people with great ideas. Those ideas are valuable
intellectual property that are the seeds of huge growth opportunities. Building
on the National Intellectual Property Strategy announced in Budget 2018, the
government proposes to further support Canadian innovators, start-ups, and
technology-intensive businesses. Budget 2021 proposes:
$90 million, over two years, starting in 2022-23, to create ElevateIP, a
program to help accelerators and incubators provide start-ups with access
to expert intellectual property services.

$75 million over three years, starting in 2021-22, for the National Research
Council’s Industrial Research Assistance Program to provide high-growth
client firms with access to expert intellectual property services.

These direct investments would be complemented by a Strategic Intellectual

Property Program Review that will be launched. It is intended as a broad
assessment of intellectual property provisions in Canada’s innovation and science
programming, from basic research to near-commercial projects. This work will
make sure Canada and Canadians fully benefit from innovations and intellectual
property.

Helping Canadian Businesses Grow and Succeed 151

Capitalizing on Space-based Earth Observation
Earth observation satellites support critical services that Canadians rely on. They
provide reliable weather forecasts, support military and transport logistics, help
us monitor and fight climate change, and support innovation across sectors,
including energy and agriculture. They also create high-quality jobs in Canada
and the government will continue to explore opportunities to support Canadian
capacity, innovation, and jobs in this sector. To maintain Canada’s capacity to
collect and use important data from these satellites, Budget 2021 proposes
to provide:

$80.2 million over eleven years, starting in 2021-22, with $14.9 million
in remaining amortization and $6.2 million per year ongoing, to
Natural Resources Canada and Environment and Climate Change
Canada to replace and expand critical but aging ground-based
infrastructure to receive satellite data.

$9.9 million over two years, starting in 2021-22, to the Canadian Space
Agency to plan for the next generation of Earth observation satellites.

Science and Technology Collaboration with Israeli

Firms
Collaborating with global innovation leaders allows Canadian companies to
leverage expertise to create new products and services, support good jobs, and
reach new export markets.

Budget 2021 proposes to provide additional funding of $10 million over

five years, starting in 2021-2022, and $2 million per year ongoing, to
expand opportunities for Canadian SMEs to engage in research and
development partnerships with Israeli SMEs as part of the Canadian
International Innovation Program. This will be sourced from existing Global
Affairs Canada resources. The government also intends to implement an
enhanced delivery model for this program, including possible legislation.

152 Chapter 4
4.7 Supporting a Digital Economy
More and more of our lives are happening online—from socializing, to our jobs,
to commerce. Recognizing the fundamental shifts underway in our society, the
government introduced a new Digital Charter in 2020 that seeks to better
protect the privacy, security, and personal data of Canadians, building trust and
confidence in the digital economy.

To make sure that Canadian businesses can keep pace with this digital
transformation and that they are part of this growth, Budget 2021 includes
measures to ensure businesses and workers in every region of the country have
access to fast, reliable internet. It also has measures to make sure that the
digital economy is fair and well reported on.

A digital economy that serves and protects Canadians and Canadian businesses
is vital for long-term growth.

Accelerating Broadband for Everyone

The COVID-19 pandemic has shifted much of our lives online and transformed
how we live, work, learn, and do business. This makes it more important than
ever that Canadians, including Canadian small businesses in every corner of this
country, have access to fast and reliable high-speed internet. Canadians and
Canadian businesses in many rural and remote communities who still do not
have access to high-speed internet face a barrier to equal participation in the
economy. Building on the $6.2 billion the federal government and federal
agencies have made available for universal broadband since 2015:
Budget 2021 proposes to provide an additional $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. This would mean thousands more Canadians
and small businesses will have faster, more reliable internet connections.

In total, including proposed Budget 2021 funding, $2.75 billion will be made
available through the Universal Broadband Fund to support Canadians in rural
and remote communities. Recently, the Universal Broadband Fund provided
funding to ensure Quebec could launch Operation High Speed, connecting
nearly 150,000 Quebecers to high-speed internet. These continuing
investments will help Canada accelerate work to reach its goal of 98 per cent of
the country having high-speed broadband by 2026 and 100 per cent by 2030.

Helping Canadian Businesses Grow and Succeed 153

Establishing a New Data Commissioner
Digital and data-driven technologies open up new markets for products
and services that allow innovative Canadians to create new business
opportunities—and high-value jobs. But as the digital and data economy
grows, Canadians must be able to trust that their data are protected and
being used responsibly.
Budget 2021 proposes to provide $17.6 million over five years, starting in
2021-22, and $3.4 million per year ongoing, to create a Data Commissioner.
The Data Commissioner would inform government and business approaches
to data-driven issues to help protect people’s personal data and to
encourage innovation in the digital marketplace.
Budget 2021 also proposes to provide $8.4 million over five years, starting
in 2021-22, and $2.3 million ongoing, to the Standards Council of Canada
to continue its work to advance industry-wide data governance standards.

Enhancing Business Condition Data

The government introduced the Canadian Survey of Business Conditions in
April 2020 to provide timely measurement of business and economic indicators
and better understand changing business conditions. To further this work with
partners and enhance the availability of real-time business indicator data:

Budget 2021 proposes to provide up to $5 million over two years, starting

in 2021-22, to Statistics Canada to work with partners to enhance the
availability of business condition data, better ensuring that the
government’s support measures are responsive to the needs of Canadian
businesses and entrepreneurs.

154 Chapter 4
Chapter 4
Helping Canadian Businesses Grow and Succeed
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
4.1. Helping
Canadians Get
Back to Work 0 685 170 160 144 144 1,303
Helping Hard-hit
Businesses Hire
More Workers 0 595 0 0 0 0 595
Opportunities for
Businesses and
Young Workers
Through Mitacs 0 90 170 160 144 144 708
4.2. Helping
SMEs Recover
and Grow 0 1,088 1,572 1,477 285 -237 4,184
Helping Small
and Medium-
sized Businesses
Move into the
Digital Age 0 424 424 408 408 0 1,663
Helping
Businesses Seize
New
Technological
Opportunities 0 26 26 0 0 0 53
Supporting
Business
Investments 0 615 1,055 985 -145 -265 2,245
Enhancing the
Canada Small
Business
Financing
Program 0 1 12 33 49 58 153
Less: Fee
Revenues 0 -16 -20 -24 -27 -31 -117
Preparing
Canada’s
Aerospace Sector
for Recovery 0 38 75 75 0 0 188
4.3. Investing In
Canada’s
Entrepreneurs 0 214 183 203 191 131 921

Helping Canadian Businesses Grow and Succeed 155

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Supporting
Entrepreneurs,
Including Equity
Deserving
Entrepreneurs 0 20 20 20 20 20 101
Supporting
Women
Entrepreneurs 0 63 21 36 27 0 147
Supporting Black
Entrepreneurs 0 12 12 13 14 0 52
Leveraging
Procurement
Opportunities 0 13 18 19 18 18 87
Expanding the
Industrial
Research
Assistance
Program 0 100 100 100 100 100 500
Investing in
Canadian
Innovators
Through a
Renewed Venture
Capital Catalyst
Initiative 0 1 6 11 7 -12 12
Boosting
Canada’s Clean
Technology
Exports 0 4 4 4 4 4 21
4.4. Making it
Easier to do
Business in
Canada 0 12 25 31 28 28 123
Removing Barriers
to Internal Trade 0 5 8 8 0 0 21
A Fair and
Competitive
Marketplace 0 4 14 23 28 28 96
Maintaining
Momentum on
Regulatory
Modernization 0 3 3 0 0 0 6

156 Chapter 4
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
4.5. Building 0 478 631 801 586 84 2,579
Infrastructure to
Boost Trade
Renewing our
National Trade
Corridors 0 300 500 600 500 0 1,900
Modernizing
Travel and Trade
at Our Borders 0 174 126 196 81 79 656
Administration of
Trade Controls 0 7 8 8 8 8 38
Less: Funds
Previously
Provisioned in
the Fiscal
Framework 0 -3 -3 -3 -3 -3 -15
4.6. Investing in
World-leading
Research and
Innovation 0 923 1,515 2,155 1,006 526 6,125
Supporting
Innovation and
Industrial
Transformation 0 705 1,099 1,704 768 295 4,571
Renewing the
Pan-Canadian
Artificial
Intelligence
Strategy 0 45 72 80 84 88 368
Launching a
National
Quantum
Strategy 0 31 49 59 61 54 254
Revitalizing the
Canadian
Photonics
Fabrication
Centre 0 2 4 5 6 6 23
Launching a Pan-
Canadian
Genomics
Strategy 0 50 86 105 81 75 398
Conducting
Clinical Trials 0 34 97 119 0 0 250
Supporting the
Innovation 0 36 24 0 0 0 60

Helping Canadian Businesses Grow and Succeed 157

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Superclusters
Initiative
Promoting
Canadian
Intellectual
Property 0 15 75 75 0 0 165
Capitalizing on
Space-based
Earth Observation 0 5 10 6 6 9 36
4.7. Supporting
a Digital
Economy 0 280 352 135 131 131 1,029
Accelerating
Broadband for
Everyone 0 272 344 129 126 126 998
Establishing a
New Data
Commissioner 0 5 5 5 5 5 26
Enhancing
Business
Condition Data 0 2 2 0 0 0 5
Additional
Investments –
Helping
Canadian
Businesses Grow
and Succeed -5 13 17 17 13 13 69
Revitalizing the
Canadian
Commercial
Corporation 0 0 13 13 13 13 52
Emergency
Funding
(Including
Reprofile) -5 13 0 0 0 0 9
Funding proposed for the Canadian Commercial Corporation would allow it to administer the Canada-US
Defence Production Sharing Agreement and help Canadian companies win US defence contracts, grow, and
support jobs here at home. $5 million that was allocated for CCC in 2020-21 is being reallocated to 2021-22.
Continuing Motor
Vehicle Safety
Oversight 0 0 4 4 0 0 8
Funding proposed for Transport Canada to continue core motor vehicle safety oversight activities, which include
monitoring and enforcing compliance with the Motor Vehicle Safety Act and its regulations, and developing new
regulations to modernize safety oversight.
Chapter 4 - Net
Fiscal Impact -5 3,691 4,465 4,978 2,384 819 16,332
Note: Numbers may not add due to rounding

158 Chapter 4
Chapter 5
A Healthy Environment for a Healthy
Economy
Climate change is real.

Wildfires, floods, droughts, and powerful storms are becoming more frequent,
more costly, and more dangerous.

COVID-19 has shown us how Canadians have what it takes to come together, to
mobilize, and to take action in the face of a crisis. The climate crisis is just as
great a challenge.

Our human impact on the environment will have lasting consequences if we fail
to come together to take bold and ambitious climate action. Action at home,
action on our commute to work, and action in industry and the financial sector.

Around the world, countries and investors realize that climate action is the key
to building strong, resilient economies. Fighting climate change, including
reaching net-zero, will be a cornerstone of this government’s plan to rebuild the
economy, create middle class jobs, and ensure Canadian industry stays
competitive on the world stage.

Climate change is the challenge of our times. And it is also one of our greatest
opportunities. Canada’s well-educated workforce, energy sector know-how, and
trade relationships position us to be a leader in the clean economy of the
future. The global recovery from the COVID-19 recession will include seismic
investments in a green recovery, and Canada’s plan for strategic, targeted
investments will take advantage of this pivot and create opportunities for
Canadians in every region of the country.

Climate action creates new opportunities for engineers, scientists, farmers,

construction workers, tradespeople, resource workers, energy workers,
researchers, and more.

A sustainable, long-term recovery demands that we look far into the horizon
and consider the legacy we will leave behind. By investing in climate action now,
we can create good middle class jobs today, and create a cleaner and safer
future for our children and grandchildren.

Since 2015, we have invested roughly $60 billion toward climate action and
clean growth. In 2020, we announced an additional investment of $15 billion for
Canada’s strengthened climate plan, along with nearly $15 billion for public
transit in February 2021. Canada also has a strong and rising price on carbon,
accelerating further action on climate change and transforming our economy.
Building on recent investments, Budget 2021 proposes to provide $17.6 billion
towards a green recovery to create jobs, build a clean economy, and fight and
protect against climate change.

“When well designed and implemented, green stimulus

measures can generate income, create jobs, improve well-
being for all and build resilience.”
— OECD, 6 October 2020

5.1 Growing Our Net-zero Economy

Across the world, advanced economies are making investments in a green
recovery. Governments and businesses are making bold investments in clean
growth.

Canadians and Canadian businesses stand poised to seize the new

opportunities for growth and jobs arising as the world builds a greener global
economy. Making sure Canada is part of this shift is critical to ensuring good
jobs for generations of Canadians.

In the global race for clean solutions, Canada will make bold new investments
so that businesses and workers can compete and win.

Accelerating Canada’s Net-zero Transformation

Through Innovation
The Net Zero Accelerator, launched in the government’s strengthened climate
plan last December, will help build and secure Canada’s clean industrial
advantage. By investing in decarbonizing large emitters, transforming key
sectors— from steel and aluminium to cement—and accelerating the adoption
of clean technology across the economy – for example, the auto and aerospace
sectors – the Net Zero Accelerator will spur Canada’s shift to innovative net-zero
technologies and attract the large-scale investments needed to meet our goal of
net-zero by 2050. It will also help Canadian firms grow and create the jobs of our
low-carbon future.

Budget 2021 proposes to provide $5 billion over seven years (cash basis),
starting in 2021-22, to the Net Zero Accelerator. Building on the support for
the Net Zero Accelerator announced in the strengthened climate plan, this
funding would allow the government to provide up to $8 billion of support
for projects that will help reduce domestic greenhouse gas emissions across
the Canadian economy.

160 Chapter 5
The Net Zero Accelerator works to cut pollution, spur clean technology
innovations, attract major investments, create good middle class jobs, and foster
development of key supply chains to ensure Canadian industries and workers can
use their low-carbon advantage to compete and win. This is an important
component of the total investment in the Strategic Innovation Fund proposed
in Chapter 4.

Propelling Clean Tech Projects

While the Canadian clean technology sector is a global leader in clean tech
innovation (11 companies were named to the Cleantech Group’s 2021 Global
Cleantech 100 list, more than any other country after the United States), it lags
in commercial scale-up, export and industry adoption. Canadian companies
frequently report facing challenges in scaling up in Canada’s small domestic
market and accessing sufficient patient growth capital. Transformative clean
technology projects, particularly large ones, often require investment at a scale
and time horizon outside of the scope of traditional project financing. To
support large-scale clean technology projects:

Budget 2021 proposes to make up to $1 billion available on a cash basis,

over five years, starting in 2021-22, to help draw in private sector
investment for these projects.
These resources would fuel the growth of innovative Canadian companies,
create jobs for highly skilled workers, and bring important environmental
and climate solutions to the world.

Growing Zero-emission Technology Manufacturing

As more countries commit to achieving net-zero emissions by 2050, the
demand for zero-emission technology will only grow. With a highly educated
and motivated workforce, Canada is well positioned to take advantage of this
opportunity. Strengthening our manufacturing sector and creating good, well-
paying jobs is key to growing a resilient, competitive middle class.
To create jobs and support the growth of clean technology manufacturing in
Canada:
Budget 2021 proposes to reduce—by 50 per cent—the general corporate
and small business income tax rates for businesses that manufacture zero-
emission technologies. The reductions would go into effect on January 1,
2022, and would be gradually phased out starting January 1, 2029 and
eliminated by January 1, 2032. The Department of Finance Canada will
regularly review new technologies that might be eligible, in consultation
with Environment and Climate Change Canada, Natural Resources Canada,
Sustainable Development Technology Canada, and other key stakeholders
across government and industry.

A Healthy Environment for a Healthy Economy 161

These proposed tax rate reductions will enhance Canada's competitiveness in
attracting investment in zero-emission technology manufacturing, while also
supporting existing businesses in the sector. This will advance Canada’s
economic recovery and help create well-paying jobs for Canadians. It is
estimated that this measure will reduce federal revenues by $45 million over
five years, starting in 2021-22.

In addition, the government will undertake an analysis to ensure that Canada

keeps pace with the U.S. and other jurisdictions in providing the appropriate tax
structures and incentives to encourage clean economy businesses to invest,
grow, and deploy solutions here in Canada.

Zero-Emission Technologies in Canada

Examples of zero-emission technology manufacturing in Canada:
 Manufacturing of wind turbines, solar panels, and equipment used in
hydroelectric facilities.
 Manufacturing of geothermal energy systems.
 Manufacturing of electric cars, busses, trucks, and other vehicles.
 Manufacturing of batteries and fuel cells for electric vehicles.
 Production of biofuels from waste materials.
 Production of green hydrogen.
 Manufacturing of electric vehicle charging systems.
 Manufacturing of certain energy storage equipment.

Accelerating Investment in Clean Energy

Technologies
In 2018, Canada introduced tax incentives to encourage businesses to invest in
clean energy generation and energy efficiency equipment. In particular, this
included a time-limited measure allowing businesses to immediately write off
the full cost of investments in certain clean energy technologies. To support
clean tech jobs, help Canadian companies adopt more clean technologies, and
fight climate change:

Budget 2021 proposes to expand the list of eligible equipment to include

equipment used in pumped hydroelectric energy storage, renewable fuel
production, hydrogen production by electrolysis of water, and hydrogen
refueling. Certain existing restrictions related to investments in water-
current, wave and tidal energy, active solar heating, and geothermal energy
technologies would also be removed.

162 Chapter 5
To ensure this tax incentive remains consistent with the government’s
environmental objectives:

Budget 2021 proposes to update the eligibility criteria such that

certain fossil-fuelled and low efficiency waste-fuelled electrical
generation equipment will no longer be eligible after 2024.

Reforming eligibility for this tax incentive will help reduce pollution and
greenhouse gas emissions in Canada. It is estimated that these measures will
reduce federal revenues by $142 million over five years starting in 2021-22.

Enhancing Canada’s Supply of Critical Minerals

The electrification of vehicles and use of solar panels is expected to surge in the
coming decade. Canada has rich reserves of the critical minerals needed for
electric vehicle batteries and solar panels, along with other low-carbon
technologies needed to reach net-zero. The resources needed for these
technologies create good jobs in regions across the country.
Canada and the U.S. recently agreed to strengthen the Canada-U.S. Joint Action
Plan on Critical Minerals Collaboration to target a net-zero industrial
transformation, batteries for zero-emissions vehicles, and renewable energy
storage. Investing in these resources is essential for our energy security and will
ensure Canada is a vital producer in the supply chains of the future.
Budget 2021 proposes to provide $9.6 million over three years, starting in
2021-22, to create a Critical Battery Minerals Centre of Excellence at Natural
Resources Canada. The centre would coordinate federal policy and
programs on critical minerals, and work with provincial, territorial, and other
partners. The centre would also help implement the Canada-U.S. Joint
Action Plan.
Budget 2021 proposes to provide $36.8 million over three years, starting in
2021-22, with $10.9 million in remaining amortization, to Natural Resources
Canada, for federal research and development to advance critical battery
mineral processing and refining expertise.

A Healthy Environment for a Healthy Economy 163

Charging and Fueling Zero-emission Vehicles
Since 2015, there has been a rapid increase in the number of Canadians who
own zero-emission vehicles (ZEVs). Since 2016, the government has invested
$376.4 million and has initiated work to build nearly 6,000 charging and
refueling stations with partners all across the country. While charging ports are
now available in more and more places—from shopping centres, to office
buildings, to curbside parking—the measurement and pricing of the energy
being sold is not always clear to drivers. Just as we know that what is coming
out of the pump is a litre of gas, drivers of ZEVs need to have the same level of
trust and certainty when they charge up an electric vehicle, or fill up their tank
with a next-generation clean fuel, such as hydrogen. To provide consistency and
transparency to drivers and help Canadians reduce carbon emissions:

Budget 2021 proposes to provide $56.1 million over five years, starting in
2021-22, with $16.3 million in remaining amortization and $13 million per
year ongoing, to Measurement Canada to develop and implement, in
coordination with international partners such as the United States, a set of
codes and standards for retail ZEV charging and fueling stations. This would
include accreditation and inspection frameworks needed to ensure the
standards are adhered to at Canada’s vast network of charging and refueling
stations.

This measure would provide regulatory certainty to providers of charging

services and facilitate the development of the charging network. It would also
give more Canadians confidence to purchase and drive ZEVs.

Federal Clean Electricity Fund

Investing in electricity generated from renewable sources can help to reduce
greenhouse gas emissions and stimulate growth in clean power infrastructure.
The Government of Canada has set a goal of ensuring 100 per cent of electricity
generation for all federal buildings is from clean sources by 2022, where
available. Purchasing renewable electricity will stimulate investments in new
clean technology and support job creation and Indigenous participation.

To support the Government of Canada’s commitment to power federal

buildings with 100 per cent clean electricity by 2022, Budget 2021
proposes to provide $14.9 million over 4 years, starting in 2022-23, with
$77.9 million in future years, to Public Services and Procurement Canada
for a Federal Clean Electricity Fund to purchase renewable energy
certificates for all federal government buildings.

164 Chapter 5
Reducing Transportation and Landfill Emissions
Taken together, the transportation and waste sectors account for nearly 30 per
cent of Canada’s greenhouse gas emissions. Light- and heavy-duty vehicles
contribute the largest share of transportation emissions, and emissions from
gas-powered household equipment are on the rise. In addition, the Canadian
landfills release large amounts of methane—a potent greenhouse gas.

To create a healthier environment and support the transition to cleaner

transportation and waste management:

Budget 2021 proposes to provide $104.6 million over five years, starting in
2021–22, with $2.8 million in remaining amortization, to Environment and
Climate Change Canada to strengthen greenhouse gas emissions
regulations for light- and heavy-duty vehicles and off-road residential
equipment, establish national methane regulations for large landfills, and
undertake additional actions to reduce and better use waste at these sites.

Investing in the Forest-based Bio-economy

The forest industry plays a vital role in many of Canada’s rural communities, and
the industry will have an important place in greening our economy. Wood-
based innovations are helping drive developments in Canada’s low-carbon
economy. They can be used in biofuels, bioplastics, building materials, and
other products our economy needs, and replace less sustainable products.
Developing and marketing these new biomaterials will help protect good jobs
in hundreds of Canadian communities. To support the growth of the forest-
based bio-economy:

Budget 2021 proposes to provide $54.8 million over two years, starting in
2021-22, to Natural Resources Canada, to enhance the capacity of the
Investments in Forest Industry Transformation program, including working
with municipalities and community organizations ready for new forest-
based economic opportunities.

A Healthy Environment for a Healthy Economy 165

First Federal Green Bond
Capital is increasingly in search of green projects that support innovative
businesses and good jobs. This is a rapidly growing new market and the
presence of AAA borrowers will help create a more mature market for investors
who are looking for a green portfolio, but also need to manage their
investment risk. To make sure that Canada is competing for these opportunities,
now and in the future:

The government will publish a green bond framework in the coming

months in advance of issuing its inaugural federal green bond in 2021-22,
with an issuance target of $5 billion, subject to market conditions. This
would be the first of many green bond issuances. The framework will
provide details on how, through green bonds, investors will have
opportunities to finance Canada’s work to fight climate change and protect
the environment. Possible projects these green bonds could fund include
green infrastructure, clean tech innovations, nature conservation, and other
efforts to address climate change and protect our environment.

The Department of Finance Canada will co-lead the development of Canada’s

green bond framework with Environment and Climate Change Canada, in co-
development with other departments including Natural Resources Canada;
Infrastructure Canada; Innovation, Science and Economic Development Canada;
Transport Canada; Agriculture and Agri-Food Canada; Public Safety Canada; as
well as related Crown corporations.

5.2 Investing in Our Clean Industry Future

Generations of Canadians have worked hard to build a strong energy sector that
supports hundreds of thousands of workers and families across the country, and
brings power to the world—a legacy of pride and accomplishment. The
development of Canada’s energy sector has made significant contributions to
clean technologies and materials, across industry, and to our country’s prosperity
and high quality of life. These technologies and materials have the potential to
transform industry, across sectors.

Nearly 30 per cent of greenhouse gas emissions in Canada are generated by a

relatively small number of large industrial facilities across Canada. Decarbonizing
these facilities is an economic and environmental opportunity that, if realized, will
position Canada as a leader in providing cleaner energy, and clean technology
solutions, around the world.

166 Chapter 5
 Figure 5.1
Greenhouse gas emissions from large facilities in Canada, 2018

Carbon capture, utilization, and storage (CCUS) and low-carbon fuels represent
two pathways to reduce these industrial emissions. Investing in these
technologies today is a significant step towards achieving Canada’s climate
targets—and a greener, more resilient future for all Canadians.

Carbon Capture, Utilization, and Storage

Fighting climate change, and reaching net-zero, requires Canadians and
Canadian industry to reduce the harmful greenhouse gases in the atmosphere
in as many ways as possible. CCUS is an important tool for reducing emissions
in high emitting sectors. It uses advanced technologies to capture carbon
dioxide emissions from fuel combustion, industrial processes, or directly from
the air. The captured carbon can then be stored deep underground, or used to
create new and innovative products. CCUS is the only currently available
technology with the potential to generate negative emissions.

Canada currently captures 4 megatonnes of carbon every year, but we have the
technical and geological capacity to capture and store much more. We have the
right building blocks in place, including infrastructure such as the Alberta
Carbon Trunk Line, and innovative companies like CarbonCure in Nova Scotia,
which developed a technology to inject captured carbon into concrete, making

A Healthy Environment for a Healthy Economy 167

it stronger and less polluting. Alberta and Saskatchewan have the greatest near-
term potential to become global leaders in CCUS by creating new ‘hubs’ where
carbon from high-emitting facilities can be efficiently captured, transported,
stored, or used.

Tax Incentive for Carbon Capture, Utilization, and

Storage
Canadian innovators and engineers have developed some of the leading global
technologies for CCUS technologies that are in demand as more countries take
action to fight climate change. The government intends to take significant
action to support and accelerate the adoption of these technologies. By
providing incentives to adopt CCUS technologies, the proposed measure will be
an important element in Canada’s plan to achieve net-zero emissions by 2050.
This important new element of Canada’s tax system is also intended to
accelerate the growth of new businesses and jobs related to carbon capture.
Budget 2021 proposes to introduce an investment tax credit for
capital invested in CCUS projects with the goal of reducing emissions
by at least 15 megatonnes of CO2 annually. This measure will come
into effect in 2022.
The government will move quickly with a 90-day consultation period with
stakeholders on the design of the investment tax credit, after which it will
announce more details—including the rate of the incentive. It is not
intended that the investment tax credit be available for Enhanced Oil
Recovery projects. The government intends to make the credit available
for direct air capture projects. The government will be seeking input from
all industrial subsectors (e.g. oil sands, refining, cement, fertilizer, power
generation, direct air capture, etc.), recognizing that various subsectors
face different challenges in adopting CCUS. The tax credit will also support
hydrogen production. During the consultation, the government will
consider how equivalent tax support could be provided to producers of
green hydrogen. The consultation will include key provincial governments,
encouraging them to create complementary measures for CCUS projects
in their jurisdictions.
Following consultations, the government intends to introduce legislation at the
earliest opportunity to implement the investment tax credit.
The government will also analyze how the tax system can be used to
further support the commercialization and deployment of breakthrough
technologies that may be critical to creating our net-zero future.

168 Chapter 5
Advancing Carbon Capture, Utilization, and Storage
Technologies
Canada is a leader in CCUS, with domestic projects that have already captured
and stored millions of tonnes of CO2. Building on this Canadian advantage is
integral to achieving our net-zero goals. But investment is needed to support
research and development that will help to advance the technology, lower its
costs, and make sure Canada stays ahead of the curve in the global market
for CCUS.

Budget 2021 proposes to provide $319 million over seven years, starting in
2021-22, with $1.5 million in remaining amortization, to Natural Resources
Canada to support research, development, and demonstrations that would
improve the commercial viability of carbon capture, utilization, and
storage technologies.
Taken together, these proposed measures related to CCUS will help Canada
achieve net-zero emissions by 2050, and position Canada as a leader in
supplying cleaner energy and innovative new technologies around the world.

Cleaner Fuels for a Cleaner Environment

Canadians and Canadian businesses use fuel every day—to get from place to
place, to produce goods, and to transport those goods to market. Innovators are
finding ways to make the fuels we use cleaner and Canada’s Clean Fuel Standard
is expected to reduce our greenhouse gas emissions by more than
20 megatonnes in 2030 and help put us on the path to net-zero emissions by
2050.

To implement and administer the Clean Fuel Standard, Budget 2021

proposes to provide $67.2 million over seven years, starting in 2021-22,
with $0.05 million in remaining amortization, to Environment and Climate
Change Canada. This standard creates new economic opportunities for
Canada’s biofuel producers, including farmers and foresters, who are part of
the diverse supply chain for low-carbon fuels. Making this investment now
will secure Canada’s future competitiveness in the global transition to a
low-carbon economy.

A Healthy Environment for a Healthy Economy 169

Supporting the Production and Use of Clean Fuels
Clean fuels, including hydrogen and biofuels, can help reduce pollution from
everyday activities, from heating our homes to commuting. The production of
these fuels offers new opportunities for Canada’s energy sector and ensures
their hard work and ingenuity are a part of Canada’s economic recovery.

As originally announced on December 11, 2020, Budget 2021 proposes to

provide $1.5 billion over five years, starting in 2021-22, with $0.9 million in
remaining amortization, to Natural Resources Canada to establish a Clean Fuels
Fund to support the production and distribution of low-carbon and zero-
emission fuels, including hydrogen and biomass, across Canada, and around the
world, as first announced in the government’s strengthened climate plan. The
fund would position Canada as a global hydrogen leader and deliver on the
Hydrogen Strategy for Canada.

Budget 2021 also proposes to provide $67.4 million over seven years,
starting in 2021-22, with $5.6 million in remaining amortization and $10.7
million ongoing, for Measurement Canada to ensure that commercial
transactions of low-carbon fuels are measured accurately just as they are
for conventional fuels.
These investments will help make sure Canada’s energy sector is a key player in
the work to build a clean energy future.

Low-Carbon Fuel Procurement Program

Low-carbon fuels will be necessary as Canada works to achieve net-zero
emissions by 2050. The Government of Canada is taking a leadership role to put
itself on a 2050 net-zero pathway by committing to buy low-carbon fuels for
use in the federal domestic air and marine fleets. By making this commitment
now, the government will encourage industry to produce these fuels, creating
jobs for Canadians and investing in the clean tech economy.

To support the long-term development of low-emission marine and

aviation fuels, Budget 2021 proposes to provide $227.9 million over eight
years, starting in 2023-24, to the Treasury Board Secretariat to implement a
Low-Carbon Fuel Procurement Program within the Greening Government
Fund.

The government will also continue to use and expand federal procurement
to support the Greening Government Strategy so that public dollars
prioritize the use of lower carbon materials, fuels, and processes.

170 Chapter 5
Supporting a Centre for Innovation and Clean Energy
in British Columbia
British Columbians have long been leaders in clean energy innovation and
building a more sustainable future. In 2018, the Government of British Columbia
released CleanBC, a plan to achieve the province’s target of reducing
greenhouse gas emissions by 40 per cent by 2030, based on 2007 levels. As part
of the CleanBC plan, British Columbia recently announced that it will help
establish a new Centre for Innovation and Clean Energy to coordinate research,
development and demonstration of clean technologies, including carbon
capture, utilization, and storage, and clean fuels.

The government will, in partnership with the Government of British

Columbia, provide up to $35 million to help establish the Centre for
Innovation and Clean Energy to advance the scale-up and
commercialization of clean technologies in B.C. and across Canada.

Investing in Clean Energy in Northern and

Indigenous Communities
Canada’s North is warming at three times the global rate. Indigenous peoples
are experiencing its impact on their way of life, which is closely tied to the land
and waters. Many communities in the North rely on diesel or other emissions-
intensive sources of energy, which not only contribute to climate change but
also pollute the air. To help these communities transition to clean energy and
make the air cleaner and healthier:

Budget 2021 proposes to invest $40.4 million over three years, starting in
2021-22, to support feasibility and planning of hydroelectricity and grid
interconnection projects in the North. This funding could advance projects,
such as the Atlin Hydro Expansion Project in Yukon and the Kivalliq Hydro-
Fibre Link Project in Nunavut. Projects will provide clean power to northern
communities and help reduce emissions from mining projects.
Budget 2021 also proposes to invest $36 million over three years, starting
in 2021-22, through the Strategic Partnerships Initiative, to build capacity
for local, economically-sustainable clean energy projects in First Nations,
Inuit, and Métis communities and support economic development
opportunities.

A Healthy Environment for a Healthy Economy 171

 The Strategic Partnerships Initiative is a unique federal program that supports
Indigenous communities at the early stages of complex large economic
opportunities. To date, the federal government has invested more than
$136 million in the Strategic Partnerships Initiative, supporting over 50 large-
scale initiatives and fostering the creation of more than 200 successful
partnerships in various sectors of the economy such as clean energy, tourism,
and fisheries. These efforts have benefitted over 400 Indigenous communities
and organizations across the country.

Additional work is happening across the country to further our commitments to

clean energy, including the Atlantic Loop.

5.3 Advancing Canada’s Climate Plan

In December 2020, the government released its strengthened climate plan, A
Healthy Environment and a Healthy Economy. Building on the Pan-Canadian
Framework on Clean Growth and Climate Change, the plan laid out $15 billion
in new investments to ensure Canada will exceed its 2030 greenhouse gas
reduction target.

Chart 5.1
Projected Canadian GHG Emissions in 2030
Projected GHG Emissions

900
815
800
+12% 2005 GHG Emission Level: 730 Mt
700
-19%
588 -31% -36%
600
503
500 468

400

300

200

100

0
2030 Trajectory in 2015 2030 Trajectory after Measures 2030 Trajectory after 2030 Trajectory after
Announced in Pan-Canadian Measures Announced in A Budget 2021 Measures
Framework on Clean Growth Healthy Environment and a and Additional Action
and Climate Change Healthy Economy Including Continued
Alignment with U.S.
Source: Environment and Climate Change Canada modelling as well as Environment and Climate Change
Canada and Finance Canada calculations. ¬

In February, the government announced nearly $15 billion for public transit
projects, which will support new subway extensions and help electrify transit
fleets with zero-emission vehicles.

172 Chapter 5
Canada has a clear climate plan—including one of the most stringent carbon
pollution pricing approaches in the world—and we must do more. Set to
announce a new, more ambitious 2030 climate target in the coming days,
through Budget 2021 the government proposes $17.6 billion in additional
investments towards a green recovery to create well-paying middle class jobs,
build a clean economy, and fight and protect against climate change.

The investments made in Budget 2021, along with other action including
strengthened alignment with the United States to further cut pollution from
transportation and methane emissions, mean that Canada is now positioned to
reduce emissions by about 36 per cent below 2005 levels by 2030. The
government will continue to work with domestic and international partners and
stakeholders to take climate action, building Canadian prosperity on our
journey to net-zero emissions by 2050.

Steering Canada’s Strengthened Climate Plan

Since 2015, the government has set an ambitious climate agenda. In 2020, it
strengthened its climate plan and introduced the Canadian Net-Zero Emissions
Accountability Act to legislate Canada’s goal of net-zero emissions by 2050. To
support the government’s work to fight climate change and chart a course for a
prosperous clean growth future:

Budget 2021 proposes to provide $94.4 million over five years, starting in
2021-22, to Environment and Climate Change Canada to increase domestic
and international capacity and action to address climate change, enhance
clean tech policy capacity, including in support of the Clean Growth Hub,
and to fund reporting requirements under the Canadian Net-Zero Emissions
Accountability Act.

Returning the Proceeds from the Price on Pollution

It is no longer free to pollute in Canada. That has been the case since 2019 and
it was recently reaffirmed by the Supreme Court of Canada.

Provincial and territorial governments have the option to introduce their own
pollution pricing system, if that system meets the federal standard. For
jurisdictions that choose not to, a federal backstop system applies—as is
currently the case in Alberta, Saskatchewan, Manitoba, and Ontario.

All direct proceeds are returned to Canadians and their communities, with
approximately 90 per cent going directly to people through their Climate Action
Incentive payment so more money goes back into the pockets of families, while
they help reduce pollution and protect our environment. In fact, the majority of
families receive more money back through the Climate Action Incentive than
they pay into the federal system.

A Healthy Environment for a Healthy Economy 173

 Budget 2021 proposes to change the delivery of Climate Action Incentive
payments from a refundable credit claimed annually on personal income
tax returns to quarterly payments made through the benefit system starting
in 2022. This will deliver Canadians’ Climate Action Incentive payments on a
more regular basis. Further details will be announced later in 2021.

The other approximately 10 per cent has been returned back to communities,
such as through small businesses, schools, and Indigenous communities in
those provinces. The government will continue to return all federal proceeds
from the price on pollution back to Canadian families and their communities to
help them make cleaner choices and protect the environment for future
generations.

Support for Farmers

Recognizing that many farmers use natural gas and propane in their operations:

Budget 2021 announces the government’s intention to return a portion of

the proceeds from the price on pollution directly to farmers in backstop
jurisdictions (currently Alberta, Saskatchewan, Manitoba, and Ontario),
beginning in 2021-22. It is estimated farmers would receive $100 million in
the first year. Returns in future years will be based on proceeds from the
price on pollution collected in the prior fiscal year, and are expected to
increase as the price on pollution rises. Further details will be announced
later in 2021 by the Minister of Finance.
Budget 2021 also proposes to ensure the recently expanded $165.5 million
Agricultural Clean Technology program will prioritize $50 million for the
purchase of more efficient grain dryers for farmers across Canada.

These initiatives will help farmers transition to lower-carbon, more fuel-efficient

ways of farming.

Agricultural Climate Solutions

Farmers are major players in Canada’s fight against climate change. The
agricultural sector has the potential to scale up climate solutions, many of which
are already underway across the country. Building on Canada’s climate action
programs for farmers—including the $185 million Agricultural Climate Solutions
program, and the $165 million Agricultural Clean Technology Program—Budget
2021 proposes to:

Provide an additional $200 million over two years, starting in 2021-22, to

launch immediate, on-farm climate action under the Agricultural Climate
Solutions program. This will target projects accelerating emission
reductions by improving nitrogen management, increasing adoption of
cover cropping, and normalizing rotational grazing.

174 Chapter 5
 Allocate $60 million over the next two years, from the Nature Smart Climate
Solutions Fund to target the protection of existing wetlands and trees on
farms, including through a reverse auction pilot program.
Allocate $10 million over the next two years, from the Agricultural Clean
Technology Program toward powering farms with clean energy and moving
off diesel.

Integrating Climate into Federal Decisions

The government is an important player in Canada’s work to reach to net-zero
emissions by 2050. Government decisions must consider climate mitigation and
adaptation in a rigorous, consistent, and measurable manner.

Budget 2021 proposes to provide $36.2 million over five years, starting in
2021-22, to Environment and Climate Change Canada to develop and apply
a climate lens that ensures climate considerations are integrated
throughout federal government decision-making. This includes resources to
increase economic and emissions modelling capacity.

Strengthening Public Climate-related Disclosures

In order to ensure a stable and predictable transition to a low-carbon economy,
markets, insurers, policy makers, and the public require standardized
information about the climate-related risks and opportunities
organizations face.

The Task Force on Climate-related Financial Disclosures has helped

governments, central banks, public companies, financial institutions, and other
organizations with consistent and comparable voluntary international disclosure
standards. To give more clarity to the markets as technology advances,
regulations evolve, and consumer behaviours change in the face of climate
change:

The government will engage with provinces and territories, with the objective
of making climate disclosures, consistent with the Task Force on Climate-
related Financial Disclosures, part of regular disclosure practices for a broad
spectrum of the Canadian economy.
Canada’s Crown corporations will demonstrate climate leadership by
adopting the Task Force on Climate-related Financial Disclosures standards,
or according to, more rigorous, acceptable standards as applicable to the
public sector at time of disclosure, as an element of their corporate reporting.
- Canada’s large Crown corporations (entities with over $1 billion in
assets) will report on their climate-related financial risks for their
financial years, starting in calendar year 2022 at the latest.

A Healthy Environment for a Healthy Economy 175

 - Crown corporations with less than $1 billion in assets will be expected
to start reporting on their climate-related financial risks for their
financial years beginning in calendar year 2024 at the latest, or provide
justification as to why climate risks do not have material impact on
their operations.

In addition, recognizing the importance of nature, the Government of Canada is

joining the Task Force on Nature-related Financial Disclosures. The Task Force is
developing a framework for corporations and financial institutions to assess,
manage, and report on dependencies and impacts on nature.

Furthermore, in order to make sure that Crown corporations are transparent

about the issues that matter to Canadians, Budget 2021 is announcing that
Crown corporations will be required to implement gender and diversity
reporting, starting in 2022.

Border Carbon Adjustments

Border carbon adjustments make sure that regulations on a price on carbon
pollution apply fairly between trading partners. If a different price on
pollution is levied at source, the difference is accordingly applied on imports
and exports between countries. This levels the playing field, ensures
competitiveness, and protects our shared environment. An important part of
advancing this work is ensuring a common understanding of border carbon
adjustments and hearing views from interested Canadians, as well as
working with Canada’s international partners.

The government intends to launch a consultation process on border carbon

adjustments in the coming weeks. This consultation process will begin in
the summer with targeted discussions, including with provinces and
territories, importers, and exporters—especially those who deal in
emissions-intensive goods. The broader public will be engaged this fall.
Throughout this process, the government intends to continue its
international engagement with like-minded partners.

5.4 Building Green Homes and Communities

The energy used to heat and cool buildings accounts for 13 per cent of
Canada’s emissions. Helping make our homes and other buildings in our
communities more energy efficient not only lowers our emissions, it lowers our
energy bills, too.

It is important to enhance Canada’s supply and production of the materials we

need to build and power highly efficient and low-emitting homes and
communities.

176 Chapter 5
Investments in upgrading our buildings will also create good, local jobs,
including for tradespeople and skilled workers.

Building greener communities can support a clean economy and create new
economic opportunities and good middle class jobs across the country.

Lower Home Energy Bills Through Interest-free Loans

for Retrofits
Climate action starts at home, and deep home energy retrofits can have a big
effect on emissions reduction. Whether people replace drafty windows, improve
insulation to keep homes warm in winter and cool in summer, or install heat
pumps, deep retrofits will help Canadians make their homes more energy
efficient and can also help to better protect their homes from climate risks.

Examples of deep retrofits to make our homes greener

 Replacing oil furnaces or low-efficiency systems with a high efficiency
furnace, air source heat pump, or geothermal heat pump.
 Better wall or basement insulation and/or wall or roof panels.
 Installing a high-efficiency water heater or on-site renewable energy like
solar panels.
 Replacing drafty windows and doors.

These retrofits also make our homes more comfortable, reduce our energy bills,
and create good middle class jobs, especially for skilled workers and
tradespeople. Furthermore, it can also help spur clean growth by developing an
industry for energy efficient retrofits, including the development of a Canadian
supply chain for high-efficiency home renovation products.

The 2020 Fall Economic Statement put forward a program to provide Canadians
with one million free energy audits and up to 700,000 grants, valued at up to
$5,000, to complete energy efficient home improvements. To help homeowners
and build on these measures:

Budget 2021 proposes to provide $4.4 billion on a cash basis ($778.7 million
on an accrual basis over five years, starting in 2021-22, with $414.1 million in
future years) to the Canada Mortgage and Housing Corporation (CMHC) to
help homeowners complete deep home retrofits through interest-free loans
worth up to $40,000. Loans would be available to homeowners and landlords
who undertake retrofits identified through an authorized EnerGuide energy
assessment. In combination with available grants announced in the Fall
Economic Statement, this would help eligible participants make deeper,
more costly retrofits that have the biggest impact in reducing a home’s
environmental footprint and energy bills. This program will also include a

A Healthy Environment for a Healthy Economy 177

 dedicated stream of funding to support low-income homeowners and rental
properties serving low-income renters including cooperatives and not-for-
profit owned housing.

The program would be available by summer 2021. It would be easily accessible

through straightforward online tools, and is expected to help build Canadian
supply chains for energy efficient products. It is estimated that more than
200,000 households would take advantage of this opportunity.

5.5 Adapting to Climate Change for a More

Resilient Future
Climate-related disasters, such as flooding, wildfires, sea-level rise, coastal
erosion, and permafrost degradation, are becoming more frequent and severe.
These disasters have significant negative impacts on public safety, human
health, and the economy. They can also result in costly damage to our
communities.

Budget 2021 proposes a number of measures to better understand and prepare

for climate-related disasters and to mitigate their impact. These measures
would help make our communities safer and more resilient to a
changing climate.

Strengthening Climate Resiliency

Climate change’s impacts—flooding, coastal erosion, permafrost thaw, and
more—put Canada’s infrastructure at significant risk. This poses a threat to
Canadians’ health, wealth, and safety. Climate-related disasters can result in
billions of dollars in disruptions, damages, and recovery costs. To ensure
Canada’s resilience in the face of climate change:

Budget 2021 proposes to provide $1.4 billion over 12 years, starting in

2021-22, to Infrastructure Canada to top up the Disaster Mitigation and
Adaptation Fund, to support projects such as wildfire mitigation activities,
rehabilitation of storm water systems, and restoration of wetlands and
shorelines.
- Of this, $670 million would be dedicated to new, small-scale projects
between $1 million and $20 million in eligible costs. In addition, 10 per
cent of the total funding envelope would be dedicated to Indigenous
recipients to benefit each distinctions-based group. Together, this would
support projects that help small, rural, remote, northern, and Indigenous
communities adapt to climate change impacts.

178 Chapter 5
 In addition, Budget 2021 proposes to invest $11.7 million over five years,
starting in 2021-22, through Infrastructure Canada to renew the Standards
to Support Resilience in Infrastructure Program, so that the Standards
Council of Canada can continue updating standards and guidance in
priority areas such as flood mapping and building in the North. This would
help communities to plan and build roads, buildings, and other
infrastructure that is more durable and resilient to a changing climate.

Keeping Canadians Safer from Floods

Communities across Canada now face once-in-a century floods every few years
due to climate change. These devastating deluges are damaging homes,
businesses, and infrastructure. In fact, floods are Canada’s most costly natural
disaster, causing over $1 billion in direct damage annually. To make our
communities safer and more resilient:

Budget 2021 proposes to provide $63.8 million over three years, starting in
2021-22, to Natural Resources Canada, Environment and Climate Change
Canada, and Public Safety Canada to work with provinces and territories to
complete flood maps for higher-risk areas.

Improving Wildfire Resilience and Preparedness

Climate change is causing wildfires to become more frequent and more severe
across Canada, threatening our health, economies, and wildlife. To improve our
resilience to wildfires, make our communities safer, and adapt to climate
change:

Budget 2021 proposes to provide $100.6 million over five years, starting in
2021-22, with $4.7 million in remaining amortization, to the Parks Canada
Agency to enhance wildfire preparedness in Canada’s National Parks.
Budget 2021 proposes to provide $28.7 million over five years, starting in
2021-22, with $0.6 million in remaining amortization, to Natural Resources
Canada to support increased mapping of areas in Northern Canada at risk of
wildfires. This funding would also enhance the capacity of the Canadian
Interagency Forest Fire Centre, which is jointly funded in partnership with
provinces and territories.

A Healthy Environment for a Healthy Economy 179

Supporting Provincial and Territorial Disaster
Response and Recovery
As climate change causes increased and catastrophic flooding, droughts,
wildfires, and other natural disasters, public finances at the provincial and
territorial level are steadily more strained. In the event of a large scale natural
disaster, the federal Disaster Financial Assistance Arrangements provide
provinces and territories with the financial assistance they need to deliver the
response and recovery services. To ensure provinces and territories have the
capacity to keep people safe from the threats climate change poses:

Budget 2021 proposes to provide $1.9 billion over five years, on a

cash basis, starting in 2021–22, to Public Safety Canada to support
provincial and territorial disaster response and recovery efforts.

Addressing Climate Change in Yukon

Climate change threatens the safety and resilience of northern
infrastructure, ecosystems, and traditional ways of life. To help Yukon
adapt to the impacts of climate change:
Budget 2021 proposes to provide $25 million, in 2021-22, to the
Government of Yukon to support its climate change priorities, in
collaboration with Crown-Indigenous Relations and Northern Affairs Canada
and Environment and Climate Change Canada.

Preserving the HMS Erebus and HMS Terror

The wrecks of HMS Erebus and HMS Terror, from the legendary and ill-fated
Franklin Expedition of 1845, were discovered near Gjoa Haven, Nunavut, in 2014
and 2016, respectively. Inuit co-manage the wrecks with Parks Canada. They are
some of the best-preserved wooden wrecks in the world. They contain clues
that can help us unravel one of the world’s greatest maritime mysteries. But
reduced ice cover and increased sea swells caused by climate change are
accelerating the deterioration of the HMS Erebus. To conserve and protect these
historical treasures:

Budget 2021 proposes to provide $15 million over three years, starting in
2021-22, to accelerate archeological and conservation work of these artifacts
of international importance.

180 Chapter 5
5.6 Protecting Nature
Canada is home to a quarter of the Earth’s wetlands and boreal forests, 20 per
cent of its fresh water, the longest coastline in the world, and a fifth of the
world’s remaining wilderness. We steward precious habitats for birds, fish, and
animals. But many of the natural spaces and species we love are under threat
from human activity and climate change.
Action is needed to conserve nature, address biodiversity loss, and protect our
species at risk. Protected nature is also a critical part of Canada’s plan to fight
climate change. Healthy forests and oceans can absorb and store carbon. We
must also take action to address plastic pollution in our water.
Budget 2021 will make sure Canada reaches its goal of conserving 25 per cent
of our lands and oceans by 2025, and create good jobs in the green economy
along the way.

Historic Investments in Canada’s Natural Legacy

From farming, to fishing, to forestry, to tourism, millions of jobs rely on our nature.
Investment in conservation is also an economic opportunity.

The Economic Challenges of the Global Biodiversity Crisis

Globally, nature is declining at unprecedented rates in human history—and
the rate of species extinctions is accelerating. A 2019 report by the United
Nations found that up to one million species are threatened with extinction
globally. Furthermore, it found that 75 per cent of land-based environments,
and 66 per cent of marine environments, have been altered by human
actions.
There is a growing consensus that economies need to be aware of their
dependence and impact on nature. The World Economic Forum ranks
biodiversity loss as one of the top five risks to the global economy, one
that could have “irreversible consequences for the environment, humankind,
and economic activity, and a permanent destruction of natural capital, as a
result of species extinction and/or reduction.”
Sources: UN Report: Nature’s Dangerous Decline ‘Unprecedented’; Species Extinction Rates ‘Accelerating’
(2019); World Economic Forum Global Report (2020); Intergovernmental Science-Policy Platform on
Biodiversity and Ecosystem Services Global Assessment Report on Biodiversity and Ecosystem Services
(2019).

A Healthy Environment for a Healthy Economy 181

To address the biodiversity crisis, fight climate change, and protect and
create jobs:

Budget 2021 proposes to provide $2.3 billion over five years, starting in
2021-22, with $100.5 million in remaining amortization, to Environment and
Climate Change Canada, Parks Canada, and the Department of Fisheries
and Oceans to:
- Conserve up to 1 million square kilometers more land and inland waters
to achieve Canada’s 25 per cent protected area by 2025 target,
including through national wildlife areas, and Indigenous Protected and
Conserved Areas.
- Create thousands of jobs in nature conservation and management.
- Accelerate new provincial and territorial protected areas.
- Support Indigenous Guardians.
- Take action to prevent priority species at imminent risk of disappearing,
including through partnerships with Indigenous peoples.
Taken together with funding provided for the Nature Legacy Initiative
announced in Budget 2018, this represents the largest investment in nature
conservation in Canada’s history.

Natural Infrastructure Fund

When people think of infrastructure, they often think of built infrastructure—
bridges, roads, or buildings. But natural infrastructure is also a critical part of
making our communities livable. Local parks, green spaces, and waterfronts are
our natural infrastructure. Natural infrastructure is the natural spaces and
wildlife crossings that support conservation and biodiversity, and provides the
wetlands and marshes that help prevent flash floods.

Budget 2021 proposes to provide $200 million over three years, starting in
2021-22, to Infrastructure Canada to establish a Natural Infrastructure Fund
to support natural and hybrid infrastructure projects. This would help to
improve well-being, mitigate the impacts of climate change, and prevent
costly natural events.

182 Chapter 5
Natural Infrastructure Strategies in Canada
According to a report by the Greenbelt Foundation, investing in natural areas
and reducing reliance on built infrastructure can help municipalities save
money and mitigate the impacts of climate change. Cities across Canada are
taking advantage of this opportunity and are investing in natural
infrastructure, see examples below:
 The City of Toronto’s Ravine Strategy aims to protect, manage, and
enhance the ecological services and recreational opportunities provided
by an urban ravine network spanning more than 300 kilometres. The
strategy focuses on ravine areas with high levels of existing use and
where the surrounding neighbourhoods have limited access to public or
private greenspace.
 The City of Vancouver’s Rain City Strategy uses natural solutions, such
as absorbent landscaping, tree trenches, and green roofs, to prevent
urban flooding and improve water quality. The strategy also aims to
manage rainwater runoff from 40 per cent of impervious areas by 2050,
and capture and clean 90 per cent of the city’s average annual rainfall.
 The City of Winnipeg’s Parks Strategy aims to connect people with
nature, value ecological systems, promote active and outdoor living, and
enhance accessibility for persons with disabilities to parks and natural
spaces.
 The City of Saskatoon’s Green Strategy aims to provide a sustainable
habitat for people and nature by building up urban forests, improving
ecosystem health, enhancing resiliency to natural disasters, connecting
people with nature, promoting active and outdoor living, and enhancing
accessibility for persons with disabilities to parks and natural spaces.
 The City of Halifax’s Green Network Plan promotes the sustainable
use of ecologically important green space, and enhances the use of land
suited for outdoor recreation.
 The City of Montreal’s Vision 2030 Strategic Plan prioritizes nature in
the city, putting biodiversity, green spaces, and the management and
development of natural riverside and aquatic heritage at the heart of
decision-making. The plan aims to ensure that everyone has access to
local parks, and includes planting trees and plants in neighbourhoods
and along the riverbanks in order to protect biodiversity.
Sources: Greenbelt Foundation Occasional Papers (2019), “Investing in the Future: The Economic Case for
Natural Infrastructure in Ontario” (PDF); City of Toronto (2017), Toronto Ravine Strategy (PDF); City of
Vancouver (2019), “Rain City Strategy: A green rainwater infrastructure and rainwater management initiative”
(PDF); City of Winnipeg (2021), Winnipeg Parks Strategy (draft) (PDF); City of Saskatoon (2021), Green
Strategy; City of Halifax (2018), Green Network Plan (PDF); City of Montréal (2020), Montréal 2030: Citywide
Strategic Plan (PDF).

A Healthy Environment for a Healthy Economy 183

Conserving Canada’s Oceans
Canada’s coastline is the longest of any country in the world and the
government is committed to protecting 25 per cent of its marine and coastal
areas by 2025, working towards 30 per cent by 2030. In addition to being home
for whales, fish, and other marine life, oceans play a critical role in capturing
carbon in the atmosphere.

Canada’s marine and coastal areas also support numerous jobs, livelihoods, and
communities. The blue economy in Canada contributed $36.1 billion in gross
domestic product in 2018 and accounts for close to 300,000 jobs.

To help meet our conservation targets, protect against loss of marine habitat,
and address the challenges of biodiversity loss and climate change:

Budget 2021 proposes to provide $976.8 million over five years, starting in
2021–22, with $80.0 million in remaining amortization, to help Canada reach
its 25 per cent by 2025 target to protect the health of our oceans,
commercial fishing stocks, and Canadians’ quality of life, especially in coastal
communities.

Reducing Ocean Plastics that Threaten Marine Life

“Ghost gear” is commercial fishing gear that has been abandoned, lost, or
discarded and is estimated to be up to 70 per cent of the plastic waste, by
weight, in our oceans. It is one of the deadliest forms of marine litter around the
world, pollutes our waters and coasts, endangers global fishing stocks, and
poses navigation hazards. Since 2019, Canada has demonstrated international
leadership in efforts to clean up ghost gear. To continue work to reduce plastic
waste in our oceans:

Budget 2021 proposes a $10 million increase, in 2021-22, to the Sustainable

Fisheries Solutions and Retrieval Support Program, the ”Ghost Gear Fund” at
Fisheries and Oceans Canada, to assist projects that retrieve ghost gear,
dispose of fishing related plastic waste, test new fishing technology, and
support international efforts to decrease ghost gear. The program also
contributes to job creation.

184 Chapter 5
Preserving Wild Pacific Salmon
Since the early 1990s, Pacific salmon stocks have declined by up to 93 per cent.
Wild Pacific salmon are facing threats from climate change, contaminants, and
changes in land and water use. The protection and recovery of wild Pacific
salmon stocks is a priority for the federal government. Action is needed to
protect and recover this iconic species—for thousands of workers in rural and
coastal communities, and hundreds of First Nations communities in British
Columbia and Yukon that fish salmon for food, social, and ceremonial reasons.
Building on previous investments of $246.3 million to enable salmon passage in
the Fraser River following the Big Bar landslide:

Budget 2021 proposes to provide $647.1 million over five years, starting in
2021-22, with $98.9 million in remaining amortization to Fisheries and
Oceans Canada to:
- Stabilize and conserve wild Pacific salmon populations, including
through investment in research, new hatchery facilities, and habitat
restoration.
- Create a Pacific Salmon Secretariat and Restoration Centre of Expertise.
 Improve management of commercial and recreational fisheries.

- Double the British Columbia Salmon Restoration and Innovation Fund

with an additional $100 million.
- Further engage with First Nations and fish harvesters.

Sustainable Aquaculture Management

An updated approach to aquaculture is essential to ensure operations are
sustainable, and that marine ecosystems and wild fish populations—in particular
wild salmon and other species facing risk to recovery—are protected.

To help position Canada as a leader in innovative and sustainable aquaculture

while protecting and rebuilding wild fish stocks, and building on the $55.5
million recently provided to the Sustainable Aquaculture Program:

Budget 2021 proposes to provide $20 million over two years to Fisheries
and Oceans Canada to expand engagement with the Province of British
Columbia, Indigenous communities, industry, scientists, and other
stakeholders. This consultation would inform the development of a
responsible plan to transition from open net-pen salmon farming in coastal
British Columbia waters by 2025.

A Healthy Environment for a Healthy Economy 185

 In addition, Budget 2021 also proposes to invest $3 million over two years to
pilot area based management approaches to planning, management, and
monitoring of aquaculture activities in priority areas on the B.C. coast—
leading the way in developing aquaculture practices that are economically,
environmentally, and socially sustainable.

Developing the Canada Water Agency

The Prairie Farm Rehabilitation Administration was created in 1935 when
farmers were facing a period of long, severe drought. For nearly 75 years it
assisted Western Canadian farmers, supporting water conservation and
irrigation projects. Its closure in 2009 created a gap as Canada lost an important
tool to manage its waters. Since then, water management has become a
broader issue connected to climate change, conservation, and the health of
Canadians. To fill this gap and begin work towards the launch of a new Canada
Water Agency that would keep our water safe, clean, and well managed:

Budget 2021 proposes to provide $17.4 million over two years, starting in
2021-22, to Environment and Climate Change Canada to support work with
the provinces, territories, Indigenous peoples, and key stakeholders on the
scope of the agency’s mandate, including identifying opportunities to build
and support more resilient water and irrigation infrastructure. The agency
would be headquartered outside the National Capital Region.

Better Understanding Our Environment

The government is committed to building a robust foundation of data to better
understand the impacts of climate change and protect our diverse ecosystems.
To increase our knowledge of Canada’s environment, ecosystems, and species,
and their relationship to local communities, the government plans to undertake
Canada’s first-ever Census of the Environment.

Budget 2021 proposes to provide $25.6 million over five years, starting in
2021-22, and $5.8 million per year ongoing to Statistics Canada, and
$1.9 million over five years, starting in 2021-22, and $0.3 million per year
ongoing to Environment and Climate Change Canada to create a Census of
the Environment to help monitor environmental trends and better inform
decision-making.

186 Chapter 5
Support for the Polar Continental Shelf Program
For over 50 years, the Polar Continental Shelf Program has enabled research
across Canada’s Arctic. Scientific interest in this important ecosystem has
increased in recent years, as has the cost of basic supplies and logistical
infrastructure.

Budget 2021 proposes to provide $25.4 million over three years, starting in
2021-22, with $5.7 million in remaining amortization, to Natural Resources
Canada to support pan-Arctic scientific research through the Polar
Continental Shelf Program. These activities would also enhance employment
and training opportunities for Indigenous people and northerners.

Continuing Canada’s Chemicals Management Regime

The Chemicals Management Plan was created in 2006 to assess chemicals used
in Canada and take action on those found to be harmful. To renew the
Chemicals Management Plan and continue to protect Canadians and the
environment from exposure to chemicals that can be harmful:

Budget 2021 proposes to provide $476.7 million over five years, starting in
2021-22, with $0.9 million in remaining amortization, to Environment and
Climate Change Canada, Health Canada, and the Public Health Agency
of Canada.

A Healthy Environment for a Healthy Economy 187

Chapter 5
A Healthy Environment for a Healthy Economy
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
5.1. Growing our Net-
zero Economy 0 80 171 147 136 146 678
Propelling Clean Tech
Projects 0 19 58 58 58 58 250
Growing Zero-emission
Technology
Manufacturing 0 1 10 10 10 15 46
Accelerating Investment
in Clean Energy
Technologies 0 14 22 30 34 42 142
Enhancing Canada’s
Supply of Critical
Minerals 0 11 19 17 0 0 46
Charging and Fueling
Zero-emission Vehicles 0 4 12 14 13 13 56
Federal Clean Electricity
Fund 0 0 1 5 5 5 15
Reducing
Transportation and
Landfill Emissions 0 19 22 21 22 21 105
Less: Funds Sourced
From Existing
Departmental
Resources 0 -7 -7 -7 -7 -7 -37
Investing in the Forest-
based Bio-economy 0 20 35 0 0 0 55
5.2. Investing in our
Clean Energy Future 0 133 452 470 463 425 1,943
Advancing Carbon
Capture, Utilization, and
Storage Technologies 0 20 50 50 50 50 220
Tax Incentive for Carbon
Capture, Utilization, and Final costing pending consultation
Storage
Cleaner Fuels for a
Cleaner Environment 0 10 10 10 10 10 48
Less: Funds Sourced
From Existing
Departmental
Resources 0 -4 -4 -4 -3 -3 -20

188 Chapter 5
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Supporting the
Production and Use of
Clean Fuels1 0 82 372 378 376 338 1,546
Low-Carbon Fuel
Procurement Program 0 0 0 11 31 31 73
Supporting the CleanBC
Centre for Innovation
and Clean Energy 0 1 6 9 11 9 35
Less: Funds Sourced
From Existing
Departmental
Resources 0 -1 -6 -9 -11 -9 -35
Investing in Clean
Energy in Northern and
Indigenous
Communities 0 25 25 25 0 0 76
5.3. Advancing
Canada’s Climate Plan 0 115 119 20 20 20 295
Steering Canada’s
Strengthened Climate
Plan 0 19 19 19 19 19 94
Less: Funds Sourced
From Existing
Departmental
Resources 0 -7 -7 -7 -7 -7 -34
Agricultural Climate 0 100 100 0 0 0 200
Solutions
Integrating Climate into
Federal Decisions 0 5 7 8 8 8 36
Less: Funds Sourced
From Existing
Departmental
Resources 0 -2 0 0 0 0 -2
5.4. Building Green
Homes and
Communities 0 90 131 221 163 174 779
Lowering Home Energy
Bills through Interest-
free Loans for Retrofits 0 90 131 221 163 174 779

5.5. Adapting to
Climate Change for a
More Resilient Future 0 62 77 145 186 303 774
Strengthening Climate
Resiliency 0 5 33 100 169 287 593

A Healthy Environment for a Healthy Economy 189

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Keeping Canadians
Safer from Floods 0 16 24 24 0 0 64
Improving Wildfire
Resilience and
Preparedness 0 22 26 27 27 27 129
Less: Funds Sourced
From Existing
Departmental
Resources 0 -11 -11 -11 -11 -11 -53
Supporting Provincial
and Territorial Disaster
Response and Recovery 0 0 0 0 0 0 0
Addressing Climate
Change in Yukon 0 25 0 0 0 0 25
HMS Erebus and HMS
Terror 0 5 5 5 0 0 15
5.6. Protecting Nature 0 605 868 985 869 807 4,133
Historic Investments in
Canada’s Natural Legacy 0 457 542 544 480 473 2,497
Less: Funds Sourced
From Existing
Departmental
Resources 0 -153 -224 -3 -3 -3 -386
Conserving Canada’s
Oceans 0 158 290 196 243 199 1,086
Less: Funds Sourced
From Existing
Departmental
Resources 0 -32 -30 -16 -16 -16 -109
Reducing Ocean Plastics
that Threaten Marine
Life 0 10 0 0 0 0 10
Preserving Wild Pacific
Salmon 0 35 158 149 158 147 647
Sustainable Aquaculture
Management 0 12 12 0 0 0 23
Developing the Canada
Water Agency 0 9 8 0 0 0 17
Better Understanding
Our Environment 0 4 5 6 6 6 27
Support for the Polar
Continental Shelf
Program 0 7 9 9 0 0 25
Continuing Canada’s
Chemicals Management
Regime 0 159 159 159 0 0 477

190 Chapter 5
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Less: Funds Sourced
From Existing
Departmental
Resources 0 -61 -61 -61 0 0 -182
Additional
Investments – A
Healthy Environment
for a Healthy Economy 0 90 47 9 1 1 149
Replacing Lost Revenue
at Parks Canada due to
COVID-19 0 72 0 0 0 0 72
Funding proposed for the Parks Canada Agency to continue to replace future lost visitor revenues due to
closures and restrictions at national parks, national marine conservation areas, and national historic sites as a
result of COVID-19 restrictions.
Continuing to Protect
Canada’s Oceans 0 2 0 0 0 0 2
Funding proposed for Fisheries and Oceans Canada to support the Canadian Coast Guard Auxiliary Chapter in
the Arctic and the Indigenous Community Boat Volunteer Pilot Program, which helps Indigenous coastal
communities in the Arctic purchase boats and water safety equipment. These programs improve the safety of
oceans and waterways by ensuring communities can effectively respond to marine emergencies.
Lake of the Woods 0 2 0 0 0 0 2
Funding proposed for Environment and Climate Change Canada to maintain research and monitoring
activities and to develop phosphorus pollution reduction targets in Lake of the Woods, located between Ontario
and Manitoba. This will allow the federal government to continue its efforts to address toxic algae in the Lake.
Renewing the Clean
Growth Hub and Clean
Technology Data
Strategy 0 8 8 8 0 0 24
Funding proposed for Innovation, Science and Economic Development and Natural Resources Canada to
renew Canada’s single source window to streamline client services and improve federal program coordination
and reporting on clean technology results across government. Funding proposed to also enable continued
generation and dissemination of data necessary to understanding how the Canadian clean technology sector is
being affected by the cumulative impact of clean growth initiatives and global circumstances.
Interim Capital Asset
Program Capacity
Funding for Parks
Canada 0 0 35 0 0 0 35
Funding proposed for the Parks Canada Agency to maintain its internal capacity to manage its capital assets.
Learning to Camp 0 3 3 3 3 3 13
Less: Funds Sourced
From Existing
Departmental
Resources 0 -1 -1 -1 -1 -1 -7
Funding proposed for the Parks Canada Agency to continue an expanded Learn to Camp program to provide
Canadians with the skills and experience needed to fully enjoy the great Canadian outdoors.

A Healthy Environment for a Healthy Economy 191

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Continuing Ballast
Water Management 0 2 2 0 0 0 5
Funding proposed for Transport Canada to continue the Canadian Ballast Water Program, which is responsible
for administering and enforcing ballast water regulations. The program helps protect Canada's marine
environments from potentially invasive aquatic species. Funding will also support the introduction of new
ballast water regulations.
Continuing Tanker
Safety Inspections 0 3 0 0 0 0 3
Funding proposed for Transport Canada to continue the Tanker Safety Inspection Program, which inspects
every foreign tanker vessel on its first arrival at a Canadian port and annually thereafter. The program helps
protect Canadian marine environments against hazardous material spills or leaks.
Chapter 5 - Net Fiscal
Impact 0 1,175 1,865 1,997 1,837 1,877 8,750
Note: Numbers may not add due to rounding
1
Announced in December 2020.

192 Chapter 5
Chapter 6
Strengthening the Cities and
Communities We Call Home
Strong and resilient cities, towns, and communities are the backbone of a strong
economy and a growing middle class.

Cities, towns, and communities have been hard-hit by COVID-19. High infection
rates have put many under public health restrictions for over a year.

As Canadians begin the work of building back better together, the government
has a plan to develop more prosperous, inclusive, healthy, and vibrant
communities across Canada. This includes investing in economic development in
every corner of the country, supporting sectors like tourism, arts, and culture that
have been disproportionately affected by lockdowns and travel restrictions, and
working with provincial, territorial, and municipal governments to address
longstanding challenges that predate the pandemic, such as affordable housing
and aging infrastructure.

6.1 A Place to Call Home

High housing costs, especially in urban centres, continue to place middle class
and low-income Canadians under huge financial pressure. For some, high
housing costs have become a barrier to pursuing promising opportunities in a
new community. Housing unaffordability can even lead to homelessness. As of
2018, more than 1.6 million Canadian households live in core housing need.

Combined with some constraints on housing inventory caused by COVID-19,

the low interest rate environment has contributed to a recent surge in housing
prices in a number of communities. It is more urgent than ever that the
government take action to make housing more affordable.

The government is taking action on several fronts to alleviate this pressure,

including proposing a tax on underused housing to support investments in
housing affordability (Chapter 10), investments in public transit that will help
local governments unlock more housing supply (section 6.4), and historic
investments in early learning and child care to make life more affordable for
young families (Chapter 3). It is also investing to build greener homes and boost
Canadian supply chains (Chapter 5).

In addition, earlier this month, the Superintendent of Financial Institutions

restarted consultations on the minimum qualifying rate for uninsured
mortgages. This would help to ensure that borrowers are able to make their
mortgage payments. Maintaining the health and stability of Canada’s housing
market is essential to protecting middle class families and to Canada’s broader
economic recovery. Stable housing is critical for communities and for a strong
middle class.

That’s why the government has a plan to invest $2.5 billion, and reallocate
$1.3 billion in existing funding to speed up the construction, repair, or support
of 35,000 affordable housing units. This will help families, young people, low-
income Canadians, people experiencing homelessness, and women and
children fleeing violence find a safe and affordable place to call home. And the
government will ensure these projects meet the energy efficiency requirements
set out under the National Housing Strategy, which will reduce their carbon
footprints and reduce families’ energy bills.

More Affordable Housing

The COVID-19 recession has widened gaps in Canadians’ access to housing.
These gaps, if not addressed, could deepen cleavages in our communities and
exacerbate social inequalities. By contrast, investments in affordable housing
can act fast to create jobs and prosperity.

Furthermore, investments to make housing more affordable for the most

vulnerable, coupled with measures to limit foreign speculation in the housing
market, will help ensure that our economic recovery is an inclusive one that
helps more people join the middle class. Access to affordable homes will give
more Canadians opportunities to find better jobs and create better futures.

After years of inaction, the government restored support for the construction of
affordable housing in 2017, recognizing that these are vital investments.

To help Canadians find affordable housing, spur job creation and local
economic recovery, alleviate cost pressure in the housing market overall, and
grow the middle class:

Budget 2021 proposes to provide an additional $2.5 billion over seven

years, starting in 2021-22, to the Canada Mortgage and Housing
Corporation, including:
- An additional $1.5 billion for the Rapid Housing Initiative in 2021-22 to
address the urgent housing needs of vulnerable Canadians by providing
them with adequate affordable housing in short order. At least 25 per
cent of this funding would go towards women-focused housing
projects, and units would be constructed within 12 months of when
funding is provided to program applicants. Overall, this new funding
will add a minimum of 4,500 new affordable units to Canada’s housing
supply, building on the 4,700 units already funded in the 2020 Fall
Economic Statement through its $1 billion investment.

194 Chapter 6
- $600 million over seven years, starting in 2021-22, to renew and
expand the Affordable Housing Innovation Fund, which encourages
new funding models and innovative building techniques in the
affordable housing sector. To date, this program has committed
funding to support the creation of over 17,600 units, including more
than 16,300 affordable housing units and units for persons with
accessibility challenges. This new funding will support the creation of
up to 12,700 more units, bringing the total to over 30,000 units.
- $315.4 million over seven years, starting in 2021-22, through the Canada
Housing Benefit, to increase direct financial assistance for low-income
women and children fleeing violence to help with their rent payments.
- $118.2 million over seven years, starting in 2021-22, through the Federal
Community Housing Initiative, to support community housing providers
that deliver long-term housing to many of our most vulnerable.
In addition to these new investments, Budget 2021 proposes to
advance and reallocate $1.3 billion, on a cash basis, of previously
announced funding, including:

- $750 million in funding under the National Housing Co-Investment Fund,

which is proposed to be advanced to 2021-22 and 2022-23. This will
accelerate the creation of 3,400 new units, and the repair of 13,700 units.
- $250 million in funding under the National Housing Co-Investment
Fund, which will be allocated to support the construction, repair, and
operating costs of an estimated 560 units of transitional housing and
shelter spaces for women and children fleeing violence. This targeted
funding is being reallocated—including advancing $200 million to 2021-
22 and 2022-23—to make sure the government delivers on its
commitments, and reinforces the government’s efforts to address
gender-based violence, including the measures outlined in the
forthcoming National Action Plan to End Gender-Based Violence (more
details in Chapter 9).
- $300 million in funding in 2021-22 and 2022-23 from the Rental
Construction Financing Initiative, which will be allocated to support the
conversion of vacant commercial property into housing. As the demand
for retail and office space has changed due to COVID, some landlords,
particularly in major urban cores, are facing higher vacancies. This is an
opportunity for property owners and communities to explore converting
excess space into rental housing, enhancing the livability and
affordability of urban communities. This funding will explore this new
approach to development and target the conversion of excess
commercial property space into 800 units of market-based rental
housing.

Strengthening the Cities and Communities We Call Home 195

Table 6.1
Units Supported Under Select National Housing Strategy Programs
Select National Housing Strategy Supported Supported through Budget
Funding Programs since 2017 2021
Rapid Housing Initiative 4,700 4,500
Affordable Housing Innovation 17,600 12,700
Fund
National Housing Co-Investment 12,400 new 3,400 new
Fund, excluding shelters 65,900 repaired 13,700 repaired
National Housing Co-Investment 800 new 560
Fund, shelters 150 repaired
Rental Construction Financing 24,900 800
Initiative
Total (new or repaired) 126,450 35,660
Note: Units supported through Budget 2021 under the National Housing Co-Investment Fund and Rental
Construction Financing Initiative are not incremental; they represent a reallocation of existing funding, as
described above.

The government also recognizes that access to safe and sustainable housing
can be particularly challenging in the North.

Budget 2021 proposes to provide $25 million, in 2021-22, to the

Government of the Northwest Territories to address housing priorities.
Funding will support the construction of 30 new public housing units across
the Territory.

Budget 2021 proposes to provide $25 million, in 2021-22, to the

Government of Nunavut to support the Territory’s short-term housing and
infrastructure needs including priority redevelopment and refurbishment
projects resulting in approximately 100 new housing units.

196 Chapter 6
National Housing Strategy
In 2017, the federal government announced Canada’s first ever National
Housing Strategy: a ten-year plan to help improve the affordability,
availability, and quality of housing for Canadians.
The strategy prioritizes support for the most vulnerable people in society,
including young adults, seniors, Indigenous peoples, those dealing with
mental health and addiction issues, and women and children fleeing
violence.
At least 25 per cent of National Housing Strategy investments are
committed to support projects that specifically target the unique needs of
women and their children. The government remains committed to
eliminating chronic homelessness.
The Government of Canada is currently on track to deliver over $70 billion
by 2027-28 to help more Canadians find a place to call home. This covers a
wide range of investments, including:
 Over $15 billion in joint funding with provinces and territories directed
towards community housing, households in need through the Canada
Housing Benefit, and support for provincial and territorial housing
priorities related to repair, construction, and affordability.
 Over $10 billion in support of community and social housing.
 Nearly $3 billion for Reaching Home: Canada’s Homelessness Strategy.
 Over $1 billion to improve home ownership options, including through
the First-Time Home Buyer Incentive.
 Over $40 billion to support new construction and repair of affordable
housing. As of December 2020, over $11.5 billion of this funding had
been committed, which will support the creation of over 58,900 new
units and the repair of over 68,000 units.
Of the overall $70 billion in National Housing Strategy funding, over
$25 billion has been committed as of December 2020.

Strengthening the Cities and Communities We Call Home 197

Ending Homelessness
COVID-19 has exacerbated many of the hardships faced by Canadians
experiencing homelessness and housing insecurity. Many have had to choose
between the harsh cold of the streets or the risk of an outbreak in shelters.
Since 2019, the government has launched more than 1,200 projects to support
Canadians experiencing homelessness. Through the pandemic the government
has more than doubled funding for Reaching Home: Canada’s Homelessness
Strategy. But more work needs to be done if we are to make sure no one in
Canada is without a place to call home. Given the progress that has been made,
and its commitment to do more, the government is now focused on entirely
eliminating chronic homelessness in Canada.
Budget 2021 proposes to provide an additional $567 million over two years,
beginning in 2022-23, to Employment and Social Development Canada for
Reaching Home. This would maintain the 2021-22 funding levels
announced in the Fall Economic Statement in response to the pressures of
COVID-19.
Every year, thousands of veterans access emergency shelters. After their service,
every veteran deserves a home.

Budget 2021 proposes to provide $45 million over two years, beginning in
2022-23, for Employment and Social Development Canada to pilot a
program aimed at reducing veteran homelessness through the provision of
rent supplements and wrap-around services for homeless veterans such as
counselling, addiction treatment, and help finding a job.

198 Chapter 6
Figure 6.1
Federal National Housing Strategy Initiatives and
Investments Committed Before Budget 2021

6.2 Restoring Tourism, Arts, Culture, and Sport

From the Calgary Stampede, to the Stratford Festival, to the Toronto Caribbean
Carnival, to Halifax Pride, to Montréal Just for Laughs—the festivals, local
cultural celebrations, concerts, exhibits, and live shows that draw us together,
tell our stories, and reinforce our cultural diversity have been severely affected
by the pandemic.
Restrictions on gatherings likewise mean that we have not been able to play
many of the sports we love, watch the talent of our competitive athletes at live
events, or take part in the amateur tournaments that many Canadians and their
families work so hard towards.
Cultural experiences and sport are central to our well-being and although
Canadians have forgone them out of safety, the many workers and
organizations in the sector have faced significant difficulties.

The tourism industry has been especially hard hit by the pandemic recession
and for some regions of the country, especially Atlantic Canada, the impacts
have been significant. Reductions in flights have compounded the impacts.

As part of its plan to support the air sector, the government is committed to
supporting the return of regional routes across the country in a way that
continues to prioritize the health, safety, and security of all Canadians.

Strengthening the Cities and Communities We Call Home 199

As the public health situation improves, the government expects to see the
return of those routes back to the Atlantic provinces, who have worked hard to
protect Atlantic Canadians. When the resumption of travel is safe, tourism in
New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and
Labrador will be particularly important to those economies.

Federal emergency support programs have provided support to businesses and

workers across the tourism, arts, and culture sectors. To date, businesses and
non-profit organizations in these sectors have received an estimated $15.4
billion in support to pay workers through the Canada Emergency Wage Subsidy,
support for rent and mortgages through the Canada Emergency Commercial
Rent Assistance, the Canada Emergency Rent Subsidy, and Lockdown Support,
as well as support for small businesses through the Canada Emergency Business
Account.

The government’s plan will support our economic recovery, restoring and
creating jobs in these sectors, drawing visitors to towns and cities across the
country, and unleashing spending that stimulates local economies.

Revitalizing Tourism
The impact of COVID-19 on workers and businesses in tourism, arts, and culture
has been severe.
With the rollout of vaccines underway, businesses in the tourism, arts, and
culture sectors are getting ready to welcome Canadians back to experience the
great places and activities this country has to offer—when it is safe to do so.
Canadians are also eager to return to the local festivals and places they know
and love.
To assist the sectors’ recovery, the government proposes to make available a
further package of supports, totalling $1 billion over three years, starting in
2021-22.

Major Festivals
Canada’s major festivals not only showcase the best of Canadian culture and
talent—they also create thousands of jobs for vendors, technicians, production
crews, and more. To support Canada’s world-class arts and cultural festivals that
have drawn millions of visitors from all over the world to Canada:
Budget 2021 proposes to invest $200 million through the regional
development agencies to support major festivals. This would ensure they
can continue to celebrate our artistic excellence and unique character.

200 Chapter 6
Community Festivals and Events
To support Canada’s many local festivals, celebrations, and amateur sport
events that draw visitors to our communities:
Budget 2021 proposes to invest $200 million through Canadian Heritage to
support local festivals, community cultural events, outdoor theatre
performances, heritage celebrations, local museums, amateur sport events,
and more.

Helping Visitors Discover Canada

To ensure that Canada is a destination of choice when domestic and
international travel is once again safe:
Budget 2021 proposes to provide $100 million to Destination Canada for
marketing campaigns to help Canadians and other visitors discover and
explore the country.

Support for Local Tourism Businesses

Recognizing the impact COVID-19 has had on tourism businesses and that even
as economies open, business and international travel will take time to recover:

Budget 2021 proposes to establish a $500 million Tourism Relief Fund,

administered by the regional development agencies. The Fund will
support investments by local tourism businesses in adapting their
products and services to public health measures and other
investments that will help them recover from the pandemic and
position themselves for future growth.

These measures would be complemented by other Budget 2021

announcements, such as measures to support safe air travel (see section 1.6 in
Chapter 1), and the expansion of the Canada Small Business Financing Program
(see section 4.2 in Chapter 4).

Supporting Canada’s Active Recovery

Canadians of all ages have sacrificed time on the field, at the park, and on the
ice to keep each other safe. Young Canadians, in particular, have missed out on
the chance to learn new skills and make memories with their teammates. Sports
and physical activity play a critical role in our mental health and in the social
and economic revitalization of our communities. To get Canadians moving
again when it is safe to do so:
Budget 2021 proposes to provide $80 million over two years, starting in
2021-22, to Canadian Heritage to remove barriers to participation in sports
programming and to help community organizations kick-start local
organized sports that are accessible to all.

Strengthening the Cities and Communities We Call Home 201

Supporting Canada’s Arts, Culture, Heritage, and
Sport Organizations and Workers
Across Canada, the organizations that host artistic, heritage, and sport events
and exhibits have been among the hardest hit during the pandemic, and many
Canadian artists and cultural workers have struggled to find work.
Before the pandemic began, an estimated 410,000 Canadians worked in the
arts, entertainment, and recreation industries in February 2020, but that number
fell drastically throughout the following year (Chart 6.1).

Chart 6.1
Employment Change (%), February 2021 Compared to February 2020
5.0%

Total, all industries

0.0%

Finance, insurance, real estate, rental

and leasing
-5.0%
Utilities

-10.0% Forestry, fishing, mining, quarrying, oil

and gas
Manufacturing
-15.0%

Construction
-20.0%
Wholesale and retail trade

-25.0% Transportation and warehousing

Agriculture
-30.0%

Accommodation and food services

-35.0%
Arts, entertainment and recreation

-40.0%

Source: Statistics Canada, Labour Force Survey.

With reduced revenues, many heritage, arts, and sport organizations run the
risk of not surviving through to the other side of the pandemic without
additional support. In the Fall Economic Statement, the government committed
to provide over $180 million in 2021-22 to support artists and live events. This
funding builds on the Emergency Support Fund for Cultural, Heritage and Sport
Organizations announced in May 2020, approximately $225 million of which
was used to support over 6,000 cultural organizations, arts and heritage
institutions, music producers, sport organizations, and artists across Canada in
2020-21.

202 Chapter 6
Supporting the Recovery of Arts, Culture, Heritage and
Sport Sectors
To promote recovery from the pandemic for heritage, arts, and sport sectors
that contribute so much to the cultural life of Canada:

Budget 2021 proposes to provide $300 million over two years, starting in
2021-22, to Canadian Heritage to establish a Recovery Fund for Heritage,
Arts, Culture, Heritage and Sport Sectors.

Supporting Performing Arts and Community Events

To support the performing arts festivals and community-based cultural events,
celebrations, and commemorations that make our communities stronger:
Budget 2021 proposes to provide $49.6 million over three years, starting in
2021-22, to Canadian Heritage for the Building Communities Through Arts
and Heritage Program ($14 million over two years, starting in 2022-23), the
Canada Arts Presentation Fund ($16 million over two years, starting in
2022-23), and the Celebration and Commemoration Program ($19.6 million
over three years, starting in 2021-22).

Supporting Musicians and Music Venues

To help Canadian musicians, concert venues, producers, and distributors:
Budget 2021 proposes to provide $70 million over three years, starting in
2021-22, to Canadian Heritage for the Canada Music Fund. This includes up
to $50 million in 2021-22 to help the live music sector, including music
venues, weather the pandemic.

Making Cultural Spaces Safe During COVID-19

To help arts and heritage institutions upgrade their facilities to meet public
health guidelines:
Budget 2021 proposes to provide $15 million in 2021-22 to Canadian
Heritage for the Canada Cultural Spaces Fund.

Supporting the National Arts Centre

The National Arts Centre (NAC) is Canada’s home for the performing arts. It is
the largest bilingual performing arts centre in Canada and nurtures the next
generation of artists and audiences. Due to COVID-19, cancelled performances
and events have had a major impact on the NAC, resulting in significant revenue
loss. The NAC plays a vital role in the career of many performing artists, singer-
songwriters, dancers, playwrights, choreographers, actors, and directors from
across the country.

Strengthening the Cities and Communities We Call Home 203

 Budget 2021 proposes to provide $17.2 million in 2021-22 to the National Arts
Centre to address financial pressures caused by COVID-19 and to ensure the
NAC will continue to support artists and celebrate Canadian culture.
Budget 2021 also proposes to provide $6 million over two years, starting in
2021-22, to the National Arts Centre to support collaborations with equity
deserving groups to help relaunch the performing arts sector.

Supporting Canadian TV and Film Productions

through COVID-19
In September 2020, to support Canadian television and film productions
interrupted by the pandemic, the government announced a $50 million Short-
Term Compensation Fund.

In February 2021, the government extended the fund into 2021-22 and doubled
the funding to up to $100 million so that, during the peak spring and summer
production period this year, filmmakers and producers have access to this
critical backstop that reduces the financial risk productions face amidst ongoing
COVID-19 shutdowns.

The fund is administered by Telefilm Canada and will support the resilience of
this important $9.3-billion industry and help maintain well over 150,000 jobs for
the industry’s artists and workers.

Investing in Telefilm Canada

The shift to digital media is changing the landscape for Canadian film and
television production and increasing global competition for online streaming
content. To make sure Canadian film tells the story of all of Canada’s diverse
peoples and reaches audiences all over the world:

Budget 2021 proposes to provide $105 million over three years, starting in
2021-22, for Telefilm Canada to modernize its current suite of programs to
provide better access to a diverse range of creators and producers, support
green practices, and respond to increasing digitization in the audiovisual
industry.

Encouraging Diverse Voices in Canadian TV and Film

To provide opportunities for equity deserving creators to build skills and
experience, and to support greater diversity in top-tier productions:
Budget 2021 proposes to provide $60 million over three years, starting in
2021-22, to the Canada Media Fund to increase support for productions led
by people from equity deserving groups working in the Canadian
audiovisual industry.

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Support for the Canadian Broadcasting Corporation /
Radio-Canada
Like many media organizations, during the pandemic the CBC/Radio-Canada
has experienced declining advertising revenues that threaten its capacity to
continue delivering public television and radio programs. To support Canada’s
public broadcaster, the CBC/Radio-Canada, and ensure it can continue to report
local and national news in both official languages:

Budget 2021 proposes to provide $21 million in 2021-22 as immediate

operational support to the CBC/Radio-Canada. This funding will ensure its
stability during the pandemic and enable it to continue providing news and
entertainment programming that keeps Canadians informed.

Support for the Canadian Book Industry

Canada has given the world some of the best stories, told by some of the best
authors. Novels about an orphan on PEI, Mennonite towns in Manitoba, young
Black immigrants in the Arctic, or life on a reserve in Northern B.C. draw the
world into uniquely Canadian landscapes and export our diverse perspectives.
Biographies, histories, and non-fiction that critique Canadian society make sure
that a faithful record of the Canadian experience is kept.

Canadian book publishers and booksellers make sure Canadian stories get told
and shared with the world. With the rise of e-commerce giants, investment is
needed to help Canadian books find their way into the hands of readers.

Budget 2021 proposes to provide a total of $39.3 million over two years,
starting in 2021-22, to Canadian Heritage to support the Canadian book
industry. This includes $32.1 million over two years, starting in 2021-22, to
help bookstores increase online sales and $7.2 million in 2021-22 to promote
Canada’s book industry at the Frankfurt Book Fair, the world’s largest trade
fair for books.

Protecting Canada’s Historic Places

From coast to coast to coast, Canada is home to a rich portfolio of historic
places across the country. Canadians expect their governments to protect
Canada’s historic places so that they can be enjoyed and preserved for future
generations. But currently, there is no legal obligation to protect the heritage
value of many of the over 300 federally-owned historic places in Canada.

Strengthening the Cities and Communities We Call Home 205

 Budget 2021 proposes to provide $28.7 million over five years, starting in
2021-22, and $5.8 million ongoing, for the Parks Canada Agency to
implement new legislation that, if enacted, would provide for a transparent
designation framework as well as the sustainable protection of the over 300
federally-owned historic places.

Memorial to the Victims of Communism

Commemorative monuments are built to reflect the values, identity, history, and
character of Canada. The Memorial to the Victims of Communism will recognize
Canada as a place of refuge for people fleeing injustice and persecution and
honour the millions who have suffered under communist regimes. The
memorial is currently under construction in Canada’s National Capital Region
and needs additional funding in order to be completed.

Budget 2021 proposes to provide $4 million in 2021-22 to Canadian

Heritage to support the completion of the Memorial to the Victims of
Communism.

6.3 Building Stronger Communities

Canada’s charities, non-profits, social enterprises, and other organizations
provide vital services to our communities, including to the most vulnerable
members of Canadian society. They work constantly to address hunger, improve
socioeconomic outcomes for diverse Canadians, and keep communities
connected and informed.

These organizations have provided essential services during the COVID-19

pandemic but they have also faced hardship. The Government of Canada is
committed to providing them with temporary support. As we navigate our
recovery, we must also bolster Canada’s thriving social sector so that we can
build healthy, resilient, and inclusive communities across the country.

Helping Charities, Non-profits, and Social Purpose

Organizations Grow
Communities across Canada face complex social, economic, and environmental
challenges—many of which have been deepened by the COVID-19 crisis.
Thousands of charities, non-profits, co-operatives, and other social purpose
organizations are committed to addressing these challenges directly at the
community level. During the pandemic, many have seen demand for their
services surge while watching their revenues plummet.
The sector employs over 611,000 people, many of whom are women, Black and
racialized Canadians, young people, newcomers, and others who have been
disproportionately affected by the pandemic. These organizations have

206 Chapter 6
invaluable on-the-ground knowledge of their communities’ needs and provide
much-needed community and social support. They are key partners in our work
to reopen and rebuild our communities.
Social finance is about mobilizing private capital to bring about public good. To
support the growth of social finance in Canada, strengthen our social sector,
ensure our most vulnerable can access much-needed services, and help our
communities recover more quickly:
The government is proposing to launch planned disbursements of the
$755 million Social Finance Fund and deploy up to $220 million over its
first two years. It is estimated that the Social Finance Fund could attract up
to $1.5 billion in private sector capital to support the development of the
social finance market, create thousands of new jobs, and drive positive
social change.

To ensure charities, non-profits, and social purpose organizations have the skills
and capacity needed to access social finance opportunities:

Budget 2021 proposes to renew the Investment Readiness Program for

$50 million over two years, starting in 2021-22. This program supports
charities, non-profits, and social purpose organizations in capacity-building
activities such as business plan development, expanding products and
services, skills development, and hiring.

Supporting Community Service Organizations

A majority of the workers in the charity and non-profit sector are women. This
sector has been significantly affected by the pandemic, causing further impacts
on the she-cession. The effects have been especially significant for small and
rural charities, whose ability to raise funds has been severely impacted even as
the pressures for their services have grown.
Recent research from Imagine Canada suggests that as of late 2020, the
average charity has reported a revenue decline of 16 per cent. Since the
pandemic began, community service non-profit and charitable organizations
have struggled to provide the fitness, children’s programs, seniors programs,
and community building projects that Canadians rely on. These organizations
have not been able to easily adapt and transition to remote work and online
programming, which has made it hard for workers and left a gap in our
communities, at a time when demand is higher.
Budget 2021 proposes to provide $400 million in 2021-22 to Employment
and Social Development Canada to create a temporary Community Services
Recovery Fund to help charities and non-profits adapt and modernize so
they can better support the economic recovery in our communities.

Strengthening the Cities and Communities We Call Home 207

Boosting Charitable Spending in Our Communities
Every year, charities are required to spend a minimum amount on their
charitable programs or on gifts to qualified donees. This is known as the
“disbursement quota” and it ensures that charitable donations are being
invested into our communities.

While most charities meet or exceed their disbursement quotas, a gap of at least
$1 billion in charitable expenditures in our communities exists today. Furthermore,
growth in the investment assets of foundations has increased significantly in recent
years. In 2019, charitable foundations held over $85 billion in long-term
investments. But grant-making and other charitable activities have not kept pace.

Chart 6.2
Growth in Investment Assets and Qualifying Disbursements
Index, 2010 = 100
450

400
Public Foundations (Investment assets)
350 Private Foundations (Investment assets)
Public Foundations (Qualifying disbursements)
Private Foundations (Qualifying disbursements)
300

250

200

150

100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Canada Revenue Agency T3010 data.

Budget 2021 proposes launching public consultations with charities over the
coming months on potentially increasing the disbursement quota and
updating the tools at the Canada Revenue Agency’s disposal, beginning in
2022. This could potentially increase support for the charitable sector and
those that rely on its services by between $1 billion and $2 billion annually.

208 Chapter 6
Consulting on a New Canadian Social Bond
Social bonds are an opportunity to connect socially conscious investors with
Government of Canada bonds that support social objectives such as reducing
homelessness and improving access to high-quality early learning and child
care.
Budget 2021 proposes to explore the potential for social bonds to
complement the government’s existing debt program. The
government intends to include this topic as part of the Debt
Management Strategy consultations this fall.

Improving Food Security

At the height of lockdowns last spring, one in seven Canadians experienced
food insecurity. Food Banks Canada reported a significant increase in use of
food banks, especially among first-time users. The federal government
responded quickly, investing nearly $250 million to support local hunger relief
initiatives.

Although things have improved, food bank lineups are still long, community
food organizations are working long hours, and more than a third of those who
rely on food banks are children. In Canada, no one should need to go hungry.
To provide continued support to emergency hunger relief organizations:

Budget 2021 proposes to provide $140 million in 2021-22 to top up the

Emergency Food Security Fund and Local Food Infrastructure Fund, which
would prevent hunger, strengthen food security in our communities, and
provide nutritious food to more Canadians.

6.4 Jobs and Growth Through Infrastructure

Investments
Public transit, bridges, roads, broadband networks, electricity grids, recreational
centres, bike paths, and more are central to the daily life of every Canadian.
Infrastructure is what keeps people moving and what keeps our economy
growing.

The government has accomplished a great deal in building and renewing

Canada’s major infrastructure since 2016. But more needs to be done to build
up our communities and ensure our economy has the 21st century infrastructure
we need to be competitive.

Budget 2021 lays out the government’s plan to revitalize Canada’s

infrastructure, to invest in community priorities, and to build projects that
contribute to a clean environment and create good middle class jobs.

Strengthening the Cities and Communities We Call Home 209

Permanent Public Transit Fund
Reliable and accessible public transit gives people faster, cheaper, and cleaner
ways of getting around. Investing in it today will create good middle class jobs,
reduce air pollution, help local economies grow, and improve Canadians’ quality
of life.

On February 10, 2021, the government announced $14.9 billion over eight years,
starting in 2021-22, for public transit projects across Canada. This included new
permanent funding of $3 billion per year for communities across Canada,
beginning in 2026-27.

This funding will support new subway lines, light-rail transit and streetcars, electric
buses, active transportation infrastructure, and improved rural transit, which will
create affordable commuting options in communities and reduce Canada’s
emissions. It will also provide local governments with the predictable transit
funding they need to plan ahead so Canada can keep building more sustainable
and livable communities.

Public transit drives productivity, reducing congestion that frees up time for
commuters and improves the flow of goods and services through our
communities.

Figure 6.2
Public Transit Provides Cross-Cutting Benefits for Communities

1
Toronto Region Board of Trade

210 Chapter 6
Canada Community-Building Fund
Core infrastructure like roads, bridges, community centres, and water and
wastewater plants are the backbone of communities. There is a risk that projects
could face delays or even cancellations as local governments across Canada
confront the realities of revenue declines due to COVID-19.

To help communities keep infrastructure projects on track, the government tabled

legislation on March 25, 2021, that proposes a one-time investment of $2.2 billion
to address infrastructure priorities in municipalities and First Nations
communities. This funding would be delivered through the federal Gas Tax Fund
and would double the federal government’s regular funding for municipalities
and First Nations communities in 2020-21. The legislation also proposes to
rename the Gas Tax Fund as the Canada Community-Building Fund.

This support would create good local jobs, support municipalities, and build the
infrastructure our communities need to thrive and recover.

National Infrastructure Assessment

Twenty-first century energy systems, public buildings, broadband networks,
roadways, public transit, and natural spaces all contribute to our long-term
economic productivity and prosperity. But smart, resilient public infrastructure
projects also require careful planning. To support Canada’s long-term
infrastructure planning:

Budget 2021 proposes to provide $22.6 million over four years, starting in
2021-22, to Infrastructure Canada to conduct Canada’s first ever National
Infrastructure Assessment. The assessment would help identify needs and
priorities for Canada’s built environment.

This measure would improve infrastructure planning and help all orders of
government make informed decisions about infrastructure projects that
ensure we have stronger, cleaner, more resilient communities.

Next Step Towards High Frequency Rail in the

Toronto-Quebec City Corridor
High frequency rail has the potential to transform passenger rail service in the
Toronto-Quebec City corridor, offering faster, more reliable service, and helping
to encourage the shift to rail from more polluting modes of transportation.

In 2019, the Government of Canada established a Joint Project Office to explore

VIA Rail Canada’s high frequency rail project. This effort is critical to making this
project a reality for Canadians.

Strengthening the Cities and Communities We Call Home 211

 To continue this work, Budget 2021 proposes to provide $4.4 million in 2021-
22 to Transport Canada and VIA Rail Canada to support their work with the
Joint Project Office in order to advance due diligence and to de-risk the
project.
In addition, Budget 2021 proposes to provide $491.2 million over six years,
starting in 2021-22, to VIA Rail Canada for infrastructure investments that
would support the overall success of the high frequency rail project. These
investments will help reduce bottlenecks, improve fluidity and connectivity,
and allow VIA to take an important step towards high frequency rail in the
corridor.

Assisting Homeowners Affected by Pyrrhotite

Some homes in certain regions of Quebec have had serious and costly
structural problems as a result of the presence of the mineral pyrrhotite in their
foundations. In response, the Government of Quebec has provided significant
financial support to affected homeowners to replace foundations and
undertake other necessary repairs.

To help more homeowners dealing with the consequences of pyrrhotite, the

Government of Canada provided $30 million over three years in Budget 2016.
Quebec recently announced an additional $25.7 million in its 2021 budget. The
Government of Canada recognizes that an additional federal contribution might
be needed. The Government of Canada will engage with Quebec to determine
the appropriate amount. Details will be provided in the Fall Economic
Statement.

Bonaventure Expressway
For nearly 20 years, the City of Montréal has envisioned converting the
Bonaventure Expressway into an urban boulevard and restoring public access to
the St. Lawrence River. A portion of the expressway is owned by the city and the
other by Jacques Cartier and Champlain Bridges Incorporated, a federal Crown
corporation. Montréal has already upgraded its portion of the Bonaventure
Expressway to increase local green space for pedestrians and cyclists.

Through Budget 2021, the government is announcing its intention to work

with the City of Montréal to redevelop the Bonaventure Expressway,
including exploring the merits of divesting the federal portion of the
Bonaventure Expressway.

Local ownership could provide more flexibility for the city to complete the
redevelopment and revitalization of the area.

212 Chapter 6
Canada’s National Capital Region
The National Capital Region (NCR) is home to some of the most significant
cultural and heritage assets in Canada. To ensure that federal assets and related
programs in the NCR continue to be safe and accessible for all Canadians:

Budget 2021 proposes to provide $35 million over five years, starting in
2021-22, to the National Capital Commission to support the acquisition and
upkeep of federal assets, green infrastructure, and spaces in the National
Capital Region.

Interprovincial bridge crossings serve as important connections in the nation’s

capital. Building on the work of the long-term integrated interprovincial
crossing plan led by the National Capital Commission, a dedicated project office
responsible for addressing the need for an additional NCR crossing will be
established at Public Services and Procurement Canada, jointly with the
National Capital Commission.

Further recognizing the importance of interprovincial transit, and building on

the National Capital Commission’s recent feasibility study:

Budget 2021 proposes to create an interprovincial transit project office

within the National Capital Commission. The project office will work to
study and plan for potential interprovincial tramway connections between
Ottawa and Gatineau, in addition to consulting and collaborating with
municipal, provincial, and transportation partners.

Strengthening the Cities and Communities We Call Home 213

6.5 Local and Regional Development
To support recovery and long-term growth, the government is committed to
supporting economic development in communities of every size, helping small
and medium-sized businesses access financing, and investing in the local
infrastructure that helps communities grow.

Supporting Jobs and Growth in All Communities

As Canada builds back better, no community will be left behind. From the
outset of the pandemic, regional development agencies have been on the
ground across Canada, helping businesses weather the effects of the pandemic.
Through the $2 billion Regional Relief and Recovery Fund, they have been
providing liquidity to businesses, helping bridge them to the recovery, and
preserving more than 125,000 jobs. To ensure businesses in every corner of
Canada have the support they need to get through the pandemic and that they
are brought along in our economic recovery:

Budget 2021 proposes to provide $700 million over three years, starting in
2021-22, for the regional development agencies to support business
financing. This would position local economies for long-term growth by
transitioning to a green economy, fostering an inclusive recovery,
enhancing competitiveness, and creating jobs in every corner of the
country.

Furthermore, the federal government will work to make FedNor a

standalone regional development agency and strengthen the economic
development of Northern Ontario.

On the Ground: Partnering on Regional Priorities—East Montreal

East Montreal has a long history of industrial activity, and work is underway
to revitalize the area for the economy of tomorrow. The area has the
potential to be an anchor for innovative research and new and growing
businesses.
The government remains supportive of new approaches to foster innovation,
help businesses grow, and create new jobs, and will explore how it can
potentially partner to best support development opportunities for Canadians
in all regions, including in East Montreal.

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Creating a New Regional Development Agency for
British Columbia
In recognition of the unique economic realities in British Columbia and across
Western Canada, the government committed, in the 2020 Fall Economic
Statement, to create a new regional economic development agency for British
Columbia with new dedicated funding. This will help businesses and
communities in British Columbia continue to grow and create good jobs across
the province. It will also ensure Alberta, Saskatchewan, and Manitoba have a
dedicated regional development agency that keeps the same level of funding to
serve their distinct regional needs, with resources to dedicate to local
populations and businesses.

To increase the impact of regional development agencies in Western Canada:

Budget 2021 proposes to create a new agency for British Columbia and to
provide $553.1 million over five years, starting in 2021-22, and $110.6
million ongoing, to support the new agency and ensure businesses in B.C.
can grow and create good jobs for British Columbians. Existing core
program funding from Western Economic Diversification will remain to
support the Prairies, making additional support available for businesses in
Alberta, Saskatchewan, and Manitoba.

Canada Community Revitalization Fund

Main streets, farmers' markets, and other gathering places underpin local
economies. In many communities, the most vibrant spaces in our communities
have laid dormant as Canadians took precautions to stay safe. Recognizing
that economic recovery is tightly linked to the vitality of our local communities:

Budget 2021 proposes to provide $500 million over two years, starting in
2021-22, to the regional development agencies for community
infrastructure. These projects will stimulate local economies, create jobs,
and improve the quality of life for Canadians from coast to coast to coast.

Investing in Small Craft Harbours

From coast to coast to coast, Fisheries and Oceans Canada owns, operates, and
maintains a national system of harbours to provide commercial fish harvesters
and other small craft harbour users with safe and accessible facilities. Ninety per
cent of Canadian seafood goes through small craft harbours and Canada’s fish
harvesters depend on these facilities to support their livelihoods.

Many harbours are in need of repair or replacement, and this work can support
good middle class jobs in rural and coastal communities.

Strengthening the Cities and Communities We Call Home 215

 Budget 2021 proposes to provide $300 million, on a cash basis, over the
next two years, to Fisheries and Oceans Canada to repair, renew, and
replace small craft harbours. This would support Canadians in the fishing,
aquaculture, tourism, environmental, recreational, marine engineering, and
construction industries, and strengthen the resilience of rural and coastal
communities.

6.6 Rural and Northern Communities

Canada’s vibrant rural and northern communities face unique challenges to
their economic growth and resilience. To support these rural communities,
Budget 2021 proposes to expand support for farmers and agricultural
producers. Additional support is proposed for the North, which faces unique
challenges related to food security, climate change, and access to post-
secondary education. It also proposes making investments to continue to
increase broadband connectivity, as detailed in Chapter 4. These efforts would
strengthen economic foundations and support opportunities for Canadians in
rural and northern communities from coast to coast to coast.

Extending the Northern Residents Deduction

The remote nature of many northern communities makes travel, even essential
travel for school or medical care, unaffordable for many. The Northern
Residents Deduction only provides tax relief to those who already receive travel
benefits through work. To reduce travel costs for northerners:

Budget 2021 proposes to expand access to the travel component of the

Northern Residents Deduction.

- Northerners without employer-provided travel benefits would be

allowed to claim up to $1,200 in eligible travel expenses. This measure
would take effect starting with the 2021 tax year.

- The Minister of Northern Affairs will work with the Minister of

Innovation, Science and Industry, who is the Minister responsible for the
Competition Bureau, to ensure that these savings are for the benefit of
citizens in the North rather than transportation providers.

It is estimated that this measure will reduce federal revenues by $125 million
over five years starting in 2021-22.

216 Chapter 6
Supporting Post-secondary Education in the North
People in Canada’s North face longstanding inequities in education, which puts
northern residents at a disadvantage, especially Indigenous peoples. Closing
gaps in education improves health and well-being, and spurs economic growth
and innovation. Building on investments in Budget 2019 for Yukon College, and
to further increase access to quality post-secondary education in Canada’s
North:
Budget 2021 proposes to provide $8 million over two years, starting in 2021-
22, to the Government of the Northwest Territories to support the
transformation of Aurora College to a polytechnic university. This would help
create new opportunities in the Northwest Territories and prepare
northerners for good jobs.

Ensuring Food Security in the North

In Canada’s North, food prices can be significantly higher than what the rest of
the country pays. Additional factors such as isolation and socioeconomic
challenges make northerners particularly vulnerable to food insecurity—
vulnerabilities that have been exacerbated by the COVID-19 pandemic.

Budget 2021 proposes to provide $163.4 million over three years, starting
in 2021-22, to expand the Nutrition North Canada program and enable the
Minister of Northern Affairs to work directly with Indigenous partners,
including in Inuit Nunangat, to address food insecurity.

Support for Jobs in the Canadian Wine Sector

The growth of the Canadian wine sector over the last 15 years has been a
success story of Canada’s agri-food sector. It has also provided growth
opportunities for grape growers and tourism businesses.
Budget 2021 proposes to provide $101 million over two years, starting in
2022-23, to Agriculture and Agri-Food Canada, to implement a program for
the wine sector that will support wineries in adapting to ongoing and
emerging challenges, in line with Canada’s trade obligations. The
government will continue to be there for Canada’s domestic wine industry
and the jobs it supports.

Strengthening the Cities and Communities We Call Home 217

Supporting Food Processors Following Ratification of
New Trade Agreements
Canada now has trade agreements with two-thirds of the world’s economy. And
Canada is the only G7 country to have trade agreements with every other G7
country. This means that Canadian businesses are well-positioned to take full
advantage of the global recovery.

Since 2016, $2.7 billion has been made available to compensate eligible dairy,
poultry, and egg farmers as a result of CETA and CPTPP. A further $100 million
has been provided for dairy processors to adapt to CETA. To date, all import
rights created in recent trade agreements have been provisionally allocated to
the industry free of charge.

To help processors of all supply-managed agricultural products adapt to

CETA and CPTPP, Budget 2021 proposes a further $292.5 million over seven
years, starting in 2021-22, for a Processor Investment Fund to support
private investment in processing plants.

These investments are in addition to the accelerated compensation announced

in the Fall Economic Statement for producers of supply-managed products. The
Government of Canada is committed to full and fair compensation with respect
to the new NAFTA and it will work with representatives of the supply-managed
sectors in determining that compensation.

6.7 Strengthening Canada’s Immigration System

Diversity is our strength, including as a source of our economic strength. Net
immigration contributed to half of Canada’s average GDP growth from 2016 to
2019, and nearly three quarters of its growth in 2019.

As our workforce ages, immigration ensures the Canadian economy continues to

grow, that we attract more top talent and investment capital, and that we
continue to create good jobs. Welcoming immigrants is an important part of
Canada’s recovery.

A well-functioning immigration plan also enriches our communities, reunites

families, and provides protection to asylum seekers and refugees.

Budget 2021 puts forward proposals that would ensure Canada stays
competitive with its international partners and is prepared to take advantage of
the resumption and growth in global travel, post-pandemic. The federal
government also recognizes that Quebec shares responsibility for immigration
and that certain initiatives will not apply to applicants seeking to reside in
Quebec.

218 Chapter 6
Delivering a Modern Immigration Platform
The digital infrastructure that supports Canada’s immigration system must be
responsive and sustainable to ensure public confidence and support growing
visitor, immigration, and refugee levels. A secure, stable, and flexible enterprise-
wide digital platform that protects people’s information will improve application
processing and help Canada remain a destination of choice.

Budget 2021 proposes to invest $428.9 million over five years, with
$398.5 million in remaining amortization, starting in 2021-22, to develop
and deliver an enterprise-wide digital platform that would gradually replace
the legacy Global Case Management System. This will enable improved
application processing and support for applicants, beginning in 2023.

Enhancing the Temporary Foreign Worker Program

For over 50 years, temporary foreign workers have been coming to Canada to
help meet the needs of businesses. Recently, the pandemic has highlighted the
critical role that these workers—the vast majority of whom are racialized and
precariously employed—play in Canada’s economy, particularly at the farms
that feed Canada and the world.

To build on recent actions taken in 2020 to support temporary foreign workers

affected by COVID-19, the Government of Canada will continue to protect our
most vulnerable and isolated workers, ensuring their health, safety, and quality
of life are protected while working in Canada. To this end, Budget 2021
proposes to provide:

$49.5 million over three years, starting in 2021-22, to Employment and Social
Development Canada, to support community-based organizations in the
provision of migrant worker-centric programs and services, such as on-arrival
orientation services and assistance in emergency and at-risk situations,
through the new Migrant Worker Support Program.
$54.9 million over three years, starting in 2021-22, to Employment and
Social Development Canada and Immigration, Refugees and Citizenship
Canada, to increase inspections of employers and ensure temporary foreign
workers have appropriate working conditions and wages.
$6.3 million over three years, starting in 2021-22, to Immigration, Refugees
and Citizenship Canada, to support faster processing and improved service
delivery of open work permits for vulnerable workers, which helps migrant
workers in situations of abuse find a new job. The government has zero
tolerance for any abuse of workers.

Strengthening the Cities and Communities We Call Home 219

Supporting Racialized Newcomer Women
Many newcomer women face multiple barriers to employment, including
language, lack of Canadian experience, and in some cases gender- and race-
based discrimination. In Budget 2018, the Government of Canada launched a
three-year pilot to support employment-related services for racialized
newcomer women, such as networking opportunities, employment counselling,
and paid work placements.

Budget 2021 proposes to provide $15 million over two years, starting in
2021-22, to Immigration, Refugees and Citizenship Canada to extend the
Racialized Newcomer Women Pilot initiative, which will continue to improve
their employment outcomes and career advancement.

Accelerated Pathways to Permanent Residence

Canada’s immigration system is critical to supporting the economic recovery.
That is why the Government of Canada recently announced the introduction of
time-limited pathways to permanent residence for foreign nationals already in
Canada. This includes recent international graduates and workers in essential
occupations, such as health care or other critical sectors. These pathways would
not only help retain the talent of those already in Canada, but would also
recognize the significant contribution to Canada—and personal sacrifice—these
workers have made during the pandemic. In Quebec, which shares
responsibility for immigration, this initiative will not apply.

Streamlining Express Entry

Canada’s Express Entry system has been in place since 2015. It has a track
record of bringing in highly skilled immigrants who succeed in Canada’s
economy and society. These newcomers fill needs in our economy that are
critical for our growth and create shared prosperity for all. Streamlining
Canada’s Express Entry system will allow the government to ensure our
immigration system responds to Canada’s growing economic and labour force
needs and help Canada reach its 2021-2023 Immigration Levels Plan.

The Government of Canada intends to propose amendments to the

Immigration and Refugee Protection Act to provide the Minister of
Immigration, Refugees and Citizenship Canada with authority to use
Ministerial Instructions to help select those candidates who best meet
Canada’s labour market needs from among the growing pool of candidates
who wish to become permanent residents through the Express Entry System.

220 Chapter 6
Chapter 6
Strengthening the Cities and Communities We Call Home
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
6.1. A Place to Call
Home 0 1,770 730 454 51 51 3,056
More Affordable
Housing 0 1,770 421 151 51 51 2,444
Ending Homelessness 0 0 309 303 0 0 612
6.2. Restoring Tourism,
Arts, Culture, and
Sport 0 898 863 123 6 6 1,896
Revitalizing Tourism 0 425 560 15 0 0 1,000
Supporting Canada's
Active Recovery 0 40 40 0 0 0 80
Supporting Canada’s
Arts, Heritage, and
Cultural Workers and
Institutions 0 241 186 32 0 0 458
Supporting Canadian TV
and Film Productions
Through COVID-191 0 100 0 0 0 0 100
Investing in Telefilm
Canada 0 20 35 50 0 0 105
Encouraging Diverse
Voices in Canadian TV
and Film 0 20 20 20 0 0 60
Support for the
Canadian Broadcasting
Corporation / Radio-
Canada 0 21 0 0 0 0 21
Support for the
Canadian Book Industry 0 23 16 0 0 0 39
Protecting Canada’s
Historic Places 0 8 11 10 10 10 50
Less: Funds Sourced
From Existing
Departmental Resources 0 -4 -4 -4 -4 -4 -22
Memorial to the Victims
of Communism 0 4 0 0 0 0 4
6.3. Building Stronger
Communities -17 665 124 49 50 51 921
Helping Charities, Non-
profits, and Social
Purpose Organizations
Grow2 0 142 141 66 67 68 483
Less: Funds Previously
Provisioned in the Fiscal
Framework -8 -17 -17 -17 -17 -17 -93

Strengthening the Cities and Communities We Call Home 221

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Less: Funds Sourced
From Existing
Departmental Resources -9 0 0 0 0 0 -9
Supporting Community
Service Organizations 0 400 0 0 0 0 400
Improving Food Security 0 140 0 0 0 0 140
6.4. Jobs and Growth
through Infrastructure
Investments 2,200 350 653 1,087 1,615 2,690 8,595
Permanent Public Transit
Fund1 0 328 572 954 1,492 2,596 5,941
Canada Community-
Building Fund3 2,200 0 0 0 0 0 2,200
National Infrastructure
Assessment 0 4 6 6 6 0 23
Next Step Towards High
Frequency Rail in the
Toronto-Quebec City
Corridor 0 12 68 120 110 86 396
Canada’s National
Capital Region 0 7 7 7 7 7 35
6.5. Local and Regional
Development 0 514 497 122 68 68 1,270
Supporting Jobs and
Growth in All
Communities 0 162 144 54 0 0 361
Creating a New Regional
Development Agency for
British Columbia 0 64 64 64 64 64 320
Canada Community
Revitalization Fund 0 250 250 0 0 0 500
Investing in Small Craft
Harbours 0 37 39 4 4 4 89
6.6. Rural and
Northern Communities 0 85 142 212 89 87 615
Extending the Northern
Residents Deduction 0 26 26 26 26 26 128
Supporting Post-
secondary Education in
the North 0 5 3 0 0 0 8
Ensuring Food Security
in the North 0 53 55 56 0 0 163
Support for Jobs in the
Canadian Wine Sector 0 0 35 66 0 0 101
Supporting Food
Processors Following
Ratification of New
Trade Agreements 0 1 24 64 64 64 217

222 Chapter 6
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Less: Funds Previously
Provisioned in the Fiscal
Framework 0 0 0 0 0 -2 -2
6.7. Strengthening
Canada's Immigration
System 0 86 142 131 97 98 555
Delivering a Modern
Immigration Platform 0 53 90 90 97 98 429
Enhancing the
Temporary Foreign
Worker Program 0 29 42 41 0 0 111
Supporting Racialized
Newcomer Women 0 4 11 0 0 0 15
Additional Investments
– Strengthening the
Cities and
Communities We Call
Home 0 222 115 79 29 15 459
Enhancing Immigration
Service and Support 0 25 25 25 0 0 74
Funding proposed for Immigration, Refugees and Citizenship Canada to maintain enhanced capacity and
service standards within the Client Support Center – ensuring timely support by phone and email for inquiries
related to the suite of services offered by the department, particularly permanent resident applications.
Support for National
Museums and the
National Battlefields
Commission 0 47 6 4 4 4 66
Funding proposed for Canada’s six national museums and the National Battlefields Commission to address
financial pressures caused by COVID-19 and program integrity issues. Funding is also proposed for the RCMP
Heritage Centre as it begins the process of transitioning to a new national museum, and to support the
completion of the National Museum of Science and Technology’s Ingenium Centre. Finally, funding is proposed
for the Canadian Museum of History to support the purchase of the collection of Canada’s Sports Hall of Fame.
Enhancing Digital Access
to our Heritage 0 5 8 10 0 0 23
Funding proposed for Canadian Heritage’s Museums Assistance Program to support the digitization of
information and collections by non-national museums and heritage institutions, which will allow these
institutions to create original content such as educational materials, apps or other virtual activities to enhance
the visitor experience.
Funding for the National
Film Board 0 5 0 0 0 0 5
Funding proposed for the National Film Board to address immediate funding pressures, and ensure that it can
continue its production and distribution activities and maintain its capital investments.
Maintaining Temporary
Resident Processing
Capacity 0 29 0 0 0 0 29
Funding proposed for Immigration, Refugees, and Citizenship Canada and the Canada Border Services Agency
to maintain enhanced capacity to serve visitors applying for temporary resident visas and permits.

Strengthening the Cities and Communities We Call Home 223

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Granville Island
Emergency Relief Fund
Extension 0 22 0 0 0 0 22
Funding proposed for the Canada Mortgage and Housing Corporation to extend emergency relief for Granville
Island to sustain its operations in 2021-2022. This would allow Granville Island to support its tenants, many of
whom are small businesses and non-profit arts and cultural venues, who continue to face significant economic
duress from COVID-19.
Continuing the Remote
Passenger Rail Program 0 14 14 15 0 0 43
Funding proposed for Transport Canada to continue the Remote Passenger Rail Program, which supports the
provision of passenger rail service to certain remote communities with no alternative means of surface
transportation.
Continuing Support for
Critical Food Inspection 0 20 0 0 0 0 20
Funding proposed for the Canadian Food Inspection Agency to retain inspectors hired in response to COVID-19
related inspection backlogs while pandemic related risks in food processing facilities persist.
Maintaining Daily Shift
Inspections 0 16 16 0 0 0 33
Funding proposed for the Canadian Food Inspection Agency to maintain daily shift inspections of meat
processing plants to allow Canadian meat processors to continue to export meat to the United States and build
consumer confidence in the Canadian meat sector.
Ensuring Food Safety 0 16 16 0 0 0 31
Funding proposed for the Canadian Food Inspection Agency to retain staff that enable the Agency to improve
food safety by improving risk and intelligence oversight, conducting offshore preventive activities and improving
stakeholder compliance.
Extending Emergency
Towing Leases 0 11 28 28 28 15 109
Less: Funds Sourced
From Existing
Departmental Resources 0 -6 0 0 0 0 -6
Funding proposed for the Canadian Coast Guard to extend emergency towing lease arrangements to provide
continued capacity on the West Coast while comprehensive risk assessment work is underway and a National
Emergency Towing Strategy is developed.
Supporting Clean
Technology Adoption in
Fisheries and
Aquaculture 0 5 5 0 0 0 10
Funding proposed for Fisheries and Oceans Canada to renew the Fisheries and Aquaculture Clean Technology
Adoption Program to assist fish harvesters and aquaculture enterprises to adopt innovative clean technologies.
Chapter 6 - Net Fiscal
Impact 2,183 4,577 3,269 2,260 2,008 3,070 17,367
Note: Numbers may not add due to rounding.
1
Announced in February 2021.
2
The Social Finance Fund will continue to operate on a repayable basis, but the funding instrument will be
conditionally (rather than unconditionally) repayable contributions. Under accounting rules, conditionally
repayable contributions are recognized as they are disbursed, such that the full cash cost is recognized upfront.
For the Social Finance Fund, this represents an incremental impact of $559.6 million.
3
Announced in March 2021.

224 Chapter 6
 Part III

A Resilient
and Inclusive
Recovery
Chapter 7
A More Equal Canada
COVID-19 highlighted and exacerbated the inequities within our society.

Systemic racism and discrimination are a painful reality for too many people,
especially for marginalized groups, including Indigenous, Black, and racialized
people, those living with disabilities, and members of the LGBTQ2 communities.

Those who live with disabilities still face many barriers to health care, jobs, and
services. And many Canadians require additional support for challenging health
issues beyond COVID-19—from substance use, to fair access to sexual and
reproductive health, to navigating the complexities of end-of-life care.

When we recover from the COVID-19 pandemic, we must continue bridging the
gaps that hold Canada back from reaching its potential. We are at our best
when we come together to help one another, as we saw Canadians do countless
times during the pandemic.

Budget 2021 outlines the government’s plan to build a healthier, more inclusive,
and more equal Canada.

7.1 Fighting Systemic Racism and Empowering

Communities
Systemic racism can have devastating consequences for the well-being of
Canadians. Violence, harassment, discrimination, exclusion from opportunities,
and myriad expressions of unconscious bias deny Canadians their freedoms and
fair treatment. A more equitable and inclusive society demands all Canadians
come together to address racism in all its forms and make permanent and
transformative changes.

In the 2020 Fall Economic Statement, the federal government announced a

series of policies and programs to fight against systemic racism and empower
racialized communities. These were early steps.

Budget 2021 takes the next steps towards long-term, foundational change.
Canada can and will do more to support racialized communities, improve
understanding of racial inequities and barriers, build a more diverse and
inclusive federal public service, and work with partners to build a more equal
and just future.

A More Equal Canada 227

Strengthening the Canadian Race Relations Foundation
and Helping Communities Respond to an Increase in
Racism
The COVID-19 pandemic has had an unequal impact on Canadians, with the
increase in reports of harassment and attacks against Asian Canadians being an
especially disturbing trend.

The work to address systemic racism is ongoing and must be done alongside
engaged and knowledgeable partners. Their invaluable on-the-ground
knowledge, experiences, learned best practices, and networks are crucial in the
work to create foundational change. And their efforts can effectively bring
Canadians together in the common purpose of building a fairer, safer, and more
equal Canada where all are free from discrimination.

The Canadian Race Relations Foundation is a Crown corporation created in 1996,

as part of the Japanese Canadian Redress Agreement. The foundation has a
quarter century of history working to eliminate racism, reaffirm the principles of
justice and equality for all in Canada, and uphold the principles of the Canadian
Charter of Rights and Freedoms. Over the past year, the foundation has focused
on supporting specific racialized communities impacted by dramatically rising
cases of racism. In Vancouver, for example, there has been a 700 per cent
increase in reported cases of anti-Asian racism since the pandemic began.

Budget 2021 proposes to provide $11 million over two years, starting in
2021-22, to expand the impact of the Canadian Race Relations Foundation.
This investment would allow the Canadian Race Relations Foundation to
scale up efforts to empower racialized Canadians and help community
groups combat racism in all its forms. This investment will also enable the
foundation to facilitate initiatives like the establishment of a national
coalition to support Asian Canadian communities, and create a fund to
support all racialized communities directly impacted by increasing acts of
racism during the pandemic.

All Canadians should feel safe and be free of discrimination. Sadly, certain
people are at risk of racially motivated violence, threatening their personal
safety and the security of their communities.

Budget 2021 proposes to provide $2 million in 2021-22 to Public

Safety Canada to enhance its Communities at Risk: Security
Infrastructure Program. This program helps protect communities at
risk of hate-motivated crimes, by providing not-for-profit
organizations such as places of worship, schools, and community
cultural centres with funding to enhance their security infrastructure.

228 Chapter 7
Supporting Black Canadian Communities
Events over the last year have shone a light on the complex and unique lived
realities of Black Canadians. Data show that Canada's Black population remains
one of the most disadvantaged, with a higher prevalence of low-income
households, lower employment rates compared to the Canadian average, as
well as a much higher likelihood of discriminatory treatment at work.
COVID-19 has only exacerbated these inequities linked to anti-Black racism, and
many Black Canadian communities, and the organizations that support them,
are increasingly vulnerable to economic hardship.
To continue to support the work of community organizations that empower,
advocate for, and lift up Black Canadians:
Budget 2021 proposes to provide $200 million in 2021-22 to Employment
and Social Development Canada to establish a new Black-led Philanthropic
Endowment Fund. This fund would be led by Black Canadians and would
create a sustainable source of funding, including for Black youth and social
purpose organizations, and help combat anti-Black racism and improve
social and economic outcomes in Black communities.
Budget 2021 proposes to provide $100 million in 2021-22 to the Supporting
Black Canadian Communities Initiative at Employment and Social
Development Canada.

The Supporting Black Canadian Communities Initiative

The Supporting Black Canadian Communities Initiative is administered by
Employment and Social Development Canada. The program supports
capacity-building of Black-led non-profit organizations so they can better
serve Black Canadian communities.
Organizations that recently received funding include:
 Black Wellness Cooperative of Nova Scotia (Bedford, NS): This organization
provides expertise, knowledge, and training to promote health, wellness,
and fitness among the African Nova Scotian and Mi'kmaq communities.
 Association Francophone de Brooks (Brooks, AB): 90 per cent of the
francophone community of Brooks is of African origin. This organization
offers activities for young people, community celebrations, and social
activities for families in the francophone community of Brooks.
 Youth Stars Foundation (Montréal, QC): This organization supports
vulnerable youth populations, including Black youth, by offering a variety
of programs and workshops that use the arts, sports, dance, and music to
foster life skills, promote self-esteem, and strengthen interpersonal skills.

A More Equal Canada 229

Mobilizing the reach and expertise of community-based organizations is an
important tool for empowering Black communities and confronting systemic
economic barriers. It also ensures that federal investments best serve the needs
of their communities. New research published by the Network for the
Advancement of Black Communities and Carleton University found that Black-
led and Black-serving charities receive significantly less grant funding than
other charities in Canada.

Better Data for Better Outcomes

For every Canadian to reach their full potential, we need to properly understand
the circumstances in which people live and the barriers they face. We cannot
improve what we cannot measure.

At present, Canada lacks the detailed statistical data that governments, public
institutions, academics, and advocates need in order to take fully informed
policy actions and effectively address racial and social inequities. From a
detailed understanding of demographic trends to economic and employment
data, Statistics Canada has a vital role to play in providing the evidence-based
foundation upon which good, effective policies can be built—policies that bring
the impacts on marginalized groups into the heart of decision-making.

Journalists and researchers have long worked to tell the stories of where and
why disparities in our society exist—whether among racialized groups or the
power gap that exists between men and women that leads women’s careers to
stall. Better disaggregated data will mean that investigative efforts or research
projects like this will have more and better data to analyze.

Budget 2021 proposes to provide $172 million over five years, starting in
2021-22, with $36.3 million ongoing, to Statistics Canada to implement a
Disaggregated Data Action Plan that will fill data and knowledge gaps. This
funding will support more representative data collection, enhance statistics
on diverse populations, and support the government’s, and society’s, efforts
to address systemic racism, gender gaps—including the power gaps
between men and women—and bring fairness and inclusion considerations
into decision making.

Building on other investments in Budget 2021, this provides a combined

$250 million over five years to Statistics Canada, ensuring Canada has the data
it needs to make evidence-based decisions across priorities including
disaggregated data, health, quality of life, the environment, justice, and
business and the economy.

230 Chapter 7
To modernize Canada’s justice system, support evidence-based policies, and
ensure accountability within the criminal justice system, the government needs
to update and fill gaps in its collection and use of data.

Budget 2021 proposes to provide $6.7 million over five years, starting in
2021-22, and $1.4 million ongoing, to Justice Canada and Statistics Canada
to improve the collection and use of disaggregated data. This is part of
ongoing efforts to address the overrepresentation of Indigenous peoples
and racialized groups in the justice system.

Comprehensive academic research enhances our understanding of the causes of

discrimination, the impact of oppression on Canadians and our communities, and
strategies to support greater justice, equity, and accountability.

Budget 2021 proposes to provide $12 million over three years, starting in
2021-22, to the Social Sciences and Humanities Research Council to fund
academic research into systemic barriers facing diverse groups. This research
will help inform actions to address social disparities related to race, gender,
and other forms of diversity.

Making the Public Service More Diverse

Canadians should have confidence that their public sector workforce is
representative of the communities it serves. In the 2020 Speech from the
Throne, the government committed to implementing an action plan to increase
diversity in hiring and appointments within the public service.

Budget 2021 proposes amendments to the Public Service Employment Act to

affirm the importance of a diverse and inclusive workforce and avoid biases
and barriers in hiring.

A More Equal Canada 231

7.2 An Economic Recovery that Includes Everyone
As Canada recovers from the COVID-19 pandemic, the Government of Canada
is committed to building a more inclusive society that leaves no one behind.
This includes providing programs and services that better respond to the
unique needs of vulnerable people and improve quality of life for all Canadians.

Increasing Old Age Security for Canadians 75

and Over
During the pandemic, many seniors have faced economic challenges as they took
on extra costs to stay safe. Additionally, many seniors are living longer and relying
on monthly benefits to afford retirement. After a lifetime of hard work, they deserve
a secure and dignified retirement. That is why the government is committed to
increasing Old Age Security (OAS) benefits for seniors age 75 and older.

The government plans to implement this commitment in two steps.

Budget 2021 proposes to meet the immediate needs of this group of

seniors by providing a one-time payment of $500 in August 2021 to OAS
pensioners who will be 75 or over as of June 2022.

Budget 2021 then proposes to introduce legislation to increase regular OAS

payments for pensioners 75 and over by 10 per cent on an ongoing basis as
of July 2022. This would increase the benefits for approximately 3.3 million
seniors, providing additional benefits of $766 to full pensioners in the first
year, and indexed to inflation going forward. This would give seniors more
financial security later in life, particularly at the time when they face
increased care expenses and greater risk of running out of savings.

In total, these two measures represent $12 billion over five years in additional
financial support, beginning in 2021-22, and at least $3 billion per year
ongoing, to be delivered by Employment and Social Development Canada.

Statutory funding authority would be sought to make the one-time payment.

Changes to the Old Age Security Act would be made to implement the benefit
increase as of July 2022, and to exempt the one-time payment from the
definition of income for the Guaranteed Income Supplement.

232 Chapter 7
 After working hard throughout his career as a barber, Matthieu retired about
a decade ago and will turn 75 in June 2022. He is in good health and looking
forward to many more healthy years in his retirement.
But because of that, Matthieu is also starting to worry that his retirement
savings could run out at some point, which he has been drawing on to
complement his monthly OAS and Canada Pension Plan payments. With the
proposed measure, Matthieu will have an extra $500 to spend this year. The
permanent increase to his OAS benefits as of July 2022 will then give him an
estimated $766 more in benefits over the following twelve months. This
amount will rise over the years, as Old Age Security benefits are increased in
line with the Consumer Price Index every quarter. Matthieu will have a
greater sense of financial security in his later years as the measure would
help ensure that he has support and can reduce reliance on his savings.

Towards a New Disability Benefit

Since 2015, the government has taken steps towards building an inclusive and
resilient economy that supports people with disabilities. In addition to enacting
groundbreaking legislation to create a barrier-free Canada, the government has
also taken concrete steps to help people with disabilities receive enhanced
programming and access to benefits, savings plans, and education funding.

The pandemic has exposed many of the long-standing challenges persons with
disabilities face, including an increased risk of poverty. The Government of
Canada has a number of programs and services in place that provide support to
Canadians with disabilities but these are often complex and can be difficult to
navigate for users. To ensure all persons with disabilities have the support they
need to overcome persistent barriers to full economic and social participation,
the government is committed to bringing forward a new disability benefit.

Budget 2021 proposes to provide $11.9 million over three years, starting in
2021-22, to Employment and Social Development Canada to undertake
consultations to reform the eligibility process for federal disability
programs and benefits. This will help maximize the reach of these programs
and improve the lives of Canadians living with disabilities. This work would
feed directly into the design of a new disability benefit.

A More Equal Canada 233

In preparation for legislation, the government will undertake extensive
consultations with stakeholders on the design of the new benefit and engage
with provinces and territories, which play a central role in providing support to
many Canadians with disabilities. Employment and Social Development Canada
will also establish a steering committee to oversee the development of this
work, alongside the Canada Revenue Agency, the Department of Finance
Canada and Veterans Affairs Canada.

Improving Access to the Disability Tax Credit

In 2017, the Government of Canada reinstated the Canada Revenue Agency’s
Disability Advisory Committee to ensure tax measures for persons with
disabilities are administered in a fair, transparent, and accessible way. Since the
release of the committee’s first annual report in 2019, the government has
introduced many important changes, including improvements to its
communications and outreach activities for the Disability Tax Credit and
changes to Registered Disability Savings Plans to better protect beneficiaries. As
the government considers new recommendations from the committee, released
in a second report on April 9, 2021, the government is proposing to take further
steps to act on the guidance of the committee by improving the eligibility
criteria for mental functions and life-sustaining therapy. To help more families
and people living with disabilities access the Disability Tax Credit, and other
related support measures like the Registered Disability Savings Plan and the
Child Disability Benefit:
Budget 2021 proposes to update the list of mental functions of everyday life
that is used for assessment for the Disability Tax Credit. Using terms that are
more clinically relevant would make it easier to be assessed, reduce delays,
and improve access to benefits.

Budget 2021 also proposes to recognize more activities in determining time

spent on life-sustaining therapy and to reduce the minimum required
frequency of therapy to qualify for the Disability Tax Credit. To ensure these
changes enable applicants to have a fair and proper assessment of their
eligibility for the Disability Tax Credit, the government will undertake a
review of these changes in 2023.

It is estimated that, as a result of these measures, an additional 45,000 people

will qualify for the Disability Tax Credit, and related benefit programs linked to
its eligibility, each year. This represents $376 million in additional support over
five years, starting in 2021-22.

234 Chapter 7
Making Our Communities and Workplaces More
Accessible
Every day, hundreds of thousands of Canadians with disabilities face accessibility
challenges. Organizations want to become more accessible but costs can be
prohibitive, especially for smaller organizations. The Enabling Accessibility Fund
provides funding for renovation, construction, and retrofit projects—from
building ramps, to support for the hearing impaired, to automatic door
openers—that make communities and workplaces more accessible for persons
with disabilities. To reduce barriers to employment, activities, and programs for
persons with disabilities:

Budget 2021 proposes to provide additional funding of $100 million over

two years, starting in 2021-22, to Employment and Social Development
Canada to triple funding for the Enabling Accessibility Fund and support
small and mid-sized projects with not-for-profit organizations, women’s
shelters, child care centres, small municipalities, Indigenous organizations,
territorial governments, small businesses, and businesses of all sizes. This
would help offset the costs of renovations, retrofits, and accessible
technologies in workplaces.

Supporting Greater Equality for LGBTQ2

Communities
Although we have made much progress as a society, LGBTQ2 people in Canada
continue to face discrimination, harassment, and prejudice. Canada is committed
to protecting LGBTQ2 rights and promoting social, economic, and political
equality with respect to sex, sexual orientation, and gender identity or
expression. To ensure that Canada’s recovery fosters a fairer and more equal
society for LGBTQ2 people, where they can participate as full members of
Canadian society:

Budget 2021 proposes to provide $15 million over three years, starting in
2021-22, to Women and Gender Equality Canada for a new LGBTQ2 Projects
Fund dedicated to supporting community-informed initiatives to overcome
key issues facing LGBTQ2 communities, such as accessing mental health
services and employment support.

Budget 2021 also proposes to provide $7.1 million over three years, starting
in 2021-22, to Canadian Heritage to continue to support the work of the
LGBTQ2 Secretariat—which coordinates work across government—and
enable the continued development of an LGBTQ2 Action Plan.

A More Equal Canada 235

Supporting Our Veterans
Veterans are three to four times as likely to suffer from depressive or anxiety
disorders, and over 15 times more likely to experience post-traumatic stress
disorder (PTSD), than the general population. Veterans are entitled to financial
support for mental health care through the Treatment Benefit Program but they
can wait up to two years to receive mental health care while waiting for their
disability benefit application to be confirmed. To ensure veterans receive timely
access to high-quality mental health care:

Budget 2021 proposes to provide $140 million over five years starting in
2021-22, and $6 million ongoing, to Veterans Affairs Canada for a program
that would cover the mental health care costs of veterans with PTSD,
depressive, or anxiety disorders while their disability benefit application is
being processed.

Many veterans have faced unique challenges during the pandemic. To improve
the quality of life for veterans and their families during this challenging period:

Budget 2021 proposes to provide an additional $15 million over three years,
starting in 2021-22, to Veterans Affairs Canada to expand and enhance the
Veteran and Family Well-Being Fund for projects that will support veterans
during the post COVID-19 recovery, including addressing homelessness,
employment, retraining, and health challenges.

Recognizing the Contributions of Atomic Workers

In the mid-twentieth century, Chalk River Laboratories was one of the leading
global sites for cutting edge atomic science. But, in 1952 and 1958, there were
accidents that required Department of National Defence and Atomic Energy of
Canada Limited personnel to contain and clean contaminated sites. In 2008, the
government recognized former Department of National Defence personnel who
participated in the clean-ups through the establishment of the Atomic Veterans
Recognition Program. To provide similar recognition to those Atomic Energy of
Canada Limited employees who worked to clean-up these dangerous incidents
and protect Canadians:
Budget 2021 proposes to provide $22.3 million over two years, starting in
2021-22, to Natural Resources Canada to establish an Atomic Workers
Recognition Program.

236 Chapter 7
7.3 Supporting the Health of Canadians
The government recognizes that, even in a pandemic, Canadians face an array of
other complex health concerns. For over half a century, our strong and reliable
public health care system has been an anchor of Canada’s social and economic
security. Investments must be made to ensure health care responds and evolves
alongside the people it treats.

Addressing the Opioid Crisis and Problematic

Substance Use
Since before the pandemic began, Canada has been facing a worsening opioid
epidemic that has devastated lives and communities across Canada, especially
in Ontario and Western Canada, with severe impacts in British Columbia and
Alberta. The COVID-19 pandemic has compounded the ongoing opioid
overdose crisis in Canada. Isolation, stress, toxic supply, and reduced access to
services have contributed to the epidemic. Canada suffered a 74 per cent
increase in opioid-related deaths over the course of the first six months of the
pandemic. The government is taking further action to help people dealing with
problematic substance use and tackle this ongoing crisis.

Budget 2021 proposes to provide an additional $116 million over two

years, starting in 2021-22, building on $66 million invested in the 2020 Fall
Economic Statement, for the Substance Use and Addictions Program to
support a range of innovative approaches to harm reduction, treatment,
and prevention at the community level.

The government continues to work closely with provinces and territories to

ensure our collective response is comprehensive, collaborative, compassionate,
and evidence-based. In response to the crisis, the government has made a
variety of investments, including a $150 million Emergency Treatment Fund to
provinces and territories for 2018-2021, over $100 million in 2019-20 for
targeted measures to expand access to harm reduction services and increase
access to safer drug supplies, and a fall investment of $66 million over two
years, starting in 2020-21, to support community organizations responding to
the crisis.

A More Equal Canada 237

Moving Forward on National Universal Pharmacare
A healthy economy is only possible when its people are healthy. Canadians have
access to some of the best doctors, nurses, hospitals, and treatments in the
world, and all through our publicly funded health care systems. But some
Canadians have difficulty affording the medications they need.

The case for national universal pharmacare is well-established. The government

is committed to work with provinces, territories and stakeholders to build on
the foundational elements that are already in progress, like the national
strategy on high-cost drugs for rare diseases, toward the goal of a universal
national program.

To maintain momentum, the government will proceed with its announced plan
to provide ongoing funding of $500 million for the program for high-cost drugs
for rare diseases. The government will also directly engage with willing partners
on national universal pharmacare, alongside other important health priorities,
that can be advanced at the provincial and territorial level.

Supporting Access to Sexual and Reproductive

Health Care Information and Services
All Canadians should have access to a full suite of sexual and reproductive
health resources and services, no matter where they live. Currently, women,
youth, LGBTQ2 people, racialized Canadians, and Indigenous populations face
the highest sexual and reproductive health risks and the greatest barriers to
accessing support, information, and services. Too often, they do not receive the
same quality of care, particularly if they are from marginalized communities.
Furthermore, examples like Clinic 554—New Brunswick’s only private abortion
clinic—show us that lack of funding puts access to sexual and reproductive
health care at risk. Everyone deserves equal treatment in our health care system.

The Government is committed to collaboration with provinces and territories to

strengthen our health care system, ensuring equitable and appropriate access
to a full suite of reproductive and sexual health services, in any upcoming
Canada Health Transfer funding discussions.

To improve access to sexual and reproductive health care support, information,

and services—including protecting access to abortion care:

238 Chapter 7
 Budget 2021 proposes to provide $45 million over three years, starting in
2021-22, to Health Canada to fund community-based organizations that
help make sexual and reproductive health care information and services
more accessible for vulnerable populations. These organizations support
activities such as producing inclusive training materials for sexual and
reproductive health care providers, carrying out public awareness activities,
and providing travel and logistical support to individuals who have to go
long distances to access abortion care.
In addition, there are currently no existing resources that collect comprehensive
data on a wide range of sexual and reproductive health indicators in Canada,
limiting our ability to target supports. To address this:
Budget 2021 proposes to provide $7.6 million over five years, starting in
2021-22, for Statistics Canada to develop and implement a national survey
on sexual and reproductive health that captures data on race, household
income, and sexual orientation–information often not captured in existing
surveys. Better information will help ensure governments understand the
challenges and improve the support they provide.

Establishing a National Institute for Women's Health

Research
Sex- and gender-related disparities continue to persist in Canada’s health
system. Women are more likely to die of preventable illnesses and bear a higher
burden of chronic illnesses. To improve health outcomes and eliminate the gaps
in the quality of care women receive, we need to strengthen research.

Budget 2021 proposes to provide $20 million over five years, starting in
2021-22, to the Canadian Institutes of Health Research to support a new
National Institute for Women’s Health Research. The new institute will
advance a coordinated research program that addresses under-researched
and high-priority areas of women’s health and ensure new evidence
improves women’s care and health outcomes. It will also ensure an
intersectional approach to research and care to tackle persistent gaps for all
women, including for racialized women, Black and Indigenous women,
women with disabilities, and members of LGBTQ2 communities.

A More Equal Canada 239

National Autism Strategy
Children and adults with autism spectrum disorder, as well as their families,
encounter significant economic and social challenges throughout their lives.
Many also confront disparities when it comes to diagnoses and treatments. To
improve the health and well-being of Canadians with autism spectrum disorder
and their caregivers:

Budget 2021 proposes to provide $15.4 million over two years, starting in
2021-22, to the Public Health Agency of Canada to work with partners to
support the creation of a national autism strategy.

Strategic Research on Pediatric Cancer

Cancer is a leading cause of disease-related death in Canadian children. Pediatric
cancers are faster growing and found in different organs than in adults. More
targeted research is needed to help save lives and improve the services these
brave children and their families receive.

Budget 2021 proposes to provide $30 million over two years, starting in
2021-22, to the Canadian Institutes of Health Research to fund pediatric
cancer research that can lead to better outcomes and healthier lives for
these young patients. The funding will support promising research projects
with the greatest potential for fighting pediatric cancers.

Establishing a National Framework for Diabetes

This year marks the 100th anniversary of the discovery of insulin, a Nobel Prize-
winning accomplishment by Canadian researchers that has helped to save
millions of lives. 3.2 million Canadians live with diabetes, a disease which can
lead to a variety of complications, such as heart disease and stroke, blindness,
and amputation. Type 2 diabetes makes up 90 per cent of all cases of diabetes
in Canada and, like other chronic diseases, is largely preventable. Adults with
diabetes are also at greater risk of more severe COVID-19 symptoms, including
respiratory distress and pneumonia.

Budget 2021 proposes to provide $25 million over five years, starting in
2021-22, to Health Canada for additional investments for research on
diabetes (including in juvenile diabetes), surveillance, and prevention, and to
work towards the development of a national framework for diabetes. This
framework will be developed in consultation with provinces and territories,
Indigenous groups, and stakeholders, and will help to support improved
access to prevention and treatment, and better health outcomes
for Canadians.

240 Chapter 7
 Budget 2021 proposes to provide $10 million over five years, starting in
2021-22, to the Public Health Agency of Canada for a new Diabetes
Challenge Prize. This initiative will help surface novel approaches to diabetes
prevention and promote the development and testing of new interventions
to reduce the risks associated with Type 2 diabetes.

Taxation of Vaping Products

Young Canadians’ use of vaping products, such as e-cigarettes, is on the rise.
One Health Canada survey indicates that, since 2018, use has doubled among
Canadian high school students. Vaping with nicotine poses risks, especially to
young people: nicotine is highly addictive, can affect memory and concentration,
and is known to alter brain development in teens. In addition to raising
revenues, vaping taxation could become an effective means to help curtail
harmful consumption of these products.

Budget 2021 announces the government’s intention to introduce a new

taxation framework for the imposition of excise duties on vaping products
in 2022.

The Government of Canada will also work with any provinces and
territories that may be interested in a federally coordinated approach to
taxing these products.

Taxation of Tobacco
Tobacco use continues to be the leading preventable cause of premature death
in Canada. Tobacco taxation is an effective way to reduce tobacco consumption
and help reach the government’s goal of less than 5 per cent of the population
using tobacco by 2035.
Budget 2021 proposes to increase the tobacco excise duty by $4 per carton of
200 cigarettes, along with corresponding increases to the excise duty rates for other
tobacco products. This measure would take effect the day after Budget Day.
It is estimated that this measure will increase federal revenues by $2.1 billion
over five years starting in 2021-22.

A More Equal Canada 241

Support for Canadian Blood Services
Many Canadians rely on plasma to treat life-threatening conditions. During the
COVID-19 crisis, global demand, prices, and shortages have increased. To
secure a domestic supply of plasma:
Budget 2021 proposes to provide $20 million over three years, beginning in
2021-22, to Health Canada to construct eight plasma collection sites across
the country. These sites would be operated by Canadian Blood Services. The
government will continue to work with partners like Canadian Blood Services
and Héma-Québec to ensure a secure plasma supply across Canada.

Better Palliative Care

To provide Canadians, including those who live in long-term care and their
families, with better palliative and end-of-life care, including culturally
sensitive care:
Budget 2021 proposes to provide $29.8 million over six years, starting in
2021-22, to Health Canada to advance the government’s palliative care
strategy and lay a better foundation for coordinated action on long-term
and supportive care needs, improving access to quality palliative care.
Initiatives could include: raising awareness of the importance of palliative
care; providing public education on grief; improving palliative care skills and
supports for health care providers, families, caregivers, and communities;
enhancing data collection and research; and improving access to culturally
sensitive palliative and end-of-life care.

Ensuring Appropriate Access and Safeguards for

Medical Assistance in Dying
Medical assistance in dying (MAID) is a complex and deeply personal issue. MAID
became law in Canada five years ago to provide relief, in certain cases, for those
with reasonably foreseeable deaths. Recent amendments to the law, with the
passage of Bill C-7 to expand access for those suffering intolerably, underscore
the need to be responsive to the evolution of Canada’s MAID framework.
Budget 2021 proposes to provide funding of $13.2 million over five years,
beginning in 2021-22, with $2.6 million per year ongoing, to Health Canada
to ensure that Canada’s medical assistance in dying framework is
implemented consistently and with all appropriate safeguards. Funding
would support training and the development of guidance materials for
practitioners, as well as support research to guide the evolution of medical
assistance in dying in Canada.

242 Chapter 7
Chapter 7
A More Equal Canada
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
7.1. Fighting Systemic
Racism and
Empowering
Communities 0 338 45 45 38 38 504
Strengthening the
Canadian Race Relations
Foundation and Helping
Communities Respond
to an Increase in Racism 0 8 5 0 0 0 13
Supporting Black
Canadian Communities 0 300 0 0 0 0 300
Better Data for Better
Outcomes 0 30 40 45 38 38 191
Making the Public
Service More Diverse 0 0 0 0 0 0 0
7.2. An Economic
Recovery that Includes
Everyone 0 1,726 1,833 2,456 2,592 2,747 11,354
Increasing Old Age
Security for Canadians
75 and over 0 1,675 1,870 2,643 2,820 3,004 12,011
Less: Projected
Revenues 0 -155 -210 -300 -325 -355 -1,345
Towards a New
Disability Benefit 0 4 4 4 0 0 12
Improving Access to the
Disability Tax Credit 0 19 84 90 91 92 376
Making Our
Communities and
Workplaces More
Accessible 0 50 50 0 0 0 100
Supporting Greater
Equality for LGBTQ2
Communities 0 8 7 7 0 0 22
Supporting Our
Veterans 0 118 13 12 6 6 155
Recognizing the
Contributions of Atomic
Workers 0 7 15 0 0 0 22

A More Equal Canada 243

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
7.3. Supporting the
Health of Canadians 0 -304 -320 -392 -400 -400 -1,814
Addressing the Opioid
Crisis and Problematic
Substance Use 0 58 58 0 0 0 116
Supporting Access to
Sexual and
Reproductive Health
Care Information and
Services 0 16 18 15 3 0 53
Establishing a National
Institute for Women's
Health Research 0 2 5 4 4 4 20
National Autism
Strategy 0 8 8 0 0 0 15
Less: Funds Sourced
From Existing
Departmental
Resources 0 -4 -4 0 0 0 -8
Strategic Research on
Pediatric Cancer 0 15 15 0 0 0 30
Establishing a National
Framework for Diabetes 0 7 7 7 7 7 35
Taxation of Tobacco 0 -415 -440 -435 -425 -420 -2,135
Support for Canadian
Blood Services 0 6 8 6 0 0 20
Better Palliative Care 0 1 4 7 9 6 27
Ensuring Appropriate
Access and Safeguards
for Medical Assistance
in Dying 0 3 3 3 3 3 13
Additional
Investments – A More
Equal Canada -28 7 22 0 0 0 0
Veterans Affairs Canada
Service Capacity 0 7 22 0 0 0 29
Less: Funds Previously
Provisioned in the Fiscal
Framework -28 0 0 0 0 0 -29
Funding for Veterans Affairs Canada to extend disability adjudication resources provided in Budget 2018 for an
additional year and to develop more efficient disability benefits application and decision-making processes
using digital technologies.
Chapter 7 – Net Fiscal
Impact -28 1,767 1,580 2,109 2,230 2,385 10,043
Note: Numbers may not add due to rounding.

244 Chapter 7
Chapter 8
Strong Indigenous Communities
No relationship is more important to the federal government than
the relationship with Indigenous peoples. The federal government continues to
work with Indigenous peoples to build a nation-to-nation, Inuit-Crown,
government-to-government relationship—one based on respect, partnership,
and recognition of rights.

In Budget 2021, the federal government is furthering its plan to address the
unique challenges faced by Indigenous communities during the pandemic. This
work is essential to make sure our recovery includes everyone and makes all
communities more resilient. Since 2015, real progress has been made righting
historic wrongs, but more work needs to be done.

Through this budget, the federal government is proposing a historic, new

investment of over $18 billion over the next five years, to improve the quality of
life and create new opportunities for people living in Indigenous communities.
Working with Indigenous partners, these investments will make significant
strides in closing gaps between Indigenous and non-Indigenous peoples,
support healthy, safe, and prosperous Indigenous communities, and advance
meaningful reconciliation with First Nations, Inuit, and the Métis Nation. These
investments will support continued action on infrastructure and clean water.
They will also take meaningful action on the new approach that is needed to
end the national tragedy of missing and murdered Indigenous women and girls,
one which addresses the root causes and the scope of the violence.
Chart 8.1
Investments in Indigenous Priorities (Actual and Projected)
Indigenous Investments: 2012-13 to 2021-22
$ Billions Expenditures (Public Accounts of Canada)
Historical Growth Rate
Projected Expenditures
25
24
23
22
21
20
19 $11.4 billion
18
17 $7.9 billion
16
15
14
13
12
11
10
9
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22

Sources: Public Accounts of Canada; Department of Finance Canada.

Strong Indigenous Communities 245

8.1 Healthy and Vibrant Communities
COVID-19 has highlighted the health vulnerabilities Indigenous peoples face and
the challenges of delivering front-line health services in many Indigenous
communities.

The federal government knows that addressing the gap in health outcomes faced
by First Nations, Inuit, and Métis peoples, beyond COVID-19, means taking a
broader approach to health and well-being. It means recognizing that health care
includes preventive care and mental wellness, that good health is only possible
when basic needs are met, and that education is key to a healthy future.

Good health also requires a distinctions-based, Indigenous-led approach. This is

what the investments in Budget 2021 set out to accomplish.

Supporting Indigenous Communities in the Fight

Against COVID-19
Since the start of the pandemic, Indigenous communities have faced
extraordinary health challenges and continue to be vulnerable to the virus and
its variants. The federal government has supported Indigenous communities
every step of the way through the pandemic, and will continue to have their
backs.
Vaccination efforts are well underway in Indigenous communities across the
country and the federal government continues to work with provinces and
territories to make sure Indigenous peoples in cities can get the vaccine too. The
federal government recently introduced legislation that, if passed, would provide
a one-time payment of up to $1 billion to provinces and territories to support
vaccination rollouts across the country, and could be used to engage Indigenous
communities to advance vaccine rollout. Indigenous communities have worked
hard to combat the virus but the pandemic is not over and Indigenous
communities remain at risk.
Budget 2021 proposes to provide an additional $1.2 billion in 2021-22 to
continue supporting the COVID-19 response in Indigenous communities as
follows:
- $478.1 million on a cash basis to continue to support the ongoing public
health response to COVID-19 in Indigenous communities, including
support to hire nurses, help at-risk people to isolate, and distribute
personal protective equipment.

246 Chapter 8
 - An additional $760.8 million for the Indigenous Community Support Fund
to help First Nations, Inuit, Métis Nation communities, and urban and off-
reserve Indigenous organizations serving Indigenous peoples meet the
unique needs of their populations during the COVID-19 pandemic. This will
provide funding to: prevent the spread of COVID-19; support elders and
vulnerable community members; provide mental health assistance and
emergency response services; address food insecurity; and support
children.
Together, these measures will help to ensure that Indigenous leadership has the
tools and resources they need to continue to keep communities safe, respond to
outbreaks, and support vaccination rollout.

To keep communities safe, the Government also proposes to introduce legislation

that would ensure that the First Nations Election Cancellation and Postponement
Regulations (Prevention of Diseases) are deemed to have been validly made since
April 7, 2020. The Regulations provide a mechanism for First Nation councils to
postpone their elections or to extend the terms of the chiefs and councillors,
while avoiding a critical governance gap, to prevent, mitigate or control the
spread of diseases on reserve, including COVID-19.

Improving Health Outcomes in Indigenous

Communities
For far too long, Indigenous peoples have faced poor health care and their
communities have experienced reduced health outcomes.

Since 2015, the government has invested over $5.5 billion to improve health
outcomes in Indigenous communities. These investments have increased access
to timely and culturally appropriate medical care and mental health services for
Indigenous people and supported distinctions-based priorities. This includes
dedicated funding for First Nations children through the implementation of
Jordan’s Principle, responding to high rates of tuberculosis in Inuit communities
and supporting the Métis Nation in gathering health data and developing a
health strategy to address their unique needs.

Building on that, and to ensure Indigenous peoples can access high-quality

health care:

Budget 2021 proposes to invest $1.4 billion over five years, beginning in
2021-22, and $40.6 million ongoing, to maintain essential health care
services for First Nations and Inuit, continue work to transform First Nations
health systems, and respond to the health impacts of climate change,
including:

Strong Indigenous Communities 247

 - $774.6 million over five years, beginning in 2021-22, to ensure continued
high-quality care through the Non-Insured Health Benefits Program, which
supports First Nations and Inuit people with medically necessary services
not otherwise covered, such as mental health services, medical travel,
medications, and more.
- $354 million over five years, beginning in 2021-22, to increase the
number of nurses and other medical professionals in remote and
isolated First Nations communities.
- $107.1 million over three years, beginning in 2021-22, to continue
efforts to transform how health care services are designed and delivered
by First Nations communities, building on the government’s
commitment to improve access to high-quality and culturally relevant
health care for Indigenous peoples.
- $125.2 million over four years, beginning in 2022-23, to continue to
support First Nations communities’ reliable access to clean water and
help ensure the safe delivery of health and social services on reserve.
- $22.7 million over five years, beginning in 2021-22, to support First
Nations and Inuit as they manage the health impacts of climate change,
such as access to country food, impacts of extreme weather events, and
mental health impacts of climate change on youth.

These investments are in addition to the government’s commitment to co-

develop distinctions-based Indigenous health legislation with First Nations,
Inuit, and the Métis Nation so that Indigenous communities have greater
control over the design and delivery of high-quality and culturally relevant care.
The government launched the engagement process to co-develop this
legislation on January 28, 2021.

Distinctions-Based Mental Wellness Strategy

The government is committed to supporting Indigenous peoples and
communities as they seek to heal from historical trauma and the
intergenerational impacts of colonization. The pandemic has exacerbated the
mental health challenges many Indigenous peoples face. Three in five
Indigenous peoples say their mental health has worsened in the pandemic.
Providing better access to trauma-informed, culturally appropriate Indigenous-
led services is a critical part of improving mental wellness in First Nations, Inuit,
and Métis Nation communities.

248 Chapter 8
 Budget 2021 proposes to provide $597.6 million over three years, starting in
2021-22, for a distinctions-based mental health and wellness strategy with
First Nations, Inuit, and the Métis Nation. The strategy will renew funding for
the Indian Residential Schools Health Supports Program and Crisis Line, which
provide healing supports for survivors of childhood trauma and residential
schools. It will also stabilize and expand community-based supports and
capacity, increase substance use treatment and prevention, and support
workforce development.

Supporting Indigenous Children and Families

The government is committed to supporting the well-being of Indigenous
children and families. Work continues with Indigenous leadership to reform
child and family services so that all Indigenous children have the opportunity to
grow up in their communities, immersed in their cultures, and surrounded by
loved ones.

To support this important work, Budget 2021 proposes to provide $1

billion over five years, starting in 2021-22, with $118.7 million ongoing to
increase funding under the First Nations Child and Family Services
Program. Proposed funding would:
- Provide increased support to First Nations communities not served by a
delegated First Nation agency for prevention activities to help First
Nations children and families stay together, within their communities
through the Community Well-being and Jurisdiction Initiative;
- Continue to implement orders from the Canadian Human Rights Tribunal;
and
- Permanently ensure that First Nations youth who reach the age of
majority receive the supports that they need, for up to two additional
years, to successfully transition to independence.
The government will also continue to support First Nations, Inuit and Métis
communities in developing their own child and family services models that
reflect their values and traditions under the Act Respecting First Nations, Inuit
and Métis children, youth and families.

Budget 2021 proposes to provide $73.6 million over four years, starting in
2021-22, to support the implementation of the Act.
These investments and the implementation of the Act will help realize the
shared goals of prioritizing the best interests of children, increasing the number
of communities exercising jurisdiction in relation to child and family services,
and decreasing the number of children in care.

Strong Indigenous Communities 249

Providing High-quality Education
A high-quality education is the foundation of success, which every child
growing up in Canada deserves no matter where they live. Not only does good
elementary and secondary schooling lead to better jobs, studies have shown
that better education can lead to better mental heath and improved personal,
family, and community well-being. Since 2015, investments the government has
made have improved learning experiences for approximately 107,000 students
per year and helped build 186 education-related infrastructure projects
benefiting 240 First Nations communities. Investing in children’s education is an
important part of the government’s plan to build long-term economic
resilience. In 2019, the federal government implemented a new, co-developed
policy and funding approach to better support the needs of First Nations
students on reserve.
To invest in the future of First Nations children and continue to support this
new approach:
Budget 2021 proposes to invest $1.2 billion over five years, and
$181.8 million ongoing, including:
- $112 million in 2021-22 to extend COVID-19 support so children on
reserve can continue to attend school safely, including PPE for students
and staff, laptops to support online learning, and more teachers and
other critical staff.
- $726 million over five years, starting in 2021-22, and $181.8 million
ongoing, to enhance funding formulas in critical areas such as student
transportation; ensure funding for First Nations schools remains
predictable from year to year; and increase First Nations control over First
Nations education by concluding more Regional Education Agreements.
- $350 million over five years, starting in 2021-22, to expand access to
adult education by supporting First Nations people on reserve who wish
to return to high school in their communities and complete their high
school education.

250 Chapter 8
Supporting Indigenous Post-secondary Education
During COVID-19
The pandemic continues to affect Indigenous post-secondary students and
institutions. To help Indigenous students complete their studies and ensure that
Indigenous-led post-secondary institutions can provide online services and
continue to implement health and safety measures:

Budget 2021 proposes to provide $150.6 million over two years, starting in
2021-22, to support Indigenous students through the Post-Secondary
Student Support Program and the Inuit and Métis Nation Post-Secondary
Education Strategies. Many students are facing financial difficulty during
the pandemic, as young people have suffered some of the worst job losses.
This support would help offset lost income that many Indigenous students
rely on to pay for tuition, books, housing, and other living expenses. The
federal government knows that young people need support to get through
this crisis so they can complete their education and succeed in their chosen
fields.
Budget 2021 also proposes to provide $26.4 million, in 2021-22, through
the Post-Secondary Partnerships Program and the Inuit and Métis Nation
Post-Secondary Education Strategies to support Indigenous post-
secondary institutions during COVID-19.

On-reserve Income Assistance

The On-reserve Income Assistance program helps eligible individuals and
families cover the costs of daily life and provides access to employment
supports. The federal government is continuing to engage with First Nations on
ways to make the program more responsive to the needs of individuals and
families and to develop support that helps people transition from income
assistance to employment and education.

Budget 2021 proposes to invest $618.4 million over two years, while work
continues, including:
- $540 million over two years, starting in 2021-22, to continue to address
basic needs and increased program demand, including as a result of
COVID-19.
- $78.4 million over two years, starting in 2021-22, to continue providing
case management and support to help people find work.

Strong Indigenous Communities 251

8.2 Building Infrastructure and Economic Growth
Budget 2021 lays out a plan to help build resilient Indigenous communities
through new, distinctions-based investments in infrastructure, including support
for clean drinking water, housing, schools, and roads. This builds on the recent
announcement by the Canada Infrastructure Bank to commit $1 billion towards
the Indigenous Community Infrastructure Initiative to support new partnerships
with Indigenous communities on infrastructure projects.

Chart 8.2
Progress on Long-Term Drinking Water Advisories since 2010

Source: Indigenous Services Canada

As of April 13, 2021, 106 long-term drinking water advisories, and 178
short-term drinking water advisories, have been lifted since 2015, while
105 long-term drinking water advisories were in place when this government
committed to eliminating long-term drinking water advisories on public
systems on reserves. Since 2015, the expansion of the scope of the commitment
and short-term advisories becoming long-term have added advisories to the
list, but the government’s commitment to end all advisories remains firm.

Indigenous community-owned businesses are key drivers of economic

growth—they reinvest profits back into their local communities. They are
important partners in the work to strengthen communities. This budget makes
bold investments to support new opportunities for Indigenous businesses and
communities. These targeted investments expand revenue sources and provide
businesses and communities with access to the capital they need to grow
during the recovery and beyond.

252 Chapter 8
Indigenous Infrastructure
Investments in clean water, housing, and other community infrastructure will
create good jobs and build healthier, safer, and more prosperous Indigenous
communities in the long-term. The investments in the federal government’s plan
will accelerate its 10-year commitment to close the infrastructure gaps in
Indigenous communities, which could include all-weather roads, northern
airstrips, broadband, health care and educational facilities.

Budget 2021 proposes distinctions-based investments of $6.0 billion over

five years, starting in 2021-22, with $388.9 million ongoing, to support
infrastructure in Indigenous communities, including:
- $4.3 billion over four years, starting in 2021-22, for the Indigenous
Community Infrastructure Fund, a distinctions-based fund to support
immediate demands, as prioritized by Indigenous partners, with shovel-
ready infrastructure projects in First Nations, including with modern-
treaty and self-governing First Nations, Inuit, and Métis Nation
communities.
- $1.7 billion over five years, starting in 2021-22, with $388.9 million
ongoing, to cover the operations and maintenance costs of community
infrastructure in First Nations communities on reserve.

Supporting Indigenous Economies

The COVID-19 pandemic has had a significant impact on Indigenous
communities and businesses. Public health measures have affected many of the
revenue sources, such as community-owned business revenues, property taxes,
and revenues from leased properties, which communities use to support service
delivery and pay loans which have been taken out to support community,
economic development, and jobs. To ensure the long-term resilience of
Indigenous economies, Budget 2021 proposes to provide:
$117 million in 2021-22 to renew the Indigenous Community Business
Fund. This will ensure First Nations, Inuit, and Métis Nation communities
can continue to provide services and support jobs for their members
through collectively owned businesses and microbusinesses affected by the
COVID-19 pandemic.
$33.4 million in 2021-22 to support the First Nations Finance Authority
pooled borrowing regime as follows:
- $32.5 million to establish a First Nations Finance Authority Emergency
Fund to provide repayable financial support for borrowing members
encountering difficulties due to COVID-19 or future widespread
economic shocks.

Strong Indigenous Communities 253

 - $925,000 to support the First Nations Finance Authority launch of the
Commercial Paper Program that will lower interest rates for First Nation
borrowers so they can secure more manageable funding.

This time-limited spending will help Indigenous communities withstand the

pressures of the pandemic and ensure they are well-positioned for a
quick recovery.

Support for Indigenous Entrepreneurs

Indigenous communities are often in rural and remote areas and the success of
Indigenous-led businesses, including tourism businesses, is critically important to
local jobs and economies. In order to ensure Indigenous businesses are part of
the recovery and that their economies experience long-term growth, Indigenous-
led businesses need access to support.

The Aboriginal Entrepreneurship Program provides additional support for First

Nations, Inuit, and Métis Nation entrepreneurs by lowering the cost of business
financing, providing equity, and offering business support services. The
program helps Indigenous entrepreneurs access affordable loans to start and
grow their businesses. To help Indigenous entrepreneurs start and grow
businesses, create jobs, and generate prosperity in their communities:

Budget 2021 proposes to invest $42 million over three years, starting in
2021-22, to expand the Aboriginal Entrepreneurship Program. This will
directly support Indigenous-led businesses and help Indigenous
communities generate wealth by improving access to capital and business
opportunities.
Budget 2021 also proposes to provide $2.4 million in 2021-22 to the
Indigenous Tourism Association of Canada to help the Indigenous tourism
industry rebuild and recover from the impacts of COVID-19.

Currently, only 36 per cent of Indigenous-led businesses are owned by women.

To address this and make sure women entrepreneurs are empowered in the
economic recovery:

Budget 2021 proposes to invest $22 million over three years, starting in
2021-22, to support the National Aboriginal Capital Corporations
Association’s (NACCA) Indigenous Women’s Entrepreneurship Initiative by
providing tools, services, and resources to increase the number of
Indigenous women entrepreneurs. This funding would support NACCA in
achieving its target of increasing the number of Indigenous women
entrepreneurs who access financing through Aboriginal Financial
Institutions by 50 per cent.

254 Chapter 8
 Launch of the Indigenous Growth Fund
Indigenous businesses play an important role in creating jobs and
opportunities across Canada. The national network of Aboriginal Financial
Institutions, including Métis Capital Corporations, helps to launch and grow
these important businesses.
In order to help ensure that Indigenous businesses have access to financing,
the government announced in Budget 2019 the development of an
Indigenous Growth Fund.
Through close collaboration between the National Aboriginal Capital
Corporation Association and the Business Development Bank of Canada, an
innovative, sustainable new $150 million fund has now been created.
As announced on April 14, 2021, the Indigenous Growth Fund is designed to
provide capital to Aboriginal Financial Institutions and ultimately Indigenous
businesses and entrepreneurs. The unique structure leverages an initial
government investment to help recruit other investors, and most importantly,
to grow and sustain the fund on an ongoing basis. This will help to provide a
long-term source of capital to support continued success for Indigenous
businesses.

Securing Capital for Community Investments

The First Nations Finance Authority provides opportunities for First Nations to
use their own revenue—often from provincial revenue-sharing agreements or
business ventures—to secure long-term financing. This in turn supports First
Nations’ self-determination, job creation, and social and economic
development. To expand opportunities for First Nations to raise capital in
support of community priorities:

Budget 2021 announces the Government of Canada’s intention to amend

legislation and regulations to expand the types of revenues that First
Nations may use to support borrowing from the First Nations Finance
Authority, specifically to include revenues from the First Nations Goods and
Services Tax and the First Nations Sales Tax.
This measure will apply to First Nations that have opted into the First Nations
Fiscal Management Act regime and that are collecting First Nations Goods and
Services Tax or First Nations Sales Tax revenues within their lands.

Strong Indigenous Communities 255

Redesigning the Additions to Reserve Policy
Lands are central to First Nations traditions, identity, and prosperity. They are a
crucial asset for advancing self-determination, economic development, and
well-being.
Budget 2021 proposes to provide $43 million over three years, starting in
2021-22, to work with Indigenous partners and other stakeholders to
redesign the federal Additions to Reserve policy and to accelerate work on
existing requests from First Nations across the country.

8.3 Responding to the Tragedy of Missing and

Murdered Indigenous Women and Girls
The government is accelerating work on the National Action Plan in response to
the National Inquiry into Missing and Murdered Indigenous Women and Girls’
Calls for Justice and the implementation of the Truth and Reconciliation
Commission’s Calls to Action.

Budget 2021 lays out a plan that will build on progress and remain accountable
to communities, families, and survivors across Canada.

To end the national tragedy of missing and murdered Indigenous women and
girls, a new approach is needed—one that addresses the root causes of violence,
that recognizes the scope of the problem, and one that factors in the different
experiences of Indigenous peoples from coast-to-coast-to-coast. This work is
anchored in four interconnected thematic areas from the national inquiry: culture,
health and wellness, human security and safety, and justice.

Actions to address this tragedy must be broad in order to address the socio-
economic root causes including loss of culture and languages, poverty and lack of
access to housing, and the need for community safety, food security, employment,
education, health care, infrastructure, and the many threads that tie the fabric of
society together.

Budget 2021 proposes to invest an additional $2.2 billion over five years,
beginning in 2021-22, and $160.9 million ongoing, to help build a safer,
stronger, and more inclusive society.

256 Chapter 8
Culture
The preservation, restoration, and promotion of culture and language, as well as
participation in sport, are powerful tools for healing, reconciliation, and
fostering a strong sense of identity. To support this work in Indigenous
communities:

Budget 2021 proposes to provide $275 million over five years, beginning in
2021-22, and $2 million ongoing to Canadian Heritage, to support the
efforts of Indigenous peoples in the reclamation, revitalization, and
strengthening of Indigenous languages as a foundation for culture,
identity, and belonging. This funding will support various initiatives such as
languages and culture camps, mentor-apprentice programs and the
development of Indigenous languages resources and documentation.
Budget 2021 also proposes to provide $14.9 million over four years,
beginning in 2021-22, to support the preservation of Indigenous heritage
through Library and Archives Canada. This will ensure that Indigenous
women, girls, 2SLGBTQQIA+ people, and all people in Canada have
meaningful access to their cultures and languages.
Budget 2021 also proposes to provide $108.8 million over two years,
beginning in 2021-22, to reestablish and revitalize Indigenous cultural
spaces. Having a dedicated, permanent space to share culture is a key
component of building strong Indigenous identities. Establishing cultural
spaces that are inclusive of Indigenous women, girls, and 2SLGBTQQIA+
people will help ensure they have a seat at the decision-making table. This
proposal responds to the Final Report of the National Inquiry into Missing
and Murdered Indigenous Women and Girls, which calls for all Indigenous
women, girls, and 2SLGBTQQIA+ people to be provided with safe, no-
barrier, permanent, and meaningful access to their cultures and language.
Budget 2021 also proposes to provide $40.1 million over three years,
beginning in 2021-22, to Canadian Heritage to support the Indigenous
Screen Office and ensure Indigenous peoples can tell their own stories and
see themselves reflected on-screen.
Budget 2021 also proposes to provide $14.3 million over five years,
beginning in 2021-22, and $2.9 million ongoing, to ensure that Indigenous
women and girls have access to meaningful sports activities through the
Sport for Social Development in Indigenous Communities program.

Strong Indigenous Communities 257

Health and Wellness

Joyce Echaquan, a 37-year-old mother of seven children, from the

Atikamekw de Manawan, died at the Joliette Hospital after receiving
degrading insults from two hospital staff. Joyce’s Principle aims to
guarantee to all Indigenous peoples the right of equitable access,
without any discrimination, to all social and health services, as well as
the right to enjoy the best possible physical, mental, emotional, and
spiritual health.

The tragic death of Joyce Echaquan last summer made clear the devastating
consequences of anti-Indigenous racism in our health care systems.

Budget 2021 proposes to provide $126.7 million over three years,

beginning in 2021-22, to take action to foster health systems free from
racism and discrimination where Indigenous peoples are respected and
safe. This funding will support patient advocates, health system navigators,
and cultural safety training for medical professionals.
Budget 2021 also proposes to provide $12.5 million over five years,
beginning in 2021-22, and $2.5 million ongoing, to support the well-being
of families and survivors through project-based programming in
collaboration with the National Family and Survivors Circle.
This builds on critical investments outlined earlier in this chapter, including
$597.6 million over three years, beginning in 2021-22 for distinctions-based
mental wellness supports which provide community-based, culturally relevant,
and trauma-informed wellness services for families and survivors, as well as
broader investments to support the health and well-being of Indigenous
peoples.

Human Security and Safety

Indigenous communities, like all communities in Canada, should be places
where people and families feel safe and secure. A well-funded, culturally
sensitive, and respectful police service is essential for community safety and
well-being.

Budget 2021 proposes to provide $861 million over five years, beginning in
2021-22, and $145 million ongoing, to support culturally responsive policing
and community safety services in Indigenous communities. This includes:
- $43.7 million over five years, beginning in 2021-22, to co-develop a
legislative framework for First Nations policing that recognizes First
Nations policing as an essential service.

258 Chapter 8
 - $540.3 million over five years, beginning in 2021-22, and $126.8 million
ongoing, to support Indigenous communities currently served under the
First Nations Policing Program and expand the program to new
Indigenous communities.
- $108.6 million over five years, beginning in 2021-22, to repair, renovate,
and replace policing facilities in First Nation and Inuit communities.
- $64.6 million over five years, beginning in 2021-22, and $18.1 million
ongoing, to enhance Indigenous-led crime prevention strategies and
community safety services.

- $103.8 million over five years, beginning in 2021-22, for a new Pathways
to Safe Indigenous Communities Initiative to support Indigenous
communities to develop more holistic community-based safety and
wellness models.

This investment seeks to address the Calls for Justice, which are further supported
by critical investments outlined in Chapter 9 to advance a new National Action
Plan to End Gender-Based Violence, including $55 million over five years,
beginning in 2021-22, for the Department for Women and Gender Equality to
bolster the capacity of Indigenous women and 2SLGBTQQIA+ organizations to
provide gender-based violence prevention programming aimed at addressing the
root causes of violence against Indigenous women, girls, and 2SLGBTQQIA+
people.

Justice
Building on recent actions to address the overrepresentation of Indigenous
people in the criminal justice system through Bill C-22, to improve Indigenous
peoples’ access to justice in all areas of the justice system:

Budget 2021 proposes to provide $74.8 million over three years, beginning in
2021-22, to improve access to justice for Indigenous people and support the
development of an Indigenous justice strategy to address systemic
discrimination and the overrepresentation of Indigenous people in the justice
system. This includes:
- $27.1 million to Justice Canada to help Indigenous families navigate the
family justice system and access community-based family mediation
services.
- $24.2 million to Justice Canada to support engagement with Indigenous
communities and organizations on the development of legislation and
initiatives that address systemic barriers in the criminal justice system,
including collaboration on an Indigenous justice strategy.
- $23.5 million to the Public Prosecution Service of Canada to support victims
of violence by increasing prosecutorial capacity in the territories.

Strong Indigenous Communities 259

Working with Partners
At present, only three national Indigenous women’s organizations and one
regional organization receive dedicated federal funding for operations. There
are over 30 regional organizations that are either unfunded or receive only
time-limited, project-based funding.
Budget 2021 proposes to provide $36.3 million over five years, beginning in
2021-22, and $8.6 million ongoing to Crown-Indigenous Relations and
Northern Affairs Canada, to enhance support for Indigenous women’s and
2SLGBTQQIA+ organizations, ensuring that the voices and perspectives of
Indigenous women and 2SLGBTQQIA+ people are reflected in all aspects of
decision-making that impacts their lives. This proposal responds directly to
the MMIWG Call for Justice 1.8, which calls upon governments to provide
core and sustainable funding to national, regional, and local Indigenous
women’s and 2SLGBTQQIA+ organizations.

Budget 2021 also proposes to provide $20.3 million over five years,
beginning in 2021-22, to work with Indigenous partners to ensure that
appropriate monitoring mechanisms are in place to measure progress and
to keep the government accountable, now and in the future.

The proposed Budget 2021 investments build on investments made as part of

the 2020 Fall Economic Statement, which announced $781.5 million over five
years, beginning in 2021-22 and $106.3 million ongoing. This included:
 $724.1 million to launch a comprehensive Violence Prevention Strategy to
expand access to culturally relevant supports for Indigenous women,
children, 2SLGBTQQIA+ people facing gender-based violence. This
strategy will support new shelters and transition housing for First Nations,
Inuit, and Métis peoples across the country, including on reserve, in the
North, and in urban areas.
 $49.3 million to support the implementation of Gladue Principles in the
mainstream justice system and Indigenous-led responses in order to help
reduce the overrepresentation of Indigenous peoples in the criminal
justice and correctional systems.
 $8.1 million to develop Administration of Justice Agreements with
Indigenous communities to strengthen community-based justice systems
and support self-determination.

260 Chapter 8
8.4 Walking the Path to Reconciliation and Self-
determination
The Government of Canada is committed to supporting self-determination and
self-government as part of its efforts to forge stronger relationships with First
Nation, Inuit, and Métis peoples.
The federal government also recognizes that meaningful action is required to
address the systemic racism many Indigenous peoples face, including in their
interactions with public institutions.
Budget 2021 presents the next steps in the federal government’s plan to ensure
Indigenous peoples have greater say over the policies and programs that affect
their lives.

Implementation of Legislation on the United Nations

Declaration on the Rights of Indigenous Peoples
The United Nations Declaration on the Rights of Indigenous Peoples is the most
comprehensive international instrument on the rights of Indigenous peoples. It
provides guidance on co-operative relationships with Indigenous peoples based
on the principles of equality, partnership, good faith and mutual respect for the
survival, dignity and well-being of Indigenous peoples. In December 2020, the
Government introduced Bill C-15, United Nations Declaration on the Rights of
Indigenous Peoples Act, which was developed with Indigenous partners, fulfilling
its commitment to introduce legislation to implement the Declaration as
government legislation.

Budget 2021 proposes to provide $31.5 million over two years,

starting in 2021-22, to support the co-development of an Action Plan
with Indigenous partners to implement this legislation and to achieve
the objectives of the Declaration. This process will support Indigenous
self-determination and enhance nation-to-nation, Inuit-Crown and
government-to-government relationships.

Strong Indigenous Communities 261

Escalating 10-Year Grant Funding
To help advance a new fiscal relationship with First Nations, a new 10-year grant
funding mechanism was implemented in 2019. This initiative aims to provide
more long-term stabilized program supports for eligible First Nations who choose
to join the grant. It allows them to build capacity, do effective planning, and
account for inflation and population increases on reserve. The government has
also committed to escalate the 10-year grants to address price and population
growth and ensure that funding keeps pace with the needs of First Nations.

Budget 2021 proposes to provide $2.7 billion over 10 years, starting in

2021-22, to ensure that funding for core programs and services provided
through the 10-year grants addresses key cost drivers. Escalation will be
based on inflation and the population of each community, but a minimum of
2 per cent annual growth will be provided to ensure that First Nations within
the grant receive stable and predictable funding. This will strengthen
communities’ ability to design and deliver services in a manner that reflects
community priorities.

Supporting Indigenous Governance and Capacity

Core governance support is essential for First Nations leaders to effectively
serve their communities and advance self-determination.
Budget 2021 proposes to provide $104.8 million over two years, starting in
2021-22, to support the administrative capacity of First Nations
governments and other organizations that deliver critical programs and
services.
Budget 2021 also proposes to invest $151.4 million over five years, starting
in 2021-22, to provide wrap-around supports for First Nations with the
greatest community development needs.

Advancing Specific Claims Settlements

The specific claims process helps right past wrongs and address First Nations’
long-standing grievances through negotiated settlements. Canada is continuing
to consult in order to co-develop program reforms. To provide timely payment
of negotiated settlements of specific claims, while this work continues,
Budget 2021 will replenish the Specific Claims Settlement Fund in 2022-23.

262 Chapter 8
Commemorating the Legacy of Residential Schools
The Residential School System is a shameful, tragic, and defining part of
Canada’s history. It was born of colonial practices that left negative impacts on
generations of Indigenous peoples. As part of our collective duty to remember:

Budget 2021 proposes to provide $13.4 million over five years, with
$2.4 million ongoing, to Canadian Heritage for events to commemorate the
history and legacy of residential schools, and to honour survivors, their
families and communities, as well as to support celebrations and
commemoration events during the proposed National Day for Truth and
Reconciliation.

This builds on investments since 2015 to commemorate the legacy of

residential schools; support the efforts of Indigenous peoples to reclaim,
revitalize, maintain and strengthen Indigenous languages and cultures including
the passage and support for the co-developed Indigenous Languages Act; and
to continue to provide healing supports for residential school survivors and
their families. The government has also announced more than $700 million in
new funding through a variety of programs and initiatives to help strengthen
Indigenous languages and cultures, with additional proposed investments of
more than $460 million in this Budget.

Support for Indigenous-led Data Strategies

Access to reliable and culturally relevant data on Indigenous peoples is critical
to building a complete portrait of Indigenous lived experiences, unmasking
inequalities, and ensuring delivery of effective policies and programs.

Indigenous-led data strategies can further self-determination by providing First

Nations, Inuit, and Métis Nation governments and organizations with the data
they need to support their communities.

Budget 2021 proposes to invest $73.5 million over three years, starting in
2021-22, to continue work towards the development and implementation
of a First Nations Data Governance Strategy.
Budget 2021 proposes to invest $8 million over three years, starting in
2021-22, to support Inuit and Métis baseline data capacity and the
development of distinctions-based Inuit and Métis Nation data strategies.

Strong Indigenous Communities 263

Engagement with Indigenous Peoples
The government is committed to renewing the relationship with Indigenous
peoples through increased engagement, partnership, and co-development of
policy and programs. In Budget 2016, the government announced new
investments to support the capacity of Indigenous Representative
Organizations to engage with the government. To continue to support this
important work:
Budget 2021 proposes to provide $50 million over five years, starting in
2021-22, and $10 million ongoing, to renew and make permanent
dedicated consultation and policy development funding.

Supporting Self-determination Through Tax

Agreements
Tax arrangements between the Crown and Indigenous governments support
self-determination and social and economic development by creating
opportunities for Indigenous governments to raise tax revenues within their
reserve or settlement lands in support of community priorities.

The federal government continues to be committed to negotiating agreements

with interested Indigenous governments that enable them to implement a First
Nations Goods and Services Tax within their reserves or settlement lands and
with interested self-governing Indigenous governments to enable them to
implement a personal income tax within their lands. The federal government
also remains committed to facilitating similar arrangements between interested
provincial and territorial governments and Indigenous governments.

Budget 2021 announces the Government of Canada’s intention to

engage with interested Indigenous governments and organizations on a
framework for the negotiation of agreements that would enable
interested Indigenous governments to implement a fuel, alcohol,
tobacco, and cannabis sales tax within their reserves or settlement lands.

264 Chapter 8
Supporting First Nations Priorities
Budget 2021 proposes significant investments for First Nations to advance
initiatives across a number of priority areas. Here is a summary of those
investments:
 $2.5 billion over five years to build on the existing distinctions-based
approach to Indigenous Early Learning and Child Care, with a long-term
investment in Indigenous-led programming that parallels the
government’s commitment to provinces and territories. This includes
$515 million for before- and after-school care on reserve, plus additional
support for First Nations programming and capacity-building.
 $1.4 billion to see Indigenous communities and businesses through the
COVID-19 pandemic, including distinctions-based funding under the
Indigenous Community Support Fund and the Indigenous Community
Business Fund, funding to maintain the public health response in First
Nations communities, and support for the First Nations Finance Authority.
 $1 billion to increase funding under the First Nations Child and Family
Services Program.
 More than $2.4 billion over five years to improve essential health,
education, and social services on reserve, including health services in
remote and isolated communities and transforming health systems,
elementary and secondary education, and on-reserve income assistance.
 $775 million over five years to maintain medically necessary services
provided through the Non-Insured Health Benefits Program.
 $598 million over three years to support a Distinctions-Based Mental
Wellness Strategy.
 $177 million over two years to support Indigenous post-secondary
students and institutions during COVID-19.
 $1.7 billion over five years to cover operations and maintenance costs of
on reserve community infrastructure in First Nations communities. First
Nations will also have access to the $4.3 billion distinctions-based
Indigenous Community Infrastructure Fund to support immediate
demands, as prioritized by Indigenous partners, with shovel-ready projects
in their communities.
 $64 million to help Indigenous entrepreneurs, including Indigenous
women, access capital and business supports to start and grow their
businesses.

Strong Indigenous Communities 265

  Funding for a range of measures to end the national tragedy of missing
and murdered Indigenous women and girls, anchored in the four
interconnected thematic areas of culture, health and wellness, human
security and safety, and justice.
 $584 million over five years to co-develop a legislative framework for First
Nations policing that recognizes it as an essential service, and to stabilize
and expand the First Nations Policing Program.
 $109 million over five years to repair, renovate, and replace policing
facilities in First Nation and Inuit communities.
 More than $165 million over five years to enhance Indigenous-led crime
prevention strategies and community safety services.
 More than $460 million over five years to support language reclamation
and revitalization, Indigenous cultural spaces, sport programming for
Indigenous women and girls, events to commemorate the legacy of
residential schools, and preserve Indigenous heritage.
 $31 million over two years to support the co-development of an Action
Plan with Indigenous partners to implement legislation on the United
Nations Declaration on the Rights of Indigenous Peoples.
 $2.7 billion over 10 years to escalate the 10-year grants to address key cost
drivers such as changes in inflation and population in First Nations
communities.
 More than $373 million over five years to support First Nations
governance, support Additions to Reserve, and further a First Nations Data
Governance Strategy.

First Nations will also benefit from:

 Access to $36 million over three years in investments to help build capacity
and create jobs in Indigenous communities through clean energy projects.
 $163 million over three years to support food security in isolated northern
communities.
 Access to $138 million for Indigenous recipients through a $1.4 billion top-
up to Infrastructure Canada’s Disaster Mitigation and Adaptation Fund to
help Indigenous communities adapt to climate change.
 $23 million over five years to engage on developing a plan to transition
from open net-pen salmon farming in British Columbia’s waters by 2025,
and collaborate with Indigenous communities to pilot area-based
management approaches to managing aquaculture activities in priority
areas of British Columbia.

266 Chapter 8
 $647 million over five years to stabilize and conserve wild Pacific salmon
populations, including funding to engage with First Nations and fish
harvesters.
 $10 million to extend the Sustainable Fisheries Solutions and Retrieval
Support Program to support projects from applicants, including
Indigenous communities and organizations, that retrieve and dispose of
fishing related plastic waste, test new fishing technology and support
international efforts to decrease discarded or abandoned gear.
 Extending the Indigenous Business Initiative to June 30, 2021 to support
Indigenous businesses during the COVID-19 pandemic by providing
interest-free loans and non-repayable contributions for First Nations, Inuit,
and Métis Nation businesses.
 $87 million over five years to modernize federal procurement and create
opportunities for specific communities by diversifying the federal supplier
base. This will in part, support efforts to meet Canada’s target of 5 per cent
of federal contracts being awarded to businesses managed and led by
Indigenous people.

Strong Indigenous Communities 267

 Supporting Inuit Priorities
The Government of Canada and Inuit Tapiriit Kanatami continue to work
together to advance shared priorities through the Inuit-Crown Partnership
Committee. Budget 2021 proposes to build on this work by advancing
initiatives that will make a meaningful difference in Inuit communities,
including:
 $2.5 billion over five years to build on the existing distinctions-based
approach to Indigenous Early Learning and Child Care, with a long-term
investment in Indigenous-led programming that parallels the
government’s commitment to provinces and territories. This includes
support for Inuit programming and capacity-building.
 $1.4 billion to see Indigenous communities and businesses through the
COVID-19 pandemic with distinctions-based support through the
Indigenous Community Support Fund and Indigenous Community
Business Fund and funding for continued public health responses in
Indigenous communities, including for Inuit.
 $775 million over five years to maintain medically necessary services
provided through the Non-Insured Health Benefits Program.
 $598 million over three years to support a Distinctions-Based Mental
Wellness Strategy.
 $177 million over two years to support Indigenous post-secondary
students and institutions during COVID-19.
 Access to the $4.3 billion distinctions-based Indigenous Community
Infrastructure Fund to support immediate demands, as prioritized by
Indigenous partners, with shovel-ready projects in Indigenous
communities, including for Inuit.
 $64 million to help Indigenous entrepreneurs, including Indigenous
women, access capital and business supports to start and grow their
businesses.
 Funding for a range of measures to end the national tragedy of missing
and murdered Indigenous women and girls, anchored in the four
interconnected thematic areas of culture, health and wellness, human
security and safety, and justice.
 $109 million over five years to repair, renovate, and replace policing
facilities in First Nation and Inuit communities.
 More than $165 million over five years to enhance Indigenous-led crime
prevention strategies and community safety services.
 $31 million over two years to support the co-development of an Action
Plan with Indigenous partners to implement legislation on the United
Nations Declaration on the Rights of Indigenous Peoples.

268 Chapter 8
 More than $460 million over five years to support language reclamation
and revitalization, Indigenous cultural spaces, sport programming for
Indigenous women and girls, events to commemorate the legacy of
residential schools, and preserve Indigenous heritage.
 $4 million over three years to support the development of an Inuit
data strategy.

Inuit will also benefit from:

 $40 million over three years to support feasibility and planning of
hydroelectricity and grid interconnection projects in the North.
 Access to $36 million over three years in investments to help build capacity
and create jobs in Indigenous communities through clean energy projects.
 Access to $138 million for Indigenous recipients through a $1.4 billion top-
up to Infrastructure Canada’s Disaster Mitigation and Adaptation Fund to
help Indigenous communities adapt to climate change.
 $163 million over three years to support food security in isolated northern
communities, including Inuit communities.
 $12 million to renew the Standards to Support Resilience in Infrastructure
Program, so that the Standards Council of Canada can continue updating
standards and guidance in priority areas such as flood mapping and
building in the North.
 $25 million over three years to support pan-Arctic scientific research
through the Polar Continental Shelf Program. These activities would also
enhance employment and training opportunities for Indigenous people
and Northerners.
 $15 million over three years, starting in 2021-22, to accelerate
archeological and conservation work on artifacts of international
importance from the wrecks of HMS Erebus and HMS Terror.
 $8 million to support the transformation of Aurora College into a
polytechnic university
 $87 million over five years to modernize federal procurement and create
opportunities for specific communities by diversifying the federal supplier
base. This will in part, support efforts to meet Canada’s target of 5 per cent
of federal contracts being awarded to businesses managed and led by
Indigenous people.
 Extending the Indigenous Business Initiative to June 30, 2021 to support
Indigenous businesses during the COVID-19 pandemic by providing
interest-free loans and non-repayable contributions for First Nations, Inuit,
and Métis Nation businesses.

Strong Indigenous Communities 269

 Supporting Métis Nation Priorities
The signing of the Canada-Métis Nation Accord in April 2017 effectively reset
the relationship between Canada and the Métis Nation. Budget 2021
continues progress by proposing investments in key Métis Nation priorities,
including:

 $2.5 billion over five years to build on the existing distinctions-based

approach to Indigenous Early Learning and Child Care, with a long-term
investment in Indigenous-led programming that parallels the
government’s commitment to provinces and territories. This includes
support for Métis Nation programming and capacity-building.
 $1.4 billion to see Indigenous communities and businesses through the
COVID-19 pandemic with distinctions-based support through the
Indigenous Community Support Fund and Indigenous Community
Business Fund and funding for continued public health responses in
Indigenous communities, including for the Métis Nation.
 $598 million over three years to support a Distinctions-Based Mental
Wellness Strategy.
 $177 million over two years to support Indigenous post-secondary
students and institutions during COVID-19.
 Access to the $4.3 billion distinctions-based Indigenous Community
Infrastructure Fund to support immediate demands, as prioritized by
Indigenous partners, with shovel-ready projects in Indigenous
communities, including the Métis Nation.
 $64 million to help Indigenous entrepreneurs, including Indigenous
women, access capital and business supports to start and grow their
businesses.
 Funding for a range of measures to end the national tragedy of missing
and murdered Indigenous women and girls, anchored in the four
interconnected thematic areas of culture, health and wellness, human
security and safety, and justice.
 More than $165 million over five years to enhance Indigenous-led crime
prevention strategies and community safety services.
 More than $460 million over five years to support language reclamation
and revitalization, Indigenous cultural spaces, sport programming for
Indigenous women and girls, events to commemorate the legacy of
residential schools, and preserve Indigenous heritage.
 $31 million over two years to support the co-development of an Action
Plan with Indigenous partners to implement legislation on the United
Nations Declaration on the Rights of Indigenous Peoples.

270 Chapter 8
 $4 million over three years to support the development of a Métis Nation
data strategy.

Métis Nation communities will also benefit from:

 Access to $36 million over three years in investments to help build
capacity and create jobs in Indigenous communities through clean
energy projects.
 Access to $138 million for Indigenous recipients through a $1.4 billion
top-up to Infrastructure Canada’s Disaster Mitigation and Adaptation
Fund to help Indigenous communities adapt to climate change.

 Extending the Indigenous Business Initiative to June 30, 2021 to support

Indigenous businesses during the COVID-19 pandemic by providing
interest-free loans and non-repayable contributions for First Nations,
Inuit and Métis Nation businesses.
 $87 million over five years to modernize federal procurement and create
opportunities for specific communities by diversifying the federal
supplier base. This will in part, support efforts to meet Canada’s target of
5 per cent of federal contracts being awarded to businesses managed
and led by Indigenous people.

Strong Indigenous Communities 271

Chapter 8
Strong Indigenous Communities
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
8.1. Healthy and
Vibrant
Communities 0 3,123 1,467 725 512 516 6,343
Supporting
Indigenous
Communities in
the Fight Against
COVID-19 0 1,225 2 2 2 2 1,231
Improving Health
Outcomes in
Indigenous
Communities 0 428 563 152 120 121 1,384
Distinctions-Based
Mental Wellness
Strategy 0 195 201 201 0 0 598
Supporting
Indigenous
Children and
Families 0 594 140 143 144 126 1,147
Providing High-
quality Education 0 270 177 227 247 267 1,188
Supporting
Indigenous Post-
secondary
Education during
COVID-19 0 102 75 0 0 0 177
On-reserve
Income Assistance 0 309 309 0 0 0 618
8.2. Building
Infrastructure
and Economic
Growth 0 1,204 1,953 1,987 763 389 6,296
Indigenous
Infrastructure 0 1,024 1,918 1,942 763 389 6,037
Supporting
Indigenous
Economies 0 150 0 0 0 0 150
Support for
Indigenous
Entrepreneurs 0 15 20 31 0 0 66
Redesigning the
Additions to
Reserve Policy 0 14 15 14 0 0 43

272 Chapter 8
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
8.3. Responding 0 223 412 453 260 238 1,585
to the Tragedy of
Missing and
Murdered
Indigenous
Women and Girls
Culture 0 107 185 150 7 5 453
Health and 0 25 54 56 2 2 139
Wellness
Human Security 0 64 132 208 239 217 861
and Safety
Justice 0 18 30 27 0 0 75
Working with 0 9 11 12 12 13 57
Partners
8.4. Walking the
Path to
Reconciliation
and Self-
determination 0 136 211 174 182 234 938
Implementation of
Legislation on the
United Nations
Declaration on the
Rights of
Indigenous
Peoples 0 15 16 0 0 0 31
Escalating 10-Year
Grant Funding 0 32 60 94 134 185 505
Supporting
Indigenous
Governance and
Capacity 0 55 92 36 36 36 256
Commemorating
the Legacy of
Residential
Schools 0 4 2 2 2 2 13
Support for
Indigenous-led
Data Strategies 0 20 31 31 0 0 82
Engagement with
Indigenous
Peoples 0 10 10 10 10 10 50

Strong Indigenous Communities 273

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Additional
Investments –
Supporting
Strong
Indigenous
Communities 0 8 5 5 2 2 23
Parks Canada
Capacity for
Indigenous
Engagement 0 2 2 2 2 2 11
Funding proposed for Parks Canada to support the Agency’s capacity to engage at Recognition of Indigenous
Rights and Self-Determination discussion tables. This measure will support the government’s commitment to
negotiating workable arrangements with Indigenous groups to define how each group will exercise its Aboriginal
rights.
Supporting the
Resolution of
Indigenous
Childhood Claims 0 3 0 0 0 0 3
Funding proposed for Crown-Indigenous Relations and Northern Affairs Canada to support work to resolve
historic childhood claims in a manner that is fair, compassionate, and respectful.
Supporting
Indigenous
Partners for
Meaningful Crown
Consultation and
Engagement 0 3 3 3 0 0 9
Funding proposed for Crown-Indigenous Relations and Northern Affairs Canada to negotiate and implement
Consultation Protocols. This measure will support the government’s commitment to meaningful engagement and
consultation with Indigenous people on projects or changes that could impact their traditional territories and
Aboriginal and treaty rights.
Chapter 8 – Sub- 0 4,695 4,048 3,344 1,720 1,378 15,184
total
Less: Provisions for 0 -431 -562 -364 -403 -427 -2,188
Anticipated
Cabinet Decisions
Not Yet Made
Included in
Previous Budgets
or Updates
Chapter 8 - Net 0 4,263 3,486 2,980 1,317 951 12,997
Fiscal Impact
Note: Numbers may not add due to rounding.

274 Chapter 8
Chapter 9
Protecting Our Shared Values
Canadians are rightly proud of our global reputation as a diverse, fair, safe, and
open society.

The government will stand up for Canadians’ shared values, including: the rule of
law; protection of the environment; freedom from persecution as a result of one’s
race, religion, sexuality, ethnicity, national origin, gender identity or expression,
age, or ability; the preservation of language and culture; the protection of the
world’s most vulnerable; and the promotion of peace, security, and human rights,
including the rights of women and girls.

The government is protecting communities through a firearms ban, protecting

Canadians through investments in defence, and protecting and upholding our
values through amendments to our justice system and public safety that make
them more responsive to the needs of Canadians.

Amid the global pandemic, our global interconnectedness has never been more
evident. We are all in this together.

9.1 Promoting Our Two Official Languages

For more than 50 years, the Official Languages Act has upheld the equal status of
English and French. Our two official languages and our linguistic duality are part
of who we are as Canadians.

The government also recognizes that Canada’s French language situation is

unique and that the federal government has the responsibility to actively protect
and promote the language. The government has been consulting with Canadians
about how to better protect the use of the French language, support the vitality
of official language minority communities—including the institutions and rights of
Francophones outside of Quebec—and improve bilingualism in our public
institutions. To meet the needs of Canadians for the next 50 years, the
government is committed to introducing amendments to the Official Languages
Act.

The government also remains committed to the work already underway to

revitalize, strengthen, and maintain Indigenous languages in Canada. More details
can be found in Chapter 8.

Protecting Our Shared Values 275

Promoting Official Languages
The federal government is committed to promoting the vitality of Canada’s
official language minority communities and fostering bilingualism in Canada—
now and for generations to come. In the recently released paper entitled English
and French: Towards a Substantive Equality of Official Languages in Canada, the
government proposed fundamental changes to establish a new linguistic balance
and pave the way for official languages for the next 50 years. This new funding
commitment will support these reforms, bolster the vitality of official language
minority communities, and celebrate the voices they bring to our country’s
landscape.

Budget 2021 proposes to provide $180.4 million over three years, starting in
2021-22, to Canadian Heritage to support students across the country in
achieving greater levels of bilingualism. Being bilingual is a competitive
advantage to Canadians. Every time a child cannot go to French immersion
school, we lose a future bilingual citizen. This funding will be used to enhance
French immersion and French second-language programs in schools and
post-secondary institutions; help provinces and territories meet the strong
demand from students and parents for spaces in French immersion and
French second-language programs; boost the existing strategy for teacher
recruitment and retention; as well as support learning French from early
childhood.
Budget 2021 proposes to provide $121.3 million over three years, starting in
2021-22, to Canadian Heritage to make high-quality post-secondary
minority-language education available across Canada.
Budget 2021 proposes to provide $81.8 million over two years, starting in
2021-22, to Canadian Heritage to support the construction, renovation, and
expansion of the educational and community spaces that serve official
language minority communities.
Budget 2021 proposes to provide $6.4 million to Canadian Heritage and
$2.3 million to the Treasury Board Secretariat, over two years, starting in
2021-22, to move forward with modernizing the Official Languages Act.

276 Chapter 9
9.2 Keeping Canadians Safe and Improving
Access to Justice
Every Canadian should feel safe in their community and everyone should
receive equitable treatment under the law.

To keep Canadians safe and protect the integrity of our public institutions, the
government is proposing measures that strengthen our democratic process,
reduce violent crime, and make the justice system more responsive to the needs
of all Canadians.

Gun Control
Firearms were used in more than 40 per cent of homicides in Canada in 2019.
There were over 107,000 victims of police-reported intimate-partner violence
in Canada in 2019. For 660 of them, a firearm was present. Women accounted
for almost 8 in 10 victims of all incidents and they were even more likely to be
the victim in the 660 incidents where a firearm was present.
According to the Canadian Medical Association Journal, in a study of 6,400
firearm-related incidents in Ontario, young men in cities and predominantly
lower-income were more likely to be involved in assaults. But two-thirds of the
cases involved self-harm by men over the age of 45, across all income levels,
and living mainly in more remote parts of the province; of those cases, 92 per
cent were fatal.

Communities across Canada have seen too many tragedies as a result of

firearms.

On February 16, 2021, the government introduced legislation to amend the

Criminal Code and Firearms Act to strengthen gun control in Canada, support
handgun bans in our cities, and eliminate all legal use of prohibited military-
assault style firearms among other measures. To continue this critical work and
protect Canadians from gun violence:

Budget 2021 proposes to provide $312 million over five years, starting in
2021-22, and $41.4 million ongoing, to implement legislation to help protect
Canadians from gun violence and to fight gun smuggling and trafficking.
Funding will support the Royal Canadian Mounted Police, the Canada Border
Services Agency, and Public Safety Canada, and builds on investments made in
the 2020 Fall Economic Statement. These measures will fight gun crime in our
communities and keep Canadians safe.

Protecting Our Shared Values 277

Advancing a National Action Plan to End Gender-
Based Violence
The Government of Canada is committed to building a country free of gender-
based violence.

Gender-based violence costs women and gender-diverse people their lives. It

has profound effects on children. And according to estimates, Canadians
collectively spend billions annually to deal with the aftermath.

Every 2.5 days a woman or girl is killed in Canada. In the last year alone there
were over 160 women violently killed. Sexual assault is a gendered crime that is
far more likely to target women, especially young women. Sadly, the rate of
sexual assault is not declining, according to Statistics Canada, with police-
reported sexual assaults increasing every year from 2015 to 2019.

Those at highest risk of violence are those living in rural and remote areas,
Indigenous women, Black women, women with disabilities, women of colour,
gender non-binary and LGBTQ2 people.

During the pandemic, job losses, financial stresses, and self-isolation have
created conditions for a rise in gender-based violence—82 per cent of those
who work on the front lines report an increase in the frequency and severity of
violence experienced by survivors. Since March 2020, the federal government
has announced up to $100 million for organizations providing emergency
support and services to survivors of gender-based violence.

In 2017, the Government of Canada launched the Gender-Based Violence

Strategy. Nearly $200 million starting in 2017-18 until 2022-23, and over
$40 million per year ongoing, has been committed through the strategy to
prevent gender-based violence, support survivors and their families, and
promote responsive legal and justice systems. The government has also
launched a $100 million Feminist Response and Recovery Fund, creating
building blocks for long-term, lasting change to advance women’s equality.

The government—in consultation with provinces, territories, municipalities,

Indigenous peoples, gender-based violence experts, stakeholders and, most
importantly, survivors of gender-based violence—is moving forward on
developing a National Action Plan to End Gender-Based Violence, focusing on
ensuring that anyone facing gender-based violence has reliable and timely
access to protection and services, no matter where they live.

Budget 2021 proposes to invest $601.3 million over five years, starting in 2021-
22, to advance towards a new National Action Plan to End Gender-Based
Violence, as outlined below.

278 Chapter 9
Gender-Based Violence Organizations
To enhance the capacity and responsiveness of organizations such as sexual
assault centres, women’s shelters, and other organizations that provide critical
and often life-saving services and supports for women, girls, LGBTQ2, and
gender non-binary people experiencing violence:
Budget 2021 proposes to invest $200 million over two years, starting in
2021-22, for the Department for Women and Gender Equality to support
gender-based violence organizations.

Gender-Based Violence Program

To make our communities more resilient to the threats of gender-based
violence, including initiatives that support at-risk populations and survivors—
almost half of whom are between the ages of 18 and 24, with nearly three in ten
survivors under the age of 18—and that educate men and boys, so that all
people recognize the role they play in ending gender-based violence:
Budget 2021 proposes to invest $105 million over five years, starting in
2021-22, for the Department for Women and Gender Equality to enhance
its Gender-Based Violence Program. Funding will go to initiatives that
engage men and boys. It will increase funding for initiatives to stop human
trafficking, including support for at-risk populations and survivors. It will
also provide support for testing and implementing best practices to
address gender-based violence, with a focus on projects that could be
scaled at the national level.

National Action Plan to End Gender-Based Violence

Secretariat
To establish a dedicated secretariat to coordinate the ongoing work towards
the development and implementation of the National Action Plan to End
Gender-Based Violence, and to continue engagement with provinces, territories,
municipalities, Indigenous peoples, gender-based violence experts,
stakeholders and, most importantly, survivors of gender-based violence:
Budget 2021 proposes to provide $14 million over five years, starting
in 2021-22, for the Department for Women and Gender Equality.

Protecting Our Shared Values 279

Increased Data Collection
To build a better foundation of data around gender-based violence upon which
government can build stronger policies and take stronger action:
Budget 2021 proposes to provide $11 million over five years, starting in
2021-22, for the Department for Women and Gender Equality for gender-
based violence research and knowledge mobilization, with funding
supporting community research models, working with Statistics Canada to
develop a national femicide database, and enhancing the sample size of
national gender-based violence surveys.

Indigenous Peoples
In recognition that Indigenous women, girls and 2SLGBTQQIA+ people are
much more likely to experience violence than non-Indigenous women, and that
the homicide rate for this community was seven times higher than for non-
Indigenous women:
Budget 2021 proposes to provide $55 million over five years, starting in
2021-22, for the Department for Women and Gender Equality to bolster the
capacity of Indigenous women and 2SLGBTQQIA+ organizations to provide
gender-based violence prevention programming aimed at addressing the
root causes of violence against Indigenous women, girls, and 2SLGBTQQIA+
people. These investments are in addition to those outlined in Chapter 8 to
address the national tragedy of missing and murdered Indigenous women
and girls.

Safer Relationships
To pilot interventions that promote healthy relationships and prevent violence
in the home:
Budget 2021 proposes to provide $50 million over five years, starting in
2021-22, for the Public Health Agency of Canada to design and deliver
interventions that promote safe relationships and prevent family violence,
including intimate partner violence, child maltreatment, and elder abuse.

Crisis Hotlines
To support crisis hotlines that are experiencing a rise in call volumes during the
pandemic:
Budget 2021 proposes to provide $30 million over five years, starting in
2021-22, for the Department for Women and Gender Equality so that crisis
hotlines can serve the urgent needs of more Canadians and offer more
robust services, resources, and supports to prevent the escalation of
gender-based violence.

280 Chapter 9
Free Legal Advice
To help ensure access to free legal advice and legal representation for survivors
of sexual assault and intimate partner violence, no matter where they live:
Budget 2021 proposes to provide $85.3 million over five years, starting in
2021-22, for Justice Canada. Funding will support a national program for
independent legal advice and independent legal representation for victims
of sexual assault, as well as to support pilot projects for victims of intimate
partner violence.

Protections for Women and Children during Divorce or

Separation
Women are six times more likely to be killed by a former spouse than a spouse
with whom they are living. When co-parenting during a divorce or separation,
having supervised options can protect women’s safety and protect children
from experiencing violence in their homes. To support supervision services for
parenting time in cases of separation and divorce:
Budget 2021 proposes to provide $28.4 million over five years,
starting in 2021-22, for Justice Canada. This will protect the safety and
well-being of children and families.

Child Exploitation
The online exploitation of children is disturbing and alarming. The government
supports innovative tools to fight child sexual exploitation including the
Canadian Centre for Child Protection’s Project Arachnid, which is a world-
leading tool to detect and remove exploitative content from the internet. But
more must be done to ensure children are protected and to stop perpetrators:
Budget 2021 proposes to provide $20.7 million over five years,
starting in 2021-22, for the Royal Canadian Mounted Police to
enhance its ability to pursue online child sexual exploitation
investigations, identify victims and remove them from abusive
situations, and bring offenders to justice—including those who offend
abroad.

Support for Newcomers

To support newcomers and refugees who experience gender-based violence:
Budget 2021 proposes to provide $2 million over five years, starting in
2021-22, for Immigration, Refugees and Citizenship Canada to
increase access to information and support for new Canadians facing
family and gender-based violence, including enhancing the availability

Protecting Our Shared Values 281

 of anti-violence resources. This will help ensure that newcomers’ lives
in Canada get off to a safe and successful start.

In addition, as outlined in Chapter 6, the government is proposing to reallocate

$250 million in funding which will be used for transitional housing and shelter
spaces for women and children fleeing violence, as well as provide additional
rental assistance through the Canada Housing Benefit for low-income women
and children fleeing violence.

Additional details on the government’s National Action Plan to End Gender-

Based Violence will be announced in the coming months.

Preventing Radicalization to Violence

In recent years, Canada and the world have witnessed an increase in
radicalization that leads to violence. This poses a significant threat to public
safety. To prevent violent extremism:

Budget 2021 proposes to provide $8.2 million over three years, starting in
2021-22, for the Canada Centre for Community Engagement and
Prevention of Violence to increase support and research for frontline
initiatives and programming that prevent and counter radicalization to
violence, including violent misogyny. This work will support the
forthcoming National Action Plan to End Gender-Based Violence.

Better Job Protections for Parents of Young Victims of

Crime
The death or disappearance of a child is devastating and can leave parents
unable to work. In September 2018, the Government of Canada introduced a
more inclusive and flexible Canadian Benefit for Parents of Young Victims of
Crime, to ensure victims’ families continue to get the help they need.

This benefit provides up to 104 weeks of income support to eligible applicants,

who have suffered a loss of income because they took time away from work to
cope with the death or disappearance of a child or children, as a result of a
probable Criminal Code offence.

The Government of Canada is announcing its intention to amend the

Canada Labour Code to ensure that employees in the federally regulated
private sector have job protection when they avail themselves of this new
benefit.

282 Chapter 9
Diverting Youth Away from the Justice System
At present, certain groups of young people are significantly overrepresented in
the youth criminal justice system. In 2018-19, 43 per cent of youth admitted to
correctional services were Indigenous — over four times higher than their share
of the population.

The government is committed to addressing systemic inequities in the criminal

justice system. That includes at early stages, when, instead of going into
custody, young people can be redirected to community-based programming
that encourages rehabilitation and reduces criminal behaviour over the long-
term. To address overrepresentation of certain groups and reduce youth crime
and youth incarceration rates:

Budget 2021 proposes to provide $216.4 million over five years, starting in
2021-22, and $43.3 million ongoing for the Youth Justice Services Funding
Program to increase funding to the provinces and territories in support of
diversion programming and to help reduce the overrepresentation of
Indigenous peoples, Black Canadians, and other racialized groups in the youth
justice system. By diverting youth to the right services at the right time and
addressing the root causes of crime, this measure would help reduce the crime
rate and promote better outcomes for young people and their communities.

Expanding Access to Drug Treatment Courts

The pandemic has exacerbated the crisis of problematic substance use in
Canada. The government takes a public-health centered approach to addiction.
With Bill C-22, the government has proposed legislative amendments that
require police and prosecutors to consider alternatives, such as diversion to
addiction treatment programs, instead of laying charges or prosecuting people
for simple drug possession. Drug treatment courts can break the cycle of drug
addiction and criminal behaviour by helping non-violent offenders get the
treatment they need. Since 2015, the federal government has provided over
$25 million to support 13 drug treatment courts, which treat an average of 200
clients per day. To make our communities safer and support families struggling
with addiction:

Budget 2021 proposes to provide $40.4 million over five years,

beginning in 2021-22, and $10 million ongoing, to support up to 25
additional drug treatment courts. This funding will provide eligible
participants with access to a comprehensive program that includes
substance use treatment and social services support.

Protecting Our Shared Values 283

Enhancing Legal Support for Vulnerable
Communities
The government is committed to building a strong justice system and ensuring
fair outcomes for all involved. That is why the government is making
investments to support access to legal information and advice for racialized
Canadians and asylum seekers.

Budget 2021 proposes to provide $21.5 million over five years, starting in
2021-22, for a Racialized Communities Legal Support Initiative. This would
support organizations that provide free public legal education and
information as well as organizations that provide legal services and advice
to racialized communities.
Budget 2021 also proposes to provide an additional $26.8 million, in 2021-
22, to enable participating provinces to maintain immigration and refugee
legal aid support for asylum seekers, while protecting the efficiency and
integrity of the asylum system.

Supporting Work to Address Systemic Racism in

Public Safety Institutions
All people in Canada should be treated fairly by our public safety agencies.
Yet, systemic racism exists in Canada and racialized communities and
Indigenous peoples continue to be overrepresented in the justice system
and far too many Canadians do not have confidence that public safety
agencies are there to protect them. This must change.

Budget 2021 proposes to provide $75 million over five years, starting
in 2021-22, and $13.5 million ongoing, to the Royal Canadian
Mounted Police to take action, with steps to combat systemic racism
through: reforming recruitment and training processes; the collection,
analysis, and reporting of race-based data; more rapidly evaluating
the impact of policing activities on certain communities; and
improving community engagement and consultation with Black,
Indigenous, and racialized communities.

284 Chapter 9
Reforming Canada’s Pardons Process
For a Canadian with a criminal record, the obstacles they face (long after serving
out their sentence) can impede their ability to fully reintegrate and contribute
to their community. A pardon increases access to jobs, education, stable
housing, and makes communities safer by helping to end the cycle of crime.
However, fees and difficult-to-navigate processes pose unnecessary barriers to
pardons, particularly among marginalized groups.

Budget 2021 proposes to provide $88.2 million over five years, starting in
2021-22, with $13 million ongoing, to the Parole Board of Canada, the Royal
Canadian Mounted Police, and Public Safety Canada. This funding would
reduce application fees, create an online application portal, and support
community organizations that help people navigate the pardon application
process.
To help ensure that the pardons program works fairly and effectively to keep
Canadians safe, the government is announcing its intention to amend the
Criminal Records Act to make pardons more accessible to people who have
served their sentences and are living law-abiding lives.

Reforming the Judicial Conduct Review Process

Canada’s judicial system is built on a foundation of trust, impartiality, and
respect. The judges that preside over Canada’s federal, provincial, and territorial
superior courtrooms should uphold these values, so it is important that when
allegations of misconduct arise, investigations are conducted in an efficient,
transparent, and accountable manner. To reform the judicial conduct process,
while fully respecting judicial independence:

The government proposes to amend the Judges Act to reform the judicial
conduct process by increasing public participation, streamlining appeals,
and giving the Canadian Judicial Council new tools to address misconduct,
at an estimated cost of $10 million over five years and $2 million ongoing.
Budget 2021 proposes to provide $8.5 million over five years, starting in
2021-22, and $0.5 million ongoing, to the Canadian Judicial Council and the
Office of the Commissioner for Federal Judicial Affairs to continue
investigations and inquiries during upcoming reforms as well as the
proposed new process.
Budget 2021 proposes to amend the Judges Act to freeze a judge’s pension
entitlements, as of the date the Canadian Judicial Council recommends a
judge’s removal from office.

Protecting Our Shared Values 285

Enhancing the Capacity of Superior Courts
An accessible justice system requires efficient court processes that help
Canadians obtain timely resolutions to their legal disputes. That is why the
government has committed to creating new judicial positions. To help reduce
court delays and enhance access to justice across Canada’s superior courts:

Budget 2021 proposes to amend the Judges Act, the Federal Courts Act, and
the Tax Court of Canada Act to add 13 new superior court positions,
including an Associate Chief Justice position for the Supreme Court of
Newfoundland and Labrador. Budget 2021 also proposes to provide
$49.3 million over five years, starting in 2021-22, and $10.4 million ongoing,
for these 13 additional superior court judicial positions.

Maintaining Federal Court Services During COVID-19

To ensure the continued safe operation of Canada’s federal courts during the
COVID-19 pandemic, the Courts Administration Service has adapted and
implemented necessary public health measures.

Budget 2021 proposes to provide $5.4 million, in 2021-22, on a cash basis,

to maintain safe court services for Canadians during the pandemic.

Re-establishing the Law Commission of Canada

A Law Reform Commission of Canada was first introduced in 1971 to provide
independent legal advice to the Government of Canada. After being shuttered
in 1992, it was re-established as the Law Commission of Canada, in 1997.
Despite a track record of providing guidance on key legal questions (for
example, on the matter of same-sex marriage), the commission was closed
again in 2006. Independent expertise is critical if Canada’s legal system is to be
responsive to the complex challenges of the day such as systemic racism in the
justice system, legal issues around climate change, establishing a new
relationship with Indigenous peoples, and rapid technological shifts in the
world.

Budget 2021 proposes to provide $18 million over five years, starting
in 2021-22, and $4 million ongoing, to Justice Canada to revive the
Law Commission of Canada.

286 Chapter 9
Preventing the Spread of COVID-19 in Correctional
Institutions
The Government of Canada has a responsibility to keep all Canadians safe from
COVID-19 infection, including the inmates at federal correctional institutions,
who are disproportionately Indigenous and Black, and staff. Since the start of
the COVID-19 pandemic, the Correctional Service of Canada has worked to limit
the spread of the virus within its institutions.

Budget 2021 proposes to provide $154.6 million, in 2021-22, to the

Correctional Service of Canada to limit the spread of COVID-19 and
keep staff and inmates safe, while enabling safe access to
rehabilitative services. This includes the procurement of personal
protective equipment, enhanced cleaning protocols, and support for
increased use of IT for remote work, as necessary, during the
pandemic.

Enhancing Data Collection on Cyber Security Threats

As our society becomes increasingly digital, the government must continually
assess emerging cyber security threats and ensure that the government can
respond and protect Canadians and Canadian businesses.

Budget 2021 proposes to provide $4.1 million over five years, starting
in 2021-22, and $1.0 million ongoing, for Public Safety Canada to
continue the cyber security and cybercrime survey program.

Improving How Access to Information Works for

Canadians
Since 2015, the Government of Canada has invested approximately $35 million in
incremental funds to improve Canadians’ access to information. To continually
raise the bar on openness, effectiveness, and transparency in government and to
provide requestors with the timely responses they deserve:

Budget 2021 proposes to provide an additional $12.8 million over five

years, starting in 2021-22, to the Treasury Board of Canada Secretariat,
to support further improvements to the online Access to Information
and Personal Information Request Service, to accelerate the proactive
release of information to Canadians, and to support completion of the
Access to Information Act review. This will help address delays in
response time that the government is committed to fixing.

Protecting Our Shared Values 287

9.3. Defending Canada and Canadian Values
Canada’s 2017 defence policy, Strong, Secure, Engaged, set out a vision for a
long-term, fully-funded plan to renew and re-equip the Canadian military, built
around people. Providing the women and men of the Canadian Armed Forces
with the training, equipment, and care they deserve is the most important
objective of this policy. This investment is also central to defending Canada and
promoting Canada’s values around the world.

Budget 2021 reaffirms Canada’s commitments to its allies.

The government also understands that for Canada’s military to truly renew, its
culture must be one in which all members of the armed forces are safe and
where sexual misconduct and abuse of power are not tolerated.

Addressing Sexual Misconduct and Gender-based

Violence in the Military
The federal government has no tolerance for sexual misconduct or gender-
based violence in the Canadian Armed Forces. Recently reported stories about
misconduct are shining a light on the scope of the problem. The members of
Canada’s military make enormous sacrifices to protect Canadians and,
regardless of rank or gender, have an inalienable right to serve in safety, in a
respectful and dignified work environment. Since the 2015 External Review into
Sexual Misconduct and Sexual Harassment in the Canadian Armed Forces,
important progress has been made, but there remains much work to do. The
government is committed to taking further action to strengthen accountability
mechanisms, promote culture change in the military, and provide a safe space
for survivors to report misconduct and access the services they need. In
addition to the Budget 2021 measures below, the federal government will have
more to announce in the coming weeks on next steps.

Budget 2021 proposes to provide $236.2 million over five years,

starting in 2021-22, and $33.5 million per year ongoing to the
Department of National Defence and Veterans Affairs Canada,
including $158.5 million over 5 years and $29.9 million per year
ongoing funded from existing resources to expand their work to
eliminate sexual misconduct and gender-based violence in the military
and support survivors. Specifically:
- Enhance internal support services to victims, including access to free,
independent legal advice and enabling military members to access
services without making a formal complaint.
- Expand an existing contribution program to support community-based

288 Chapter 9
 sexual assault service providers outside major urban military centres, and
increase the reach of the Sexual Misconduct Response Centre that serves
the Canadian Armed Forces to additional locations across Canada.
- Pilot online and in-person peer support groups for Canadian Armed
Forces members and veterans who experienced sexual misconduct
during their service. These will be tailored to military experience.
- Conduct research to inform targeted training and response
frameworks, and engage external experts to support education and
training to prevent sexual violence.
- Implement new external oversight mechanisms to bring greater
independence to the processes of reporting and adjudicating
sexual misconduct within the military.
- Undertake other initiatives to enhance institutional capacity to
address harassment and violence, including enhancing the military
justice system to better respond to allegations of misconduct and
support survivors.
These investments will be part of the government’s broader National Action
Plan to End Gender-Based Violence.

Supporting NORAD Modernization

Canada takes seriously its responsibility to defend against threats to North
America, including as a member of the North American Aerospace Defence
Command (NORAD). Since NORAD was established in 1958, the threats facing
the continent have evolved significantly — including as climate change drives a
changing strategic context in the Arctic. Building on commitments in Canada’s
defence policy, Strong, Secure, Engaged, the Prime Minister and the President of
the United States recently agreed to modernize NORAD and expand cooperation
on continental defence and in the Arctic to keep people in both our countries
safe.

Budget 2021 proposes to provide $163.4 million over five years, starting in
2021-22, with $111.1 million in remaining amortization, to support NORAD
modernization. This investment would lay the groundwork for NORAD’s
future, including through research and development of cutting-edge
technologies that can detect and defend against threats to the continent.
Budget 2021 also proposes to provide $88.8 million over five years,
starting in 2021-22, with $48.7 million in remaining amortization and
$0.6 million per year ongoing, to sustain existing continental and Arctic
defence capability.

These early measures will position Canada to move forward hand-in-hand with
the United States on modernizing NORAD and to maintain continental defence

Protecting Our Shared Values 289

and deterrence capabilities. It will also support jobs and businesses in
Canada’s North.

Increasing Canada’s Contributions to NATO

Since its creation in 1949, the North Atlantic Treaty Organization (NATO) has
been a cornerstone of Canadian defence policy. In 2019, Canada committed to
increase its contribution to the NATO Readiness Initiative, an agreement to
enhance the pool of high-readiness forces and capabilities available for
collective defence and crisis response. To follow through on this commitment
and invest in a ready and capable collective defence force to help keep
Canadians safe:

Budget 2021 proposes to provide $541.2 million over five years, starting in
2021-22, to the Department of National Defence to maintain an additional
six fighter aircraft and a frigate as part of the NATO Readiness Initiative.
Budget 2021 also proposes to provide up to $305.9 million over five years,
starting in 2020-21, to the Department of National Defence to cover higher
Canadian contributions to NATO’s common budget and military activities.

This funding demonstrates Canada’s unwavering commitment to NATO and will

strengthen this country’s capacity to respond to evolving global security
challenges.

Advancing the Safer Skies Initiative

Canada launched the Safer Skies Initiative after Ukraine International Airlines
Flight 752 was shot down by Iran on January 8, 2020, killing all 176 people on
board, including 138 people with ties to Canada. Since then, Canada has been
at the forefront of global efforts to uncover the full truth of what happened,
including by highlighting the major shortcomings of the Iranian investigation,
and demanding that Iran provide answers to Canadians who lost loved ones.

While we cannot bring back the lives lost, we can do our utmost to prevent
similar tragedies in the future. The goal of the Safer Skies Initiative is to prevent
civil aviation tragedies like Flight 752 from ever happening again. To achieve
this, the initiative will bring together like-minded countries, international
associations, industry, and the International Civil Aviation Organization to
develop a warning system that can keep civilian aircraft out of dangerous
conflict zones when the countries responsible for those conflict zones fail to act
responsibly to close their dangerous airspace. Safe and secure air travel will be
more important than ever when the world emerges from the global pandemic.

290 Chapter 9
To help protect Canadians and reduce civil aviation safety risks:

Budget 2021 proposes to provide $9.1 million over five years, starting in
2021-22, to Transport Canada for the continued development and
implementation of the Safer Skies Initiative, which includes supporting the
operations of the Conflict Zone Information Office.
To pay tribute to the students, teachers, and all those victims of Flight 752 who
had ties to schools across Canada, the government will establish scholarships in
memory of the victims of Flight 752.

On March 10, 2019, Ethiopian Airlines Flight 302 crashed near Addis Ababa,
Ethiopia, claiming the lives of 157 people, including 18 Canadians and many
others with ties to Canada. To honour the memory of those who died on
Ethiopian Airlines Flight 302:

Budget 2021 also proposes to provide $5.6 million over five years, starting
in 2021-22, to Transport Canada for commemoration initiatives, which
could include scholarships.

To honour all victims of air tragedies, the government has designated January
8th of every year as a National Day of Remembrance for Victims of Air Disasters.

Sustaining Health Services for the Canadian Armed

Forces
To continue protecting the health and safety of the women and men who serve
in the Canadian Armed Forces, especially during COVID-19:

Budget 2021 proposes to provide $134.3 million over five years,

starting in 2021-22, and $28.2 million per year ongoing, to ensure that
Canadian Armed Forces members receive timely access to health care.

Better Equipping Our Coast Guard and Military

Public Services and Procurement Canada manages the procurement of
equipment and ships for the Canadian Armed Forces and the Canadian Coast
Guard. Procurement and project management volumes are increasing as
Canada implements its defence policy, Strong, Secure, Engaged.
Budget 2021 proposes to provide $70.8 million over 10 years, starting in
2021-22, to ensure the timely delivery of defence and marine procurement
projects.
Budget 2021 also proposes to provide $1.1 million in 2021-22 to augment
the Cost and Profit Assurance Program, which saves millions annually
through the audit and oversight of defence contracts.

Protecting Our Shared Values 291

This funding will increase defence procurement efficiency, help Canada negotiate
better contracts, improve oversight, and lower costs in the long run. Ultimately, it
will help ensure our women and men in uniform receive the equipment they
need.

Ensuring Procurement Partners Respect Canada’s

Economic Interests
In December 2017, the government announced that the evaluation of bids for
the competition to replace Canada’s fighter aircraft would include an
assessment of bidders’ impact on Canada’s economic interests, and that any
bidder that had harmed Canada’s economic interests would be disadvantaged.

Budget 2021 confirms the government will apply this policy to major
military and Coast Guard procurements going forward. Companies found to
have prejudiced Canada’s economic interests through trade challenges will
have points deducted from their procurement bid score at a level
proportional to the severity of the economic impact, to a maximum penalty.

This policy will protect Canada’s economic interests and make sure the
government does business with trusted partners who value doing business
with Canada.

9.4 Building a Safer, Resilient, and Equitable World

The government understands that to protect people, save lives, and defeat
COVID-19, global collaboration is essential and that Canada has a responsibility
to take action on shared challenges. In Budget 2021, the government is making
investments to support Canada’s international COVID-19 response, with a focus
on addressing the health needs in developing countries (Chapter 1).

Furthermore, it is important that our global economic recovery be fair and not
leave the most vulnerable countries behind. This is the surest path to a more
stable, peaceful, and prosperous world. That is why Budget 2021 commits an
additional $1.4B over five years in international assistance to support developing
countries and vulnerable populations respond to this crisis and to meet growing
humanitarian needs around the world.

The government also recognizes that climate change and biodiversity loss do
not respect borders. Not only do they represent existential threats in their own
right, but they are also catalysts for instability, conflict, starvation, and
pandemics. That is why Canada intends to build on its ambitious plan to reduce
greenhouse gas emissions in Canada with an ambitious commitment to combat
climate change and biodiversity loss around the world in the coming months
leading up to the international COP conferences. These commitments will

292 Chapter 9
particularly help those already being affected by climate change to adapt, with
a focus on those in low and middle income countries. This is part of Canada’s
contribution to ensure 2021 is a transformative year for ambitious global
climate action and COP26 is a success.

Increasing International Humanitarian Assistance

The COVID-19 pandemic has driven the number of people in need of
humanitarian assistance to new highs. The United Nations estimates that 235
million people worldwide will require humanitarian assistance and protection in
2021.

Budget 2021 proposes to allocate an additional $165 million in 2021-22 to

Global Affairs Canada to provide international humanitarian assistance to
save lives and alleviate suffering resulting from conflicts, food insecurity,
and other crises in developing countries.

This support would be used by trusted humanitarian partners to provide needs-

based and gender-responsive assistance in vulnerable countries affected by
protracted crises.

This funding is in addition to the $1 billion increase to Canada’s loan

commitment to the International Monetary Fund's Poverty Reduction and
Growth Trust, which provides interest-free loans to low-income countries.
Additionally since May 2020, Canada has provided more than $70 million in
temporary debt service relief for the poorest countries through the G20 and
Paris Club agreed Debt Service Suspension Initiative (DSSI). For the final DSSI
extension to the end of 2021, announced by the G20 on April 7th, Canada could
provide up to an additional $33 million in relief. Canada also strongly supports
the G20 Common Framework for Debt Treatments which will enable more
comprehensive debt relief for the poorest countries.

Responding to the Rohingya Crisis

Three years after Canada became the first country in the world to recognize the
attacks perpetrated against the Rohingya minority as constituting a genocide,
over 860,000 refugees are living in the world’s largest refugee camp, in
Bangladesh. To continue to respond to this humanitarian crisis, encourage
positive political developments, ensure accountability for the crimes committed,
and enhance international cooperation:

Budget 2021 proposes to allocate $288.3 million over three years, starting
in 2021-22, to Global Affairs Canada to respond to the Rohingya crisis.

Protecting Our Shared Values 293

This investment is part of Canada’s ongoing efforts to address the crisis in
Myanmar. Canada condemns the recent actions of the Myanmar military and
State Administrative Council and stands with the people of Myanmar in their
quest for democracy and human rights.

Response to the Venezuelan Migrant and Refugee

Crisis
The political and economic situation in Venezuela has led to more than five
million Venezuelans to flee their homes—and it is currently one of the world’s
largest displacement crises. Canada is a key player in international efforts to
find solutions to this crisis.
Budget 2021 proposes to provide $80.3 million over two years, starting in
2021-22, to Global Affairs Canada and Immigration, Refugees and
Citizenship Canada to respond to the Venezuelan migrant and refugee
crisis. This investment would enable Canada to help reduce human
suffering, irregular migration, and security threats in the region, while
improving the integration of migrants and refugees into host communities.

Extending Canada’s Middle East Strategy

Since 2016, Canada has been a major contributor to the international response
to the crisis in Iraq, Syria, and neighbouring countries. Canada has worked with
its allies to reduce instability in the region and counter terrorism by groups like
Daesh through the NATO Mission in Iraq and Operation IMPACT.

While there has been progress, the situation remains fragile.

To continue providing development, humanitarian, and military support and

advance peace and stability in the region:
Budget 2021 proposes to provide $527 million in 2021-22, on a cash basis, to
Global Affairs Canada, the Department of National Defence, the
Communications Security Establishment, and the Canadian Security
Intelligence Service to extend Canada’s Middle East Strategy for another year.

Recapitalization of FinDev Canada

Private sector finance is critical to helping developing countries reduce poverty,
economically empower women, and mitigate and adapt to climate change.
FinDev Canada advances these objectives by supporting inclusive private sector
growth and sustainability in developing countries.
Budget 2021 proposes to provide a $300 million recapitalization over three
years, starting in 2023-24, to FinDev Canada, from the retained earnings of
Export Development Canada, to allow FinDev Canada to build a portfolio
totaling $1.4 billion.

294 Chapter 9
Supporting Developing Economies Through the
International Finance Corporation
The International Finance Corporation (IFC) supports private-sector development
in developing economies. In April 2020, the World Bank Group Board of
Governors, which includes Canada, provided final approval for a US$5.5 billion
capital increase for the IFC.
Budget 2021 proposes to provide US$175.9 million (an estimated
$224.4 million) to the Department of Finance Canada through the
International Assistance Envelope, to fully purchase the IFC shares allocated
to Canada in 2021-22. Fully purchasing the shares allocated to Canada in
2021-22 would enable the IFC to rapidly expand its support in response to
the COVID-19 crisis.

Supporting the African Development Bank

The financial capacity of the African Development Bank (AfDB) has been eroded
by the COVID-19 crisis. This bank is a core development partner of Canada that
plays a critical role in economic growth and development in Africa. In May 2020,
Canada committed to provide US$253.4 million over eight years, starting in 2020-
21, to purchase shares in the latest general capital increase of the AfDB.
Budget 2021 proposes to accelerate and complete Canada’s purchase of
shares of the African Development Bank in 2022-23, rather than in 2027-28,
to help alleviate the financial strain during the COVID-19 crisis and enable it
to maintain support to its client countries through the recovery. Funding for
Canada’s purchase of shares is allocated to Global Affairs Canada from the
International Assistance Envelope.

Canadian Ombudsperson for Responsible Enterprise

A robust and responsible global trading system generates prosperity and jobs at
home and abroad. The Canadian Ombudsperson for Responsible Enterprise
(CORE) reflects the government’s commitment to advance the responsible
conduct by Canadian companies when doing business abroad.
Budget 2021 proposes to provide an additional $16.0 million over five years,
starting in 2021-22, and $3.3 million per year ongoing, to Global Affairs
Canada to support the CORE. This would enable the CORE to fulfil its
mandate of ensuring ethically, socially, and environmentally responsible
practices of Canadian corporations when doing business abroad. To this end,
the CORE will conduct reviews of human rights abuse allegations involving
Canadian companies in the resource mining, oil and gas, and apparel sectors
overseas.

Protecting Our Shared Values 295

Chapter 9
Protecting Our Shared Values
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
9.1. Promoting Our
Two Official
Languages 0 132 160 100 0 0 392
Promoting Official
Languages 0 132 160 100 0 0 392
9.2. Keeping 0 473 397 260 248 246 1,623
Canadians Safe and
Improving Access to
Justice
Gun Control1 0 55 73 64 62 57 312
Less: Funds Sourced
From Existing
Departmental
Resources 0 -1 0 0 0 0 -1
Advancing a National
Action Plan to End
Gender-Based Violence 0 136 216 85 84 80 601
Less: Funds Sourced
From Existing
Departmental
Resources 0 -7 -7 -7 -7 -1 -28
Preventing
Radicalization to
Violence 0 1 4 4 0 0 8
Diverting Youth Away
from the Justice System 0 43 43 43 43 43 216
Expanding Access to
Drug Treatment Courts 0 4 6 10 10 10 40
Enhancing Legal
Support for Vulnerable
Communities 0 31 4 4 4 4 48
Supporting Work to
Address Systemic
Racism in Public Safety
Institutions 0 12 15 18 15 15 75
Reforming Canada's
Pardons Process 0 17 19 18 19 20 92
Less: Fee Revenues 0 -1 -1 -1 -1 -1 -4

296 Chapter 9
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Reforming the Judicial
Conduct Review
Process 0 6 6 3 3 3 19
Enhancing the Capacity
of Superior Courts 0 10 9 10 10 10 49
Maintaining Federal
Court Services During
COVID-19 0 4 0 0 0 0 5
Re-establishing the Law
Commission of Canada 0 1 5 4 4 4 18
Preventing the Spread
of COVID-19 in
Correctional
Institutions 0 155 0 0 0 0 155
Enhancing Data
Collection on Cyber
Security Threats 0 1 1 1 1 1 4
Improving How Access
to Information Works
for Canadians 0 6 3 3 0 0 13
9.3. Defending
Canada and Canadian
Values 50 280 299 267 267 197 1,361
Addressing Sexual
Misconduct and
Gender-based Violence
in the Military 0 64 63 37 37 35 236
Less: Funds Sourced
From Existing
Departmental
Resources 0 -30 -30 -33 -34 -32 -159
Supporting NORAD
Modernization 0 45 62 54 52 39 252
Increasing Canada's 204 320 320 326 327 334 1,831
Contributions to NATO
Less: Funds Sourced
From Existing
Departmental
Resources -153 -153 -153 -153 -153 -217 -984
Advancing the Safer
Skies Initiative 0 3 3 3 3 3 15
Sustaining Health
Services for the
Canadian Armed Forces 0 26 26 27 27 28 134
Better Equipping Our
Coast Guard and
Military 0 6 7 7 7 7 35

Protecting Our Shared Values 297

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
9.4. Building a Safer, 0 880 205 43 -29 -33 1,067
Resilient, and
Equitable World
Increasing International
Humanitarian
Assistance 0 165 0 0 0 0 165
Responding to the 0 95 96 96 0 0 288
Rohingya Crisis
Less: Funds Sourced 0 -27 -27 -27 0 0 -80
From Existing
Departmental
Resources
Response to the
Venezuelan Migrant
and Refugee Crisis 0 39 41 0 0 0 80
Less: Funds Sourced
From Existing
Departmental
Resources 0 -10 -10 0 0 0 -20
Extending Canada’s
Middle East Strategy 0 527 0 0 0 0 527
Less: Funds Sourced
From Existing
Departmental
Resources 0 -237 0 0 0 0 -237
Recapitalization of 0 0 0 110 108 104 322
FinDev Canada
Less: Funds From the 0 0 0 -100 -100 -100 -300
Retained Earnings of
Export Development
Canada
Supporting Developing
Economies Through
the International
Finance Corporation 0 224 0 0 0 0 224
Supporting the African
Development Bank 0 141 141 0 0 0 283
Less: Funds Previously
Provisioned in the
Fiscal Framework 0 -40 -40 -40 -40 -40 -202
Canadian
Ombudsperson for
Responsible Enterprise 0 3 3 3 3 3 16

298 Chapter 9
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Additional 0 92 51 61 39 37 279
Investments –
Protecting Our
Shared Values
Leaders’ Debates
Commission2 0 1 1 4 1 1 6
Less: Funds Previously
Provisioned in the
Fiscal Framework 0 0 -1 -5 0 0 -6
Realignment of funds proposed for the Leaders’ Debates Commission to ensure a base level of funding and
readiness in a minority government context. This would ensure the Commission is ready and prepared to
support leadership debates during the next election.
Enhancing IM/IT
Systems to Support
Transparent Lobbying 0 1 1 1 1 1 4
Funding proposed for the Office of the Commissioner of Lobbying of Canada to improve the resilience and
capabilities of the office’s information management/information technology systems used to ensure
transparent lobbying in Canada.
Supporting Parole
Board of Canada
Operations 0 1 2 2 2 2 8
Funding proposed for the Parole Board of Canada to ensure it can deliver its mandate to make fair and
informed conditional release and record suspension decisions for offenders.
Modernizing the
Department of
National Defence’s
Information Systems 0 89 48 60 36 34 267
Funding proposed for the Department of National Defence to upgrade the critical information systems it relies
on to manage its assets, finances, and human resources. These projects will improve administrative efficiency
and departmental planning, reducing costs and ensuring the Canadian Armed Forces have access to the
equipment they need when and where it is required.
Chapter 9 - Net Fiscal
Impact 50 1,857 1,112 731 525 447 4,722
1
Announced in February 2021.
2
Timing of estimated costs is notional and would depend on timing of federal election.
Note: Numbers may not add due to rounding

Protecting Our Shared Values 299

 Part IV

Fair and
Responsible
Government
Chapter 10
Responsible Government
The government is focused on building the middle class and building an economy
that works for everyone. To do that, Canadians need a tax system that is fair.

The COVID-19 pandemic has shed new light on the importance of delivering
services to Canadians in a timely and efficient manner. Providing these services
requires a continued commitment to ensuring that everyone pays their fair share
of tax, so that essential supports can be available to those in need—especially in
times of crisis.

In Canada, we have a progressive tax system. Those who make more pay more to
support the services that all Canadians rely on. That is why the first thing the
government did in 2015 was to raise taxes on the wealthiest to pay for a middle
class tax cut. At the same time, the government is also committed to maintaining
a strong financial sector that Canadians can count on to safeguard their savings
and investments.

10.1 A Tax System that Promotes Fairness

Taxes help pay for the government programs and services that benefit Canadians.
They provide a social safety net on which all Canadians can rely in times of crisis.
And they make sure that Canada can invest in people and in helping our
economy grow and recover.

A tax system in which everyone pays their fair share requires action on multiple
fronts: addressing aggressive tax planning schemes; aligning our rules with
evolving international norms; ensuring that digital service providers pay their fair
share of taxes; and strengthening the government’s ability to crack down on tax
evasion, money laundering, and terrorist financing.

The actions proposed in Budget 2021 will help Canada continue to have the
resources needed to support the middle class and people working hard to join it,
invest in Canadians, and keep our economy strong.

Responsible Government 303

Digital Services Tax
The government is committed to ensuring that corporations in all sectors, including
digital corporations, pay their fair share of tax on the money they earn by doing
business in Canada. Increasingly, many digital companies earn revenues from the
active collection and use of Canadians’ data. In the 2020 Fall Economic Statement,
the government announced that it would be moving ahead to implement a tax on
corporations providing digital services. This builds on the changes announced at
that time to ensure that the Goods and Services Tax/Harmonized Sales Tax applies
in a fair and effective manner to the growing digital economy.

Canada has a strong preference for a multilateral approach to this issue. Work is
underway to reach a multilateral agreement on cross-border digital taxation by
mid-2021, and Canada is optimistic about the progress made this year. However,
multilateral discussions have been going on since 2013. That is why, while
Canada’s hope and preference is for a multilateral solution this summer, whether
or not a deal is reached, Canada intends to take action.

Budget 2021 proposes to implement a Digital Services Tax at a rate of

3 percent on revenue from digital services that rely on data and content
contributions from Canadian users. The tax would apply to large businesses
with gross revenue of 750 million euros or more. It would apply as of
January 1, 2022, until an acceptable multilateral approach comes into effect.
This would help ensure that Canada’s tax rules capture new ways in which
businesses carry out value-creating activities.

It is estimated that this measure will raise $3.4 billion in revenue over five years
beginning in 2021-22.

Luxury Tax
Even as Canadians have sacrificed to keep our economy going through the
pandemic, some of the wealthiest have done well. Those who can afford to buy
luxury goods can afford to pay a bit more. To that end, the government is
following through on its commitment to introduce a tax on select luxury goods.

Budget 2021 proposes to introduce a 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. The tax would be calculated at the
lesser of 20 per cent of the value above the threshold ($100,000 for cars and
personal aircraft, $250,000 for boats) or 10 per cent of the full value of the
luxury car, boat, or personal aircraft. This measure would come into force on
January 1, 2022.
It is estimated that this measure will increase federal revenues by $604 million
over five years, starting in 2021-22.

304 Chapter 10
Tax on Unproductive Use of Canadian Housing by
Foreign Non-resident Owners
Across the country, young Canadians who are starting to build their future are
running up against sky-high housing prices.

In the 2020 Fall Economic Statement, the government announced that it would
take steps over the coming year to implement a national, tax-based measure
targeting the unproductive use of domestic housing that is owned by non-
resident, non-Canadians. This will help to ensure that foreign, non-resident
owners, who simply use Canada as a place to passively store their wealth in
housing, pay their fair share.

Budget 2021 announces the government’s intention to implement a

national, annual 1 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. The tax will require all owners,
other than Canadian citizens or permanent residents of Canada, to file a
declaration as to the current use of the property, with significant
penalties for failure to file.
Homes are to live in. This measure is one tool among several to ensure that
Canada’s housing market is a place to grow for Canadians starting their families
and building their future.

In the coming months, the government will release a consultation paper to

provide stakeholders with an opportunity to comment on the parameters of the
proposed tax, including on whether special rules should be established for small
tourism and resort communities. Moving forward, the government intends to
work closely with provinces, territories, and municipalities.

It is estimated this measure will increase federal revenues by $700 million over
four years, starting in 2022-23. These revenues will help to support the
government’s significant investments to make housing more affordable for all
Canadians.

Responsible Government 305

Limitations on Excessive Interest Deductions
Many firms borrow in order to fund their operations. Generally, the interest
charges on those borrowings are considered a cost of doing business and,
therefore, are deductible from income for tax purposes. However, some large
companies, typically multinationals, use excessive deductions of interest to
reduce the taxes they pay in Canada.

All G7 countries—except Canada—have taken action, as a result of the Base

Erosion and Profit Shifting (BEPS) Project, to limit excessive interest deductions by
large companies.

Budget 2021 proposes that, starting in 2023, the amount of interest that
certain businesses can deduct be limited to 40 per cent of their earnings in
the first year of the measure and 30 per cent thereafter. Relief will be
provided for small businesses and for other situations that do not represent
significant tax base erosion risks. The government expects to release draft
legislation this summer and will seek stakeholder input on the new rules.

This strengthening of the rules on interest deductibility will ensure that large
companies pay their fair share and bring Canada in line with other jurisdictions,
including all our G7 peers. It is estimated that this measure will increase federal
revenues by $5.3 billion over five years, starting in 2021-22.

Preventing Cross-border Tax Schemes

Hybrid mismatch arrangements are cross-border tax schemes, used primarily by
multinational enterprises, that exploit differences between Canadian and foreign
income tax laws to avoid paying their fair share of tax. Under the current rules, a
multinational company can exploit the different treatment of certain business
entities and financial instruments in Canada and another country to earn income
that is not taxed in any country. These schemes not only erode the tax base that
supports programs and services for Canadians, but they also give an unfair
advantage to multinational enterprises over Canadian businesses, particularly our
small and medium-sized businesses.

Budget 2021 proposes to amend the Income Tax Act to eliminate the tax
benefits of hybrid mismatch arrangements. These proposals would be
implemented in stages starting July 1, 2022.

These proposals will level the playing field and help ensure everyone pays their
fair share. It is estimated that this measure will increase federal revenues by
$775 million over four years starting in 2022-23.

306 Chapter 10
Mandatory Disclosure Rules
It is important that the Canada Revenue Agency be able to obtain timely
information on arrangements that involve aggressive tax planning. Canada has
been an active participant in the Base Erosion and Profit Shifting (BEPS) Project—
an initiative of the G20 and the Organisation for Economic Co-operation and
Development. The BEPS Project is primarily devoted to tackling the problem of
certain corporations and wealthy individuals inappropriately shifting profits
offshore and using other international tax avoidance schemes. This project has
shown that stronger rules are needed to strengthen the Canada Revenue Agency’s
ability to curtail tax evasion and aggressive tax avoidance in both the domestic
and international context.

Budget 2021 launches public consultations on proposals to enhance

Canada’s income tax mandatory disclosure rules, building on the advice of
the BEPS Project. This consultation will address changes to the Income Tax
Act’s reportable transaction rules, a new requirement to report notifiable
transactions, and a new requirement for specified corporations to report
uncertain tax treatments.

Tackling Tax Avoidance and Evasion

The government has made significant investments since 2015 to strengthen the
Canada Revenue Agency’s (CRA’s) ability to crack down on complex tax schemes,
increase collaboration with international partners, and ultimately bring offenders to
justice. These investments have yielded positive results.

Budget 2021 builds on these previous investments with new measures to combat
tax evasion and aggressive tax avoidance. Having the means to avoid paying
one’s fair share should not mean that one can.

Budget 2021 proposes an additional $304.1 million over five years,

starting in 2021–22, to allow the CRA to fund new initiatives and extend
existing programs, including:
 Increasing GST/HST audits of large businesses where risk assessment
models have found the greatest risk of non-compliance.
 Modernizing the CRA’s risk assessment process to prevent unwarranted
and fraudulent GST/HST refund and rebate claims at the outset, and
improve the ability to issue refunds for compliant businesses as quickly
as possible.
 Enhancing capacity to identify tax evasion involving trusts and provide
better service to executors and trustees.

Responsible Government 307

Budget 2021 estimates that these measures to combat tax evasion and
aggressive tax avoidance will recover $810 million in revenues over five years.
Additional gains will be realized by provinces and territories, whose tax revenues
will also increase as a result of these initiatives.

Strengthening the CRA

The success of the CRA’s work in combatting aggressive tax planning, the
underground economy, and tax evasion depends on the CRA’s ability to collect
outstanding taxes in a timely way.

Budget 2021 proposes to provide $230 million over five years, starting in
2021-22, for the CRA to improve its ability to collect outstanding taxes. It is
anticipated that this proposal will lead to the collection of an additional
$5 billion in outstanding taxes over five years.

Protecting the Fairness and Integrity of Our Tax

System
The Federal Court of Appeal decision in Her Majesty The Queen v Cameco
Corporation has highlighted concerns with the application of Canada’s domestic
transfer pricing rules. Taking into account the court’s reasoning, the government
believes that, without reform, shortcomings in the current transfer pricing rules
can encourage the inappropriate shifting of corporate income out of Canada,
artificially reducing corporations’ taxes owed in Canada. If not addressed, this
poses a risk to the integrity of Canada’s corporate income tax system.
Furthermore, Canada must ensure that there is not a separate set of rules that
large corporations can play by.

Budget 2021 announces the government’s intention to consult on Canada’s

transfer pricing rules with a view to protecting the integrity of the tax system
while preserving Canada’s attractiveness as a destination for new investment
and business activity.

In the coming months, the Department of Finance will release a consultation

paper to provide stakeholders with an opportunity to comment on possible
measures to improve Canada’s transfer pricing rules. The government will also
take next steps to strengthen and modernize Canada’s general anti-avoidance
rule, as announced in the 2020 Fall Economic Statement.

308 Chapter 10
Action Against Money Laundering and Terrorist
Financing
Money laundering and terrorist financing are a threat to the security of the
financial system. An effective regime to combat these threats is essential to
protecting Canadians and the integrity of the financial sector.

Budget 2021 proposes to provide $4.6 million over four years, starting in
2022-23, and $0.6 million per year ongoing, to enable the Financial
Transactions and Reports Analysis Centre of Canada (FINTRAC) to: build its
expertise related to virtual currency; supervise the armoured car sector; and
develop and administer a cost recovery scheme for its compliance activities.

The Canada Revenue Agency plays an important role in the fight against terrorist
financing and money laundering in Canada. In support of this role, amendments
to the Income Tax Act are needed to address legislative gaps and streamline the
revocation process to prevent abuse of charitable status.

Budget 2021 proposes to amend the Income Tax Act to allow for the
immediate revocation of charitable status for organizations listed as a
terrorist entity.
Budget 2021 also proposes to prevent individuals with a known history of
supporting terrorism from becoming a director, trustee, or similar official of a
registered charity.
Budget 2021 further proposes to allow for the revocation of charitable status
when a charity provides false statements for the purpose of maintaining their
registration.
By preventing the abuse of charities, these proposed measures will strengthen
Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime.

Beneficial Ownership Transparency

To catch those who attempt to launder money, evade taxes, or commit other
complex financial crimes, law enforcement, tax, and other authorities need access
to accurate and up-to-date data on the individuals who own and control
corporations. Building on public consultations in 2020:

Budget 2021 proposes to provide $2.1 million over two years to Innovation,
Science and Economic Development Canada to support the implementation
of a publicly accessible corporate beneficial ownership registry by 2025.

Responsible Government 309

Combatting Abusive Tax Collection Avoidance
Schemes
A small number of high-net-worth taxpayers are engaging in complex
transactions intended to avoid the collection of their tax debts. This is done by
transferring their assets to a non-arm’s length person—such as a corporation
owned by the same person—in a manner that leaves them without the assets
necessary to pay their tax debts while circumventing an existing tax rule that is
intended to prevent this type of scheme.

Budget 2021 proposes to introduce a number of amendments to the Income

Tax Act to address this type of planning, as well as a penalty for those who
devise and promote such schemes.

Improving Duty and Tax Collection on Imported

Goods
The efficient and fair collection of duties and taxes on imported goods protects
the competitiveness of Canadian businesses.

Budget 2021 proposes changes to the Customs Act to improve duty and tax
collection. These changes would ensure that goods are valued in a fair and
consistent manner by all importers. This would level the playing field
between domestic and foreign businesses and generate an estimated $150
million in additional annual duty revenues. The changes would also
modernize and digitize the duty and tax payment process for commercial
importers, so as to minimize administrative burden.

10.2 A Stable and Robust Financial Sector

Canadians expect the financial system to safeguard their savings and investments
and deliver the financial services they need, especially in times of uncertainty. The
financial sector and its governing framework has performed well during the
COVID-19 pandemic, supported by strong supervisory oversight and responses
of financial sector agencies.

Budget 2021 proposes measures to further strengthen Canada’s financial sector

framework, including: modernizing corporate governance; strengthening
Canada’s anti-money laundering and anti-terrorist financing framework; targeted
legislative initiatives that will support consumers, promote innovation, and
enhance the stability, security, and integrity of the financial system in advance of
the next legislative review, in 2025 (see Annex 3); and a new retail payments
oversight framework.

310 Chapter 10
Retail Payments Oversight Framework
The current COVID-19 crisis has accelerated the adoption of digital payments and
highlighted the need to have safe and reliable digital payments.

The government will work with provincial partners to introduce legislation to

implement a new retail payments oversight framework that would promote
growth, innovation, and competition in digital payment services while making
these payments services safer and more secure for consumers and
businesses. In doing so, the government will work with provincial partners in
recognition of complementary objectives and powers in this area.

Budget 2021 proposes a public consultation on measures that would expand

federally regulated financial institutions’ use of electronic communications with
their owners, including the delivery and provision of governance documents,
as well as virtual meetings.

10.3 Better Services for Canadians

The government is continuously modernizing and improving the way it delivers
programs and services to Canadians. As we have seen over the last year, fast and
efficient government services and programs are critical to helping Canadians and
businesses through challenging times.
Budget 2021 moves forward with a plan to ensure Canadians have reliable and
secure digital access to more government services.

E-payroll to Help Businesses

The COVID-19 pandemic highlighted the need to accelerate the government’s
commitment to implementing a real-time e-payroll solution that will reduce red
tape, and increase the delivery, speed, and accuracy of services and benefits.
E-payroll is a “tell-us-once” approach that will streamline employer reporting by
collecting electronic payroll, employment, and demographic data directly from
businesses in real-time. E-payroll will save time for Canadian businesses,
especially small businesses.

In response to the pandemic, countries with some form of a real-time payroll

data reporting system had greater accuracy with targeting support and benefits,
and were able to deploy benefits rapidly. The government is committed to a
modernized benefits delivery platform that can target support when Canadians
need it most and will ensure all Canadians are receiving all the benefits they are
entitled to.

Responsible Government 311

 Budget 2021 proposes to provide $43.9 million over three years, starting in
2021-22, for the Canada Revenue Agency (CRA) to accelerate the ongoing
work with Digital Government and Employment and Social Development
Canada (ESDC), and to develop the first phase of an e-payroll solution
through the testing of prototype options for the implementation of a real-
time e-payroll solution for the Government of Canada.
A Central Agency Steering Committee co-chaired by the Privy Council Office
and the Office of the Chief Information Officer (Treasury Board Secretariat)
will work with the CRA and ESDC to oversee the implementation plan.

Protecting Taxpayer Information

Cyber security is more important than ever and the government is committed to
securing taxpayer information against any and all who would attempt to breach
Canadians’ private information. Millions of Canadians rely on the CRA’s digital
services to access financial lifelines like the CERB, wage subsidy, or rent subsidy.
Since February 2020, registration for the CRA’s secure digital services has
increased by 36 per cent and logins have increased by 170 per cent. To further
safeguard the electronic data stored by the CRA and protect Canadians’ personal
information from falling into the wrong hands:
Budget 2021 proposes to provide $330.6 million over five years, starting in
2021-22, with $1.6 million in remaining amortization, and $51.2 million
ongoing, to the Canada Revenue Agency to invest in new technologies and
tools that match the growing sophistication of cyber threats, and to ensure
the CRA’s workforce has the specialized skills to proactively monitor threats
and better safeguard Canadian data.

Modernizing CRA Services

To modernize CRA services and help people quickly and easily access the tax
credits and benefits they are entitled to:

Budget 2021 proposes to provide $41.7 million over three years, starting in
2021-22, to the CRA to reduce processing time for T1 adjustments (i.e.
corrections to people’s general income tax return) by making online self-
service more user-friendly and improving automated processing of T1
adjustments. Faster processing of T1 adjustments will provide Canadians with
more timely access to their credits and benefits.
The CRA has created a simplified credit and benefit return and Canada Child
Benefit form for First Nations individuals, and will be expanding this project
to make these forms more widely available to more Indigenous people. The
improved forms take into account Indigenous experience—such as
community care and nurturing of children—and remove information that is
not applicable to Indigenous peoples.

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Canadian Digital Service
The Canadian Digital Service was established in 2017 to design and deliver digital
government services. During the pandemic, its services and expertise were more
vital than ever. It launched the COVID Alert App, used by more than 6 million
people in Canada and providing over 26,000 exposure notifications, helping to
prevent tens of thousands of possible outbreaks in our communities. It also
accelerated the development of GC Notify, a platform to provide vital email and
text messaging services for an array of COVID-19 services, showcasing how
effective design and delivery can serve Canadians. To make sure that the Canadian
Digital Service can meet the growing needs of Canadians and Canadian businesses:

Budget 2021 proposes to provide $88 million over four years, starting in
2022-23, and $25.8 million ongoing, to the Treasury Board of Canada
Secretariat to renew and expand the capacity of the Canadian Digital
Service and further improve how the government delivers digital services
to Canadians.

10.4 Reinforcing Government of Canada

Operations
To provide Canadians with the programs and services they deserve and expect,
the government must continue to invest in core, mission-critical government
operations, while continuously identifying opportunities to use resources more
efficiently. The government is committed to improved productivity across federal
organizations and cost-effective and efficient government services.

Measuring What Matters

There is a growing recognition internationally that economic growth is only one
dimension of what makes for a good quality of life. Currently, Canada collects less
detailed information about non-economic indicators than economic indicators.
Better federal data sets are needed to better incorporate quality of life
measurements into decision-making and budgeting, similar to international
approaches such as in New Zealand and Scotland.

Budget 2021 proposes to provide $7.7 million over five years, and $1.6 million
ongoing, to enable Statistics Canada to improve quality of life measures and
address key data gaps.
Budget 2021 further proposes to provide $6.1 million over five years, and
$0.6 million ongoing, to enable Statistics Canada to bring together key economic,
social, and environmental datasets and develop a user interface to better support
decision-making and budgeting.

Responsible Government 313

These are in addition to more than $285 million over five years, and more than
$40 million ongoing, in proposed Budget 2021 investments across government to
collect better, disaggregated data that will enable the government, researchers, and
others to better understand the experiences of people in Canada and environmental
changes.

Reducing Government Travel

COVID-19 has significantly affected the way the federal government operates,
with a greater reliance on digital and virtual interaction, reducing the need for
travel.

Budget 2021 proposes to reduce the operating budgets of the departments

and agencies with the highest historical travel costs, resulting in combined
savings of $1.1 billion over five years, starting in 2021-22, and $222.5 million
per year ongoing.

These savings will be in the interests of Canadian taxpayers and offset increased
costs and requirements related to the pandemic, particularly upgrades to
Government of Canada IT systems.

Improving and Defending Our Cyber Networks

Threats to cyber security are growing globally. The protection of Canadians’
personal information is a priority for the government. Maintaining secure, up-to-
date cyber security and defence capabilities on reliable networks is essential as
more Canadians access government services digitally. To ensure the security of
Canadians’ information:

Budget 2021 proposes to provide $456.3 million over five years, starting in
2021-22, with $60.7 million in remaining amortization and $62.2 million
ongoing, to Shared Services Canada and the Communications Security
Establishment.

314 Chapter 10
Modernizing Critical IT Infrastructure
Canada’s IT infrastructure is aging faster than the pace of repairs or replacements.
By investing in IT infrastructure, the government will ensure that key services like
Old Age Security and Employment Insurance benefits or immigration and border
case management will continue to be delivered and can be modernized in a
timely manner. To perform critical upgrades and a modernization of Canada’s IT
infrastructure and improve the way benefits and services are delivered to
Canadians over the coming decade:
Budget 2021 proposes to provide a total of $648 million on a cash basis to
Employment and Social Development Canada and the Treasury Board
Secretariat over the next seven years, starting in 2021-22, to continue
implementing Benefit Delivery Modernization, invest in Service Canada’s IT
systems and related activities, and support service delivery to Canadians
going forward.

Budget 2021 also proposes to provide $300 million on a cash basis to Shared
Services Canada over the next three years, starting in 2021-22, to continue
work to repair and replace critical IT infrastructure.

Responsible Government 315

Chapter 10
Responsible Government
millions of dollars
2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
10.1. A Tax System that
Promotes Fairness 0 -125 -1,055 -2,064 -2,504 -2,569 -8,317
Digital Services Tax 0 -200 -700 -800 -800 -900 -3,400
Less: Funds Previously
Provisioned in the Fiscal
Framework 0 200 700 800 800 900 3,400
Administrative Costs 0 17 7 4 4 4 35
Luxury Tax 0 -34 -140 -140 -145 -145 -604
Tax on Unproductive Use
of Canadian Housing by
Foreign Non-resident
Owners 0 0 -200 -170 -165 -165 -700
Limitations on Excessive
Interest Deductions1 0 -30 -400 -1,330 -1,755 -1,810 -5,325
Administrative Costs 0 4 2 1 1 1 9
Preventing Cross-border
Tax Schemes 0 0 -130 -205 -215 -225 -775
Tackling Tax Avoidance
and Evasion 0 42 67 68 64 63 304
Less: Projected Revenues 0 -64 -151 -199 -198 -198 -810
Strengthening the CRA 0 27 38 56 55 55 230
Action Against Money
Laundering and Terrorist
Financing 0 0 2 1 1 1 5
Beneficial Ownership
Transparency 0 1 1 0 0 0 2
Improving Duty and Tax
Collection on Imported
Goods 0 -88 -150 -150 -150 -150 -688
10.2. A Stable and
Robust Financial Sector 5 16 28 29 5 6 88
Retail Payments Oversight
Framework 5 16 28 37 38 37 160
Less: Costs to be
Recovered 0 0 0 -8 -32 -31 -71

316 Chapter 10
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
10.3. Better Services for
Canadians 0 99 127 123 77 78 504
E-payroll to Help
Businesses 0 13 17 14 0 0 44
Protecting Taxpayer
Information 0 71 75 75 54 55 331
Modernizing CRA Services 0 15 14 12 0 0 42
Canadian Digital Service 0 0 22 22 22 23 88
10.4. Reinforcing
Government of Canada
Operations 0 -90 -5 76 -1 -15 -34
Measuring What Matters 0 3 3 3 2 2 14
Reducing Government
Travel 0 -222 -222 -222 -222 -222 -1,112
Improving and Defending
our Cyber Networks 0 63 109 117 78 89 456
Modernizing Critical IT
Infrastructure 0 66 105 179 142 142 634
Less: Projected Revenues 0 0 0 0 0 -26 -26
Additional Investments –
Responsible Government 0 306 212 68 54 47 688
Eliminating the Backlog of
Pay Problems 0 23 23 0 0 0 47
Funding proposed for Public Services and Procurement Canada to support the workforce dedicated to processing
pay transactions. This will help the department achieve its target of eliminating the backlog of Phoenix pay system
transactions by December 2022.
Stabilizing Human
Resources, Pay, and
Pensions 0 23 23 0 0 0 45
Funding proposed for the Treasury Board of Canada Secretariat to ensure that the Office of the Chief Human
Resources Officer has the capacity necessary to address human resources, pay, and pension policy matters on behalf
of the Government.
Advancing Public Service
Job Classification 0 5 5 0 0 0 10
Funding proposed for the Treasury Board of Canada Secretariat to support the Classification Program, which
ensures that the relative value of work is recognized and compensated appropriately across the core public
administration.
Modernizing Leave
Without Pay Provisions 0 8 11 11 11 11 52
Proposed changes to the Public Service Superannuation Regulations to align provisions concerning pensionable
service status for periods of absence without pay with enabling legislation.
Justice Canada Employee
Benefit Plan Rate Change 0 0 39 39 39 39 157
Less: Costs to be
Recovered 0 0 -39 -39 -39 -39 -157
Funding proposed for Justice Canada to account for the implementation of comprehensive Employee Benefit Plan
rate changes charged to client departments for legal services. This measure is a technical adjustment and there is no
fiscal impact.

Responsible Government 317

 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Improving Federal Asset
Management 0 2 2 1 0 0 5
Funding proposed for the Treasury Board of Canada Secretariat to implement recommendations from its Fixed
Asset Review (announced in Budget 2017) and to help departments respond to real property use changes resulting
from the COVID-19 pandemic. This will help ensure the Government’s real property portfolio is modern, agile, and
right-sized, as well as financially and environmentally sustainable.
Supporting Government
Translation and
Interpretation Services 0 9 9 0 0 0 18
Funding proposed for the Translation Bureau to respond to a higher volume of translation and interpretation
requests while continuing to support a remote working environment. This will ensure that Parliamentarians and
Canadians receive timely translation and interpretation services in both of our official languages as well as
Indigenous languages, sign languages, and other languages spoken across Canada.
Procurement Workforce 0 7 9 9 9 9 43
Funding proposed for Public Services and Procurement Canada to continue to deliver procurement services to client
departments and agencies, negotiate increasingly complex high value contracts, and develop and implement a
vendor performance management framework.
Supporting the Office of
the Chief Information
Officer 0 6 7 7 7 7 34
Funding proposed for the Treasury Board of Canada Secretariat to ensure that the Office of the Chief Information
Officer has the necessary resources to provide strategic direction and leadership in the areas of information
management, information technology, security, privacy, and access to information across the Government of
Canada.
Supporting Efficient, Stable
Digital Applications 0 58 98 20 20 20 215
Funding proposed for Shared Services Canada to continue to help government departments and agencies assess
digital applications and data, then decommission or move them to modern computing facilities. This will reduce
service interruptions, loss of data, and security risks for government operations and digital services.
Public Services and
Procurement Canada
Program Integrity 0 30 0 0 0 0 30
Funding proposed to Public Services and Procurement Canada to continue service delivery to federal departments
and agencies, maintain federal employee salaries, and to support employee safety during the pandemic.
Employment and Social
Development Canada Rent
Price Adjustment 0 1 1 1 1 1 4
Less: Funds From CPP
Account 0 0 0 0 0 0 -1
Funding proposed for Employment and Social Development Canada to cover rent increases related to its national
network of service centres and offices.
Supporting the Public
Service Occupational
Health Program 0 4 8 8 0 0 19
The Public Service Occupational Health Program is the occupational health service provider of the federal public
service, providing specialized occupational health evaluations and technical advice to help departments meet their
Canada Labour Code obligations. Proposed funding would allow the program to continue to play this function for
departments by addressing program integrity pressures.

318 Chapter 10
 2020- 2021– 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026 Total
Renewing funding for the
Office of Public Service
Accessibility 0 3 3 3 0 0 10
Funding proposed for the Treasury Board Secretariat to continue its work to improve accessibility in the federal
government, including strengthening capacity for implementing an Accessibility Strategy for the Public Service and
supporting departments in fulfilling legislative obligations under the Accessible Canada Act.
Addressing Financial
Impacts on Atomic Energy
of Canada Limited 0 38 0 0 0 0 38
Funding proposed for Atomic Energy of Canada Limited to mitigate the financial impacts of the COVID-19
pandemic, including budget pressures due to supply chain disruptions, delays in the construction schedules of key
projects, lost revenues, and additional costs related to increased health and safety protocols.
Strengthening Capital
Markets Stability and
Enforcement 0 12 0 0 0 0 12
Funding proposed for the Canadian Securities Transition Office to continue supporting federal efforts to advance the
Cooperative Capital Markets Regulatory System and to strengthen capital markets stability and enforcement in
Canada.
CRA Administrative
Funding for Certain
Budget 2019 Measures 0 10 9 8 7 6 41
Funding proposed for the Canada Revenue Agency for the administration of certain tax measures announced in
Budget 2019. This includes funding associated with the Canadian Journalism Labour Tax Credit, the designation
process for Qualifying Canadian Journalism Organizations, the Canada Training Credit, and the permitting of
advanced life deferred annuities and variable payment life annuities under certain registered plans.
Supporting the Ongoing
Delivery of Benefits to
Canadians 0 77 4 0 0 0 81
Less: Funds From CPP
Account 0 -9 0 0 0 0 -9
Less: Projected Revenues 0 0 0 0 0 -6 -6
Funding proposed for Employment and Social Development Canada to continue to support both remote and in-
person delivery of services and benefits to Canadians. This will support delivery of Old Age Security, the Canada
Pension Plan and Employment Insurance.
Chapter 10 - Net Fiscal
Impact 5 206 -692 -1,768 -2,368 -2,453 -7,070
Note: Numbers may not add due to rounding.
1
An important proportion of the overall projected revenue impact (75%) relates to the expectation that the
measure will help in preventing the shifting of debt into Canada.

Responsible Government 319

Annex 1
Details of Economic and Fiscal Projections
Economic Projections
The average of private sector forecasts has been used as the basis for economic
and fiscal planning since 1994. This helps ensure objectivity and transparency,
and introduces an element of independence into the government’s economic
and fiscal forecast. The economic forecast presented in this section is based on a
survey conducted in March 2021.

The March survey includes the views of 13 private sector economists:

1. BMO Capital Markets,

2. Caisse de dépôt et placement du Québec,

3. CIBC World Markets,

4. The Conference Board of Canada,

5. Desjardins,

6. IHS Markit,

7. Industrial Alliance Insurance and Financial Services Inc.,

8. Laurentian Bank Securities,

9. National Bank Financial Markets,

10. Royal Bank of Canada,

11. Scotiabank,

12. TD Bank Financial Group, and

13. The University of Toronto (Policy and Economic Analysis Program).

Private sector economists expect real gross domestic product (GDP) to rebound
from a contraction of 5.4 per cent in 2020 to growth of 5.8 per cent in 2021 and 4
per cent in 2022, a faster recovery than the growth rates of, respectively, 4.8 per
cent and 3.2 per cent projected in the November 2020 Fall Economic Statement
(FES 2020). This improved outlook reflects stronger-than-expected results in the
last quarter of 2020, and higher projected growth starting in the second quarter
of this year due to a faster anticipated rollout of vaccines (Table A1.1 below). Real
GDP growth is expected to moderate to about 2 per cent on average per year
over the remaining years of the forecast horizon, reflecting a return to trend
long-run growth rates.

Details of Economic and Fiscal Projections 321

Along with the faster recovery in economic activity, the unemployment rate is
expected to decline from its peak of 9.6 per cent in 2020 to 8 per cent in 2021
and 6.5 per cent in 2022, a faster projected decline than in FES 2020. The
unemployment rate is expected to reach 5.9 per cent by 2025.

The outlook for GDP inflation (the broadest measure of economy-wide price
inflation) in the March 2021 survey has also been revised up for 2021 compared
to FES 2020 forecast (from 2.2 per cent to 3.3 per cent) reflecting better-than-
expected results in the second half of 2020 and upward forecast revisions in the
first quarter of 2021, in part attributable to higher oil prices. Going forward, GDP
inflation is expected to stand at about 2 per cent per year.

As a result of these developments, the level of nominal GDP (the broadest

measure of the tax base) is projected at $2,408 billion for 2021, $68 billion higher
than projected in FES 2020 (but still $75 billion lower than projected in the
Economic and Fiscal Update 2019). The nominal GDP level difference with FES
2020 is expected to average about $70 billion per year over the 2020-2025 period.

While the outlook for the short-term interest rate is broadly similar to FES 2020
projection, forecasts for the long-term interest rate have been revised up in the
March 2021 survey by about 40 basis points over the 2020-2025 period
compared to FES 2020 forecast.

Table A1.1
Average Private Sector Forecasts
per cent, unless otherwise indicated
2020 2021 2022 2023 2024 2025 2020-
2025
Real GDP growth1
Fall Economic Statement 2020 -5.5 4.8 3.2 2.3 2.1 1.9 1.5
Budget 2021 -5.4 5.8 4.0 2.1 1.9 1.8 1.7
GDP inflation1
Fall Economic Statement 2020 0.1 2.2 2.0 2.0 2.1 2.1 1.7
Budget 2021 0.8 3.3 2.0 2.0 2.1 2.0 2.0
Nominal GDP growth1
Fall Economic Statement 2020 -5.4 7.0 5.3 4.4 4.3 4.0 3.3
Budget 2021 -4.6 9.3 6.0 4.0 4.0 3.8 3.8
Nominal GDP level (billions of
dollars)1
Fall Economic Statement 2020 2,186 2,340 2,465 2,572 2,682 2,789
Budget 2021 2,204 2,408 2,553 2,657 2,763 2,869
Difference between Fall
Economic Statement 2020 and
Budget 2021 18 68 89 84 81 79 70

322 Annex 1
 2020 2021 2022 2023 2024 2025 2020-
2025
3-month treasury bill rate
Fall Economic Statement 2020 0.4 0.2 0.3 0.5 1.1 1.5 0.7
Budget 2021 0.4 0.1 0.2 0.5 1.1 1.6 0.7
10-year government bond rate
Fall Economic Statement 2020 0.7 0.9 1.2 1.6 2.0 2.4 1.5
Budget 2021 0.7 1.5 1.8 2.1 2.5 2.7 1.9
Exchange rate (US cents/C$)
Fall Economic Statement 2020 74.2 76.1 76.6 77.9 78.9 79.2 77.2
Budget 2021 76.6 79.4 79.8 80.8 81.0 81.0 79.4
Unemployment rate1
Fall Economic Statement 2020 9.8 8.2 7.1 6.4 6.1 6.1 7.3
Budget 2021 9.6 8.0 6.5 6.2 6.0 5.9 7.0
Consumer Price Index inflation
Fall Economic Statement 2020 0.7 1.7 1.9 2.0 2.1 2.1 1.7
Budget 2021 0.7 2.2 2.0 2.1 2.1 2.1 1.9
U.S. real GDP growth
Fall Economic Statement 2020 -4.3 3.7 3.3 2.6 2.2 2.0 1.6
Budget 2021 -3.5 6.0 4.3 2.2 1.9 1.8 2.1
West Texas Intermediate crude
oil price ($US per barrel)
Fall Economic Statement 2020 39 46 52 54 58 59 51
Budget 2021 39 60 61 60 60 60 57
Note: Forecast averages may not equal average of years due to rounding. Numbers may not
add due to rounding.
1
Figures have been restated to reflect the historical revisions in the Canadian System of
National Accounts and in the Labour Force Survey.
Sources: Statistics Canada; for the Fall Economic Statement 2020, Department of Finance
Canada September 2020 survey of private sector economists; for the Budget 2021,
Department of Finance Canada March 2021 survey of private sector economists.

Details of Economic and Fiscal Projections 323

Fiscal Projections
Changes to the Fiscal Outlook since the 2020 Fall
Economic Statement (FES 2020)
Table A1.2
Economic and Fiscal Developments since FES 2020 and Policy Actions and
Investments
billions of dollars
Projection

2020- 2021- 2022- 2023- 2024- 2025-

2021 2022 2023 2024 2025 2026

Budgetary balance – FES 2020

(before stimulus) -381.6 -121.2 -50.7 -43.3 -30.9 -24.9
Economic and fiscal
developments since FES 2020 35.2 15.8 19.3 16.0 12.8 10.3
(Table A1.3)
Budgetary balance before
policy actions and investments -346.4 -105.4 -31.4 -27.3 -18.1 -14.6
Policy actions since FES 2020 0.2 0.3 0.9 -1.1 -0.7 -0.3
Investments in Budget 2021 (by chapter)
1. Keeping Canadians Healthy
and Safe -5.0 -1.2 -1.0 -0.9 -0.8 -0.7
2. Seeing Canadians and
Businesses Through to Recovery -0.2 -27.0 -4.2 -1.0 -0.7 0.7
3. New Opportunities for
Canadians -0.5 -3.9 -9.0 -7.5 -7.6 -8.8
4. Helping Canadian Businesses
Grow and Succeed 0.0 -3.7 -4.5 -5.0 -2.4 -0.8
5. A Healthy Environment for a
Healthy Economy 0.0 -1.2 -1.9 -2.0 -1.8 -1.9
6. Strengthening the Cities and
Communities We Call Home -2.2 -4.6 -3.3 -2.3 -2.0 -3.1
7. A More Equal Canada 0.0 -1.8 -1.6 -2.1 -2.2 -2.4
8. Strong Indigenous
Communities 0.0 -4.3 -3.5 -3.0 -1.3 -1.0
9. Protecting Our Shared Values -0.1 -1.9 -1.1 -0.7 -0.5 -0.4
10. Responsible Government 0.0 -0.2 0.7 1.8 2.4 2.5
Total – Actions since FES 2020
and Budget 2021 Investments -7.7 -49.3 -28.3 -23.8 -17.7 -16.1

324 Annex 1
Budgetary balance -354.2 -154.7 -59.7 -51.0 -35.8 -30.7
Budgetary balance (%GDP) -16.1 -6.4 -2.3 -1.9 -1.3 -1.1
Federal Debt (%GDP) 49.0 51.2 50.7 50.6 50.0 49.2
Note: FES 2020 Escalated Restrictions Scenario and $100 billion stimulus
Budgetary balance -398.7 -166.7 -109.6 -71.7 -39.4 -33.4
Budgetary balance (%GDP) -18.2 -7.3 -4.5 -2.9 -1.5 -1.2
Federal Debt (%GDP) 51.4 56.4 58.1 58.5 57.6 56.6

Economic and Fiscal Developments since FES 2020

Table A1.3
Economic and Fiscal Developments since FES 2020
billions of dollars
Projection
2020- 2021- 2022- 2023- 2024- 2025-
2021 2022 2023 2024 2025 2026
Economic and fiscal developments by
component1:
Change in budgetary revenues
(1.1) Income taxes 11.8 14.5 13.5 11.9 11.9 11.9
(1.2) Excise taxes/duties 0.2 1.5 1.8 1.5 1.3 1.0
(1.3) Proceeds from the pollution
pricing framework 0.3 0.4 0.3 0.4 0.3 0.3
(1.4) Employment Insurance premiums 0.7 0.7 1.1 0.9 0.5 -0.5
(1.5) Other revenues 7.9 2.2 2.8 2.6 1.9 2.4
(1) Total budgetary revenues 20.8 19.2 19.6 17.3 15.9 15.1
Change in program expenses
(2.1) Major transfers to persons 6.3 2.1 0.0 -0.7 -0.9 -1.2
(2.2) Major transfers to other levels of
government 0.1 -4.4 -0.4 -1.1 -1.2 -1.1
(2.3) Direct program expenses 8.2 -2.7 0.2 2.4 1.8 1.0
(2) Total program expenses, excluding net
actuarial losses 14.6 -5.0 -0.2 0.6 -0.3 -1.3
(3) Net actuarial losses 0.0 3.4 3.3 2.9 2.1 1.5
(4) Public debt charges -0.1 -1.8 -3.3 -4.8 -4.9 -5.0
(5) Total economic and fiscal
developments 35.2 15.8 19.3 16.0 12.8 10.3
¹ A negative number implies a deterioration in the budgetary balance (lower revenues or higher expenses). A
positive number implies an improvement in the budgetary balance (higher revenues or lower expenses).

Details of Economic and Fiscal Projections 325

Budgetary revenues, particularly income tax revenues, have been revised up
relative to FES 2020. In the near-term, this is driven by the faster-than-expected
economic recovery in the second half of 2020. Over the longer-term, an
improvement in the outlook for the labour market, personal income and
corporate profitability drive revisions to personal and corporate income tax
revenues.
 Because more people will be working, and earning more, income tax
revenues are projected to be $11.8 billion higher in 2020-21 due to strong
year-to-date results, and up on average by more than $12 billion per year
over the forecast horizon.
 Excise taxes and import duty revenues have been revised upwards in large
part due to an upward revision to Goods and Services Tax (GST) revenues,
reflecting a stronger outlook for consumption.
 Proceeds from the federal pollution pricing framework that arise from the
provinces and territories that are a part of the federal backstop are projected
to be marginally higher reflecting an improved economic outlook. These
proceeds will continue to be fully returned: primarily through Climate Action
Incentive payments to eligible individuals and families in Alberta, Manitoba,
Ontario and Saskatchewan and through a transfer to the governments of
Yukon and Nunavut.

 Employment Insurance (EI) premium revenues have been revised up due to

better-than-expected labour force participation and an improved outlook for
economy-wide wage growth.

 Other revenues, such as those resulting from sales of goods and services,
investments and loans, interest and penalties, and Crown corporations’ net
profits, are projected to be much higher in 2020-21 than expected at the time
of FES 2020. This improvement is primarily due to better-than-expected
financial performance by enterprise Crown corporations, and lower-than-
expected premiums paid by the Bank of Canada in the course of its
secondary market purchases of Government of Canada securities to support
liquidity in financial markets. Upward revisions in future years largely reflect
an improved outlook for enterprise Crown corporations profits, including
income on increased asset balances held by the Bank of Canada.

Program expenses, particularly major transfers to persons and direct program

expenses, are projected to be significantly lower in 2020-21 relative to FES 2020,
largely reflecting the revised timing and re-estimation of the cost of COVID-response
programs, such as the Canada Emergency Response Benefit.

 Over the remainder of the forecast horizon, adjustments to major transfers to

persons reflect the impact of higher expected inflation, to which children’s and
elderly benefits rates are indexed.

326 Annex 1
 Major transfers to other levels of government are higher in 2021-22, reflecting
a revised preliminary estimate of potential Fiscal Stabilization payments. In the
outer years of the forecast, expenses have been revised upwards, as a result of
the stronger economic outlook as the Canada Health Transfer and
Equalization payments are indexed to growth in nominal GDP.
 Direct program expenses, which include pollution pricing proceeds returned,
other transfer payments administered by departments, and departmental
operating expenses, have been adjusted downward in 2020-21 and upward in
2021-22, largely due to the revised timing of COVID program expenses. Over
the horizon, direct program expenses are revised downward, driven by lower
anticipated pension and benefits current service costs, and slightly lower
departmental spending projections.

Net actuarial losses, which represent changes in the measurement of the

government’s obligations for pensions and other employee future benefits
accrued in previous fiscal years, are expected to be lower relative to FES 2020,
reflecting upward revisions to projected long term interest rates used to value the
obligations.

Public debt charges have increased to reflect higher expected interest costs on
interest-bearing debt due to higher interest rates, and a revised financial
requirement. Despite these developments, public debt charges remain on a
sustainable long-term path and are $1.6 billion lower in 2022-23 than was forecast
in the 2019 Economic and Fiscal Update (forecast of $27.3 billion at that time),
before the onset of COVID. This is in spite of the substantial increase in federal
debt as a result of the pandemic.

Details of Economic and Fiscal Projections 327

Summary Statement of Transactions
Table A1.4
Summary Statement of Transactions
billions of dollars
Projection
2019– 2020– 2021– 2022– 2023– 2024– 2025–
2020 2021 2022 2023 2024 2025 2026
Budgetary revenues 334.1 296.2 355.1 377.9 396.4 417.9 437.7
Program expenses,
excluding net actuarial
losses 338.5 614.5 475.6 403.0 409.2 414.4 426.7
Public debt charges 24.4 20.4 22.1 25.7 30.5 35.4 39.3
Total expenses,
excluding net actuarial
losses 362.9 634.9 497.6 428.7 439.7 449.8 466.0
Budgetary balance
before net actuarial
losses -28.8 -338.8 -142.5 -50.9 -43.4 -31.9 -28.3
Net actuarial losses -10.6 -15.4 -12.2 -8.9 -7.7 -3.9 -2.4
Budgetary balance -39.4 -354.2 -154.7 -59.7 -51.0 -35.8 -30.7

Financial Position
Total liabilities 1,248.6 1,648.4 1,799.7 1,858.3 1,928.0 1,983.1 2,025.3
Financial assets 1
435.7 472.4 466.2 459.6 473.6 488.8 496.8
Net debt 812.9 1,176.0 1,333.6 1,398.8 1,454.4 1,494.3 1,528.6
Non-financial assets 91.5 96.9 99.8 105.3 109.9 114.0 117.6
Federal debt 721.4 1,079.0 1,233.8 1,293.5 1,344.5 1,380.3 1,411.0
Per cent of GDP
Budgetary revenues 14.5 13.4 14.7 14.8 14.9 15.1 15.3
Program expenses,
excluding Net Actuarial
losses 14.6 27.9 19.7 15.8 15.4 15.0 14.9
Public debt charges 1.1 0.9 0.9 1.0 1.1 1.3 1.4
Budgetary balance -1.7 -16.1 -6.4 -2.3 -1.9 -1.3 -1.1
Federal debt 31.2 49.0 51.2 50.7 50.6 50.0 49.2
Note: Totals may not add due to rounding.
1
The projected level of financial assets for 2020-21 includes an estimate of other comprehensive
income.

328 Annex 1
Outlook for Budgetary Revenues
Table A1.5
The Revenue Outlook
billions of dollars
Projection
2019– 2020– 2021– 2022– 2023– 2024– 2025–
2020 2021 2022 2023 2024 2025 2026
Income taxes
Personal income tax 167.6 168.2 180.4 187.5 195.5 204.0 213.5
Corporate income tax 50.1 46.2 50.3 52.8 56.7 62.9 66.8
Non-resident income tax 9.5 8.5 9.9 10.6 11.0 11.3 11.7
Total income tax 227.1 222.9 240.5 251.0 263.2 278.1 291.9
Excise taxes/duties
Goods and Services Tax 37.4 29.8 41.0 43.6 45.2 46.7 48.2
Customs import duties 4.9 3.7 4.5 4.9 5.1 5.4 5.8
Other excise taxes/duties 11.6 10.5 11.7 12.4 12.7 12.8 12.9
Total excise taxes/duties 53.9 44.0 57.1 60.9 63.0 64.9 66.9
Digital Services Tax 0.0 0.2 0.7 0.8 0.8 0.9
Total tax revenues 281.0 266.9 297.8 312.5 326.9 343.8 359.7
Proceeds from the pollution
pricing framework1 2.7 4.5 6.4 7.9 8.0 7.9 7.9
Employment Insurance
premium revenues 22.2 22.2 23.7 25.4 27.3 29.2 31.2
Other revenues
Enterprise Crown 5.1 -13.9 7.1 10.2 10.7 11.7 12.5
corporations
Other programs 20.8 14.2 18.5 19.9 21.2 22.6 23.4
Net foreign exchange 2.4 2.2 1.7 1.9 2.2 2.6 3.0
Total other revenues 28.3 2.6 27.3 32.0 34.2 36.9 38.9
Total budgetary revenues 334.1 296.2 355.1 377.9 396.4 417.9 437.7
Per cent of GDP
Total tax revenues 12.2 12.1 12.4 12.2 12.3 12.4 12.5
Proceeds from the pollution 0.1 0.2 0.3 0.3 0.3 0.3 0.3
pricing framework
Employment Insurance 1.0 1.0 1.0 1.0 1.0 1.1 1.1
premium revenues
Other revenues 1.2 0.1 1.1 1.3 1.3 1.3 1.4
Total budgetary revenues 14.5 13.4 14.7 14.8 14.9 15.1 15.3
Note: Totals may not add due to rounding.
1
This represents those charges applied through the federal backstop, excluding the Output Based Pricing System.
All these proceeds will be returned to their province/territory of origin through Climate Action Incentive payments
and other climate supports.

Details of Economic and Fiscal Projections 329

Table A1.5 sets out the government’s projection for budgetary revenues.
Personal income tax (PIT) revenues – the largest component of budgetary
revenues – are projected to increase to $168.2 billion in 2020-21, or 0.4 per cent.
This limited growth reflects the negative impact of the COVID-19 crisis on
household incomes, partly compensated by measures put in place by the
government to support income. PIT revenues are expected to rebound to
$180.4 billion in 2021-22 as employment levels recover. For the remainder of the
forecast, PIT revenue growth is expected to return to an average of 4.3 per cent, in
line with projected nominal GDP growth.
Corporate income tax (CIT) revenues are projected to decrease by 7.6 per cent, to
$46.2 billion in 2020-21. The decline is driven by lower corporate profitability and
general economic weakness due to the impact of COVID-19. Starting 2021-22, CIT
is expected to rebound and grow at an average rate of 7.6 per cent per year
through to the end of the forecast horizon, reflecting the outlook for corporate
profitability.
Non-resident income tax revenues are income taxes paid by non-residents on
Canadian-sourced income, notably dividends and interest payments. These
revenues are expected to decrease to $8.5 billion in 2020-21, or 10.7 per cent, as
corporate profits and investment income were hit by the economic impacts of the
crisis, before rebounding to $9.9 billion in 2021-22. From 2022-23 on, growth is
expected to return to an average of 4.3 per cent.
GST revenues are forecast to fall to $29.8 billion in 2020-21, or 20.3 per cent,
reflecting the temporary shutdown of large portions of the retail sector and the
introduction of the one-time enhanced GST credit payment, before increasing to
$41 billion in 2021-22, or 37.4 per cent. Over the remainder of the projection
period, GST revenues are forecast to grow by 4.1 per cent per year, on average,
reflecting the outlook for taxable consumption.
Customs import duties are projected to fall from $4.9 billion in 2019-20 to
$3.7 billion in 2020-21, or 22.8 per cent, due to lower imports and the
government’s waiver of customs duties on medical goods in order to better
combat the spread of COVID-19, before rebounding to $4.5 billion in 2021-22,
or 19.8 per cent. Over the remainder of the horizon, customs import duties are
projected to grow at an average annual rate of 6.4 per cent due to expected
growth in imports.
Other excise taxes and duties (OETD) are projected to decline to $10.5 billion in
2020-21, or 10.2 per cent, primarily reflecting lower air travel security surcharge
and excise tax revenue from motive fuels as a result of decreased demand since
the onset of the pandemic. OETD revenues are expected to increase to
$11.7 billion in 2021-22, or 11.4 per cent, as demand recovers, and over the
remainder of the projection period, are expected to grow at an average annual
rate of 2.7 per cent, reflecting projected underlying consumption growth.

330 Annex 1
The new digital services tax (DST) is expected to be in effect as of January 1, 2022.
DST revenues are projected to be $0.2 billion in 2021-22, and rise to $0.9 billion by
2025-26.
In 2020-21, EI premium revenues are projected to remain unchanged at $22.2 billion.
Over the remainder of the projection horizon, premium revenues are anticipated to
grow at an average annual rate of 7.1 per cent, largely due to the current outlook for
the labour market, the end of the currently planned two-year freeze in premium rates
as of 2023, and the return to a premium rate structure under current legislation that
balances accumulated spending in the account over seven years. The current forecast
anticipates a gradual increase in premium rates, beginning in 2023, from $1.58 to
$1.83 per $100 insurable earnings by the end of the horizon. This would result in a
premium rate that is still lower than the peak level of rates at $1.88 following the
2008-09 recession. The government will continue to review premium rates following
the results of its consultations on future EI reforms over the course of the next year
and where the labour market stands further on in the recovery.
Other revenues consist of three broad components: net income from enterprise
Crown corporations; other program revenues from returns on investments,
proceeds from the sales of goods and services, and other miscellaneous revenues;
and revenues in the Exchange Fund Account.
Enterprise Crown corporation revenues are projected to decrease by $18.9 billion in
2020-21 and increase by $21 billion in 2021-22, before growing thereafter at an
average annual rate of 15.2 per cent. These projections reflect the outlooks
presented in corporate plans of respective enterprise Crown corporations, including
the impact of COVID-19 on profits, and the impact of Bank of Canada programs
introduced during COVID-19, including purchases of Government of Canada
securities on the secondary market to support liquidity in financial markets.
Other program revenues are affected by consolidated Crown corporation
revenues, interest rates, inflation and exchange rate movements (which affect the
Canadian-dollar value of foreign-denominated assets). These revenues are
projected to decline by 31.5 per cent or $6.6 billion in 2020-21, primarily due to a
decline in interest and penalty revenue of $2.7 billion and return on investments of
$1.3 billion as a result of lower interest rates and interest and penalty waivers
provided as part of the government’s COVID-19 response, along with a $1.6 billion
projected decline in revenue from sales of goods and services. Over the remainder
of the forecast horizon, these revenues are projected to grow at an average annual
rate of 10.4 per cent, largely as a result of growth in revenue from return on
investments and interest and penalty revenue.
Net foreign exchange revenues, which consist mainly of returns on investments
held in the Exchange Fund Account, are volatile and sensitive to fluctuations in
foreign exchange rates and foreign interest rates. These revenues are projected to
decrease in 2020-21 due mainly to lower interest rates.

Details of Economic and Fiscal Projections 331

 Employment Insurance Operating Account
Employment Insurance Operating Account Projections
2019- 2020- 2021- 2022- 2023- 2024- 2025-
2020 2021 2022 2023 2024 2025 2026
EI premium revenues 22.2 22.2 23.7 25.4 27.3 29.2 31.2
EI benefits1 21.8 33.5 41.2 28.1 24.5 24.9 25.6
EI administration and
other expenses2 2.0 2.1 2.1 2.2 2.0 1.9 1.9
2019 3
2020 2021 2022 2023 2024 2025 (…) 2028
EI Operating Account
annual balance 2.1 -6.3 -21.9 -6.1 -0.7 2.2 3.8 6.5
EI Operating Account
cumulative balance 5.9 -0.3 -22.2 -28.3 -29.0 -26.8 -22.9 -4.44
Projected premium rate
(per $100 of insurable
earnings) 1.62 1.58 1.58 1.58 1.63 1.68 1.73 1.83
1
EI benefits include regular EI benefits, sickness, maternity, parental, compassionate care, fishing and work
sharing benefits, and employment benefits and support measures. EI benefits exclude EI-Emergency
Response Benefit costs as these will not be recovered via EI premiums in line with the Government’s
commitment to credit the EI Operating Account.
2
The remaining EI costs relate mainly to administration and are included in direct program expenses.
3
Values for 2019 are actual data. Values for 2020 and future years are a projection.
4
The EI Operating Account cumulative balance does not reach exactly zero at the end of the seven-year
period as projected EI rates are rounded to the nearest whole cent per $100 of insurable earnings, in
accordance with the Employment Insurance Act. In addition, the positive deficit amount in 2028 reflects the
cost of new support measures that are not fully recovered due to the 5-cent limit on premium rate
increases.

The Employment Insurance Operating Account operates within the

Consolidated Revenue Fund. As such, EI-related revenues and expenses that
are credited and charged to the Account, respectively, in accordance with the
Employment Insurance Act, are consolidated with those of the government,
and impact the budgetary balance. For consistency with the EI premium rate,
which is set on a calendar-year basis with the objective of having the Account
break even over time, the annual and cumulative balances of the Account are
also presented on a calendar-year basis.
The EI Operating Account is expected to record annual deficits from 2020 to
2023 as a result of the increase in EI benefits (excluding the Emergency
Response Benefit) and the temporary freeze on EI premiums through 2022. The
Account is then projected to record annual surpluses starting in 2024 due to
projected increases in the premium rate until reaching $1.83. The increases
reflect the practice of the rate-setting mechanism that started with the setting
of the 2017 premium rate.

332 Annex 1
Outlook for Program Expenses
Table A1.6
The Expense Outlook
billions of dollars
Projection
2019– 2020– 2021– 2022– 2023– 2024– 2025–
2020 2021 2022 2023 2024 2025 2026
Major transfers to persons
Elderly benefits 56.2 58.8 62.5 68.0 72.5 76.7 81.0
Employment Insurance benefits1 21.8 59.8 41.2 28.1 24.5 24.9 25.6
Canada Emergency Response
Benefit and Canada Recovery
Benefits 4.7 57.3 13.9 0.0 0.0 0.0 0.0
Canada Child Benefit2 24.3 27.6 27.2 26.3 26.6 27.2 27.9
Total 107.1 203.5 144.8 122.3 123.7 128.7 134.4
Major transfers to other levels
of government
Canada Health Transfer 40.9 45.9 43.1 44.7 47.5 49.8 51.7
Canada Social Transfer 14.6 15.0 15.5 15.9 16.4 16.9 17.4
Equalization 19.8 20.6 20.9 21.7 23.1 24.1 25.1
Territorial Formula Financing 3.9 4.2 4.4 4.6 4.8 4.9 5.1
Canada Community-Building Fund 2.2 4.3 2.3 2.3 2.4 2.4 2.5
Home care and mental health 1.1 1.3 1.5 1.2 1.2 1.2 1.2
Other fiscal arrangements3 -3.3 15.5 -1.2 -6.0 -6.3 -6.6 -6.9
Total 79.2 106.7 86.6 84.3 89.1 92.7 96.1
Direct program expenses
Proceeds from the pollution
pricing framework returned4 2.6 4.8 6.9 8.1 8.3 7.9 7.9
Canada Emergency Wage Subsidy 0.0 84.6 26.0 0.0 0.0 0.0 0.0
Canada-Wide Early Learning and
Child Care5 0.0 0.0 3.0 4.5 5.5 6.5 7.7
Other transfer payments 54.4 103.3 85.9 76.1 74.0 70.1 70.5
Operating expenses6 95.2 111.6 122.5 107.7 108.6 108.4 110.1
Total 152.2 304.3 244.3 196.4 196.5 193.0 196.2
Total program expenses,
excluding net actuarial losses 338.5 614.5 475.6 403.0 409.2 414.4 426.7
Net actuarial losses7 10.6 15.4 12.2 8.9 7.7 3.9 2.4
Per cent of GDP
Major transfers to persons 4.6 9.2 6.0 4.8 4.7 4.7 4.7
Major transfers to other levels of
government 3.4 4.8 3.6 3.3 3.4 3.4 3.3
Direct program expenses 6.6 13.8 10.1 7.7 7.4 7.0 6.8

Details of Economic and Fiscal Projections 333

 Projection
2019– 2020– 2021– 2022– 2023– 2024– 2025–
2020 2021 2022 2023 2024 2025 2026
Total program expenses 14.6 27.9 19.7 15.8 15.4 15.0 14.9
Note: Totals may not add due to rounding.
1
EI benefits include regular EI benefits, sickness, maternity, parental, compassionate care, fishing and work-
sharing benefits, and employment benefits and support measures. Remaining EI costs relate mainly to
administration and are part of operating expenses. As in FES 2020, this includes the portion of payments for the
Emergency Response Benefit charged to the EI Operating Account, totalling $1.8 billion in 2019-20, and an
estimated $26.3 billion in 2020-21. These costs are not projected to be recovered with higher EI premiums
given the government’s commitment to credit the EI Operating account for the costs associated with the
Emergency Response Benefit program.
2
Includes the Children’s disability benefits and residual payments for the Universal Child Care Benefit (UCCB),
now replaced by the Canada Child Benefit.
3
Other fiscal arrangements includes the Quebec Abatement (Youth Allowances Recovery and Alternative
Payments for Standing Programs); payments under the Canada-Nova Scotia Arrangement on Offshore
Revenues; Fiscal Stabilization payments; and established terms for repayable floor loans. In 2020-21 this also
includes COVID-19 response measures.
4
This includes the return of charges applied through the federal backstop, excluding those through the Output
Based Pricing System, which are returned to their province/territory of origin through Climate Action Incentive
payments and other climate supports.
5
Amounts exclude funding for Indigenous Early learning and Child Care which are included in the other transfer
payments line.
6
This includes capital amortization expenses.
7
Actuarial gains and losses were previously reported as “Losses (gains) from employee future benefit plans” and
as a part of Direct program expenses, but are now presented in a new line item titled Net actuarial losses since
FES 2020.

Table A1.6 provides an overview of the projection for program expenses by major
component. Program expenses consist of three main categories: major transfers
to persons, major transfers to other levels of government, and direct program
expenses.

Major transfers to persons consist of elderly, Employment Insurance (EI) and

children’s benefits, as well as the Canada Emergency Response Benefit and
Recovery Benefits.

Elderly benefits are projected to reach $58.8 billion in 2020-21, up 4.6 per cent,
due to an increase in the population of seniors. Over the remainder of the
horizon, elderly benefits are forecast to grow by $4.4 billion per year, on average,
reflecting the ongoing demographic change, and projected consumer price
inflation, to which benefits are fully indexed, as well as the planned 10 per cent
increase to regular Old Age Security payments for pensioners 75 and over on an
ongoing basis as of July 2022 announced in this budget.

EI benefits are projected to increase to $59.8 billion in 2020-21, largely reflecting

the cost of Emergency Response Benefits ($26.3 billion) and higher
unemployment resulting from the crisis. The government has committed to
crediting the EI Operating Account for costs resulting from the Emergency
Response Benefit, which means that they will not result in higher future EI

334 Annex 1
premiums. EI benefits are expected to fall to $24.5 billion by 2023-24 as a result
of the projected improvement in the labour market. After which, EI benefits are
forecast to grow at an average of 2.3 per cent annually, as the unemployment
rate is projected to stabilize at around 6 per cent after 2023.
The Canada Emergency Response Benefit (CERB) was introduced as part of
Canada’s COVID-19 Economic Response Plan to provide immediate assistance to
Canadians not eligible for EI benefits. The government is committed to
continuing to support all Canadians and has introduced the Canada Recovery
Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB) and the Canada
Recovery Caregiving Benefit (CRCB). The CERB and the Canada Recovery Benefits
(CRB, CRSB and CRCB) are expected to cost $57.3 billion in 2020-21, decreasing
to $13.9 billion in 2021-22 as the economy recovers and temporary programs
end.
Canada Child Benefit (CCB) payments are projected to increase 13.3 per cent to
$27.6 billion in 2020-21, largely reflecting temporary top up transfers. These
benefits will stay close to this level for 2021-22, mainly due to the temporary
support for families with young children introduced in the 2020 Fall Economic
Statement, before decreasing to $26.3 billion in 2022-23 as temporary supports
expire. For the period 2022-23 to 2025-26, CCB payments are expected to grow
at an average annual rate of 2 per cent, reflecting forecasted consumer price
inflation to which the benefits are indexed.
Major transfers to other levels of government, which include the Canada Health
Transfer (CHT), the Canada Social Transfer (CST), Equalization, Territorial Formula
Financing and the Canada Community-Building Fund (formerly known as the Gas
Tax Fund), among others, are expected to increase by 34.8 per cent to $106.7
billion in 2020-21, reflecting the unprecedented level of support provided to
provinces and territories during the pandemic. The increase in 2020-21 is driven
by previously announced COVID-19 response measures, including $4 billion for a
one-time increase to the Canada Health Transfer, the $2.2 billion top-up to the
Canada Community-Building Fund, and $1 billion that is being provided to assist
provinces and territories with immunization campaigns.
As a result of the one-time, $4 billion increase to the CHT in 2020-21, total CHT
support is $5 billion higher than in 2019-20. Beginning in 2021-22, the CHT is
projected to grow from $43.1 billion to $51.7 billion in 2025-26, as it grows in line
with a three-year moving average of nominal GDP growth, with
funding guaranteed to increase by at least 3 per cent per year. The CST is
legislated to grow at 3 per cent per year. Canada Community-Building Fund
payments are indexed at 2 per cent per year, with increases applied in
$100 million increments. Home care and mental health transfers are projected to
be $1.3 billion in 2020-21, stabilizing at $1.2 billion starting in 2022-23.

Details of Economic and Fiscal Projections 335

Direct program expenses, which include proceeds from the pollution pricing
framework returned, the Canada Emergency Wage Subsidy, the Canada-Wide
Early Learning and Child Care plan, other transfer payments administered by
departments, and operating expenses, are expected to increase about 100 per
cent to $304.3 billion in 2020-21. The projected increase in direct program
expenses is largely driven by COVID-19 response measures, including the wage
subsidy, with an estimated cost of $84.6 billion in 2020-21. Direct program
expenses are projected to fall to $193 billion in 2024-25. This fall is partially offset
in the outer years by the new Canada-Wide Early Learning and Child Care
System, which is expected to cost $3 billion in 2021-22 growing to $7.7 billion by
2025-26.

Other transfer payments administered by departments are projected to increase

about 90 per cent to $103.3 billion in 2020-21, reflecting investments made to
help Canadian families and businesses through the crisis. This includes the
expected cost of the loan repayment incentive for the Canada Emergency
Business Account $12.6 billion, and $3 billion for the Canada Emergency Student
Benefit. Also contributing to the increased costs are supports for seniors through
a one-time payment ($2.5 billion) provided in July 2020, and to small businesses
through the Canada Emergency Commercial Rent Assistance ($1.9 billion), and
through the Canada Emergency Rent Subsidy ($4.1 billion). Other transfer
payments are projected to fall to $76.1 billion by 2022-23, as the economy
recovers and support measures are lifted, after which they are projected to
stabilize around $71.5 billion per year, on average.

Operating expenses reflect the broad range of day-to-day costs of government

operations for more than 100 government departments, agencies and Crown
corporations. Operating expenses are projected to increase to $111.6 billion in
2020-21, and to $122.5 billion in 2021-22. This includes spending related to the
procurement of vaccines and personal protective equipment in response to the
crisis. Operating expenses are projected to decrease to $107.7 billion by 2022-23,
after which they are projected to grow at an average of 0.7 per cent, annually.

Net actuarial losses, which represent changes in the measurement of the

government’s obligations for pensions and other employee future benefits
accrued in previous fiscal years, are expected to increase to $15.4 billion in 2020-
21. This increase reflects losses stemming from the 2019-20 actuarial valuations of
the government’s pension and benefit plans, which are amortized to expense
starting in 2020-21. These 2019-20 losses were due mainly to lower long-term
interest rates used to value the obligations, as well as increased costs associated
with the utilization of disability and other future benefits provided to veterans.
Over the horizon, net actuarial losses are forecasted to decline reflecting the
increase in projected long-term interest rates.

Financial Source/Requirement
336 Annex 1
The budgetary balance is presented on a full accrual basis of accounting, recording
government revenues and expenses when they are earned or incurred, regardless
of when the cash is received or paid. In contrast, the financial/source requirement
measures the difference between cash coming in to the government and cash
going out. This measure is affected not only by the budgetary balance, but also by
the government’s non-budgetary transactions. These include changes in federal
employee pension liabilities; changes in non-financial assets; investing activities
through loans, investments and advances; and changes in other financial assets and
liabilities, including foreign exchange activities.

Table A1.7
The Budgetary Balance, Non-Budgetary Transactions and Financial
Source/Requirement
billions of dollars
Projection
2019– 2020– 2021– 2022– 2023– 2024– 2025–
2020 2021 2022 2023 2024 2025 2026
Budgetary balance -39.4 -354.2 -154.7 -59.7 -51.0 -35.8 -30.7
Non-budgetary transactions
Pensions and other accounts 10.3 15.8 11.0 8.7 7.3 3.4 1.8
Non-financial assets -4.9 -5.4 -2.9 -5.5 -4.6 -4.1 -3.6
Loans, investments and advances
Enterprise Crown corporations -13.5 1.0 -0.3 -5.5 -4.7 -5.8 0.9
Other -1.7 -32.7 -10.6 19.1 -1.8 -1.1 -1.3
Total -15.1 -31.7 -10.9 13.6 -6.6 -6.9 -0.4
Other transactions
Accounts payable, receivable,
accruals and allowances 7.1 26.9 -30.3 -4.3 -3.5 -2.8 -2.5
Foreign exchange activities -5.2 7.9 -2.8 -3.9 -4.0 -4.1 -3.4
Total 1.8 34.8 -33.1 -8.2 -7.5 -6.9 -5.9
Total -7.8 13.5 -36.0 8.6 -11.3 -14.4 -8.1
Financial source/requirement -47.2 -340.6 -190.7 -51.1 -62.4 -50.2 -38.8

As shown in Table A1.7, a financial requirement is projected in each year over the
forecast horizon, largely reflecting financial requirements associated with the
projected budgetary balance.
A financial source is projected for pensions and other accounts for 2020-21 to
2025-26. Pensions and other accounts include the activities of the Government
of Canada’s employee pension plans and those of federally appointed judges and
Members of Parliament, as well as a variety of other employee future benefit
plans, such as health care and dental plans, and disability and other benefits for
veterans and others. The financial source for pensions and other accounts largely
reflects adjustments for pension and benefit expenses not funded in the period.

Details of Economic and Fiscal Projections 337

Financial requirements for non-financial assets mainly reflect the difference
between cash outlays for the acquisition of new tangible capital assets and the
amortization of capital assets included in the budgetary balance. They also
include disposals of tangible capital assets and changes in inventories and
prepaid expenses. A net cash requirement of $2.9 billion is projected for
2021-22.
Loans, investments and advances include the government’s investments in
enterprise Crown corporations, including Canada Mortgage and Housing
Corporation, Export Development Canada, the Business Development Bank of
Canada, and Farm Credit Canada. They also include loans, investments and
advances to national and provincial governments and international organizations,
and under government programs, including the Canada Emergency Business
Account (CEBA). The projected financial requirements for 2020-21 and 2021-22
mainly reflect the disbursement of loans under CEBA and loans advanced to
enterprise Crown corporations under the consolidated borrowing framework. A
financial source is projected for 2022-23, largely reflecting the expected
repayment of CEBA loans. Financial requirements are projected from 2023-24 to
2025-26, reflecting retained earnings of enterprise Crown corporations, as well
loans provided to Crown corporations and third-parties.
In general, loans, investments and advances are expected to generate additional
revenues for the government in the form of interest or additional net profits of
enterprise Crown corporations, which partly offset debt charges associated with
these borrowing requirements. These revenues are reflected in projections of the
budgetary balance.
Other transactions include the payment of tax refunds and other accounts
payable, the collection of taxes and other accounts receivable, the conversion of
other accrual adjustments included in the budgetary balance into cash, as well as
foreign exchange activities. A financial source is projected for 2020-21, primarily
reflecting adjustments for accrued expenses not paid in the period and non-cash
exchange rate impacts. Projected cash requirements over the remainder of the
forecast horizon mainly reflect the payment of accounts payable, forecast
increases in the government’s official international reserves held in the Exchange
Fund Account, as well as projected growth in accounts receivable, in line with
historical trends.

Alternative Economic Scenarios

There is still a large amount of uncertainty regarding the ultimate path of the
recovery and the eventual return to normal economic activity. The outlook
continues to be shaped by the path of the virus and its variants as well as by the
vaccination rollout.

338 Annex 1
At the same time, Canada’s performance through the second wave over the
winter was stronger than projected in the Fall Economic Statement. Indeed, the
Canadian economy was more resilient during the second wave than the initial
wave, suggesting that Canadian households and businesses have adapted to
operating under public health restrictions.

To illustrate the consequences of different health outcomes and the associated

responses of households and businesses, the Department of Finance has
considered two alternative scenarios to the projections of the private sector
economists which reflect downside and upside risks to the outlook.

Scenario: Slower Recovery

In this scenario, new and more contagious variants of the virus broaden their
circulation in Canada, leading to tighter restrictions on businesses vulnerable to
social distancing and a delay in the reopening of borders (e.g. restaurants,
shopping malls, hairdressers and other personal care) until progress on
vaccination can help bring down cases more sustainably. While these restrictions
would be less severe than those assumed in previous downside scenarios, activity
restrictions induce Canadians to consume less and add further to their
accumulated savings.

Further, this scenario assumes that vaccine supply disruptions delays the
projected roll out, and assumes vaccines have less efficacy against new variants.
In this scenario, getting a critical mass of Canadians vaccinated would take until
the end of the year either due to the rise of new variants or some delay in getting
the second dose for the two-dose vaccines, resulting in delays of the return to
normality.

Overall, the downside risks scenario suggests a reduced pace of growth over the
second and third quarters compared to the March survey outlook, with the
recovery accelerating in the final quarter of 2021. This reduces the rebound in
real GDP to around 5.4 per cent in 2021 but slightly increases the growth outlook
for 2022 to around 4.1 per cent, compared to growth rates of, respectively, 5.8
per cent and 4 per cent expected in the March 2021 survey (Chart A1.1 and Table
A1.8, below). This is still faster than the baseline forecast for 2021 of the Fall
Economic Statement, which expected growth of 4.8 per cent of GDP.

Scenario: Faster Recovery

In this scenario, Canada’s diversified portfolio of vaccines allows vaccination
rollout to progress faster than expected and most Canadians are vaccinated by
the summer. Most importantly, COVID-19 related deaths and hospitalizations
plummet rapidly as vulnerable populations are vaccinated. With hospital capacity
restored, provinces are able to quickly lift the most stringent public health and
border restrictions (e.g. restaurant and retail closures). Public fears of the virus

Details of Economic and Fiscal Projections 339

start to recede by the spring and a more robust rebound occurs in the hospitality
sector, quickly lifting employment and economic activity.

Further, the prospect of significant fiscal stimulus and a faster vaccination rollout
in the U.S. drives demand for Canadian exports and provides upward support to
global commodity prices, helping to close the remaining gaps in activity in
manufacturing, mining, and energy.

Overall, the upside risks scenario suggests much faster growth in the first half of
this year compared to the March survey forecast, with growth slowing thereafter,
resulting in a rebound of about 6.6 per cent in 2021 followed by slightly slower
growth of around 3.8 per cent in 2022.

Chart A1.1
Real GDP Growth Outlook
Quarterly Growth Annual Growth

Sources: Department of Finance Canada March 2021 survey of private sector economists; Department of
Finance Canada calculations.

The potential impact of these alternative scenarios on the projected federal

deficit and debt-to-GDP ratio is shown in Chart A1.2 below. The relative change
in economic activity under both scenarios would be expected to affect tax
revenues, and expenses such as Employment Insurance benefits and the
government’s COVID emergency response programs including the Canada
Recovery Benefit, and Canada Emergency Wage Subsidy, and, in the downside
scenario, may require the government to delay the scaling down of those
programs. Notably, in a slower growth scenario, the federal government’s
business and income supports would need to be extended further.

340 Annex 1
In total, the downside scenario could be expected to add about $15 billion to the
deficit in 2021-22, and 1.2 percentage points to the federal debt-to-GDP ratio by
the end of the forecast horizon. In the upside scenario, the deficit would be
reduced by approximately $10 billion in 2021-22 and the federal debt-to-GDP
ratio would fall to 47 per cent by 2025-26. Under this scenario, inflation is
expected to reach a peak of 2.3 per cent in 2023, within the Bank of Canada’s
inflation-control target range of 1 to 3 per cent, inducing a faster normalization in
policy rates.

Chart A1.2
Deficit under alternative economic Federal Debt-to-GDP under
scenarios alternative economic scenarios
billions per cent of GDP

2021-22 2022-23 2023-24 2024-25 2025-26 53

0 52.3

52 51.7 51.7 Slower Recovery

-20
51.2 51.1
-22.9
-28.2 50.7
-40 -30.7 51 50.6
-35.8 -33.6
-38.9 50.4
-43.2
-51.5 -51.0 49.9 50.0
-60 -53.8
-59.7 50
-63.0
49.1 49.2
-80
48.8
49 Budget 2021
-100 Faster Recovery
48.0
-120
Budget 2021 48

Slower Recovery 47.0

-140 47
-144.3 Faster Recovery
-160 -154.7
46
-169.3 2021-22 2022-23 2023-24 2024-25 2025-26
-180

Source: Department of Finance Canada calculations.

Notably, in all cases, the debt-to-GDP ratio forecasted here is lower across the
planning horizon than the upper limits projected in the Fall Economic Statement,
including the impact of planned stimulus. This reflects a generally better
economic environment against which the recovery may unfold faster or slower.

Details of Economic and Fiscal Projections 341

Table A1.8
Department of Finance Alternative Scenarios
per cent, unless otherwise indicated
2021Q1 2021Q2 2021Q3 2021Q4 2021 2022 2023 2024 2025
Real GDP Growth
Budget 2021 3.6 4.4 6.3 5.0 5.8 4.0 2.1 1.9 1.8
Scenario: Slower
Recovery 5.0 2.0 4.0 6.0 5.4 4.1 2.1 1.9 1.8
Scenario: Faster
Recovery 6.5 6.0 5.5 4.0 6.6 3.8 2.1 1.9 1.8
GDP Inflation
Budget 2021 2.9 1.9 2.6 2.1 3.3 2.0 2.0 2.1 2.0
Scenario: Slower
Recovery 2.5 1.1 2.1 2.2 3.1 2.1 1.9 2.0 2.0
Scenario: Faster
Recovery 7.0 2.8 2.2 2.1 4.5 2.1 1.9 2.0 2.0
Nominal GDP
Growth
Budget 2021 6.6 6.3 9.0 7.2 9.3 6.0 4.0 4.0 3.8
Scenario: Slower
Recovery 7.6 3.2 6.2 8.3 8.6 6.3 4.1 3.9 3.8
Scenario: Faster
Recovery 13.9 9.0 7.8 6.2 11.4 6.0 4.1 3.9 3.8
Nominal GDP
Level ($ billions)
Budget 2021 2,408 2,553 2,657 2,763 2,869
Scenario: Slower
Recovery 2,394 2,545 2,650 2,754 2,859
Scenario: Faster
Recovery 2,455 2,603 2,709 2,815 2,923
Difference between
Budget 2021and
Scenario: Slower
Recovery -14 -8 -7 -9 -9
Difference between
Budget 2021and
Scenario: Faster
Recovery 47 49 52 52 54
Unemployment
Rate
Budget 2021 9.1 8.4 7.6 7.0 8.0 6.5 6.2 6.0 5.9
Scenario: Slower
Recovery 8.4 8.3 7.9 7.4 8.0 6.7 6.3 6.0 5.9
Scenario: Faster
Recovery 8.4 7.9 7.2 6.7 7.6 6.2 6.0 5.9 5.9

342 Annex 1
 2021Q1 2021Q2 2021Q3 2021Q4 2021 2022 2023 2024 2025
3-month Treasury
Bill Rate
March 2021 Survey 0.1 0.1 0.2 0.2 0.1 0.2 0.5 1.1 1.6
Scenario: Slower
Recovery 0.1 0.2 0.2 0.2 0.2 0.2 0.3 1.0 1.5
Scenario: Faster
Recovery 0.1 0.2 0.2 0.2 0.2 0.2 0.5 1.2 1.7
10-Year
Government Bond
Rate
March 2021 Survey 1.3 1.5 1.6 1.6 1.5 1.8 2.1 2.5 2.7
Scenario: Slower
Recovery 1.2 1.4 1.5 1.6 1.5 1.8 2.0 2.3 2.5
Scenario: Faster
Recovery 1.2 1.6 1.7 1.8 1.6 2.0 2.3 2.6 2.9
Sources: Statistics Canada; for the Budget 2021, Department of Finance Canada March 2021
survey of private sector economists; Department of Finance Canada calculations.

Details of Economic and Fiscal Projections 343

Supplementary Information
Sensitivity of Fiscal Projections to Economic Shocks
Changes in economic assumptions affect the projections for revenues and expenses.
The following tables illustrate the sensitivity of the budgetary balance to a number of
economic shocks:
 A one-year, 1-percentage-point decrease in real GDP growth driven equally by
lower productivity and employment growth.
 A decrease in nominal GDP growth resulting solely from a one-year, 1-
percentage-point decrease in the rate of GDP inflation (assuming that the
Consumer Price Index (CPI) moves in line with GDP inflation).
 A sustained 100-basis-point increase in all interest rates.

These sensitivities are generalized rules of thumb that assume any decrease in
economic activity is proportional across income and expenditure components, and
are meant to provide a broad illustration of the impact of economic shocks on the
outlook for the budgetary balance. The sensitivity analysis conducted in this section
has been presented routinely in budgets since 1994, and is separate from the
scenarios for a faster or slower recovery presented earlier in this Annex. Actual
economic shocks may have different fiscal impacts. For example, they may be
concentrated in specific sectors of the economy or cause different responses in key
economic variables (e.g. GDP inflation and CPI inflation may have different responses
to a given shock).

344 Annex 1
Table A1.9
Estimated Impact of a One-Year, 1-Percentage-Point Decrease in Real GDP
Growth on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues
Tax revenues
Personal income tax -2.9 -3.0 -3.4
Corporate income tax -0.5 -0.5 -0.6
Goods and services tax -0.4 -0.4 -0.4
Other -0.1 -0.1 -0.2
Total tax revenues -3.9 -4.0 -4.6
Employment Insurance premiums -0.1 -0.1 0.8
Other revenues -0.1 -0.1 -0.1
Total budgetary revenues -4.1 -4.2 -3.9
Federal expenses
Major transfers to persons
Elderly benefits 0.0 0.0 0.0
Employment Insurance benefits 1.3 0.9 1.1
Canada Child Benefit 0.0 0.0 0.0
Total major transfers to persons 1.3 0.9 1.1
Other program expenses -0.2 -0.3 -0.5
Public debt charges 0.0 0.1 0.5
Total expenses 1.1 0.8 1.0
Budgetary balance -5.2 -5.0 -4.9

A 1-percentage-point decrease in real GDP growth proportional across income

and expenditure components reduces the budgetary balance by $5.2 billion
in the first year, $5 billion in the second year and $4.9 billion in the fifth year
(Table A1.9).

 Tax revenues from all sources fall by a total of $3.9 billion in the first year.
Personal income tax revenues decrease as employment and the underlying tax
base fall. Corporate income tax revenues fall as output and profits decrease.
GST revenues decrease as a result of lower consumer spending associated with
the fall in employment and personal income.

Details of Economic and Fiscal Projections 345

 EI premium revenues are relatively unchanged in the first two years due to the
2021 premium rate already being in effect, and the 2022 rate being frozen. EI
revenues increase in the fifth year as the EI premium rate increases, which,
under the seven-year break-even mechanism, adjusts to offset the increase in
benefits such that the EI Operating Account balances over time.

 Expenses rise, mainly reflecting higher EI benefits (due to an increase in the

number of unemployed) and higher public debt charges (reflecting a higher
stock of debt due to the lower budgetary balance). This rise is partially offset by
lower other program expenses (as certain programs are linked to growth in
nominal GDP).

Table A1.10
Estimated Impact of a One-Year, 1-Percentage-Point Decrease in GDP
Inflation on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues
Tax revenues
Personal income tax -2.9 -2.5 -2.5
Corporate income tax -0.5 -0.6 -0.7
Goods and services tax -0.4 -0.4 -0.4
Other -0.1 -0.1 -0.2
Total tax revenues -3.9 -3.6 -3.7
Employment Insurance premiums 0.0 -0.1 -0.2
Other revenues -0.1 -0.1 -0.1
Total budgetary revenues -4.0 -3.8 -4.0
Federal expenses
Major transfers to persons
Elderly benefits -0.4 -0.7 -0.8
Employment Insurance benefits 0.1 0.1 0.2
Canada Child Benefit 0.0 -0.1 -0.3
Total major transfers to persons -0.3 -0.7 -0.8
Other program expenses -0.6 -0.6 -1.4
Public debt charges -0.6 0.1 0.3
Total expenses -1.5 -1.2 -2.0
Budgetary balance -2.4 -2.6 -2.1

346 Annex 1
A 1-percentage-point decrease in nominal GDP growth proportional across
income and expenditure components resulting solely from lower GDP inflation
(assuming that the CPI moves in line with GDP inflation) lowers the budgetary
balance by $2.4 billion in the first year, $2.6 billion in the second year and
$2.1 billion in the fifth year (Table A1.10).

 Lower prices result in lower nominal income and, as a result, personal income
tax revenues decrease. As the parameters of the personal income tax system
are indexed to inflation, the fiscal impact is smaller than under the real shock.
For the other sources of tax revenue, the negative impacts are similar under
the real and nominal GDP shocks.
 EI premium revenues decrease in response to lower earnings.
 Other revenues decline slightly as lower prices lead to lower revenues from
the sales of goods and services.
 Partly offsetting lower revenues are the declines in the cost of statutory
programs that are indexed to inflation, such as elderly benefit payments,
which puts downward pressure on federal program expenses. In addition,
other program expenses are also lower as certain programs are linked directly
to growth in wages and nominal GDP.
 Public debt charges decline in the first year due to lower costs associated with
Real Return Bonds, then rise due to the higher stock of debt.

Table A1.11
Estimated Impact of a Sustained 100-Basis-Point Increase in All Interest
Rates on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues 2.1 2.7 3.6
Federal expenses -3.1 -5.3 -8.2
Of which: public debt charges -3.1 -5.3 -8.2
Budgetary balance -1.0 -2.5 -4.6

A one per cent increase in interest rates decreases the budgetary balance by $1
billion in the first year, $2.5 billion in the second year and $4.6 billion in the fifth
year (Table A1.11). Higher interest rates directly impact estimated public debt
charges on marketable debt in two ways. First, interest costs increase as existing
debt matures and is refinanced at higher rates. Second, rising rates increase the
expected cost of future borrowing needs. Public debt charges are estimated
based on the current expectations for future changes in interest rates, which are
subject to change based on economic conditions.

Details of Economic and Fiscal Projections 347

It is important to note that interest rates also directly affect other government
revenue and expenses and that they typically do not change in isolation. That is,
with higher interest rates, the government would realize some offsetting benefits,
including:
 Higher revenues from the government’s interest-bearing assets, which
are recorded as part of other revenues;
 Corresponding downward adjustments that reduce public sector
pensions and employee benefits obligations, which are not
incorporated in the table above; and,
 Higher government tax revenues if interest rate increases were due to
stronger economic growth (also not included in the table above).

Short-term Economic Impacts of Government

Support and Investment
There are two primary channels through which government spending can affect
short-term output and employment. First, governments can invest in
infrastructure or purchase goods and services, which translates into an
immediate, dollar-for-dollar increase in final domestic expenditure. Second,
governments can induce spending increases by households and businesses
through tax measures or transfers. The extent to which these measures boost
domestic expenditure and production will be determined by changes in saving
and imports.
To estimate the economic impacts of fiscal measures, the Department of Finance
allocates spending into expenditure categories, which correspond to those used
in the Department’s macroeconomic and fiscal model: infrastructure investment,
personal income tax and transfer measures, measures for modest- and low-
income households, government spending measures (such as government
support for research, training, and innovation), and corporate income tax
measures. Each of these categories has a different fiscal multiplier, a summary
measure that takes into account the channels by which spending affects
economic activity, including direct, indirect and induced impacts, and leakages to
saving and imports.
Table A1.12 shows the total value of support and investments included in the
economic impact assessment. It is expected that support and investments will
raise the level of real GDP by 2 per cent by the second year (Table A1.13). This is
expected to translate into an increase in employment of more than 330 thousand
jobs created or maintained by 2022-2023.

348 Annex 1
Table A1.12
Value of Recovery Plan for Economic Impact Assessment
$ billions
2021- 2022- 2023-
2022 2023 2024
Fall Economic Statement 20201 21.6 1.3 1.8
Actions since FES 2020 and Budget 2021 Investments 49.3 28.3 23.8
Recovery Plan Total (accrual basis) 70.9 29.6 25.6
Recovery Plan Total (cash basis) 81.7 35.6 32.1
Measures excluded from impact assessment2 -6.6 -1.3 -1.7
Total Value for Economic Impact Assessment 75.1 34.3 30.4
Note: Totals may not add due to rounding.
1
Includes investments in FES 2020 Chapter 3 and the extension of CEWS/CERS to June 2021.
2
Actions that have no impact on GDP (e.g., contingencies, international initiatives) are excluded.

Table A1.13
Impacts on Real GDP and Employment
per cent, unless otherwise indicated
2021– 2022– 2023–
2022 2023 2024
Real GDP (per cent) 1.6 2.0 1.9
Employment (jobs created or maintained, thousands) 315 334 280

Details of Economic and Fiscal Projections 349

Policy Actions Taken since the 2020
Fall Economic Statement
Since 2016, the government has provided a transparent overview of all off-cycle
spending. The investments (Table A1.14) ensure that Canadians are continually
well served by the programs they rely on and that government operations carry
on as usual.

Table A1.14
Policy Actions Since the 2020 Fall Economic Statement
millions of dollars
2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026
Government Operations,
92 476 170 149 149 150
Fairness and Openness
Global Affairs Canada
Adjustments for Non- 26 89 92 74 74 74
Discretionary Cost Fluctuations
Funding provided to Global Affairs Canada for non-discretionary cost increases affecting
missions abroad, such as changes in exchange rates and inflation. This will allow Canada’s
missions to continue delivering a high standard of services to support the needs of Canadians.
Establish Pandemic-related safety
0 110 0 0 0 0
measures in Elections1
Temporary amendments to the Canada Elections Act to ensure the health and safety of
electors and election workers during a general election if it takes place during the pandemic,
including introducing a 3-day polling period.
Price and Volume Inflation
Protection for Federal Banking 0 6 0 0 0 0
and Postage
Funding for Public Services and Procurement Canada for credit and debit card and postage
costs incurred when mailing cheques to Canadians on behalf of the federal government.
Public Inquiry into the Tragedy in
2 12 8 1 0 0
Nova Scotia
Less: Costs to be Recovered -1 -6 -4 0 0 0
Less: Funds Sourced From Existing
-1 0 0 0 0 0
Departmental Resources
Funding for the Privy Council Office, to support a joint federal-provincial public inquiry into
the April 2020 tragedy in Nova Scotia.
Price and Volume Inflation
Protection for Federal Real 1 14 14 14 14 14
Property
Funding for Public Services and Procurement Canada to maintain current office, common use
accommodation, and related real property service levels for federal departments and agencies.
CRA administration costs to
deliver the COVID recovery 63 199 0 0 0 0
benefits.

350 Annex 1
 2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026
Less: Funds Previously
Provisioned in the Fiscal -45 0 0 0 0 0
Framework
Funding for the CRA to administer COVID recovery benefits including the Canada Recovery
Benefit, Sickness Benefit, and Caregiving Benefit.
Resolving Complex Tax Disputes
47 52 59 60 61 61
and Litigation
Funding to bolster legal resources at the Department of Justice and the CRA. These resources
will support the government's efforts to recover tax revenue in high-complexity cases and
protect the integrity of the tax system.
Growth, Innovation,
Infrastructure and the 12 650 999 1,300 784 403
Environment
A Healthy Environment and a Healthy Economy Climate Plan Measures – Announced
December 11, 20202
Creating the Strategic Innovation
0 267 398 780 785 404
Fund Net Zero Accelerator
Funding for Innovation, Science and Economic Development Canada of $3 billion (cash basis)
over five years to create a Net Zero Accelerator within the Strategic Innovation Fund. The Net
Zero Accelerator will help Canada meet its climate change goals by supporting projects that
will rapidly expedite decarbonization projects, scale-up clean technology and accelerate
Canada’s industrial transformation.
Integrating Climate
Considerations in Government 0 2 0 0 0 0
Decision-Making
Funding for Environment and Climate Change Canada to develop an analytical lens to
integrate climate mitigation and adaptation considerations into federal decisions on policies,
programs and proposals.
Green and Inclusive Community
0 400 600 500 0 0
Buildings
Year-over-year reallocation of
0 0 -150 0 75 75
funding3
Funding for Infrastructure Canada to support retrofits, repairs or upgrades of existing public
buildings and the construction of new public buildings that serve communities across Canada.
Net-Zero Challenge for Large
0 1 1 1 1 1
Industrial Emitters
Funding for Environment and Climate Change Canada to launch a Net-Zero Challenge for
large industrial emitters to encourage companies to develop and implement plans to
transition their facilities to net-zero greenhouse gas emissions by 2050.
Returning Carbon Pricing
0 37 74 73 74 74
Proceeds
Less: Funds Sourced From
0 -2 0 0 0 0
Existing Departmental Resources
Less: Fuel Charge Proceeds
0 -5 0 0 0 0
Booked in the Fiscal Framework

Details of Economic and Fiscal Projections 351

 2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026
Less: Estimates of OBPS
Proceeds Not Yet Booked in the 0 -108 -159 0 0 0
Fiscal Framework
Funding for Environment and Climate Change Canada to continue to administer the Low
Carbon Economy funds and return federal carbon pricing proceeds to provinces that do not
meet federal carbon pricing benchmark stringency requirements as well as funding for the
Canada Revenue Agency to return a portion of carbon fuel charge proceeds collected in New
Brunswick directly to the Government of New Brunswick.
Advancing Smart Renewable
0 85 293 293 293 0
Energy and Grid Modernization
Funding to Natural Resources Canada to support renewable power generation projects such
as wind and solar, and the deployment of grid modernization technologies such as power
storage. This will support emissions reduction and the electrification of the economy.
Supporting the Net Zero Advisory
1 6 4 1 1 1
Body
Funding for Environment and Climate Change Canada to support the Net-Zero Advisory Body,
which is an independent expert group that will provide advice to the Government of Canada
on the best pathways to achieve net-zero greenhouse gas emissions by 2050.
Promoting the Demonstration of
0 60 130 160 175 225
Clean Technologies
Funding to Sustainable Development Technology Canada to support start-ups and to scale-up
companies to enable pre commercial clean technologies to successfully demonstrate feasibility
as well as to support early commercialization efforts.
Transitioning Diesel-Reliant
Indigenous Communities onto 0 0 60 60 60 60
Clean Energy
Funding to advance the Government’s commitment to ensure that rural, remote and
Indigenous communities that currently rely on diesel have access to clean and reliable energy
by 2030.
Supporting the Adoption of Clean
Technologies in the Agriculture 0 16 34 34 34 34
Sector
Funding to support the agriculture industry in developing transformative clean technologies
and help farmers adopt commercially available clean technology.
Less: Funds Provisioned in the
2020 Fall Economic Statement for -1 -92 -437 -622 -638 -395
Climate Plan

Other Measures
Federal Carbon Pricing Backstop
20 18 0 0 0 0
and Litigation
Less: Funds Sourced From Existing
-8 -8 0 0 0 0
Departmental Resources
Funding for Environment and Climate Change Canada to further develop and implement the
Output-Based Carbon Pricing System and for legal costs associated with defending the
Greenhouse Gas Pollution Pricing Act against various legal challenges.
Wood Buffalo National Park
0 17 23 21 0 0
Action Plan

352 Annex 1
 2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026
Less: Funds Previously
Provisioned in the Fiscal 0 -5 -5 0 0 0
Framework
Less: Funds Sourced From
0 -12 -18 -21 0 0
Existing Departmental Resources
Less: Year-Over-Year
0 -26 2 21 0 0
Reallocation of Funding
Funding for the Parks Canada Agency and Environment and Climate Change Canada to
continue to implement federal commitments under the Wood Buffalo National Park World
Heritage Site Action Plan.
Labour Markets, Health,
Safety and Economic 0 654 0 0 0 0
Prosperity of Canadians
Enhanced Border and Quarantine
0 1,059 0 0 0 0
Measures
Less: Funds Previously
Provisioned in the Fiscal 0 -165 0 0 0 0
Framework
Funding of $895 million in 2021-22 to the Public Health Agency of Canada to support
strengthened border health and quarantine measures in response to the COVID-19 pandemic.
Canada Emergency Wage Subsidy
Parameters From March 14 to 0 13,860 0 0 0 0
June 5, 2021
Less: Funds Previously
Provisioned in the Fiscal 0 -14,100 0 0 0 0
Framework
Canada Emergency Rent Subsidy
and Lockdown Support
0 2,125 0 0 0 0
Parameters From March 14 to
June 5, 2021
Less: Funds Previously
Provisioned in the Fiscal 0 -2,125 0 0 0 0
Framework
To provide certainty and continued support for workers, businesses and other affected
organizations in the face of ongoing challenges presented by the pandemic, this measure
extended the existing rate structures for the wage subsidy, the rent subsidy and Lockdown
Support from March 14 to June 5, 2021. In particular, the maximum wage subsidy rate for
active employees was kept at 75%; the maximum rent subsidy rate was kept at 65%; and
Lockdown Support was kept at 25%.
Tax Policy 242 43 2 1 0 0
Adjust Certain Deductions for
Employment Insurance and 2 3 2 1 0 0
COVID-19 Benefits
Temporarily allow Employment Insurance and Quebec Parental Insurance Plan benefit
recipients to deduct eligible expenses for the Child Care Expense Deduction and the Disability
Supports Deduction against this benefit income, to align with the treatment of CERB and other
COVID-19 emergency income.

Details of Economic and Fiscal Projections 353

 2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026
CERB Repayment for Self-
employed Individuals and Interest 240 40 0 0 0 0
Relief on 2020 Tax Debt
In February 2021, the Government of Canada announced that self-employed individuals who
applied for the CERB and would have qualified based on their gross income will not be
required to repay the benefit, provided they also met all other eligibility requirements. The
Government of Canada also announced targeted interest relief on income tax debt for the
2020 tax year for Canadians who received COVID-related income support benefits.
Trade, International
1 4 4 4 4 4
Relations and Security
Renewal of Operating Funding for
the National Security and
0 4 4 4 4 4
Intelligence Committee of
Parliamentarians
Funding for the National Security and Intelligence Committee of Parliamentarians to continue
its mandate to review national security and intelligence matters in Canada.
Support for the Office of the
1 0 0 0 0 0
Intelligence Commissioner
Funding for the Office of the Intelligence Commissioner to enable it to meet the legislated
requirements of the Intelligence Commissioner Act.
(Net) Fiscal Impact of Measures
Discussed in Tax Measures:
2 7 -5 0 -10 -20
Supplemental Information (Annex
6)
(Net) Fiscal Impact of Non-
Announced Measures in this -509 -2,102 -2,109 -317 -269 -243
Budget
The net fiscal impact of measures that are not announced is presented at the aggregate level,
and would include provisions for anticipated Cabinet decisions not yet made (including the
use of such provisions from previous budgets or updates) and funding decisions related to
national security, commercial sensitivity, contract negotiations and litigation issues.
Net Fiscal Impact – Total Policy
Actions Taken Since the 2020 -160 -268 -939 1,138 659 295
Fall Economic Statement
Note: Totals may not add due to rounding.
1. Timing of estimated costs is notional and would depend on timing of federal election.
2. Supporting the Production and Use of Clean Fuels was also announced as part of the Climate Plan on
December 11, 2020 and is included in Chapter 5.
3. Recent year-over-year reallocation shown for information. Not included in totals.

354 Annex 1
COVID-19 Economic Response Plan
Since March 2020, the government has committed over $345 billion – 15.7 per
cent of 2020 GDP – to support Canadians through the pandemic, with major
investments in health care, procuring vaccines and personal protective
equipment, in income support and responding to businesses’ urgent needs.
Altogether, these investments by the federal government represent more than 8
out of every 10 dollars spent in Canada to fight COVID-19 and support
Canadians.

Table A1.15 below updates the overview of Canada’s COVID-19 Response Plan
detailed in Chapters 1 and 2 of the Fall Economic Statement 2020, with new
COVID response measures included in this Budget.

Table A1.15
Canada’s COVID-19 Economic Response – Detailed Overview
Net Fiscal Impact (Accrual)
Impact
2019– 2020– 2021– Future
Value1
2020 2021 2022 Years2

Protecting Health and Safety

Safe Restart Agreement 19,909 - 19,909 - 0
Safe Return to Class 2,000 - 2,000 - 0
Vaccines and Therapeutics 14,340 - 7,520 6,530 826
PPE and Medical Equipment 5,352 200 3,331 1,821 289
Long-Term Care 1,340 - 824 516 1
Other Public Health Support 9,579 382 6,830 2,025 308
Helping Health Care Systems Recover 3 4,000 - 4,000 - 0
Canada’s COVID-19 Immunization Plan3 1,000 - 1,000 0 0
Supporting the Mental Health of Those
140 - - 140 118
Most Affected by COVID-19
Supporting Indigenous Communities in
1,239 - - 1,225 6
the Fight Against COVID-19
Safe Return to School on Reserve 112 - - 112 0
International COVID-19 Response and
375 - - 375 0
Recovery
Total - Protecting Health and Safety 59,385 582 45,414 12,744 1,547
Of which:
Policy Actions in FES 2020 52,520 582 40,414 10,892 1,424
Measures in Budget 2021 7,040 - 5,000 1,852 124
Direct Support Measures
Canada Emergency Wage Subsidy 110,545 - 84,590 25,955 -
Canada Emergency Rent Subsidy and
8,405 - 4,065 4,340 -
Lockdown Support
Canada Emergency Recovery Benefit 73,056 6,505 66,551 - -
Enhancements to Employment
13,046 - 3,240 9,806 2,905
Insurance4
Canada Recovery Benefit 4
26,794 - 14,462 12,332 69
Canada Recovery Sickness Benefit4 738 - 456 282 15
Canada Recovery Caregiver Benefit4 3,546 - 1,953 1,593 22

Details of Economic and Fiscal Projections 355

 Net Fiscal Impact (Accrual)
Impact
2019– 2020– 2021– Future
Value1
2020 2021 2022 Years2
Canada Emergency Business Account -
13,822 - 12,618 1,205 -
Incentive
Other Direct Support Measures (FES
34,460 106 31,276 1,715 812
2020)
Additional Direct Support Measures in
1,829 - - 1,879 1,104
Budget 2021
Total - Direct Support Measures 286,242 6,611 219,141 59,117 4,926
Of which:
Policy Actions in FES 2020 269,797 6,611 226,873 34,960 1,515
Impact of Re-estimated Costs -10,014 - -7,974 -2,040 -
Measures in Budget 2021 26,459 - 241 28,224 3,411

Total - Protecting Health and Safety and

345,628 7,193 264,555 71,861 6,473
Direct Support Measures

Tax and Customs Duty Payment

85,050 56 2,938 15 -5
Liquidity (in FES 2020)
Business Credit Availability Program and
81,889 - 5,989 4,453 2,592
Other Credit Liquidity Support
Of which:
Policy Actions in FES 2020 83,400 - 6,355 4,689 2,424
Impact of Re-estimated Costs -1,511 - -366 -236 168
Total - COVID-19 Economic Response
512,516 7,249 272,129 76,329 9,060
Plan
Of which:
Policy Actions in FES 20205 490,716 7,249 275,227 50,556 5,358
Impact of Re-estimated Costs -11,525 - -8,340 -2,276 168
Measures in Budget 2021 33,325 - 5,241 28,049 3,534
Note: Numbers may not add due to rounding.
1
The impact value reflects projected cash expenditures and liquidity support primarily in 2020-21 (some measures
also include projected expenditures in 2019-20, and 2021-22). The fiscal (budgetary) impact on an accrual basis is
lower, owing to cash-accrual accounting differences and the fact that some of these measures relate to loans and
tax deferrals, for which only provisions for potential losses, and forgone interest and penalties would affect the
budgetary balance, respectively.
2
2022-2023 to 2025-2026.
3
Announced in March 2021.
4
Includes the cost of extensions and changes announced in February 2021.
5
Net fiscal impact, after amounts provisioned in the 2020 Economic and Fiscal Snapshot for Anticipated Decisions.

356 Annex 1
Annex 2
Debt Management Strategy
Introduction
The 2021-22 Debt Management Strategy sets out the Government of Canada’s
objectives, strategy, and borrowing plans for its domestic debt program and the
management of its official reserves.

The Financial Administration Act (FAA) requires that the Minister of Finance table,
in each House of Parliament, a report on the anticipated borrowing to be
undertaken in the fiscal year ahead, including the purposes for which the money
will be borrowed and the management of the public debt, no later than 30 sitting
days after the beginning of the fiscal year. The 2021-22 Debt Management
Strategy fulfills this requirement.

This year’s Debt Management Strategy takes an important step forward in

continuing to implement the government’s approach, first outlined last summer
in the 2020 Economic and Fiscal Snapshot, by issuing long-term debt to finance
the emergency support to Canadians and Canadian businesses through the
pandemic. As a result of these actions, and the path forward outlined in this
year’s strategy, the government has a plan to more than double, compared to
2019, the share of its annual bond issuance dedicated to long-term debt. Over
the next several years, these actions will result in the government’s average term
to maturity for its domestic market debt to reach a level not seen in over 40
years. Despite the significant increase in total debt the government has taken on
as a result of COVID-19, total public debt charges are projected to be lower both
in 2021-22 and 2022-23, than was forecast in December 2019 in the 2019
Economic and Fiscal Update.

Objectives
The fundamental objectives of debt management are to raise stable and low-cost
funding to meet the financial requirements of the Government of Canada and to
maintain a well-functioning market for Government of Canada securities.

For 2021-22, the government will seek to maximize the financing of COVID-19-
related debt through long-term issuance. This is a fiscally prudent approach that
provides security by lowering debt rollover and providing more predictability in
the cost of servicing debt. It involves maintaining a shift towards long-term debt
issuance, which began in 2020-21, re-opening the ultra-long 50-year bond in
2021-22, and continuing to issue in this sector in coming years. The government
will closely monitor financial markets and may issue more long-term debt if

Debt Management Strategy 357

market conditions are favourable. Having access to a well-functioning
government securities market contributes to lower costs and less volatile pricing
for the government, ensuring that funds can be raised efficiently over time to
meet the government’s financial requirements. Moreover, to support a liquid and
well-functioning market for Government of Canada securities, the government
strives to promote transparency and consistency.

The government plans to update financial markets on the debt program in the fall.

Outlook for Government of Canada Debt

Canada entered the pandemic in a position of fiscal strength which enabled the
government to provide extraordinary support to Canadians and Canadian
businesses to weather the impact of the pandemic, and better position the
economy for recovery. The cost of inaction in the face of this pandemic would
have been much higher than that of not doing enough.

Prudent fiscal management means Canada continues to have an enviable fiscal

position relative to international peers, with the lowest net debt-to-GDP ratio in
the G7. Furthermore, the government has already issued an unprecedented level
of long-term bonds, at historically low interest rates, to ensure Canada’s debt is
sustainable and will not weigh on future generations.

Rating agencies have indicated that Canada's effective, stable, and predictable
policymaking and political institutions, economic resilience and diversity, well-
regulated financial markets, and its monetary and fiscal flexibility contribute to
Canada's strong current credit ratings: Moody's (Aaa), S&P (AAA), DBRS (AAA),
and Fitch (AA+).

Planned Borrowing Activities for 2021-22

The projected sources and uses of borrowings for 2021-22 are presented in Table
A2.1. Actual sources and uses of borrowings compared with the projections will
be reported in the Debt Management Report for 2021-22. This document will be
released soon after the Public Accounts of Canada 2022, which provides detailed
accounting information on the government’s interest-bearing debt.

Sources of Borrowings
The aggregate principal amount of money to be borrowed by the government in
2021-22 is projected to be $523 billion.

This is consistent with the borrowing limits previously proposed by the

government in December 2020, with the tabling of Bill C-14, the Economic
Statement Implementation Act, 2020.

358 Annex 2
Uses of Borrowings
The government’s borrowing needs are driven by the refinancing of debt and
projected incremental financial requirements. The size of the program reflects
both requirements to refinance debt of $332 billion, including the large maturing
stock of short-term debt issued in 2020-21 in response to the COVID-19
pandemic, as well as the projected financial requirement of $191 billion to
support the recovery in 2021-22. All borrowings will be sourced from domestic
and foreign wholesale markets (Table A2.1). The long-term outlook of the
government’s cash balances is not expected to change since new borrowings are
expected to meet all financing requirements.

Despite record borrowings to support Canadians and the economy during the
COVID-19 pandemic, public debt charges are projected to remain sustainable at
$22.1 billion for 2021-22, representing 0.9 per cent of GDP. Even though interest
rates are forecasted to increase throughout the forecast horizon, public debt
charges are projected to only rise to 1.4 per cent of GDP by 2025-26 to a level of
$39.3 billion. This is still substantially lower than the average cost of financing
debt over the last two decades, even with a significantly higher public debt load
because of COVID-19.

Public debt charges remain on a sustainable long-term path and are still
projected to be $1.6 billion lower in 2022-23 than forecast in the December 2019
Economic and Fiscal Update (forecast of $27.3 billion at that time), before the
onset of COVID. This is in spite of a substantial increase in federal debt as a result
of the pandemic.

Throughout 2021-22, the government will closely monitor conditions and issue
more long-term debt if market conditions are favourable. In addition, actual
borrowings for the year may differ due to uncertainty associated with economic
and fiscal projections, the timing of cash transactions, and other factors such as
changes in foreign reserve needs and Crown corporation borrowings. To adjust
for these unexpected changes in financial requirements, debt issuance can be
altered during the year, typically through changes in the issuance of treasury bills.

Debt Management Strategy 359

Table A2.1
Planned/Actual Sources and Uses of Borrowings for Fiscal Year 2021-22
$ Billions
Sources of borrowings
Payable in Canadian Currency
Treasury bills1 226
Bonds 286
Total payable in Canadian currency 512
Payable in foreign currencies 10
Total sources of borrowings 523

Uses of borrowings
Refinancing needs
Payable in Canadian Currency
Treasury bills 219
Bonds 105
Retail debt 0
Total payable in Canadian currency 324
Payable in foreign currencies 8
Total refinancing needs 332
Financial requirement
Budgetary balance 155
Non-budgetary transactions
Pension and other accounts -11
Non-financial assets 3
Loans, investments and advances 11
Of which:
Loans to enterprise Crown corporations 0
Other 11
Other transactions2 33
Total financial requirement 191
Total uses of borrowings 523
Change in other unmatured debt transactions 3
0
Net increase or decrease (-) in cash 0
Source: Department of Finance Canada calculations.
Notes: Numbers may not add due to rounding. In the uses of borrowings section, a negative sign denotes a financial
source.
1
Treasury bills are rolled over, or refinanced, a number of times during the year. This results in a larger number of
new issues per year than the stock of outstanding at the end of the fiscal year, which is presented in the table.
2
Other transactions primarily comprise the conversion of accrual transactions to cash inflows and outflows for
taxes and other accounts receivable, provincial and territorial tax collection agreements, amounts payable to
taxpayers and other liabilities, and foreign exchange accounts.
3
Includes cross-currency swap revaluation, unamortized discounts on debt issues, obligations related to capital
leases and other unmatured debt, where this refers to in the table.

360 Annex 2
2021-22 Borrowing Program
As Canada moves towards economic recovery, the shift towards long-term debt
issuance, which began in 2020-21, will continue. Funding more COVID-19-related
debt through long-term issuance will help provide security and stability to the
government balance sheet by lowering debt rollover while remaining fiscally
prudent. Issuances with a maturity of 10 years or greater will be higher in 2021-
22 than 2020-21 in both relative and absolute terms (Table A2.2). As part of this
move towards longer-term issuance, the government will re-open issuance of the
ultra-long 50-year bond for 2021-22.

Before the pandemic, 15 per cent of the bonds issued by the government were
issued at maturities of 10 years or greater. Over the course of 2020, federal
government allocations of long bonds rose to about 29 per cent. The
government is now proposing to increase that proportion to 42 per cent. This will
result in the longest average term to maturity in four decades, and will protect
Canada from rollover risks.

Table A2.2
Gross Bond Issuances by Maturity
$ Billions, end of fiscal year
2020-21 Previous Year 2021-22 Planned
Issuance Share of Issuance Share of Bond
Bond Issuance Issuance
Short (2, 3, 5-year sectors) 267 71% 160 56%
Long (10-year+) 107 29% 121 42%
Green bonds - - 51 2%
Gross Bond Issuance 374 100% 286 100%
Note: Numbers may not add due to rounding.
1
Target issuance, subject to market conditions.

The government also plans to issue its first ever green bond in 2021-22 to
support the environment and climate change plan. The inaugural green bond
issuance will target $5 billion, subject to market conditions, and will be the first of
many issuances. More details are provided in Chapter 5 of this budget.

In addition, the government proposes to explore, through Debt Management

Strategy consultations this fall, the potential for the issuance of social bonds.
More details are provided in Chapter 6. Social bonds can support investments in
a variety of areas that promote greater social inclusion and broad-based
economic prosperity, such as the historic investments in early learning and child
care proposed in Budget 2021.

Debt Management Strategy 361

Composition of Market Debt
The total stock of market debt is projected to reach $1,305 billion by the end of
2021-22 (Table A2.3)

Table A2.3
Change in Composition of Market Debt
$ Billions, end of fiscal year
2017-18 2018-19 2019-20 2020-21 2021-22
Actual Actual Actual Estimated Projected
Domestic bonds1 576 569 597 879 1,062
Treasury bills 111 134 152 219 226
Foreign debt 16 16 16 15 18
Retail debt 3 1 1 0 0
Total market debt 705 721 765 1,114 1,305
Sources: Bank of Canada; Department of Finance Canada calculations.
Note: Numbers may not add due to rounding.
1
Includes additional debt that accrues during the fiscal year as a result of the inflation adjustments to
Real Return Bonds.

Over the next three years, the average term to maturity for outstanding domestic
marketable bonds and treasury bills is expected to increase to nearly 8 years, a
level that is significantly higher than the historical average of 5.9 years seen in the
period from 1981-82 to 2019-20.

Gross debt issuance will fall in 2021-22 compared to 2020-21, reflecting lower
financial requirements. However, as illustrated in Table A2.4, the total level of
issuance of bonds with a term to maturity of 10 years or more is planned to be
higher than in 2020-21.

362 Annex 2
Table A2.4
Projected Gross Issuance of Bonds and Bills for 2021-22
$ Billions, end of fiscal year
2019-20 2020-21 2021-22 Change from
Actual Estimated Planned 2020-21
Treasury bills 152 219 226 3%
2-year 53 129 76 -41%
3-year 19 56 36 -36%
5-year 33 82 48 -41%
10-year 13 74 84 14%
30-year 4 32 32 0%
Real Return Bonds 2 1 1 0%
Ultra-long - - 4 -
Green bonds - - 51 -
Total bonds 124 374 286 -23%
Total gross issuance 276 593 512 -14%
Sources: Bank of Canada; Department of Finance Canada calculations.
Notes: Numbers may not add due to rounding. The share of issuance per bond sector is relative to total
bond issuance.
1
Target issuance, subject to market conditions

Treasury Bill Program

Bi-weekly issuance of 3-, 6-, and 12-month maturities are planned for 2021-22,
with auction sizes planned to be largely within the $12 billion to $32 billion
range. As financial requirements in 2021-22 and following years are expected to
be lower than 2020-21, the government will target a year-end stock of treasury
bills of $226 billion for 2021-22. This approach is intended to support a liquid and
well-functioning market for Canadian federal government treasury bills, which
helps investors, as a whole, who need access to short-term, interest-bearing
securities in lieu of cash. This approach is also informed by consultations with
market participants held in September and October 2020. Market participants
indicated that treasury bills were currently in high demand due to excess cash in
the financial markets, both from domestic and international investors. Further
highlights from these consultations are outlined in the 2020 Fall Economic
Statement.

Cash management bills (i.e., short-dated treasury bills) help manage government
cash requirements in an efficient manner. These instruments will also be used in
2021-22 when needed.

Debt Management Strategy 363

2021-22 Bond Program
Annual gross bond issuance is planned to be about $286 billion in 2021-22,
$88 billion lower than the $374 billion issued for 2020-21 (Table A2.4), and the total
stock of bonds is projected to be $1,062 billion by the end of 2021-22. The reduction
in annual bond issuance reflects the decrease in expected financial requirements
over the next few years as the economy recovers from the COVID-19 pandemic. The
approach balances liquidity requirements in both the treasury bill and core
benchmark bond sectors, while also satisfying the government’s objective of placing
COVID-19-related debt in long-term sectors.

Throughout 2021-22, the government will closely monitor financial markets and,
subject to favourable market conditions, will seek opportunities to issue more
long-term debt. Along with treasury bills, issuance in the 3-year sector may be
adjusted to address potential larger issuance in long-term issuances or
unexpected changes in financial requirements. Given the Bank of Canada’s
purchases of Government of Canada bonds in the secondary market, regular,
switch, and cash management bond buyback operations are not planned for
2021-22.

Maturity Date Cycles and Benchmark Bond

Target Range Sizes
For 2021-22, benchmarks in core sectors will be lower in many sectors relative to
2020-21, reflecting the decreased overall issuance in bonds (A2.5).

Table A2.5
Maturity Date Patterns and Benchmark Size Ranges 1
$ Billions
Feb. Mar. Apr. May June Aug. Sept. Oct. Nov. Dec.
2-year 16-22 16-22 16-22 16-22
3-year 16-20 16-20
5-year 22-26 22-26
10-year 38-44 38-44
30-year2 46-58
Real Return
8-12
Bonds2,3
Ultra-long4 N/A
Source: Department of Finance Canada calculations.
Note: These amounts do not include coupon payments.
1
Actual annual issuance may differ.
2
The 30-year nominal bond and Real Return Bond do not mature each year or in the same year as each other.
3
Benchmark size range includes estimate for inflation adjustment, while planned annual issuance does not.
4
There is currently no benchmark size set for the 50-year ultra-long bond, which matures on December 1, 2064.

364 Annex 2
Bond Auction Schedule
In 2021-22 there will be quarterly auctions of 2-, 3-, 5-, 10-, 30-, and 50-year
bonds. Some of these bonds may be issued multiple times per quarter. The
number of planned auctions in 2021-22 for each sector is shown in Table A2.6.
The actual number of auctions for 2021-22 may be different from the planned
number due to unexpected changes in borrowing requirements. In addition, the
government may increase the number of long-term bond auctions if market
conditions are favourable for more long-term issuance.

Table A2.6
Number of Planned Auctions for 2021-22
$ Billions
Sector Planned Bond Auctions
2-year 16
3-year 12
5-year 12
10-year 16
30-year 10
Real Return Bonds 4
Ultra-long1 4
Source: Department of Finance Canada
Note: These amounts do not include coupon payments.
1
Issuances for ultra-long bonds will take the format of a modified auction.

The dates of each auction will continue to be announced through the Quarterly
Bond Schedule, which is published on the Bank of Canada’s website prior to the
start of each quarter
(www.bankofcanada.ca/stats/cars/results/bd_auction_schedule.html).

Management of Canada’s Official

International Reserves
The Exchange Fund Account (EFA), which is held in the name of the Minister of
Finance, represents the largest component of Canada’s official international
reserves. It is a portfolio of Canada’s liquid foreign exchange reserves and special
drawing rights (SDRs)1 used to aid in the control and protection of the external
value of the Canadian dollar and provide a source of liquidity to the government.
In addition to the EFA, Canada’s official international reserves include Canada’s
reserve position held at the International Monetary Fund.

1 SDRs are international reserve assets created by the International Monetary Fund whose value is based on a
basket of international currencies.

Debt Management Strategy 365

The government borrows to invest in liquid reserves, which are maintained at a
level at or above three per cent of nominal GDP. Net funding requirements for
2021-22 are estimated to be around US$15 billion, but may vary as a result of
movements in foreign interest rates and exchange rates.

Foreign debt is used exclusively to provide funding for Canada’s official

international reserves. The anticipated rise in foreign funding in fiscal year
2021-22 is due to swap and bond maturities that need to be financed.

The mix of funding sources used to finance the liquid reserves in 2021-22 will
depend on a number of considerations, including relative cost, market conditions,
and the objective of maintaining a prudent foreign-currency-denominated debt
maturity structure. Potential funding sources include a short-term US-dollar
paper program (Canada bills), medium-term notes, cross-currency swaps
involving the exchange of Canadian dollars for foreign currency to acquire liquid
reserves, and the issuance of global bonds.

Further information on foreign currency funding and the foreign reserve assets is
available in the Report on the Management of Canada’s Official International
Reserves (https://www.canada.ca/en/department-
finance/services/publications/official-international-reserves.html) and in The
Fiscal Monitor (https://www.canada.ca/en/department-
finance/services/publications/fiscal-monitor.html).

Cash Management
The core objective of cash management is to ensure that the government has
sufficient cash available at all times to meet its operating requirements.

Cash consists of money on deposit with the Bank of Canada, chartered banks, and
other financial institutions. Cash with the Bank of Canada includes operational
balances and balances held for prudential liquidity. Periodic updates on the liquidity
position are available in The Fiscal Monitor (https://www.canada.ca/en/department-
finance/services/publications/fiscal-monitor.html).

Prudential Liquidity
The government holds liquid financial assets in the form of domestic cash
deposits and foreign exchange reserves to safeguard its ability to meet payment
obligations in situations where normal access to funding markets may be
disrupted or delayed. The government’s overall liquidity levels are managed to
normally cover at least one month of net projected cash flows, including coupon
payments and debt refinancing needs.

Owing to the government's ample fiscal capacity and continued access to

funding markets, the government did not need to access liquidity from its
Prudential Liquidity Plan.

366 Annex 2
Annex 3
Legislative Measures
This annex includes a number of measures (other than tax-related measures) that
would be implemented through legislation.

Subject of the Measure Proposed Legislative Action

Strengthening In Budget 2021 the government proposes to strengthen
Canada’s Anti-Money Canada’s Anti-Money Laundering and Anti-Terrorist
Laundering and Anti- Financing (AML/ATF) Regime by introducing amendments
Terrorist Financing to the Proceeds of Crime (Money Laundering) and Terrorist
Regime Financing Act to enable the Financial Transactions and
Reports Analysis Centre of Canada to recover its
compliance costs, clarify its ability to obtain information
from reporting entities and expand the information that it
can disclose; strengthen criminal penalties and the
registration framework for money services businesses;
regulate armoured car services for AML/ATF purposes;
amend certain disclosure recipients and definitions; and
make other technical amendments to the Act. The
government also proposes to introduce amendments to
reduce the administrative burden for financial institutions
filing reports under the Justice for Victims of Corrupt
Foreign Officials Act (Sergei Magnitsky Law).
Financial Stability In Budget 2021 the government proposes to introduce
Measures amendments to the Canada Deposit Insurance Corporation
Act to:
(i) clarify the scope of, and support, the cross-border
enforceability of the stay provisions applicable to
eligible financial contracts; and
(ii) clarify how investors, creditors and other participants
may be compensated as a result of actions taken by
financial sector authorities to sell, wind-down or
restore to viability a failing bank.
The government also proposes to introduce amendments
to the Payment Clearing and Settlement Act to clarify how
investors, creditors and other participants may be
compensated as a result of actions taken by financial
sector authorities to sell, wind-down or restore to viability
a failing financial market infrastructure.

Legislative Measures 367

Subject of the Measure Proposed Legislative Action
Payment System In Budget 2021 the government proposes to clarify the
Measures Bank of Canada’s authority to oversee payment exchanges
under the Payment Clearing and Settlement Act.
Unclaimed Assets In Budget 2021 the government proposes to modernize
Regime the federal unclaimed assets regime, by increasing the
information available and use of electronic communication
to match Canadians with their unclaimed assets, and
expand the scope of the regime to include unclaimed
balances from terminated federally regulated pension
plans and foreign denominated bank accounts by
proposing amendments the Bank of Canada Act, the Bank
Act, the Trust and Loans Companies Act, and the Pension
Benefits Standards Act, 1985.
Clarifying the In Budget 2021 the government proposes to introduce
Consumer Protection legislative amendments to clarify that application of the
Framework statutory right to cancel a contract with a bank under the
Bank Act only applies to retail consumers, which are
individuals and small and medium-sized businesses, and
excludes large businesses.
Financial Institution In Budget 2021 the government proposes to amend the
Restructuring Powers Canada Deposit Insurance Corporation Act to provide the
(FIRP) Extension Canada Deposit Insurance Corporation with greater
flexibility to facilitate a transaction in circumstances where
it takes control of a failed member institution.
Strengthening the In Budget 2021 the government proposes to introduce
Canadian Deposit technical legislative amendments to the Canada Deposit
Insurance Framework Insurance Corporation Act to provide the Canada Deposit
Insurance Corporation with a targeted expansion of its
authorities to improve the timeliness and efficiency of the
deposit insurance payout process.
2023 Sunset Date of In Budget 2021 the government proposes legislative
Financial Institutions amendments to the Bank Act, the Insurance Companies
Statutes Act, and the Trust and Loans Companies Act to extend the
sunset dates by two years to 2025. Extending the sunset
dates will enable full consideration of the impacts of the
pandemic on the financial sector as part of the next
legislative review.

368 Annex 3
Subject of the Measure Proposed Legislative Action
Revised Framework for In Budget 2021 the government proposes to introduce
Negotiated amendments to the Pension Benefits Standards Act, 1985
Contribution Pension to establish a revised framework for multi-employer
Plans negotiated contribution pension plans that strengthens
plan governance, transparency, and sustainability of
benefits.
Retail Payments To continue to promote growth and innovation in digital
Oversight Framework payment services, such as digital wallets, while ensuring
that these payments services are safer and more secure,
the government proposes to introduce legislation to
implement a new retail payments oversight framework.
Strengthening Capital Increase the statutory limit in the Canadian Securities
Markets Stability and Regulation Regime Transition Office Act to ensure
Enforcement additional funding for the Canadian Securities Transition
Office to continue supporting federal efforts to advance
the Cooperative Capital Markets Regulatory System and to
strengthen capital markets stability and enforcement in
Canada.
Credit Cards The government will engage with key stakeholders to work
Acceptance Fees towards three objectives:
 Lower the average overall cost of interchange
fees for merchants
 Ensure that small businesses benefit from pricing
that is similar to large businesses
 Protect existing rewards points of consumers

Following consultations with stakeholders, detailed next

steps will be outlined as part of the 2021 Fall Economic
Statement, including legislative amendments to the
Payment Card Networks Act that would provide authority
to regulate interchange fees, if necessary.

Better Supports for Budget 2021 announces the government’s intention to

Exporters work with Export Development Canada to enhance
supports to small and medium-sized exporters and to
strengthen human rights considerations in export
supports. To do so, the government may propose
amendments to the Export Development Act.
Science and Budget 2021 proposes to provide additional funding of
Technology $10 million over five years, starting in 2021-2022, and

Legislative Measures 369

Subject of the Measure Proposed Legislative Action
Collaboration with $2 million per year ongoing, to expand opportunities for
Israeli Firms Canadian small and medium-sized enterprises (SMEs) to
engage in research and development partnerships with
Israeli SMEs. This will be sourced from existing Global
Affairs Canada resources. The government also intends to
implement an enhanced delivery model for this program,
including possible legislation.
Improving Duty and Budget 2021 proposes changes to the Customs Act that
Tax Collection on would improve duty and tax collection.
Imported Goods  These changes would ensure that goods are valued in
a fair and consistent manner by all importers.
 In support of ongoing efforts to digitize payment of
duty and tax, the changes would also modernize the
payment process for commercial importers, to
minimize administrative burden.
Strengthening Budget 2021 announces the government’s intention to
Canada’s Trade launch public consultations on measures to strengthen
Remedy System Canada’s trade remedy system and to improve access for
workers and small and medium-sized enterprises.
Following these consultations, the government may
propose amendments to the Special Import Measures Act
and the Canadian International Trade Tribunal Act.
Budget 2021 also proposes to amend the Canada-United
States-Mexico Agreement Implementation Act to clarify
processes for the selection of trade remedy dispute
settlement panels and committees under the agreement.
Canada Community- On March 25, 2021, the government tabled a bill that
Building Fund proposes to provide $2.2 billion for a one-time top-up to
the federal Gas Tax Fund, which would double the
government’s commitment to municipalities and First
Nations communities in 2020-21. The bill also proposes to
rename the fund as the Canada Community-Building
Fund. The government intends to proceed with this
proposal.
Canada Small Business Budget 2021 proposes to amend the Canada Small
Financing Program Business Financing Act, including broader eligibility and
increased loan limits to help facilitate greater access to
financing through the Canada Small Business Financing
Program.

370 Annex 3
Subject of the Measure Proposed Legislative Action

Public Service The public sector workforce should be representative of

Employment Act the communities it serves. In the 2020 Speech from the
Throne, the government committed to implementing an
action plan to increase representation in hiring and
appointments within the Public Service. The government is
committed to diversity and inclusion and will review key
aspects of the staffing process in hopes of removing
conscious and unconscious bias and systemic barriers,
with the goal of increasing representation in hiring and
appointments within the Public Service.
To this end, the government will propose amendments to
the Public Service Employment Act to reaffirm the
importance of a diverse and inclusive workforce and to
strengthen provisions to address potential bias and
barriers in the staffing processes.
Amendments to the Budget 2021 proposes to introduce amendments to the
Canada Elections Act Canada Elections Act to specify that making or publishing
a false statement in relation to a candidate, prospective
candidate, or party leader would be an offence only if the
person or entity knows that the statement is false.
Modernizing the Fiscal As indicated in the Fall Economic Statement 2020, the
Stabilization Program government intends to introduce legislative amendments
to reform the Fiscal Stabilization Program to provide a
more effective backstop to provinces that face an
extraordinary drop in revenues. The modernization of the
program would index the maximum payment of $60 per
capita, which was set in 1987, to total Canadian economic
growth per person since that time, nearly tripling it to
$170 per person in 2019-20 and 2020-21. The higher cap
would apply to 2019-20 Stabilization claims and onward.
In addition, technical changes would modernize and
simplify the program, effective for 2021-22 Stabilization
claims and onward.
Enhancing the Budget 2021 proposes to amend the Judges Act, the
Capacity of Superior Federal Courts Act, and the Tax Court of Canada Act to add
Courts 13 new superior court positions, which includes 1
Associate Chief Justice position.
Establishing a Canada- Budget 2021 proposes to include in legislation a
wide Early Learning financial authority for the transfer of funding to
and Child Care System provinces and territories in support of new bilateral

Legislative Measures 371

Subject of the Measure Proposed Legislative Action
agreements, including an asymmetrical agreement
with Québec, towards a Canada-wide Early Learning
and Child Care system, for the year 2021-22.
Extending Temporary Budget 2021 proposes legislative changes to ensure that
Support for Seasonal all self-employed fishers who submit an Employment
Workers Who Insurance (EI) claim for the winter 2021 fishing benefit
Continue to be period are treated equally, by extending temporary
Affected by the eligibility changes for the entire benefit period.
Pandemic Budget 2021 proposes legislative changes to extend the
rules of an existing EI seasonal pilot project for an
additional year, until October 2022.
Reforming Student The government proposes to introduce legislation that
Financial Assistance would extend the waiver of interest accrual on Canada
Student Loans and Canada Apprentice Loans until March
31, 2023.
Support to the Budget 2021 proposes funding through a statutory
Government of appropriation to support the Government of Quebec in
Quebec to align the ensuring that benefits offered under the Quebec Parental
Quebec Parental Insurance Plan reflect the temporary changes in place
Insurance Plan with between September 2020 and September 2021 that have
Temporary EI Changes made Employment Insurance maternity and parental
benefits more generous for some claimants.
Establishing a $15 The Government of Canada is committed to help
Federal Minimum Canadians in low-wage jobs by announcing its intention to
Wage introduce amendments to the Canada Labour Code that
will 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.
Legislative Authority The government is proposing to introduce legislation to
for the Hibernia satisfy Canada’s obligations under the Hibernia Dividend
Dividend Backed Backed Annuity Agreement with the Government of
Annuity Agreement Newfoundland and Labrador.

Amendment of the The government is proposing amendments to the

Government Annuities Government Annuities Improvement Act to reduce
Improvement Act duplicative audit requirements. Canadians and annuitants
would continue to have access to information on the
program through the Public Accounts and the actuarial
reports published by the Office of the Chief Actuary.

372 Annex 3
Subject of the Measure Proposed Legislative Action

Social Security Tribunal The government is proposing amendments to the

Reforms Department of Employment and Social Development Act to
improve the recourse process for Income Security
programs, which include the Canada Pension Plan and Old
Age Security.
Extending Temporary To ensure that workers who accessed the Canada
Provisions Related to Emergency Response Benefit through Service Canada
the Employment continue to have access to training and skills development
Insurance (EI) programs and to allow integrity activities over a longer
Emergency Response time frame, the government announces its intention to
Benefit (ERB) introduce amendments to the Employment Insurance Act
to extend the application of certain provisions related to
the Canada Emergency Response Benefit.
Annual Regulatory The government intends to introduce a second annual
Modernization Bill cleanup legislation to concurrently amend multiple acts to
(ARMB) improve regulations and remove outdated or duplicative
regulatory requirements that will strengthen Canada’s
economic competitiveness.
Enhancing Protections To better protect these employees, the government is
for Contract Workers announcing its intention to introduce amendments to the
in the Air Canada Labour Code that will extend equal remuneration
Transportation Sector protection to more employees in the air transportation
sector. This would ensure that, when a service contract
changes hands, affected employees are not paid less if
they are laid off and rehired to do the same work.
Parents of Young The Government of Canda is announcing its intention to
Victims of Crime amend the Canada Labour Code to ensure that employees
in the federally regulated private sector have job
protection when they avail themselves of this new benefit.

Labour Program The Government of Canda is announcing its intention to

Authority to use the amend the Department of Employment and Social
Social Insurance Development Canada Act to provide the Minister of
Number Labour with the authority to collect, use and retain the
Social Insurance Number, for program administration.
Freezing Judicial Budget 2021 proposes to amend the Judges Act to freeze
Pension Entitlements a judge’s pension entitlements, as of the date the
Canadian Judicial Council recommends a judge’s removal
from office.

Legislative Measures 373

Subject of the Measure Proposed Legislative Action

Streamlining Express The Government of Canada intends to propose

Entry amendments to the Immigration and Refugee Protection
Act to provide the Minister of Immigration, Refugees and
Citizenship Canada with authority to use Ministerial
Instructions to help select those candidates who best meet
Canada’s labour market needs from among the growing
pool of candidates who wish to become permanent
residents through the Express Entry System.
Assignment of The Government of Canada proposes to amend the First
revenues from the Nations Fiscal Management Act (FNFMA) to allow First
Crown for the Nations who are borrowing members of the First Nations
purposes of pooled Finance Authority to assign their rights to certain revenues
borrowing payable by Her Majesty in right of Canada, for the purpose
of securing financing under the FNFMA pooled borrowing
regime.
First Nations Election The government proposes to introduce legislation that
Cancellation and would ensure that the First Nations Election Cancellation
Postponement and Postponement Regulations (Prevention of Diseases) are
Regulations deemed to have been validly made since April 7, 2020.

Amendments to the The government proposes to amend the

Telecommunications Telecommunications Act to allow the Canadian Radio-
Act to Facilitate television and Telecommunications Commission (CRTC) to
Broadband Delivery share more information with federal, provincial, and
territorial broadband partners and to take steps to avoid
unnecessary delays in respect of CRTC decisions to
allocate funding to recipients to expand access to
telecommunications services in underserved areas.
Helping Health Care On March 25, 2021, the government tabled a bill that
Systems Recover proposes to amend the Federal-Provincial Fiscal
Arrangements Act to provide $4 billlion to help provinces
and territories through the Canada Health Transfer to
support clearing health care system backlogs caused by
the pandemic. The government intends to proceed with
this proposal.
Enabling National The government proposes to introduce amendments to
Research Council enable the National Research Council to manufacture and
Canada Medical produce medical products such as vaccines on a large
Production and scale to respond to public health needs and to establish
Partnership-Building and take interests in corporations to facilitate new
partnership operating models.

374 Annex 3
Subject of the Measure Proposed Legislative Action

Clarifying the The government is announcing its intention to introduce

Suspension of Interest legislation that will clarify the changes made to the
on Student Loans Canada Student Loans Act, Canada Student Financial
Announced in the Fall Assistance Act and Apprentice Loans Act as part of
Economic Statement Bill C-14 in order to ensure they reflect what was
announced in the Fall Economic Statement.
Additional Fiscal On February 3, 2021, the government tabled a bill to
Equalization Offset amend the Nova Scotia and Newfoundland and Labrador
Payments to Nova Additional Fiscal Equalization Offset Payments Act to
Scotia authorize the Minister of Finance to make an additional
fiscal equalization offset payment to Nova Scotia for 2020-
21 and to extend the Arrangement on Offshore Revenues
with Nova Scotia to 2022-23. The government intends to
proceed with this proposal.
Providing Additional The government proposes to provide up to 12 additional
Weeks of Recovery weeks of income support for claimants who will start
Benefits exhausting their 38 weeks of Canada Recovery Benefit
(CRB) on June 19, 2021. The first four of these additional 12
weeks will be paid at $500 per week and the remaining 8
weeks will be paid at a lower amount of $300 per week. All
new Canada Recovery Benefit claimants after July 17, 2021
would also receive the lower rate of $300 per week. The
government also proposes to provide an additional 4
weeks, up to a maximum of 42 weeks, for the Canada
Recovery Caregiver Benefit. The government will also seek
legislative authorities to make further extensions, as
necessary, past September 25, 2021 and until no later than
November 20, 2021, to both the Canada Recovery Benefit
suite of supports, including caregiving and sickness
benefits, as well as Employment Insurance regular benefits.
Corresponding amendments to the Canada Labour Code
are also proposed.
Canada’s COVID-19 Provinces and territories will face significant financial
Immunization Plan pressures as immunization campaigns accelerate. On
March 25, 2021, the government tabled a bill that
proposes to establish an appropriation authority of up to
$1 billion to provinces and territories, in support of
Canada’s COVID-19 immunization plan. Payments would
be allocated to provinces and territories on a per-capita
basis, and could be used for a variety of vaccine-related

Legislative Measures 375

Subject of the Measure Proposed Legislative Action
costs. The government intends to proceed with this
proposal.
Increasing Old Age Budget 2021 proposes to provide a taxable grant payment
Security for Canadians of $500 to Old Age Security pensioners who will be age 75
75 and Over or older as of June 2022 through statutory appropriations
and to amend the Old Age Security Act to exempt this
payment from the definition of income for the Guaranteed
Income Supplement. Budget 2021 also proposes to amend
the Old Age Security Act to increase by 10 per cent the
maximum benefits payable to Old Age Security pensioners
age 75 or older effective July 1, 2022.
Labour protection for Budget 2021 reiterates the government’s commitment to
gig workers in the making legislative changes to improve labour protection
federally regulated for gig workers in the federally regulated sector, including
sector those who work through digital platforms. These legislative
changes will be informed by the outcomes of online
consultations recently launched by the Minister of Labour.
Protecting Canada’s In Budget 2021 the government proposes to introduce
Historic Places legislation to establish a framework for the transparent
designation and sustainable protection of federally-owned
historic places.
Maintaining Flexible Budget 2021 proposes amendments to the Employment
Access to Employment Insurance Act to maintain common entrance requirements,
Insurance Benefits and to simplify eligibility rules around contentious reasons
for separation and the allocation of monies on separation
for a period of one year, from September 2021 to
September 2022.
Extending Employment Budget 2021 proposes amendments to the Employment
Insurance Sickness Insurance Act to extend the maximum duration of
Benefits to Better Employment Insurance sickness benefits from 15 weeks to
Support Canadians 26 weeks. In addition, Budget 2021 proposes to make
Suffering From Illness corresponding changes to medical leave under the Canada
or Injury Labour Code.

376 Annex 3
Annex 4
Gender, Diversity, and Quality of Life
Statement
Gender equality and diversity are fundamental to creating a thriving and
successful country that reflects Canadian values and achieves its potential. When
every Canadian has the opportunity to succeed, all Canadians benefit.

Gender Equality and Diversity as Means to a

Stronger Society
The past half century has seen major advancements in gender equality and
diversity in Canada, but the COVID-19 pandemic has put that progress at risk.
Canada’s challenge now is to ensure an inclusive, intersectional recovery that
builds a truly equitable society.

“Now is the time to make sure that every voice is heard. Now is the
time to teach our children so that human rights, and gender equality
become part of who they are and how they will live. Our lives are
better thanks to the efforts of the women who came before us. If we
are to honour their legacy and our daughters’ futures, we must
continue the fight for gender equality in our communities, our
workplaces, our schools and our homes.”

—Marie-Claude Landry, Ad.E., Chief Commissioner, Canadian Human

Rights Commission

Progress over the last half century has been real. Women have broken barriers
in positions of leadership, taking on roles as entrepreneurs, scientists, educators,
and CEOs. LGBTQ2, Indigenous, and minority rights have also been greatly
expanded, enshrined in the Canadian Charter of Rights and Freedoms and the
Canadian Human Rights Act. But there remains a range of gaps and barriers that
threatened equality even before the pandemic.
The government’s recovery plan is feminist and intersectional, and makes
targeted investments to support those most affected by the pandemic and
address long-standing inequities. In laying out its plan, the government remains
committed to Canada’s broad gender equality goals and to a decision-making
process that considers the impacts of policy proposals on Canadians from all
angles, as enshrined in the Gender Budgeting Act. The Task Force on Women in
the Economy has been established to advise the government on priorities for
gender equality.

Gender, Diversity, and Quality of Life Statement 377

Two important gender budgeting tools have also helped to guide the
preparation of Budget 2021: the Gender Results Framework (GRF), which helps to
identify policy gaps and priorities, and the process of factoring gender and
diversity considerations into decision making (gender-based analysis plus, or GBA
Plus, which encompasses numerous identity factors such as ethnicity, region of
residence, age, biological sex, income level, gender, educational attainment,
sexual orientation, race, immigrant status, and mental or physical ability).

Figure A4.1
Gender Equality Goals for Canada

The Gender Results Framework is aligned with the Government of Canada’s policy
of GBA Plus, ensuring that gender is considered in relation to other intersecting
identity factors. Wherever possible, and with a view to collecting better data,
intersecting identity factors will be considered in the above indicators.

Canada’s Gender Results Framework (GRF) was introduced in Budget 2018 as a

whole-of-government articulation of gender equality priorities and goals with
matching indicators to track developments toward these goals. This statement
includes a summary of where Canada stands on these priorities.

378 Annex 4
Reflecting that gender is only one aspect of identity, and that systemic
discrimination, racism, ableism, and ageism, among other many factors,
compound the impacts of gender issues, this section also presents statistics on
additional identity characteristics to enable a deeper understanding of the
experiences of diverse groups of people, such as Indigenous peoples, people with
disabilities, racialized peoples, and members of LGBTQ2 communities. By reporting
on indicators in the GRF, Canadians and the government can see where Canada
was, where it is now, and where it can be in relation to gender equality
and diversity.

As in previous years, this statement also highlights some of the key actions the
government is taking in this budget to improve fairness and inclusion within each
priority area, and provides a summary of the aggregate gender and diversity
impacts of all new and renewed measures in this budget.

Budget 2021’s Impacts Report, which follows this Statement, includes an

assessment of the impact of every budget measure included in Budget 2021. To
support the government’s efforts to address existing inequalities and make more
inclusive decisions, this budget makes significant investments in Statistics Canada
to improve the availability of data.

Note on Terminology

In this section, the term "visible minorities" is occasionally used because it is the
official demographic category defined by the Employment Equity Act and used by
Statistics Canada in their surveys. With the commitment to support a task force
on modernizing the Employment Equity Act, the question of appropriate
terminology will be taken up by the members.

Gender, Diversity, and Quality of Life Statement 379

 Gender Results Framework
Education and Skills Development
Equal opportunities and diversified paths in education and skills development

Education and skills development are critical for participation in the job market,
and a key source of opportunities for Canadians to pursue a better life.
Educational paths should be chosen based on interests and aptitudes, free from
gendered expectations and stereotypes.

Educational attainment University degree Tradeswomen

45 W: 42%
M W 20
14%
100
90
84 86 86 88 87
M: 33%

70 10
0
1991 2019
2006 2011 2016 1990 2020

Share aged 25-64 with a certificate, Share aged 25-54 with a university Share of newly certified
diploma or degree. degree. tradespeople who are women.

High school math High school reading High school science

100 M: 84% 100 W: 91% W: 88%
W: 84% M: 82% 100
M: 85%

80 80 80
2006 2018 2006 2018 2006 2018

Share aged 15 at proficiency level 2 Share aged 15 at proficiency level 2 Share aged 15 at proficiency level 2
or above in mathematics. or above in reading. or above in science.

Adult numeracy Adult literacy Field of study

100 100
Education 76
51
40
52 51
Health 76

Math and comp. science 27

0 0
M W
Arch. and engineering 25
M W

Share aged 16-65 at proficiency level Share aged 16-65 at proficiency level Share enrolled in a Bachelor’s in
3 or above in 2012. 3 or above in 2012. 2018-19 who were women.
Sources: 2016 Census, Labour Force Survey, Registered Apprenticeship Information System, 2018 Programme for
International Student Assessment, 2012 Programme for International Assessment of Adult Competencies, and
Post-Secondary Student Information System, 2018-19.

380 Annex 4
Prior to the COVID-19 pandemic, many significant gender gaps in education and
skills development had narrowed. Women exceeded men in terms of high school
graduation and university education, and many fields of study that were once
male-dominated in the past had become far more equal. For example, women
represented around one in 20 students in law and medicine in 1950, but now
represent over one-half of students in these fields. Despite marked
improvements, women were still significantly under-represented in some fields of
study, like engineering, math, and computer science, and were much less likely to
pursue high-paying jobs in the trades. For example, only about 1 in 4 engineering
students and about 1 in 7 newly certified registered apprentices are women.
There were also a number of important education and skills development gaps
from a diversity perspective, such as lower rates of educational attainment
among people with disabilities, and lower literacy and numeracy skills among
Indigenous peoples.

Diversity Focus
Indigenous • 26 per cent of Indigenous people had no educational
identity credentials in 2016 compared to 11 per cent of non-Indigenous
people. Inuit men were the most likely to report none.
• Off-reserve Indigenous peoples had lower literacy and
numeracy skills than non-Indigenous people in 2012.
Visible • University attainment varied substantially among racialized
minority people in 2016. Canadians of Korean descent were the most
status likely to be university educated (57 per cent), while Southeast
Asian Canadians were the least likely to have obtained a
university degree (24 per cent). Gender gaps were the largest for
Canadians of Filipino descent, where 47 per cent of women had
completed a university degree, compared to 38 per cent of men.
LGBTQ2 • Between 2015 and 2018, gay men and lesbian women were
member more likely to have a post-secondary qualification than
heterosexual men and women, while bisexual men and women
were less likely to have a post-secondary qualification.
Disability • Persons with disabilities, especially those with severe disabilities
status and men, were less likely to have obtained an educational
credential in 2017 than those without disabilities.
Income • High school students’ socio-economic status was a weaker
predictor of academic performance in Canada in 2018 than in
other OECD countries, and disadvantaged students in Canada
were more likely to be academically resilient.

Gender, Diversity, and Quality of Life Statement 381

Given that many postsecondary degrees or diplomas require at least one year or
more to complete, the impact of COVID-19 and related public health restrictions
on lifelong educational attainment is hard to measure in the short term. But it is
clear that the pandemic has had large negative impacts on racialized women and
youth, with both students and non-students seeing significant job losses,
particularly young women, and many young people returning to school or staying
in school longer in light of weaker job prospects. There is strong evidence that the
effects of a recession on young people are long lasting and that the scarring
effects of unemployment can reduce earnings for years after the economy has
recovered. When young people experience periods of unemployment, or are
forced to work at jobs for which they are overqualified, they miss out on
opportunities to acquire valuable skills that help them advance, and decrease their
connection to the labour market during formative years. All these challenges will
be compounded for more vulnerable youth.
There is no silver bullet to address these challenges. Governments provide
extensive supports aimed at helping youth achieve their full potential. Major
federal investments in recent years have focused on making postsecondary
education more affordable, including enhancements to the Canada Student
Loans and Canada Student Grants programs, and improving skills development
and job opportunities, including funding to assist provincial and territorial
training and employment supports such as work-integrated learning placements.
Countries whose youth perform better in the school-to-work transitions, such as
Germany, tend to have a strong apprenticeship culture. In recent years, the
government has made many investments in these areas — such as through
Canada Apprentice Loans, Apprenticeship Incentive and Completion Grants.

The Task Force on Women in the Economy members have emphasized the
opportunities for women to enter high paying fields in the trades and other well-
paying jobs in the innovation sector. They also emphasized the importance of
providing opportunities for up-skilling for mid-career women and training and
employment opportunities to groups who systemically face fewer opportunities.
The 2020 Fall Economic Statement provided funding to bolster training supports
for those most affected by the pandemic, including marginalized women,
Indigenous peoples, youth, persons with disabilities, and recent newcomers
to Canada.

382 Annex 4
In an effort to build on that momentum and tackle long-standing gaps in
education and skills development, and encourage lifelong learning and retraining
among all groups of Canadians, the government has introduced a number of
Budget 2021 measures, including:

 Additional funding and a pilot  Supporting Indigenous post-

expansion of the Supports for secondary students and
Student Learning Program. institutions during COVID-19.
 Strengthening elementary and  Opportunities for businesses and
secondary education on young workers through Mitacs to
reserve, including helping adults expand work-integrated learning
finish high school. opportunities for post-secondary
 Additional funding for Aboriginal students.
Head Start programs. Helping youth and students
 Enhancements to federal skills build job skills and connect
and employment training with employers through
programs, including to additional funding towards the
strengthen foundational skills Youth Employment and Skills
through Skills for Success. Strategy, the Student Work
Placement Program, and the
 Providing enhanced student Canada Summer Jobs program.
financial assistance and
expanded student debt relief.

For the details of the impacts of these and more Budget 2021 measures which
advance the Education and Skills Development Pillar, please see the Impacts
Report.

Gender, Diversity, and Quality of Life Statement 383

 Gender Results Framework
Economic Participation and Prosperity
Equal and full participation in the economy

Ensuring that every person has the opportunity and the support to participate
fully in the economy will raise the incomes of Canadian families and benefit the
country as a whole.

Labour force Gender earnings gap Gender wage gap

100 M: 90% 60 25

27% 11%

W: 82%

50 0 0
1976 2020 1976 2019 1997 2020

Share aged 25-54 in the labour Gender gap in median employment Median hourly full-time wage gap
force. income for those aged 25-54. for those aged 25-54 years.

Full-time workers Unpaid work Child care costs

100
Shopping 10.0 6.9 6.3
5.6 5.1
M W
M: 94%
W: 83% Child care
0.0
Child 0-5 Child 0-12
Housework
40 Lone parents Couples
1976 2020 0 100

Share of employed aged 25-54 Share aged 25-54 engaging in Average proportion of after-tax
working full-time. unpaid work activities in 2015. income spent on child care in 2019.

Temporary or involuntary
Career choice Low-wage jobs
part-time work
30 W: 12% W: 16%
50
M: 8%
Nursing 89
M: 10%

Office support 87
Front-line public
20
protection services
Industrial, electrical and
5
construction trades 0 0
1997 2020 1997 2020

Share of employed who are women Share of employed aged 25-54 in Share aged 25-54 with hourly pay
by occupation in 2020. temporary or involuntary PT work. less than two-thirds of the median.
Sources: Labour Force Survey, Survey of Consumer Finances, Survey of Labour and Income Dynamics, Canadian
Income Survey, 2015 General Social Survey, and 2017 General Social Survey.

Fifty years ago, only half of Canadian women participated in the labour market
and women’s annual income was almost 60 per cent lower than men’s. Today,
over 8 in 10 women participate in the labour market and the gender gap in
annual employment income has fallen to 27 per cent. These changes represent
major progress toward gender equality in the labour market. However, persistent
social norms mean that women continue to spend more time on caregiving and

384 Annex 4
household responsibilities, and this unpaid work is not valued in traditional
economic terms and cuts into the number of hours that women can spend in the
paid workforce. Balancing work and family responsibilities may also lead some
women to trade off more secure, high-paying jobs, for lower-paying, but more
flexible positions. In addition, occupational segregation continues to limit career
choices for women, making women more likely to work in low-wage jobs.
Women from underrepresented groups, including Indigenous, Black, racialized
and newcomer women, often face even greater barriers to equal and full
participation in the labour market. Where women do succeed in predominantly
male fields, there remain diparities between their compensation relative to their
male counterparts.

Diversity Focus
Indigenous • Indigenous women earned 44 per cent less than white men
identity in 2015. Even after adjusting for differences in demographic
and job characteristics, a large gap of over 30 per cent
remained.
• Indigenous men and women had higher unemployment
rates than non-Indigenous men and women in 2019.

Visible • In 2015, visible minority women earned 17 per cent less than
minority white men. Demographic and job characteristics, like
status industry, occupation, age, and education, did not explain this
gap.
• Unemployment rates were higher among racialized
Canadians, but the rates varied significantly across groups.
For example, in May 2016, about 1 in 7 Arab Canadian
women were looking for work, compared to 1 in 25 Filipino
Canadian women. Black Canadian men and women, Arab
Canadian men, West Asian Canadian women and South
Asian Canadian women, also had particularly high rates.

Immigrant • In 2019, immigrant women, especially recent immigrant

status women (i.e. those who landed in Canada 5 or less years
earlier), were less likely to work than women born in Canada.
Compared to recent immigrant men, newcomer women from
Africa and Asia experienced the largest gender gaps in
employment.
• Visible minority newcomer women earned $26,600 in 2015,
compared to $30,100 for non-visible minority newcomer
women, $35,600 for visible minority newcomer men, and
$42,600 for non-visible minority newcomer men.

Gender, Diversity, and Quality of Life Statement 385

 Diversity Focus
LGBTQ2 • Between 2015 and 2018, lesbian women were more likely to
member work than heterosexual women, while gay men were slightly
less likely to work than heterosexual men. Bisexual men and
women had the lowest employment rates.

Disability • Persons with disabilities were less likely to work than those
status without disabilities. Severity negatively impacts employment,
with only 31 per cent of people with severe disabilities
working in 2016.

In part reflecting these pre-existing inequalities, the COVID-19 pandemic and

related public health measures have disproportionately affected women,
especially women from underrepresented groups. As outlined in the Overview of
Economic and Social Foundations, women’s jobs were affected earlier and more
severely, and continue to recover more slowly, with especially notable negative
employment impacts for Black and racialized women, newcomer women, low-
wage women and young women. Even when women were not at risk of losing
their jobs, the essential nature of the services they provide – e.g. nursing, child
care – put them at a greater risk of transmission of COVID-19. Although the
overrepresentation of women in low-wage work has been a long-standing
contributor to gender inequity in Canada, COVID-19 has highlighted the essential
nature of many of these jobs, especially front-line care work. For women who are
mothers, the closure of schools and child care centres exacerbated work-life
balance challenges and increased barriers to labour market entry.
The Task Force on Women in the Economy has been clear in advising the
government that this pandemic requires a stimulus and recovery response
tailored to the unique nature of this crisis on women. Members placed a high
priority on investments in the care economy to address the burden of unpaid
work on women, to facilitate women’s participation in the paid labour force, and
to create good jobs in sectors of the economy where women work. This includes
investments in early learning and child care, and in supportive care, where the
pandemic exposed inadequacies in the quality of care being provided to seniors
and in the wages and working conditions of care workers.

386 Annex 4
 “Any job can be a great job. The social infrastructure on which we all depend
will be a growing driver of GDP for decades, the result of population aging and
the needs of a shrinking but increasingly valuable working-age cohort. The
caring economy could power a better life, not just a bigger economy, if we
address issues revealed by the pandemic. Just as manufacturing generated
Canada’s middle class from the 1950s to the 1970s, the care sector could be
the source of our next middle class.”
–Armine Yalnizyan, Economist, Atkinson Fellow on the Future of Workers and
Task Force on Women in the Economy Member

In recognition of these challenges, Budget 2021 is investing in a feminist and

inclusive recovery and working toward tackling gender inequities and systemic
discrimination in the labour market in a number of ways, some of which include:

 Establishing a Canada-wide Early  Investing in distinctions-based,

Learning and Child Care system. culturally appropriate child care
 Supporting Black Canadian for Indigenous children.
communities through additional  Deploying the Social Finance
investments for Black-led non- Fund to mobilize private capital
profit organizations and and grow the social finance market
establishing a Black-led in order to create thousands of
Philanthropic Endowment Fund. new jobs in this women-dominated
 Strengthening long-term and sector, provide much-needed
supportive care across Canada by services for vulnerable Canadians,
investing to support the and drive positive social change.
implementation of standards for  Renewing the Investment
long-term care, improved access Readiness Program to continue
to quality palliative care and helping charities, non-profits, and
improved data infrastructure to lay other social purpose organizations
a better foundation for to develop the necessary skills and
coordinated action across the capacity to access social finance
sector. opportunities.
 Also see actions listed under  Funding to my65+ by the Service
Poverty Reduction, Health and Employees International Union
Well-Being to raise the federal Healthcare to provide incentives for
minimum wage and enhance the worker participation.
Canada Workers Benefit.
For the details of the impacts of these and more Budget 2021 measures which
advance the Economic Participation and Prosperity Pillar, please see the Impacts
Report.

Gender, Diversity, and Quality of Life Statement 387

 Gender Results Framework
Leadership and Democratic Participation
Gender equality in leadership roles and at all levels of decision-making

Gender equality and diversity in leadership positions in economic, political and

judicial spheres is essential to a fair and democratic society.

Senior management Business ownership Board members

50 80 Men-owned: 66%
29%
Two or more 11

Women-owned: 18% One 27

None 62

0 75
0 0
1987 2020 2005 2013

Share of senior management Share of private enterprises by Share of boards by number of

positions filled by women. majority-ownership. women directors in 2018.

Federal Provincial and territorial First Nations Bands

50
55 MPs: 30%
Ministers: 50%
Senators: 49% Cabinet 36 Council members: 27%

Members 35
Chiefs: 19%
0
1st Today
0 50 0
1992 2019

MPs, Ministers and Senators who are Share in PT governments who are Share in First Nations Band Councils
women by Parliament. women as of Feb. 16, 2021. who are women.

Municipal Federal judges Police officers

45% 50
55
50
38
22%

17

0
Councillors Mayors 0 0
J-85 A-21 1986 2019

Share of city councillors who are Federal judges who are women by Share of full-time equivalent police
women as of Feb. 16, 2021. month and year, Jan. 85 to Apr. 21. officers who are women.
Sources: Labour Force Survey, Canadian Employer-Employee Dynamics Database, Corporation Returns Act,
Parliament of Canada, Indigenous Services Canada, municipal, provincial and territorial websites, Office of the
Commissioner of Federal Judicial Affairs, and Police Administration Survey.

Since most women won the right to run as candidates in the federal elections in
1920, there have been gradual improvements in gender representation in Canadian
politics. For example, the number of women elected to Parliament has increased to
100 out of 338, and in 2015, Canada saw its first ever gender balanced Cabinet.

388 Annex 4
At the same time, there have been significant improvements in the judicial
sphere, in part due to recent reforms to the superior courts’ judicial appointment
process that emphasize transparency, merit, and the diversity of the Canadian
population, while continuing to ensure the appointment of jurists who meet the
highest standards of excellence and integrity. This process has helped to
increased the share of federally appointed judges who are women from 34 per
cent in 2015 to 45 per cent in 2020. It has also resulted in the appointment of 16
judges identifying as LGBTQ2 and 30 judges identifying as belonging to a visible
minority group since October 2016.

However, the power gap persists. Business continues to be heavily male

dominated, with only 1 out of every 3 senior management positions filled by a
woman, and diversity is severely lacking in many leadership and decision-making
roles. For example, Black, racialized people, Indigenous peoples and people with
disabilities are much less likely to be business owners and serve on corporate
boards. Racialized Canadians are also less likely to serve in law enforcement.

Diversity Focus
Indigenous  Few small- and medium-sized enterprises (SMEs) were majority-
identity owned by Indigenous people in 2017 (1 per cent).
 There are currently 5 First Nations, 2 Inuit, and 4 Métis Members
of Parliament (MPs), representing 3 per cent of the House,
compared to 5 per cent of the population. Of the 11 Indigenous
MPs, 4 are women. Concurrently, the Senate has 5 First Nations,
1 Inuit, and 4 Métis Senators (10 per cent). Of these Indigenous
Senators, 6 were female.
 Overall, 4 per cent of police officers and 3 per cent of recruits
identified as Indigenous in May 2019. Within First Nation police
services, 63 per cent of officers identified as Indigenous.
 Among the 403 distributing corporations that disclosed diversity
information in 2020 to meet the new Canada Business
Corporations Act (CBCA) regulations, only 0.3 per cent of 2,411
board directors were Indigenous and only 0.2 per cent of 2,158
individuals in senior management positions were Indigenous.

Visible  While over 1 in 5 people reported belonging to a visible minority

minority group in Canada in 2016, only about 1 in 8 SMEs were majority-
status owned by visible minorities in 2017.
 In mid-May 2019, visible minorities were underrepresented as
police officers (8 per cent) and recruits (11 per cent).
 Members of visible minorities held 4 per cent of board seats and
9 per cent of senior management positions among the 403
distributing corporations that disclosed diversity data in 2020.

Gender, Diversity, and Quality of Life Statement 389

 Diversity Focus

LGBTQ2  According to the Annual Report Card 2018, published by the

member Canadian Board Diversity Council, only 1 per cent of board
directors self-identified as LGBTQ2.

Disability  Although over 1 in 5 people reported a disability in 2016, SMEs

status were rarely majority-owned by persons with a disability (1 per
cent) in 2017.
 Only 0.3 per cent of board seats and 0.6 per cent of senior
management positions among the 403 distributing corporations
that disclosed data in 2020 were held by persons with
disabilities.

COVID-19 has had a disproportionate impact on women, especially racialized

women. Beyond all the direct impacts, their underrepresentation in politics,
business, and justice has meant that their voices are muted in many political and
economic discussions. This has created additional challenges in securing the
change needed to help women and diverse groups overcome systemic barriers
and discrimination.

Women, however, have taken a leading role in the charitable and non-profit
sector. According to a recent report by the YWCA, organizations in this sector
employ over 2.4 million people in Canada, 70 per cent of whom are women. Of
that, Canada’s human and community service organizations employ
approximately 315,000 people.
Governments play a key role in facilitating and encouraging improved gender
equality in politics, business, and justice. To support and build toward gender
equality and diversity in Canada’s public institutions, the federal government
introduced a commitment to selecting Governor in Council appointees that are
reflective of Canada’s diversity in terms of linguistic, regional, and employment
equity groups in open, transparent and merit-based processes in February 2016.
And, more recently, to support gender equality and diversity in business, the
federal government launched the 50-30 Challenge, an initiative that asks that
organizations aspire to gender parity on their boards and in senior management
and to significant representation of other underrepresented groups. As of
April 13, 2021, there were 1,172 participating organizations. For similar reasons,
the federal government also recently introduced new disclosure requirements for
gender and diversity concerning director and senior manager positions and
diversity policies in corporations governed by the Canada Business
Corporations Act.

390 Annex 4
Since women’s entrepreneurship reflects broader industrial gender segregation
patterns in the economy, business owners who are women have also been
particularly negatively affected by the pandemic, as have business owners who
are racialized Canadians. Structural barriers for many women entrepreneurs
amplified the greater impacts of the pandemic.
Reflecting that the needs of women entrepreneurs are unique, the Women
Entrepreneurship Strategy was introduced to increase women-owned businesses’
access to the financing, talent, networks and expertise they need to start up, scale
up and access new markets. The Task Force on Women and the Economy and
other stakeholders have emphasized that the support networks and financing
needs of women entrepreneurs are often different from those of men, with
women valuing wraparound supports and smaller amounts of funding.
Recognizing that there continue to be challenges for women and diverse groups
in attaining and maintaining positions of leadership, the government has
introduced a number of Budget 2021 measures, including:

 Accelerating the Women’s  Additional Indigenous Business

Entrepreneurship Strategy. Supports to increase
 Providing additional funding to opportunities for Indigenous
support the Black entrepreneurs to start and grow
Entrepreneurship Program. their businesses, and increase the
proportion of Indigenous
 Consultations on corporate
businesses owned and operated
governance diversity in federally
by Indigenous women.
regulated financial institutions.
 Strengthening Indigenous voices
 Supporting small and medium-
in federal decision-making by
sized businesses including non-
supporting their capacity to
profit and charitable social
engage in federal consulations
enterprises through
and engagements.
enhancements to the Canada
Small Businesses Financing  Supporting Indigenous
Program. Governance and Capacity for
First Nations communities with
 Legislative amendments to the
the most acute needs, resulting in
Public Service Employment Act
better administration and access
to address potential bias and
to services and programs.
barriers in staffing processes
 Supporting entrepreneurs,
 Investing in companies led by
including underrepresented
Canadians from typically
entrepreneurs through the Small
underrepresented groups
Business and Entrepreneurship
through a new Inclusive Growth
Development Program.
Stream of the Venture Capital
Catalyst Initiative..

Gender, Diversity, and Quality of Life Statement 391

For the details of the impacts of these and more Budget 2021 measures that
advance the Leadership and Democratic Participation Pillar, please see the
Impacts Report.

392 Annex 4
 Gender Results Framework
Gender-Based Violence and Access to Justice
Eliminating gender-based violence and harassment, and promoting security of the
person and access to justice

Gender-based violence has long-lasting, negative health, social, and economic

effects that span generations, often leading to cycles of violence within families
and potentially whole communities. All Canadians should be safe and free from
physical, emotional or sexual violence, discrimination, and harassment, regardless
of where they live.

Workplace harassment Intimate partner violence Sexual assault

1,000 W: 536 M W
50 50
M: 149
30
19
13
8
1 3
0 0 0
2009 2019
Men Women Since 15 Past year

Share self-reporting harassment in Police-reported intimate partner Share self-reporting sexual assault in
the workplace in past year in 2016. violence, rate per 100K population. 2018.

Childhood abuse Homicide rate Homicide relationship

50 M W 8.8 M W
10.0
Intimate partner 6 47
25
22
1.1
2.4 Other family member 15 26
12 0.5
4 0.0 Other relationship 52 13
M W
0
Physical Sexual
Stranger or unknown 26 13
Indigenous Non-Indigenous

Share aged 15+ self-reporting Homicide rates per 100K population Share of homicides by relationship
childhood abuse in 2018. in 2019. to perpetrator in 2019.

Violent victimization Indigenous women Unfounded sexual assault

Sexual Physical
50 25
36 First Nations 48 45
14
23 Métis 40 44 12
10
Inuit 25 26
Non-
0 26 30 0
Men Women Indigenous 2017 2018 2019

Share of violent victimization Share self-reporting assault since Per cent of incidents of sexual
reported to police in 2014. age 15 years in 2018. assault deemed to be unfounded.
Sources: 2016 General Social Survey, Uniform Crime Reporting Survey, 2018 Survey of Safety in Public and Private
Spaces, Homicide Survey, 2014 General Social Survey.

Gender, Diversity, and Quality of Life Statement 393

Gender-based violence is defined as violence that is committed against someone
based on their gender identity, gender expression, or perceived gender and
includes a range of behaviours from unwanted sexual attention, harassment, and
neglect, to physical and sexual assault, and homicide. Experiences of gender-based
violence are quite common in Canada, with women reporting about 536 incidents
of police-reported intimate partner violence per 100,000 population in 2019 and
about 1 in 3 women reporting in 2018 that they had experienced at least one
incident sexual assault since the age of 15 years.

Some groups of women and girls are disproportionately affected by gender-based

violence, including Indigenous women and girls, Black women, and LGBTQ2
community members. For example, in 2018, 43 per cent of Indigenous women
reported experiencing sexual assault since the age of 15 years, compared to
26 per cent of non-Indigenous women. Those living in northern, rural, and remote
communities and people with disabilities are also at an elevated risk of
experiencing gender-based violence.

Diversity Focus
• In 2016, Indigenous women were more likely to report
Indigenous
workplace sexual harassment in the past 12 months (10 per
identity
cent) than non-Indigenous women (4 per cent).
• In a 2018 survey, more First Nations and Métis adults reported
experiences of childhood abuse than Inuit and non-Indigenous
people.
• Compared to non-Indigenous women, Indigenous women
were more than three times as likely to self-report an
experience of spousal violence between 2009 and 2014.
Indigenous victims of spousal violence were also more likely to
report the most severe forms of spousal violence.
• When surveyed in 2018, visible minority men and women were
Visible
minority slightly less likely to report experiences of childhood abuse. In
status this same survey, they were much less likely to report adult
experiences of physical or sexual assault.
• In 2014, recent experiences of spousal violence were reported
slightly less often by people belonging to a visible minority
group than by those that did not.
• Immigrants reported adult experiences of physical or sexual
Immigrant
status assault since age 15 years less often than non-immigrants
when asked in 2018, but were only marginally less likely to
report experiences of childhood abuse.

394 Annex 4
 Diversity Focus

LGBTQ2 • In a 2016 survey, lesbian and bisexual women reported

elevated rates of sexual harassment at work compared to
member
heterosexual women.
• Transgender individuals reported inappropriate workplace
behaviour (69 per cent) in a 2018 survey at three times the rate
of cisgender individuals (23 per cent).
• Gay, lesbian, and bisexual people reported higher rates of
childhood abuse than heterosexual people when surveyed in
2018. They were also more like to report experiences of
physical or sexual assault since age 15 years.
• In this same 2018 survey, transgender people were significantly
more likely to report having had experiences of physical or
sexual assault since age 15 years (59 per cent) than cisgender
people (37 per cent).
• When asked in 2018, persons with disabilities were more likely
Disability
to report having experienced physical or sexual assault as
status
adults than persons without disabilities, with women with
disabilities reporting sexual assault since age 15 years at three
times the rate of men with disabilities. People with disabilities
were also more likely to report experiencing childhood abuse.

COVID-19 and the resulting financial stresses and self-isolation has created
conditions that led to a rise in intimate partner and family violence. Increased call
volume at violence help lines and a rise in the number of calls for police services
related to domestic disturbances and disputes indicate that gender-based violence
was exacerbated by the public health crisis. Recognizing that many Canadians’
safety was at risk during the pandemic, the Government of Canada acted quickly to
ensure that front-line organizations that support women and families facing
violence had the resources they needed to keep their doors open and continue
providing their vital services, with dedicated funding for those organizations serving
Indigenous women both on and off reserve.
Like many of the other structural challenges faced by women, eliminating gender-
based violence will take sustained efforts over the long-term, as it is firmly
grounded in gender and social norms around femininity and masculinity, including
patriarchal views of the family, sexism, and gendered expectations regarding
behaviour.
Knowing that many women and girls continue to face violence, the government has
made significant investments towards eliminating gender-based violence and
supporting victims and survivors, including through the It’s Time: Canada’s Strategy
to Prevent and Address Gender-Based Violence. Federal government actions have

Gender, Diversity, and Quality of Life Statement 395

also included introducing a National Framework to Prevent Gender-Based Violence
on Campus, changes to the treatment of unfounded sexual assault cases, and
legislation to ensure that federally regulated workers are protected from workplace
harassment. In 2019, the federal government also introduced its National Strategy
to Combat Human Trafficking.
Improving access to and confidence in the justice system is also key to supporting
survivors of gender-based violence and other acts of physical, sexual, or
psychological harm or suffering, such as race-based hate crimes. And it is vital to a
safe and secure Canada.
Recent federal government actions and investments to improve access to justice
and build confidence in the justice system have included boosting legal aid to
support victims of sexual harassment in the workplace, amending legislation to
increase access to family justice in the official language of one’s choice, investing in
an assessment of the impact of race and culture on sentencing, and supporting the
growing demand for Public Legal Education and Information Services.
To continue to address the ongoing challenges related to gender-based violence in
Canada, and the structural and systemic barriers that limit access to justice for many
disadvantaged groups, the government has introduced a range of Budget 2021
measures, some of which include:

 Expanding the work of the  Supporting a range of measures to

Department of National Defence end the national tragedy of
and Veterans Affairs Canada to missing and murdered
eliminate sexual misconduct and Indigenous women and girls.
gender-based violence in the  Supporting community-based
military and support survivors. organizations and the LGBTQ2
 Increasing funding for provinces Secretariat to advance greater
and territories to divert youth equality for LGBTQ2
away from the justice system. communities.
 Supporting Indigenous policing and  Enhancing access to legal support
community safety. for racialized communities.
 Improving access to justice for  Advancing a National Action Plan
Indigenous peoples. to End Gender-Based Violence to
 Addressing systemic racism in support at-risk populations and
institutions. survivors and ensure that victims
have reliable and timely access to
protection and services.
For the details of the impacts of these and more Budget 2021 measures which
advance the Gender-Based Violence and Access to Justice Pillar, please see the
Impacts Report.

396 Annex 4
 Gender Results Framework
Poverty Reduction, Health and Well-Being
Reduced poverty and improved health outcomes

All Canadians should have their basic needs met, access to good quality health
care, and know that action is being taken to reduce poverty and create new
opportunities for a better quality of life.

Poverty Food insecurity Core housing need

20 W: 10% M W M W
M: 10%
Living alone 12 12 All Canadians 9 10
10 Lone parent 16 25 Living alone 19 19
All households 9 Lone parent
17 30
0 Couple, no kids 3 family
2015 2019
Couple, with kids 7 Seniors 8 11

Share below the Official Poverty Share of households in moderate or Share living in core housing need by
Line. severe food insecurity in 2017-18. family type in 2018.

Support orders Causes of death Life expectancy

M W 80 W: 70 years
100 M: 69 years
77%
Cancer 1 1
Heart diseases 2 2
Accidents 3 5
50
2005-06 2018-19
Chronic lower respiratory 4 4 65

Cerebrovascular 5 3
2000-02 2015-17

Spousal and child support order Rank of five leading causes of death Health-adjusted life expectancy at
payment collection rate. by gender in 2019. birth.

Sports participation Psychological well-being Adolescent birth rates

25
75
50 M: 70%
34

20
W: 65% 6

60
0 0
2015 2019
Men Women 2000 2019

Share aged 15+ participating in Share aged 12+ reporting very good Number of live births per 1,000
sports regularly in past year in 2016. or excellent mental health. females aged 15-19 years.
Sources: Canadian Income Survey, Canadian Community Health Survey, Survey of Maintenance and Enforcement
Programs, Vital Statistics Death and Birth Databases, 2016 General Social Survey.

Poverty, especially long-term poverty, has deep and wide-ranging impacts.

Individuals living with low income have a lower life expectancy, higher rates of
suicide, as well as higher rates of heart disease, chronic conditions, and mental
health issues. Poor mental and physical health – whether as a result of poverty or
not – may affect an individual’s well-being and earnings potential, and result in
economic losses for individuals, families, and society.

Gender, Diversity, and Quality of Life Statement 397

In Canada, poverty and poor health are challenges faced by many, but some
subgroups are at greater risk than others. For example, poverty is more prevalent
among recent immigrants and racialized people, while poor mental health is more
prevalent among Indigenous peoples and LGBTQ2 Canadians.

The prevalence of low wage, low quality jobs in certain sectors of the economy can
also contribute to the incidence of poverty, and these low wage, low quality jobs
are themselves the result of a number of factors, including the absence of
bargaining power among workers, as evidenced by the decline of private sector
unions, low or limited growth in real minimum wages, a rising return to
investments in education and skills, and increased automation and globalization.
Since women are more likely than men to be employed in low wage, part time, and
precarious jobs, women are more at risk of being among the working poor.

Diversity Focus

Indigenous • Indigenous people faced higher poverty rates (20 per cent) than
identity non-Indigenous people (10 per cent) in 2018.
• Off-reserve Indigenous people reported lower levels of mental
health in 2017-18 than non-Indigenous people.
• In 2016, Indigenous men reported regularly participating in
sports less often than non-Indigenous men, but there were no
notable differences for women.

Visible • In 2017-18, people belonging to a visible minority group

minority reported similar levels of positive (very good or excellent) mental
status health as those not belonging to a visible minority group.
• Poverty rates were higher among the visible minority population
in 2016. West Asian Canadians had the highest poverty rates, but
rates were also elevated among Arab, Korean, Black, and Chinese
Canadians.
• Visible minority women regularly participated in sports less often
than their counterparts in 2016, while visible minority men
participated slightly more.

Immigrant • Recent immigrants faced higher poverty rates (20 per cent) than
status non-recent immigrants in 2018.
• Immigrants and those born in Canada were nearly equally likely
to report very good or excellent mental health in 2017-18.
• Compared to people born in Canada, immigrant individuals were
less likely to regularly participate in sports in 2016.

398 Annex 4
 Diversity Focus
• Bisexual women had the lowest rates of positive mental
LGBTQ2
health in 2017-18, followed by bisexual men. Gay men and
member
lesbian women had higher rates than bisexual men and
women, but lower rates than heterosexual women, who
themselves had lower rates than heterosexual men.
• In 2016, gay men and bisexual women reported regularly
participating in sports less often than heterosexual men
and heterosexual women.
• Transgender individuals had higher rates of negative
mental health in 2018 and were significantly more likely to
report having seriously contemplated suicide (45 per cent)
than cisgender individuals (16 per cent).

Disability • Persons with a disability had elevated poverty rates in 2017 (17
status per cent), especially if they simultaneously belonged to another
at-risk group.

Income • Babies born into the lowest income quintile in 2015-17

could expect to live about eight years less than those born
into the highest income quintile.
• Mental health was worse among low-income people in
2017-18.
Education • People with less than a high school diploma had worse
mental health in 2017-18 than those with a Bachelor’s
degree or higher.

The economic and health crisis brought on by COVID-19 and related public
health measures has had devastating impacts on the physical and mental health
and financial well-being of huge numbers of Canadians. As public health
restrictions reduced social contacts, mental health declined and many Canadians
increased their use of substances. Even for those Canadians fortunate enough to
avoid COVID-19, physical health has still been negatively impacted as sports were
cancelled and gyms were closed. And, although Canadians have been supported
by strong and responsive income programs, like the Canada Response Benefit,
which helped offset the income and employment effects of the pandemic, many
Canadians continue to suffer from unemployment or face challenges meeting
their essential needs.

Gender, Diversity, and Quality of Life Statement 399

While the Government has supported a comprehensive response to the
pandemic, it has long been committed to policies aimed at reducing poverty,
providing access to affordable housing and making investments in healthy
communities. For example, recent investments in the Canada Child Benefit helped
lift more than 400,000 children out of poverty, while an expansion of the Rental
Construction Financing Initiative helped to increase the supply of affordable
rental housing, and a redesigned federal homelessness program, called Reaching
Home, helped to support people without access to safe and secure housing.
Federal government actions also included supporting a Pan-Canadian Suicide
Prevention Service with bilingual, 24/7 crisis support from trained responders and
enhancing the response to the opioid crisis.
To support Canadians at risk of or facing poverty, food insecurity and core
housing need as a result of the pandemic, the federal government has introduced
a Canada Child Benefit and special GST Credit top-up payment, enhanced
funding for the Reaching Home initiative, and supported food banks and other
organizations providing hunger relief to affected individuals. Other actions have
included additional investments for Distress Centres and the introduction of the
Wellness Together Canada Portal to support Canadians struggling with mental
health or a substance use disorder.
In the context of future actions to support a pandemic recovery, members of the
Task Force on Women in the Economy have emphasized the issue of precarious
work and the importance of policies to support better wages and working
conditions, such as changes to minimum wage laws and paid sick leave. They also
stressed the need over the long term for modernization of Canada’s income
support programs, such as Employment Insurance, the Canada Workers Benefit,
and disability supports.

“The economic, health and social impacts of COVID-19 have been

devastating for the communities we work with. From the loss of
steady jobs to child care shortages to addressing discrimination, hate
and violence in all its forms, we are seeing we can't go back to the
old ways of doing things. We need a fresh approach that thinks about
the economy and gender equity together.”

—Maya Roy, CEO of YWCA Canada and Task Force on Women in the
Economy Member

400 Annex 4
To respond to immediate and ongoing challenges related to poverty, health and
well-being, the government has introduced a number of Budget 2021 measures,
including:

 Establishing a $15 federal  Enhancing the Canada

minimum wage. Workers Benefit, which could
 Maintaining flexible access to provide about $1,000 more a
Employment Insurance year to low-wage, full-time
benefits as the labour market workers and lift close to
begins to improve. 100,000 Canadians out of
poverty.
 Emergency funding for
homelessness programs to  Increasing funding for public
protect vulnerable Canadians health measures and the
experiencing – or at risk of – Indigenous Community
homelessness. Support Fund to respond to
the immediate needs of
 Continued funding to
Indigenous communities.
emergency hunger relief
organizations supporting food  Supporting communities in
security for vulnerable providing services for
Canadians. Indigenous peoples dealing
with mental health issues
 Supporting community
through a distinctions-based
organizations to improve
mental wellness strategy.
access to sexual and
reproductive health care  Investments in mental health
information and services. to support populations
disproportionately impacted
 Addressing the opioid crisis
by COVID-19 and to develop
and problematic substance
national mental health
use by supporting a range of
standards.
innovative approaches to harm
reduction, treatment, and  Establishing a National
prevention. Institute for Women’s
Health Research.
 Extending the Racialized
Newcomer Women Pilot.  Extending Employment
Insurance Sickness Benefits
to better support Canadians
suffering from illness or injury

For the details of the impacts of these and more Budget 2021 measures which
advance the Poverty Reduction, Health and Well-Being Pillar, please see the
Impacts Report.

Gender Results Framework

Gender, Diversity, and Quality of Life Statement 401

 Gender Equality Around the World
Promoting gender equality to build a more peaceful, inclusive, rules-based and
prosperous world

Full and equal access to resources, opportunities and security for women and girls
around the world can lead to greater prosperity, improved quality of life, and peace
and security for everyone. Women and girls are powerful agents of change and can
improve their own lives and the lives of their families, communities and countries.

Peace and security Leadership Women’s rights

10 30 25% 100
7%
93%

0 0 0
2009 2021 1997 2020 2014 2018

Share of UN peacekeeping Share of seats held by women in Screened bilateral allocable aid
personnel who are women. national parliaments globally. targeted toward gender equality.

Gender in trade
Sexual health Reproductive health
agreements
50 34% 100 Canada-United States-Mexico
58 60 64 60 Agreement
Comprehensive and
Progressive Agreement for
Trans-Pacific Partnership
0
0 1990 2000 2014 2017 Canada-EU Comprehensive
Economic and Trade
30 years ago Today

Agreement
Share of girls in 31 countries who Share of women aged 15-49 years
Canada-Chile FTA
experienced genital mutilation. using contraceptives.
Canada-Israel FTA

Resource equity Gender-based violence Education and skills

Low- and middle-income countries
30 100
Americas 30
Africa 37
Europe 25
5% M: 93%
W 91%
Eastern Mediterranean 37
South-East Asia 38
0
1971 2021
Western Pacific 25 50
1975 2019
High-income countries 23

Countries without equal spousal Share of women with experiences of Literacy rate of youth aged 15-24
administrative authority over assets. intimate partner violence in 2010. years.

Sources: United Nations, Inter-Parliamentary Union, OECD, UNICEF, World Bank, WHO.

Gender equality around the world has continued to improve as international

organizations and governments recognize the importance of the empowerment of
women and girls. Not only is gender equality a fundamental human right but there is
significant evidence that unlocking the potential of all women and girls is the most
effective way to reduce poverty and create a world that is more inclusive, more
peaceful and more prosperous.

402 Annex 4
Although significant progress has been made in many countries around the world
over the last two decades, there are still millions of women and girls who continue to
be held back from achieving their full potential due to unequal access to resources,
opportunities, and security. These inequalities start at birth and follow women
throughout their lives. For example, in many countries, boys receive access to health
care, nutrition, and education to the detriment of girls. All combined, the impact of a
preference for boys and men over girls and women has led to an estimated
100 million women missing due to excessive mortality. In addition, in 41 countries,
inheritance laws do not treat daughters and sons equally; in 38 countries, there are
no laws prohibiting the dismissal of pregnant workers; and in 32 countries, there is
no legislation specifically addressing domestic violence.

Gender-based violence and sexual exploitation also continue to act as significant

barriers to women and girls around the world. For example, 12 million girls are
married before reaching adulthood each year, almost one in three women has
experienced intimate partner violence, and over 200 million women and girls in
31 countries have experienced female genital mutilation.

To help in the fight for global gender equality and women’s rights, the federal
government undertook a number of important actions, including supporting the
implementation of Canada’s Feminist International Assistance Policy through the
International Assistance Envelope, welcoming an extra 1,000 vulnerable women
and girls from various conflict zones around the world as government-assisted
refugees, launching Her Voice, Her Choice, to enable the fight against sexual and
gender-based violence, and helping women’s organizations and networks in over
30 developing countries through the Women’s Voice and Leadership Program.
Canada also took to the world stage as a leader in advancing gender equality by
creating the G7’s first Gender Equality Advisory Council and leading G7 partners
in committing to meaningful action to help improve the lives of women and girls
around the world, co-hosting the first formal Women Foreign Ministers’ Meeting,
and leading trade missions supporting women-owned businesses through the
Business Women in International Trade program, as well as launching a new
Partnership for Gender Equality, bringing together the Government of Canada,
the philanthropic community, the private sector and civil society.

During the COVID-19 pandemic, the challenges that women around the world
were already facing have been amplified. Unpaid care work – predominantly
carried out by women – increased as schools and child care services closed, more
meals needed to be cooked at home, and public health authorities recommended
more cleaning and disinfecting. Access to modern contraceptives and family
planning diminished due in part to the diversion of resources away from sexual
and reproductive health services and in part due to public health restrictions that
limited access to or temporarily cancelled certain services, leading to a rise in
unintended pregnancies and maternal mortality. Job losses and economic
hardships have been felt across the globe but are particularly affecting women as

Gender, Diversity, and Quality of Life Statement 403

40 per cent of all working women, globally, are in the sectors that have been most
impacted by the pandemic. And, crucially, job loss impacts have the potential to
be particularly traumatizing for women, who traditionally earn less, save less, and
have less financial independence than men. Poor working conditions in many
women-dominated health-care related jobs, such as nursing, have also put many
women at greater risk of transmission. Finally, shortfalls in humanitarian aid
funding amid the COVID-19 pandemic may have placed millions of women and
children fleeing violence at risk of starvation. Recognizing the uneven impact of
COVID-19 on women, the government has committed to ensuring that
international efforts to fight the pandemic are invested in line with the Feminist
International Assistance Policy.

As long as gender equality around the world remains elusive, Canada will have a role
to play in eliminating barriers to equality and helping to create better opportunities
for women and girls. Recognizing this, Budget 2021 proposes the following
measures:

 Extending the Middle East  Further enhancing Canada’s

Strategy for another year. contribution to the
 Addressing growing international International COVID-19
humanitarian assistance needs Response.
around the world.  Supporting Canada’s response
 Additional funding for the Canadian to the Rohingya crisis and the
Ombudsperson for Responsible situation in Myanmar.
Enterprise (CORE).  Sustaining Canada’s effort on
the Venezuelan migrant and
refugee crisis.

For the details of the impacts of these Budget 2021 measures, please see the
Impacts Report.

404 Annex 4
Summary of Budget 2021 Gender and Diversity
Impacts
This year’s budget is about securing the recovery and building a strong, more
inclusive and more resilient economy. This government is committed to evidence-
based decision making and taking into account impacts on people from a variety
of perspectives. This approach has guided all decisions taken on the COVID-19
Economic Response Plan as well as all investments made in this budget.
Following the approach introduced in Budget 2019, the remainder of this chapter
provides a summary of the impacts of the budget as a whole. This analysis is
complemented by the comprehensive analysis of the impacts of individual
budget measures in terms of gender, diversity and other factors as found in the
Budget 2021 Impacts Report.
Timing of GBA+ and Responsive Approaches
Chart A4.1 When GBA+ was First Performed
100%
Later
Budget 2021 saw a greater proportion of
90% Later
GBA+ being performed in earlier stages,
80% Mid-Point which is indicative of the continuous
70% Mid-Point efforts the government is making to
60%
Early integrate gender and diversity
50%
considerations in policy development.
There remains room for further
40%

30% Early
Existing
improvement, however, considering the
20%

10%
number of measures that are still
0%
Existing reporting this analysis being performed
Budget 2019 Budget 2021 at the later stages.

Chart A4.2 Responsive Approaches A key purpose of conducting a GBA+ is

to identify barriers to access or
unintended negative impacts for specific
Includes Responsive
Approach groups so that mitigation strategies or
Negative No Responsive Approach
Impacts
Possible
responsive approaches can be
developed to respond to these. Just
under 10 per cent of measures identified
a possible negative impact on some
Negative groups. For roughly half of these
Impacts
Highly measures, a responsive approach was
Unlikely
developed. Where negative impacts
were identified as unlikely, over 15 per
cent of measures incorporated a
0% 20% 40% 60% 80% 100%

proactive approach to reduce potential

barriers to access, up from 8 per cent in
Budget 2019. Other measures were
explicitly targeted at vulnerable groups.

Gender, Diversity, and Quality of Life Statement 405

Target Population
Chart A4.3 Share of Budget 2021 Investments While many measures in the budget
($ value of measures*) are aimed at all Canadians (28 per cent
of the budget), some measures target
support to a specific group of the
Early
population or region/ sector (9 per
Learning cent). Targeted support is aimed at
and Child All
Care Canadians challenges or opportunities unique to
Benefit 19% 28%
Increases subgroups of Canadians. For example,
this year’s budget includes significant
for Seniors
8%
Indigenous support for Indigenous communities
Persons
13% Other Specific and businesses (13 per cent of the
Region/Sector
Subgroups
23% 9% budget) and beneficiaries of two
specific measures: early learning and
child care i.e. women and families with
*Excluding Tax Fairness and Savings Measures. young children (19 per cent) and
benefit increases for seniors i.e. seniors
age 75+ (8 per cent).

Expected Benefits: Gender

Chart A4.4 Share of Budget 2021 A large percentage of Budget 2021
Investments ($ value of measures*) directly benefits women and men in
equal proportions (48 per cent), while
others carry benefits that are likely to
disproportionately benefit women or
Women
34% men. A significant proportion (34 per
cent) of this year’s budget is expected to
directly benefit women. In particular this
Men reflects up to $30 billion in investments
18%
to Establish a Canada-Wide Early
Gender
Balanced
Learning and Child Care System which
48% will directly create jobs for women and
will support women’s labour market
participation and their responsibilities as
*Excluding Tax Fairness and Savings Measures. caregivers. Other measures in Budget
2021 will address challenges faced more
by men, for example Ending
Homelesness (men represent 72 per cent
of shelter users).

406 Annex 4
Expected Benefits: Additional Characteristics
Chart A4.5 Expected Benefits by Subgroup,
Number of Measures

Lone Parent Household Budget measures were assessed in terms

of expected direct and indirect benefits
Newcomers by various subgroups of Canadians. A
number of measures in this budget are
Urban identified as helping Indigenous peoples,
rural Canadians, and visible minorities.
Rural For example, Indigenous Early Learning
and Child Care is expected to benefit
Visible Minority Indigenous women, children and families
while efforts to strengthen the Canadian
Indigenous Race Relations Foundation are expected
to benefit racialized communities.
Students
Budget measures can also carry benefits
for more than one group – for instance,
Persons with Disabilities or improving Food Security of Vulnerable
Canadians is expected to benefit Black,
Health Problem

LGBTQ2
Indigenous and northern communities as
well as low-income Canadians and lone-
parent families.
Low-income

0 20 40 60 80 100

Gender, Diversity, and Quality of Life Statement 407

Expected Benefits: Intergenerational and Income Distribution Impacts
Chart A4.6 Expected Intergenerational Chart A4.7 Expected Income Distribution
Impacts, Share of Budget 2021 Impacts, Share of Budget 2021 Investments
Investments ($ value of measures*) ($ value of measures*)
100% 100%

90% 90%
Somewhat
Primarily benefits high
80% benefits youth, 80% income
children and/or individuals
future
70% generations 70%
No Significant
Distributional
60% 60% Impacts
No significant
inter-
50% generational 50%
impacts Somewhat
benefits low
40% 40% income
individuals

30% Primarily 30%

benefits seniors Strongly
or the baby benefits low
20% boom 20% income
generation individuals

10% 10%

0% 0%

*Excluding Tax Fairness and Savings Measures.

Budget 2021 measures were also evaluated with respect to how they affected
Canadians at different generational and income levels. More than half of Budget 2021
investments are expected to benefit Canadians broadly equally across generations. A
significant share (30 per cent) are expected to particularly benefit youth or future
generations. For example, Supporting Internships and Growing Businesses through
Mitacs directly benefits youth entering the labour market by expanding access to work-
integrated learning opportunities for post-secondary students. This category in part
also reflects many of the environmental budget measures, such as Historic Investments
in Canada’s Natural Legacy which are designed to benefit all Canadians, but assessed
as particularly benefitting youth and future generations given that the ultimate impacts
of climate change and loss of biodiversity will not be felt for several years.

A large proportion of the budget benefits lower-income Canadians. For example,

enhancements to the Canada’s Workers Benefit will benefit three million low-and
modest-income workers through direct income support and by promoting longer term
attachment to the labour force. A smaller portion of the budget is expected to benefit
higher income Canadians. For example, Growing Zero-emission Technology
Manufacturing will benefit all Canadians in the long term but immediate benefits will
accrue to higher income technology manufacturers as these groups receive
disproportionately large amounts of investment income.

408 Annex 4
Gender, Diversity, and Quality of Life Statement 409
Measuring What Matters: Quality of Life
The Government of Canada is working to better incorporate quality of life
measurements into decision-making and budgeting based on international best
practice, expert engagement, evidence on what shapes well-being, and public
opinion research on what matters to Canadians.
The Government of Canada has made important progress over the years in
understanding how societal trends and budget investments affect people
differently. A logical next step is to focus more on the nature of these impacts.
This means assessing progress on multiple fronts so decisions about priorities
and investments are based on evidence of what will most improve Canadians’
quality of life.
The COVID-19 pandemic has affected many dimensions of Canadians’ quality of
life, from health impacts and job losses to mental health and social isolation.
Inequalities in our society and gaps in our social safety net have been revealed, and
many Canadians are reflecting on what they value most. Governments are also
assessing how best to promote recovery and build back better.
The experience of the pandemic in Canada and around the world has highlighted
the importance of thinking “beyond GDP.” It has long been understood that
standard measures of economic progress like GDP do not capture the full range of
the factors that, evidence shows, determine a good quality of life. GDP tells us how
overall economic activity is growing, but little about how growth is distributed
across our society. It fails to account for non-market economic activity, like care
responsibilities, and environmental harms.
Recognizing the importance of factors beyond GDP does not imply a reduced
focus on investing in a strong economy or prudent fiscal management; in fact
these are critical to achieving and sustaining quality of life. Increasing Canada’s
GDP through productivity growth, labour market participation, and investment is
crucial for raising Canada’s national standard of living now and into the future.

“One in two Canadians (53%) feel that stronger growth in Canada’s GDP is
important to their day-to-day life. However, far more (82%) feel that
measures beyond economic growth such as health and safety, access to
education, access to clean water, time for extracurricular and leisure
activities, life satisfaction, social connections, and equality of access to public
services are important to their day-to-day life. In fact, nearly three quarters
(71%) of respondents feel it is important that the government move past
solely considering traditional economic measurements like levels of
economic growth, and also consider other factors like health, safety, and the
environment when it makes decisions.”

Public Opinion Research by Earnscliffe

Commissioned by the Department of Finance Canada, August 2020

410 Annex 4
 Figure A4.2 While economic growth is
Objectives of the Quality of Life Framework important, there is now
for Canada growing international interest
in adopting broader measures
of progress for decision-
making. Building on the
OECD’s ‘‘Better Life Initiative,”
more than half of its member
countries now have “quality of
life” or “well-being” policy
initiatives. These differ in
design and application, but
share a common ethos: 1) a
well-functioning society
should focus on the well-
being of its citizens, 2) the
distribution of outcomes
across society matters, and 3)
governments should aim to
achieve sustainable outcomes
over time.
Governments have generally developed frameworks that track a set of indicators
to monitor how the country is faring from a quality of life standpoint, using this
evidence inform better policy and funding decisions based on the greatest
opportunities for cost-effective interventions.
With renewed attention on what Canadians value most, the pandemic offers an
opportunity to “build back better” toward a society that is more prosperous,
inclusive, and sustainable. Canada has been working towards these objectives
prior to the pandemic, making important investments in long-term economic
growth, poverty reduction and housing, and taking action on the climate crisis.
The OECD’s Better Life Initiative develops statistics that capture aspects of life that matter
to people and that help shape the quality of their lives

In 2019, New Zealand released the world’s first Well-being Budget based on the NZ
Treasury’s Living Standards Framework, setting well-being priorities at the outset of the
annual budget cycle.

Scotland’s National Performance Framework articulates outcomes related to quality of life

and sustainability, aligning the efforts of the public, private and not-for-profit sectors to
achieve them.

In 2020, France announced its green budgeting initiative, evaluating its national budget
against its Paris Agreement objectives.

Gender, Diversity, and Quality of Life Statement 411

A quality of life framework can bring together these and other objectives, such as
social cohesion and resilience. This integrated approach can serve as a north star
for policy development and budgeting; articulating priorities based on what
matters most for Canadians’ quality of life. Work to do this is well underway. In
December 2019, the Minister of Middle Class Prosperity and Associate Minister of
Finance was tasked with better integrating quality of life measurements into
decision-making and budgeting. Guided by conversations with experts, nations
that are advanced in their thinking about well-being, provinces and territories,
Indigenous partners, and feedback from Canadians themselves, officials across
the government have teamed up to create a draft “made-in-Canada” approach.
Figure A4.3 The Quality of Life Framework is based
Architecture of the Quality of Life on evidence about the factors that
Framework for Canada matter most to Canadians: prosperity,
health, environment, social cohesion,
and good governance. It uses
disaggregated data to look at the
distribution of these outcomes
through a “Fairness and Inclusion” lens,
and considers long-term dynamics
through a “Sustainability and
Resilience” lens. You can learn more
about the proposed framework in this
discussion paper on the Department of
Finance Canada website. Dialogue will
continue on the framework and its
evergreen set of indicators.
This framework is already beginning
to inform decisions. Consideration of how each budget proposal affects the
various dimensions and indicators of this framework helped achieve the right mix
of measures with an appropriate focus on building a strong, inclusive and
sustainable recovery. Moving forward, the framework will continue to underpin
how we monitor progress in “building back better” to improve Canadians’ quality
of life now and into the future.

“Last but not least, hard-wiring well-being into policymaking could

make an important contribution to “building back better”. Our
forthcoming Economic Survey looks at how measures of well-being
can be used in policymaking. Canada’s commitment to developing a
well-being framework can help to ensure that the slogan of “building
back better” is translated into an actionable set of outcomes and
concrete measures.”
– Angel Gurría, Secretary-General, OECD,
Address to the Empire Club of Canada, February 2021

412 Annex 4
Annex 5
Budget 2021 Impacts Report
This section considers how each Budget 2021 measure affects Canadians—both
who is most affected and the nature of the impacts at a high level.

The Canadian Gender Budgeting Act was passed by Parliament in December 2018,
enshrining the government’s commitment to decision-making that takes into
account the impacts of policies on all types of Canadians. The Act legislated the
government’s commitment to publish information on the gender and diversity
impacts of all new budget measures. Starting in Budget 2019, the government’s
budget documents have included analysis of the impacts of individual budget
measures, providing transparency into the analysis that is performed as part of
the policy development and budgeting processes. This analysis continues to be a
work in progress, and is often limited by the availability of data, especially for
certain identity factors such as race, gender identity, and disability. But under the
leadership of the Minister for Women and Gender Equality and Rural Economic
Development, the Minister of Diversity and Inclusion and Youth, the Minister of
Employment, Workforce Development and Disability Inclusion, and the Minister
of Middle Class Prosperity and Associate Minister of Finance, departments
continue to work at modernizing and improving the quality of this analysis, with
particular attention to the intersectional analysis of race, Indigeneity, disability,
and gender identity. These insights were instrumental in informing the
development and evolution of the COVID-19 Economic Response Plan. Going
forward, new Budget 2021 investments in Statistics Canada should help improve
Canadians’ access to disaggregated data.

Reflecting the feedback of experts who have been advising the Department of
Finance Canada on its gender budgeting practices on a periodic basis, this report
devotes more space to measures that are more relevant from a gender and
diversity standpoint, while ensuring a basic level of coverage for all budget
measures. Budget 2021 measures which are expected to advance the Gender
Results Framework are placed at the beginning of this report.

Impacts Report 413

This report is also expanded this year to contain additional information on the
nature of the impacts expected from each budget measure, reflecting the
government’s commitment to better incorporate quality of life measurements into
decision-making and budgeting. As outlined in Measuring what Matters, the
government is beginning to track progress on a range of fronts to ensure that
priorities and decision-making are based on evidence of what will most improve
current and future Canadians’ quality of life. As an illustration of initial steps in that
direction, this report includes information on how individual budget measures
advance various dimensions and indicators of the draft quality of life framework.

414 Annex 5
Notes on Terms and Fields
Title and Context: Each title is linked with its corresponding entry in the budget
text. Click the title of a GBA+ to view the description of the measure.

Text section: contains information on the key impacts of the measures from a
gender and diversity and quality of life perspective, including direct and indirect
impacts, both positive and negative, where applicable. Key facts and data sources
are included in this section.

GBA+ Timing: GBA+ can be conducted at various stages throughout the

development of a government policy, program, or initiative. High-quality GBA+
requires early attention to develop effective options and strategies for delivering
programs and services to Canadians. For GBA+ to be most valuable, it is ideally
built directly into the early stages of the policy development process. This section
identifies when the GBA+ was conducted.
Early in the idea development phase (when proposals are being
developed)
Mid-point (as proposals are being finalized)

Later stage (after proposals are finalized, prior to submission of

proposal)
GBA+ was previously performed on the existing program (in cases
where an existing program is seeking a renewal of funding). If the
proposal is for an existing program, it was either modified to reflect
the changes to the program or was confirmed to reflect that the
program hasn’t changed since the GBA+ was last conducted.
Quality of Life Impacts: Describes the primary domains of the framework each
budget measure is expected to advance and lists relevant indicators. Primary
domains for each measure are indicated through a darker “active” icon.

Prosperity – the economic domain, encompassing income and

growth, employment and skills and learning and economic security.

Health – physical and mental health, and care systems that enable
people to thrive through all stages of life.

Environment – natural and built environments that meet human

needs such as clean air and water, as well as ecological integrity and
stewardship dimensions such as greenhouse gas emissions.

Society – includes culture and identity, inclusion, social cohesion and

connection, and time use.
Good Governance – includes democracy and institutions, safety and
security and justice and human rights.

Impacts Report 415

Target Population: Describes the group whom the measure is intended to
benefit. This section is not intended to describe the expected impacts, but rather
the motivation and policy intent behind the measure.

Expected Benefits

Gender: This section collects information on the expected gender characteristics

of the benefitting group. The scale is explained as follows:

Predominantly men (e.g. 80 per cent or more men)

60 per cent - 79 per cent men

Broadly gender-balanced

60 per cent - 79 per cent women

Predominantly women (e.g. 80 per cent or more women)

Income Distribution: This indicator describes expected impacts of the measure from an
income distributional perspective. The scale is explained as follows:

Strongly benefits low income individuals (Strongly progressive)

Somewhat benefits low income individuals (Somewhat

progressive)

No significant distributional impacts

Somewhat benefits high income individuals (Somewhat

regressive)

Strongly benefits high income individuals (Strongly regressive)

Inter-generational: Inter-generational impacts identify the age cohort receiving

the benefits or which is likely to disproportionately benefit.

Primarily benefits youth, children and/or future generations

No significant inter-generational impacts or impacts generation

between youth and seniors

Primarily benefits seniors or the baby boom generation

Additional Characteristics: Highlights other notable characteristics of

beneficiaries (i.e. race, region, ability, Indigeneity, region, sector, etc.).

Gender Results Framework (if applicable): For measures that advance a goal or
objective of Canada’s Gender Results Framework (GRF), an icon and associated
GRF pillar is listed. Although only gender is included in the title of the Framework,
it is aligned with the Government of Canada’s policy of GBA+, ensuring that
gender is considered in relation to other intersecting identity factors.

416 Annex 5
Additionally, a measure may advance more than one goal under one or more
pillars; however, in this report, only the primary pillar is listed. More information
on these goal statements, objectives, and indicators can be found on Women and
Gender Equality Canada's website: https://women-gender-
equality.canada.ca/en/gender-results-framework.html.

GBA+ Responsive Approach (if applicable): Includes any effort in place to

minimize possible negative impacts of a measure on certain individuals or
groups, or any plans to proactively reduce barriers to participation.

Impacts Report 417

Education and Skills Development
The following Budget 2021 measures are expected to advance the Education and
Skills Development Pillar under the Gender Results Framework.

Helping Youth and Students Build Job Skills and Connect with
Employers
Investments in youth employment and job Quality of
skills training will directly benefit youth Life Impacts
(ages 15-30), including vulnerable youth
Prosperity – Employment; Child, student and adult skills;
facing multiple barriers to employment and
Youth not in employment, education or training
groups under-represented in the labour
Target Population: Youth
market such as racialized and Indigenous
Expected Benefits:
youth, women in certain skilled trades, as
Gender:
well as some newcomers to Canada. It is
Income Distribution:
also expected that young women will see
Inter-generational:
slightly more benefit than men, as young
Vulnerable and Under-
women have been disproportionately Additional
represented Youth, Young
economically affected by the pandemic Characteristics:
Women
compared to other demographics, including GBA+ Timing:
experiencing higher rates of job loss. Gender Results Education and Skills
Framework Development
Data Sources: Statistics Canada

Opportunities for Businesses and Young Workers Through Mitacs

This program directly benefits youth since it Quality of Life
will expand the number of work-integrated Impacts
learning opportunities for post-secondary
students. It will also directly benefit Prosperity – Employment; Future outlook; Productivity
businesses that get access to highly-
Target Population: Students, Businesses
qualified individuals. As Mitacs’ internships
Expected Benefits:
tend to focus on science, technology,
engineering and mathematics (STEM) Gender:

subjects, in which men are overrepresented, Income Distribution:

it is likely that men would benefit more than Inter-generational:
women from these opportunities. Relative to Additional
Students, Businesses
their share of the labour force, visible Characteristics:
minorities are also more likely to work in GBA+ Timing:
STEM fields. Women make up only 34 per Gender Results Economic Participation
cent of STEM bachelor degree holders and Framework and Prosperity
men account for 53 per cent of college
GBA+ Responsive Approach
enrolments in STEM programs. Men are also
more highly-represented among Canadian Mitacs is committed to improving diversity as an
organization and among program participants. It has a
business owners.
strategy in place to improve equity and diversity, particularly
Data Sources: Statistics Canada among four underrepresented groups: women, visible
minorities, people with disabilities, and Indigenous peoples.

418 Annex 5
 Supporting Vulnerable Children and Youth during the Recovery
This program directly benefits youth as it Quality of
specifically targets students who are at risk Life Impacts
of dropping out of school. Since students at Prosperity – Post-secondary attainment; Child, student and
the greatest risk of dropping out are those adult skills; Youth not in employment, education or training
who face systemic and individual barriers in Society – Sense of belonging to local community
their daily lives, the program’s main Target Population: Vulnerable Youth
beneficiaries will be students from low- Expected Benefits:
income households, marginalized and Gender:
racialized communities, and those living in Income Distribution:
rural and remote regions. Inter-generational:
Data Sources: Internal Administrative Data, Students, Marginalized and
Additional
Racialized Communities, Rural and
Statistics Canada Characteristics:
Remote Regions
GBA+ Timing:
Gender Results Education and Skills
Framework Development

Creating New Opportunities for Skilled Tradespeople

This program will disproportionately benefit Quality of
young men as they are overrepresented in Life Impacts
most Red Seal trades. 53 per cent of Prosperity – Employment; Student and adult skills; Post-
apprentices are under 25 years of age, secondary attainment
86 per cent are men, 91 per cent are Apprentices and Employers
Target Population:
Canadian-born, and 56 per cent had a high who Hire Them

school diploma as their highest level of Expected Benefits:

Gender:
education when starting an apprenticeship.
Income Distribution:
Women comprised about 14 per cent of Inter-generational:
apprentices overall, and fewer women than Additional
Students
men apprentices were registered in a Red Characteristics:
Seal trade (59 per cent versus 81 per cent). GBA+ Timing:
Across the top 10 Red Seal trades, women Gender Results Education and Skills
were more likely than men to be hairstylists Framework Development
or cook apprentices. However, the number
of women entering an apprenticeship GBA+ Responsive Approach
program in a male-dominated trade (e.g. An additional $5,000 per apprentice position ($10,000 in
carpentry, electrical) has more than doubled total) will be provided to incent employers to hire and train
apprentices from underrepresented groups, including
in the last decade. Indigenous apprentices
women, Black and racialized Canadians.
comprised about six per cent of apprentices
overall, while immigrants comprised about
nine per cent apprentices overall.

Data Sources: Statistics Canada

Impacts Report 419

 Helping Employers Train and Recruit Workers
This program is expected to benefit men Quality of
and women relatively equally, with benefits Life Impacts
accruing differently depending on the Prosperity – Employment; Labour market participation;
specific projects and sectors supported. Adult skills
Projects in the health sector are likely to Displaced Workers, Lower-skilled
Target Population:
Individuals
disproportionately benefit women, as they
Expected Benefits:
currently hold 80 per cent of jobs in the
Gender:
sector. Projects in the energy sector are Income Distribution:
likely to benefit men disproportionately, as Inter-generational:
women make up 22 per cent of the energy Additional Health Sector, Energy Sector,
production workforce, 55 per cent of which Characteristics: Construction Sector
are in business administration or GBA+ Timing:
accounting. Gender Results Education and Skills
Framework Development
Data Sources: Statistics Canada
GBA+ Responsive Approach
The program will integrate criteria into its project proposal
assessment process to ensure that at least 40 per cent of
program participants are from underrepresented groups
such as women and persons with disabilities.

Supporting Skills for Success

While supports will be available to all Quality of Life
Canadians, including those with higher Impacts
education and in high skilled jobs, this Prosperity – Employment; Student and adult skills; Future
program will disproportionately benefit outlook
adults with low skills, with gender impacts Target Population: Low-skilled Workers
expected to be roughly even. Men display Expected Benefits:
higher numeracy proficiencies than women Gender:
while, in general, women and men display Income Distribution:
Inter-generational:
similar proficiencies in literacy. In addition,
Additional
newcomers show lower proficiency in Low-skilled Canadians
Characteristics:
literacy and numeracy than the Canadian- GBA+ Timing:
born population, while 35 per cent of off- Gender Results Education and Skills
reserve First Nations people and 50 per cent Framework Development
of Métis had literacy skills required to
compete in a knowledge-based economy, GBA+ Responsive Approach
compared with 57 per cent for non-
To maximize participation of vulnerable groups,
Indigenous adults. significant and targeted outreach will be conducted
Data Sources: Statistics Canada with stakeholder groups that have expertise and
experience serving these populations prior to launching
calls for proposals. Additionally, data collection and
analysis will occur for each project to assess
participation.

420 Annex 5
 Ensuring Communities Recover Through Skills Training and
Workforce Planning
Benefits of this program are expected to be Quality of
gender balanced, accruing differently Life Impacts
depending on specific projects supported. Prosperity – Household incomes; Employment; Student and
Groups traditionally underrepresented in adult skills
Society – Sense of belonging to local community
the labour market such as youth, persons
Underrepresented Groups, All
with disabilities, newcomers, Black Target Population:
Canadians
Canadians and other racialized individuals,
Expected Benefits:
Indigenous peoples and older workers may
Gender:
benefit more given that 75 per cent of Income Distribution:
funding will be dedicated to addressing the Inter-generational:
labour market needs of these populations. Additional
Underrepresented Groups
In addition, the program will ensure that the Characteristics:
needs of diverse communities including GBA+ Timing:
urban, rural and remote are considered.
Gender Results Education and Skills
Data Sources: Internal administrative data, Development
Framework
Statistics Canada

Extending Federal Supports for Adults Who Return to School Full-

Time
This program directly targets low and Quality of
middle-income adults who have been out of Life Impacts
high school for at least ten years and Prosperity – Post-secondary attainment; Adult skills; Financial
choose to return to post-secondary well-being; Future outlook
education on a full-time basis. Adult Target Population: Adult Students
students face significant financial pressures Expected Benefits:
related to housing costs, dependants Gender:
Income Distribution:
(47 per cent reported caring for a
Inter-generational:
dependant in 2018), education savings for Additional
children, pre-existing debts and saving for Students
Characteristics:
retirement. Women account for GBA+ Timing:
approximately 64 per cent of the recipients Gender Results Education and Skills
of the adult learner top-up grant to-date. Framework Development
Overall, an estimated 60 per cent of top-up
grant recipients say the grant was an
important factor in their decision to return
to school.
Data Sources: Internal Administrative Data,
Statistics Canada

Impacts Report 421

 Doubling the Canada Student Grants for Two Additional Years
This program directly targets students from Quality of Life
low and middle-income families. Women Impacts
make up a majority of students in post- Prosperity – Financial well-being; Post-secondary attainment;
secondary education, and represented 60 Future outlook
per cent of student financial aid recipients in Students from Low and Middle-
Target Population:
income Families
2018-19. Additionally, more than two thirds
of student financial aid recipients are under Expected Benefits:
the age of 25 (72 per cent in 2018-19). Gender:
This program will provide additional Income Distribution:
financial aid to students with disabilities and Inter-generational:
students with parents who have above-
Additional Low-income Students, Students
average levels of total financial need Characteristics: with Disabilities
compared to their peers.
GBA+ Timing:
Data Sources: Internal Administrative Data, Gender Results Education and Skills
Statistics Canada Framework Development

Providing Relief from Student Debt

As of March 2020, women represented Quality of
61 per cent of all borrowers with Life Impacts
outstanding federal student loan debt. Prosperity – Household debt service ratio; Financial
Women are also more likely to require well-being
assistance repaying student loan debts, Target
Youth with Student Debt
representing 66 per cent of participants in Population:
the Repayment Assistance Plan. Expected Benefits:
Gender:
Approximately half of all Repayment Income Distribution:
Assistance Plan recipients in 2018-19 were Inter-generational:
below the age of 30, and 85 per cent had Additional
Students
incomes low enough that they did not have Characteristics:
to make payments on their loans. GBA+ Timing:
Approximately three quarters of all Gender Results Education and Skills
repayment assistance recipients have been Framework Development
out of their studies for less than five years.
Data Sources: Internal Administrative Data,
Statistics Canada

422 Annex 5
 Expanding Access to Supports for Students and Borrowers with
Disabilities
This program directly targets an estimated Quality of
40,000 current and former students per year Life Impacts
with persistent and prolonged disabilities. Prosperity – Post-secondary attainment; Financial well-being;
Women currently represent 61 per cent of Future outlook
Society – Accessible environments
recipients of the Canada Student Grant for
Persons with Disabilities and 65 per cent of Target Population: Students with Disabilities

recipients under the Repayment Assistance Expected Benefits:

Gender:
Plan for Persons with Disabilities, which
Income Distribution:
provides loan deferrals and forgiveness Inter-generational:
exclusively to low-income borrowers who Additional
Students with Disabilities
experience difficulty making student loan Characteristics:
payments. Among the broader population, GBA+ Timing:
15 per cent of women and 10 per cent of Gender Results Education and Skills
men report having a disability, and students Framework Development
with disabilities generally have the highest
levels of need not covered by student
financial assistance programs.
Data Sources: Internal Administrative Data,
Statistics Canada

Providing High-quality Education for First Nations

These investments will benefit individuals of Quality of
all genders, however the greatest gains may Life Impacts
be for First Nations boys and men who are Prosperity – Child, student and adult skills; Youth not in
less likely to complete their secondary employment, education or training; Future outlook
education. Students, teachers and Health – COVID-19 incidence
Society – Indigenous languages; Sense of belonging to local
communities will benefit from measures to
community
keep schools safe during COVID-19. In
Target Population: First Nations Children and Adults
2016, 44 per cent of the First Nations Living on Reserve
population on reserve ages 18 to 24 had Expected Benefits:
completed high school, compared to Gender:
88 per cent of the non-Indigenous Income Distribution:
population. Investments in adult education
Inter-generational:
will allow First Nations to offer programs
Additional
that respond to the unique, often gendered First Nations
Characteristics:
circumstances that prevent people from GBA+ Timing:
completing their high school education. Gender Results Education and Skills
Data Sources: Statistics Canada Framework Development

Impacts Report 423

 Promoting Official Languages
Funding for official languages is expected to Quality of Life
directly benefit students and youth from Impacts
official language minority communities who Prosperity – Child, student and adult skills; Future outlook
will have greater access to opportunities to Society – Knowledge of official languages; Sense of
pride/belonging to Canada; Sense of belonging to local
study in their language of choice and benefit
community
from additional community spaces and
Good Governance – Confidence in public institutions
educational infrastructure. In Canada, more
Target Population: Students in Official Language
than a million Francophones live outside Minority Communities
Quebec and more than 1.1 million Expected Benefits:
Anglophones live in Quebec. Knowledge of Gender:
official languages and an increase in training Income Distribution:
and bilingualism will improve employment Inter-generational:
opportunities for young Canadians, Official Language Minority
Additional
Communities, Teachers,
especially for those living in remote or rural Characteristics:
Construction Sector
communities. Post-secondary institutions
GBA+ Timing:
train the bilingual workforce required for the
Gender Results Education and Skills
vitality of official language minority Development
Framework
communities and the promotion of
bilingualism, such as French-language
teachers and early childhood educators. As
women make up 70 per cent of education
services, they are expected to indirectly
benefit. Investments will also support jobs in
construction, with these indirect benefits
accruing disproportionately to men.
Data Sources: Statistics Canada, Provincial
Government Reports

Supporting Post-secondary Education in the North

The measure is expected to benefit Quality of
residents of the Northwest Territories, with Life Impacts
an emphasis on youth. Indigenous peoples
represent over 50 per cent of the Prosperity – Post-secondary attainment; Future outlook
population in the Territories. The Target Population: Residents of the Northwest
transformation of the college to a Territories
polytechnic university will also benefit Expected Benefits:
lower-income individuals and families, Gender:
through increased access to degree Income Distribution:
programs along with applied training in Inter-generational:
order to obtain skills needed in the Additional Residents of the Northwest
workforce. Characteristics: Territories, Indigenous peoples
GBA+ Timing:
Data Sources: Statistics Canada
Gender Results Education and Skills
Framework Development

424 Annex 5
Supporting Indigenous Post-Secondary Education during COVID-19
These investments will benefit Indigenous Quality of
students, the majority of whom are young Life Impacts
women. Women have historically made up Prosperity – Child, student and adult skills, Post-secondary
approximately 69 per cent of students attainment
Society – Indigenous language; Vibrant communities
funded through the Post-Secondary
Student Support Program. Post-secondary Target Population: First Nations, Inuit and Métis
Nation Students
education attainment rates of Indigenous
Expected Benefits:
people are approximately 18 per cent lower Gender:
than those of their non-Indigenous Income Distribution:
counterparts, and COVID-19 interruptions Inter-generational:
risk accelerating these inequalities. Additional First Nations, Inuit and Métis
Obtaining a post-secondary qualification Characteristics: Nation Students
can have a significant positive impact. In GBA+ Timing:
2016, the employment rate for the First Gender Results Education and Skills
Framework Development
Nations population living on reserve with
no certificate, diploma or degree was
33 per cent. This increased to 49 per cent
for those with a high school diploma or
equivalent, and again to 65 per cent for
those who had attained a post-secondary
certificate, diploma or degree. Indigenous-
led post-secondary institutions also
preserve and strengthen Indigenous
languages and cultures.
Data Sources: Statistics Canada, Indigenous
Services Canada

Impacts Report 425

 Teaching Kids to Code
CanCode has a focus on reaching girls, Quality of Life
Indigenous youth, youth with disabilities, and Impacts
youth living in rural, remote, and northern Prosperity – Child, student and adult skills; Future outlook
communities to increase their representation
in science, technology, engineering, and Target Population: Youth, Teachers
mathematics training. Expected Benefits:
About seven per cent of Canadians under the Gender:
age of 24 are Indigenous and, in CanCode’s
Income Distribution:
first three years, between 6 and 9 per cent of
participants have been Indigenous youth. Inter-generational:
Between 45 and 49 per cent of CanCode Additional Indigenous Youth, Rural and
Characteristics: Remote Communities
participants were girls, consistent with their
48.6 per cent share of the school-aged GBA+ Timing:
population. Gender Results Education and Skills
About 19 per cent of Canadians live in rural Framework Development

areas, and between 16 and 20 per cent of GBA+ Responsive Approach

CanCode participants were youth living in
By ensuring that all its programs are free to participants,
rural areas. About 4 per cent of the population CanCode helps to reduce income-based barriers to
aged 15 to 24 report having a disability, participation. CanCode also targets gender-balanced
compared with between one and 2.5 per cent cohorts in its programming.
of CanCode recipients.
Data Sources: Internal program data, Statistics
Canada

426 Annex 5
Economic Participation and Prosperity
The following Budget 2021 measures are expected to advance the Economic
Participation and Prosperity Pillar under the Gender Results Framework.

Establishing a Canada-Wide Early Learning and Child Care System

This measure primarily targets parents with Quality of Life
young children, particularly mothers who often Impacts
retain primary caregiving responsibilities. It will Prosperity – Access to early learning and child care;
also be of particular benefit to early childhood Employment; GDP per capita; Youth not in education,
employment or training
educators, 96 per cent of whom are women.
Health – Children vulnerable in early development
Women, particularly those with young Society – Time use
children, have lower labour market
Target Population: Families with Young Children
participation rates than men. In 2019, only
83 per cent of women between the ages of 25 Expected Benefits:
and 44 participated in the labour force, Gender:
whereas men in the same age range Income Distribution:
participated at a rate of 91 per cent. Young
Inter-generational:
women with children are at higher risk of not
Parents currently in, wanting to
being in education, employment or training.
Additional remain in, or looking to join the
Access to affordable early learning and child
Characteristics: labour force, Early Childhood
care will increase women’s labour market Educators
participation and shrink the gender
GBA+ Timing:
participation gap as more mothers enter the
Economic
workforce. Gender Results
Participation and
Families of all income ranges will see Framework Prosperity
reduction in fees. Funding for a Canada-wide GBA+ Responsive Approach
early learning and child care system will also
support efforts to attract and retain high- The federal government will work with provincial and
quality early childhood educators, who are territorial partners to prioritize the provision of high-
quality child care through support for a robust and
predominantly women and face challenges
growing not-for-profit sector, and ensure inclusion and
such as low wages, poor working conditions, equality of opportunity for children of all socio-economic
and a lack of career advancement backgrounds, including Black and other racialized
opportunities. children, Indigenous children in urban and northern
There is significant research that shows high- communities, children from Official Language minority
communities and children with disabilities.
quality child care supports positive child
development outcomes such as improved
cognition and social skills, particularly among
children from disadvantaged families.
Data Sources: Statistics Canada, internal
administrative data

Impacts Report 427

 Indigenous Early Learning and Child Care
This investment will benefit Indigenous Quality of Life
women, children, and families by increasing Impacts
opportunities for labour force participation Prosperity – Access to early learning and child care;
and reducing unpaid caregiving time use Employment; GDP per capita; Future outlook, Youth not in
education, employment or training
pressures, contributing to healthy child
Health – Children vulnerable in early development
development, and benefiting workers in the
Society – Indigenous languages; Time use
sector. The labour market impacts of COVID- Indigenous Families with
19 have had a deeper and longer-lasting Target Population:
Young Children
impact on Indigenous people. Employment Expected Benefits:
among Indigenous women, in particular, Gender:
remains below pre-pandemic levels. Income Distribution:
Inter-generational:
Access to flexible, high quality child care has
Additional Indigenous Families, Early
been shown to increase participation in work, Characteristics: Childhood Educators
education or training by parents—particularly GBA+ Timing:
mothers—and could play a role in addressing Economic
Gender Results
these disparities. Participation and
Framework Prosperity
First Nations, Inuit, and Métis children are
more likely to live in poverty compared to the
overall Canadian average. Access to high
quality, culturally relevant programming will
help improve school readiness, long-term
development, and life outcomes, and
empower young children with a strong sense
of identity.
These investments will also benefit Indigenous
early childhood educators, who are
overwhelmingly women, by allowing child care
providers to raise wages, provide upskilling
opportunities, and create training programs
and jobs for new entrants.
Data Sources: Statistics Canada, ESDC

428 Annex 5
 Strengthening Long-Term Care and Supportive Care
The pandemic has disproportionately Quality of
affected the long-term and supportive care Life Impacts
sectors in Canada. Over 2,500 care homes Prosperity – Employment; Wages
experienced an outbreak between March 1, Health – Long-term care (access and quality); Home care
needs met; Health-adjusted life expectancy
2020, and February 15, 2021, resulting in
Society – Sense of belonging to local community; Someone
the deaths of over 14,000 residents and
to count on; Time use
close to 30 staff. This represents more than
Target Seniors and Persons with
two-thirds of Canada’s overall COVID-19
Population: Disabilities
deaths. About 80,000 residents and staff of
Expected Benefits:
LTC and retirement homes have been
Gender:
infected, representing 10 per cent of all
Income Distribution:
COVID-19 cases in Canada.
Inter-generational:
This funding directly benefits seniors and Persons with Disabilities, Personal
Additional
persons with disabilities who require long- Support Workers, Newcomers or
Characteristics:
term care and supportive care. Women are Immigrants
expected to particularly benefit as 65 per GBA+ Timing:
cent of patients in residential continuing Gender Results Economic Participation
Framework and Prosperity
care facilities are women.
Health care providers, particularly personal
support workers, and informal caregivers
are also expected to benefit from the
additional work and improved working
conditions created through this funding.
The vast majority of care providers in
supportive care are women, with a
significant portion of these individuals
being newcomers or immigrants, especially
among personal support workers.
Of the 245,500 people employed as nurse
aides, orderlies and patient service
associates in Canada in 2016, more than a
third (87,925) were immigrants. Women
accounted for the majority of these
workers among both immigrants (86 per
cent) and non-immigrants (87 per cent).
Data Sources: CIHI, Statistics Canada

Impacts Report 429

 Supporting Black Canadian Communities
Not-for-profit organizations and charities
serving Black communities support a range Quality of
of needs, including health and well-being Life Impacts
services, educational programming, skill Prosperity – Child, student and adult skills; Future outlook
development workshops, employment Health – Self-rated mental health; Children vulnerable in
services, and other initiatives addressing early development
gaps and barriers due to discrimination and Society – Sense of belonging to local community; Satisfaction
unfair treatment in Canadian institutions. with personal relationships
Good Governance – Discrimination and unfair treatment
The majority of Black Canadians are under
Target Population: Black Canadians
30 years old and live in census metropolitan
Expected Benefits:
areas. Compared to the Canadian average,
Gender:
Black Canadians are more likely to face
Income Distribution:
financial insecurity, and they are more likely
Inter-generational:
to be newcomers to Canada.
Additional Black Canadians, Newcomers to
Data Sources: Statistics Canada Characteristics: Canada
GBA+ Timing:
Gender Results Economic Participation
Framework and Prosperity

Helping Workers Transition to New Jobs

This initiative will help underemployed, Quality of
lower income, mid-career Canadians in Life Impacts
disrupted industries transition to higher- Posterity – Firm growth; Household incomes; Student and
paying jobs in newer industries. adult skills; Future outlook
Target Population: Workers Facing Transition
Additionally, by including processes to
Expected Benefits:
mitigate hiring biases for racialized
Gender:
Canadians, women, and older workers, this Income Distribution:
initiative will specifically help women and Inter-generational:
other underrepresented workers transition Additional Workers Facing Transition, Firms
into new industries. This measure will also Characteristics: Seeking Skilled Workers
benefit companies that are able to hire from GBA+ Timing:
new pools of workers to help their Gender Results Economic Participation
businesses grow. However, benefits to Framework and Prosperity
companies will likely be unevenly GBA+ Responsive Approach
distributed as 63.5 per cent of small and
This initiative is designed to proactively mitigate risks and
medium-sized enterprises are majority-
hiring biases that disadvantage certain groups, particularly
owned by men. racialized minorities, women, and older workers, while also
encouraging their participation in growing sectors of the
economy.

430 Annex 5
 Reforming Canada’s Pardon Process
Approximately 10 per cent of Canadians have a Quality of
criminal record. This initiative is expected to Life Impacts
facilitate their reintegration into society. This
Prosperity – Employment; Financial well-being
measure will primarily benefit men, who in 2018- Health – Self-rated mental health
19, represented 87 per cent of those admitted to Society – Sense of belonging to community
correctional facilities. Groups that are Target Individuals with a Criminal
overrepresented in the criminal justice system Population: Record
are also expected to directly benefit, including Expected Benefits:
Indigenous peoples, who account for 30 per cent Gender:
of admissions to federal custody, while only Income Distribution:
accounting for five per cent of the Canadian Inter-generational:
population, as well as Black Canadians, who Additional Indigenous peoples, Black
account for 7.2 per cent of federal inmates Characteristics: Canadians
despite representing 3.5 per cent of Canadians. GBA+ Timing:
Economic
In addition, the reduction of the application fee Gender Results
Participation and
and funding for community support services will Framework Prosperity
increase accessibility to pardons, particularly for
lower-income and marginalized applicants. More
broadly, this measure will benefit not only
applicants, but society in general. For example,
Canadians who obtain a pardon are more likely
to gain employment and suitable housing.
Data Sources: Statistics Canada, Public Safety
Canada, Office of the Correctional Investigator

Impacts Report 431

 Helping Charities, Non-profits, and Social Purpose Organizations
Grow via the Social Finance Fund
The Social Finance Fund was designed Quality of Life
through a lens of equity and inclusion to Impacts
support social purpose organizations (e.g. Prosperity – Child, student and adult skills; Future outlook
charities, non-profits, mission-focused for- Health – Self-rated health; Self-rated mental health
profits, social enterprises). This initiative is Society– Social participation; Volunteering; Sense of meaning
expected to have significant positive impacts and purpose
for underrepresented and marginalized Social purpose Organizations and
groups served by these organizations, Target Population: their Clients, Vulnerable and
Marginalized Groups
including women, Indigenous communities,
low-income individuals, Black and racialized Expected Benefits:
Gender:
people, recent immigrants and refugees,
Income Distribution:
members of the LGBTQ2 community, and Inter-generational:
persons with disabilities. Moreover, a social Additional
equity investment lens will help ensure Social Sector
Characteristics:
diversity analysis is incorporated into GBA+ Timing:
investment decision-making processes. This Gender Results Economic Participation
lens will be applied to wholesaler selection, Framework and Prosperity
disaggregated data collection, reporting
GBA+ Responsive Approach
requirements, and other elements of the
Social Finance Fund's design. The majority of Social investment managers will develop plans to monitor
and ensure that funds reach a diversity of social purpose
workers in social purpose organizations are
organizations and beneficiary populations. In addition, the
women. change in funding instrument to conditionally repayable
Data Sources: Statistics Canada, OECD, contributions is likely to promote greater investments into
Canada Social Enterprise Survey currently underserved segments of the social purpose sector.

432 Annex 5
 Helping Charities, Non-profits, and Social Purpose Organizations
Grow via the Investment Readiness Program
The renewed program will fund social purpose Quality
organizations (e.g. charities, non-profits, social of Life
enterprises) to advance a broad range of socio- Impacts
economic objectives for diverse populations. The Prosperity – Firm growth; Investment in R&D; Thriving
program is committed to providing equitable non-profit sector
Society – Sense of belonging to local community
access to all Canadian social purpose
organizations, and it will build on partnerships Target
Social Purpose Organizations
with organizations such the Canadian Women’s Population:
Foundation and National Aboriginal Capital Expected Benefits:
Gender:
Corporations Association to support social
Income
purpose organizations facing barriers in Distribution:
accessing social financing, such as those led by Inter-
or serving women, Indigenous people, and more. generational:
The renewed program will strengthen Vulnerable and Marginalized
Additional
employment opportunities for women, Groups Served by Social Purpose
Characteristics:
Indigenous people, persons with disabilities, Organizations
Black Canadians, LGBTQ2, and other GBA+ Timing:
marginalized groups to support a more inclusive Gender
Economic Participation
and diverse workforce. Results
and Prosperity
Framework
Data Sources: Statistics Canada, Women and
Gender Equality Canada, Canadian Social
Enterprise Survey, Charity Village, Imagine
Canada, Ontario Nonprofit Network, Canadian
Women's Foundation, Canada Council for the Arts

Support for Personal Support Workers

Personal support workers are often captured Quality of
under the occupational categories of nurse Life Impacts
aides, orderlies and patient service Prosperity – Financial well-being
associates. The 2016 Census indicates that Target
Frontline Care Workers
86 per cent of these front-line care providers Population:
were women and more than one-third were Expected Benefits:
immigrants (compared to one-quarter of all Gender:
other occupations). This sub-group was also Income Distribution:
Inter-generational:
more likely to identify as a visible minority
Care Workers, Members of Visible
(34 per cent) than workers in other Additional
Minority Communities,
occupations (21 per cent), with Black and Characteristics:
Newcomers
Filipino women especially overrepresented. GBA+ Timing:
While the initiative is preliminarily assessed Gender Results Economic Participation
as mainly benefiting women, my65+ is open Framework and Prosperity
to both Service Employees International
Union’s members and their families, and may
have broader benefits once the eligibility
criteria for receipt of funding are finalized.
Data Sources: Statistics Canada

Impacts Report 433

 Investing in Telefilm Canada and Encouraging Diverse Voices in
Canadian TV and Film
Funding will allow Telefilm Canada to continue Quality of
to support audiovisual production excellence Life Impacts
in Canada by modernizing its current suite of Prosperity – Employment
programs in response to increasing Society – Social participation; Sense of pride/belonging
digitization in the audiovisual sector and to Canada
global demand for content. In addition, Target
Audiovisual Industry
targeted funding for Telefilm Canada and the Population:
Canada Media Fund will be used to directly Expected Benefits:
benefit underrepresented professionals in the Gender:
Income
industry, including women, people with
Distribution:
disabilities, LGBTQ2, people of colour, Black, Inter-generational:
and Indigenous creators. Women, especially Black, Indigenous, People of
Additional
women of colour and Indigenous women, Colour, People with Disabilities,
Characteristics:
continue to be underrepresented across most LGBTQ2
jobs in film and television production in GBA+ Timing:
Canada. Women of colour represent less than Gender Results Economic Participation
one per cent of TV writing roles and five per Framework and Prosperity
cent of directing roles. While women make up
more than half of arts and culture workers
generally in Canada, they continue to earn a
lower average hourly rate than men who work
in the sector.
Data Sources: Women in View, 2019, Statistics
Canada

434 Annex 5
 Revitalizing Tourism
The impact of COVID-19 on the tourism
Quality of Life
sector has been most acute among
Impacts
underrepresented groups, as the sector
employs a large number of women, youth, Prosperity – Employment
Society – Sense of pride/belonging to Canada;
Indigenous peoples, immigrants, and
Vibrant communities
LGBTQ2 Canadians. For example, women
Target Population: Tourism Sector
occupy 51.4 per cent of total jobs in the
tourism sector, compared to 48.2 per cent Expected Benefits:
across all industries, while youth make up Gender:
30.7 per cent compared to 12.7 per cent, Income Distribution:
and Indigenous persons occupy 4.1 per cent Inter-generational:
of jobs in the sector compared to Additional Tourism Sector, Rural
3.7 per cent of all employment. Tourism Characteristics: Communities
businesses are more likely to be owned by GBA+ Timing:
underrepresented groups than those in Gender Results Economic Participation
other sectors. For example, 30 per cent of Framework and Prosperity
businesses in the tourism sector are fully
owned by women, versus 16 per cent of
businesses in the broader economy.
The announced tourism measures are
designed to benefit the most affected
groups in the sector and rural communities
dependent on tourism. The economic
stimulus impacts of this spending will
benefit all Canadians.
Data Sources: Statistics Canada

Impacts Report 435

Leadership and Democratic Participation
The following Budget 2021 measures are expected to advance the Leadership
and Democratic Participation Pillar under the Gender Results Framework.

Supporting Women Entrepreneurs

The target group of this proposal is women Quality of
entrepreneurs. Only 16 per cent of all small Life Impacts
and medium-size enterprises (SMEs) are
Prosperity – Firm growth; Employment
majority owned by women, compared to
Good Governance – Representation in senior
63.5 per cent majority owned by men. leadership positions
Women entrepreneurs are not a Target Population: Women Entrepreneurs
homogenous group. Women with different, Expected Benefits:
and sometimes intersecting, demographic Gender:
characteristics pursue entrepreneurship.
Income Distribution:
Women entrepreneurs are strongly Inter-generational:
represented among Indigenous and to a Additional Women and Indigenous SME
lesser extent, visible minority SME owners. Characteristics Owners
For example, approximately 19 per cent of GBA+ Timing:
visible minority entrepreneurs are women, Gender Results
Leadership and
and 36 per cent of Indigenous-owned SMEs Democratic
Framework Participation
are partially or wholly owned by women.
Data Sources: Statistics Canada, OECD, GBA+ Responsive Approach
Diversity Institute Support will be targeted to entrepreneurs from diverse
backgrounds, including Indigenous, Black, immigrant, and
LGBTQ2 women.

Supporting Entrepreneurs, Including Equity Deserving Entrepreneurs

The new Small Business and Quality of
Entrepreneurship Development Program Life Impacts
will support diverse entrepreneurs and small Prosperity – Firm dynamism; Household incomes
business owners. The direct benefits will go Society – Sense of belonging to local community
Good Governance – Discrimination and unfair treatment
to underrepresented groups including
youth, Indigenous people, persons with Target Population: Underrepresented Entrepreneurs

disabilities, LGBTQ2, Black and other Expected Benefits:

Gender:
racialized peoples, women, and other
Income Distribution:
diverse entrepreneurs. Employees of small Inter-generational:
businesses may receive indirect benefits of Additional Youth, Indigenous, Persons with
this measure. Characteristics: Disabilities, LGBTQ2
Data Sources: Statistics Canada GBA+ Timing:
Gender Results Leadership and
Framework Democratic Participation

GBA+ Responsive Approach

Performance metrics, including aggregated demographic
data, will be collected and analyzed as the program is
implemented to better understand specific needs of various
entrepreneurs and to inform ongoing service and program
design.

436 Annex 5
 Supporting Black Entrepreneurs
The direct benefits of this proposal will Quality of Life
accrue predominantly to Black Canadian Impacts
entrepreneurs. Prosperity – Firm growth; Employment; Household incomes

Black Canadians are statistically more likely Target Population: Black Entrepreneurs
to live in low-income environments. Expected Benefits:
Approximately 1 in 5 Black Canadians, versus Gender:
just over 1 in 10 of their counterparts in the Income Distribution:
rest of the population, live in low-income Inter-generational:
environments. Additional Black Entrepeneurs residing in
Characteristics: Urban Areas
This program is also expected to
GBA+ Timing:
disproportionately benefit men as 63.5 per
cent of small and medium-sized enterprises Gender Results Leadership and
are majority-owned by men. Framework Democratic Participation

Data Sources: Statistics Canada

GBA+ Responsive Approach
Program elements have been designed to support gender-
diverse accessibility and promote diverse participation.
Performance metrics, including aggregated demographic
data, will be collected and analyzed as the program is
implemented to better understand specific needs of various
entrepreneurs and to inform ongoing service and program
design.

Support for Indigenous Entrepreneurs

This investment will directly benefit Quality of
Indigenous entrepreneurs, including Life Impacts
targeted supports for the Indigenous Prosperity – Firm growth; Employment; Household incomes
tourism industry. It also includes targeted Target Indigenous peoples, Indigenous
supports to address gender-specific Population: Women
barriers for Indigenous women Expected Benefits:
entrepreneurs. Only 29 per cent of Gender:
businesses supported by the network of Income Distribution:
Inter-generational:
Aboriginal Financial Institutions are owned-
Additional Indigenous Entrepreneurs and
by Indigenous women. Survey results have Characteristics: Business Owners
shown that the top three challenges for GBA+ Timing:
Indigenous women entrepreneurs are Gender Results Leadership and
accessing financing (47 per cent), balancing Framework Democratic Participation
family and business (40 per cent), and a
lack of business training (32 per cent). GBA+ Responsive Approach
Support for an Indigenous Women’s Targeted supports to increase the number of Indigenous
Entrepreneurship Initiative will help women entrepreneurs include providing them with the
increase the number of Indigenous women tools, services and resources required to start and grow
entrepreneurs accessing financing from their businesses.
Aboriginal Financial Institutions.
Data Sources: National Aboriginal Capital
Corporations Association

Impacts Report 437

 Supporting Indigenous Governance and Capacity
Funding directly benefits all members of Quality of
recipient First Nations, as communities have Life Impacts
greater capacity for financial and human Society – Vibrant communities; Social participation
resources management, planning and risk Good Governance – Confidence in public institutions;
management, and community engagement. Indigenous self-determination
Additional support for community readiness Target
First Nations
will directly benefit First Nations with the most Population:
acute needs, and result in better Expected Benefits:
administration and access to social services Gender:
Income
and programs, to help close the gap with
Distribution:
other First Nations and non-Indigenous Inter-generational:
communities. All community members are First Nations Communities with
Additional
expected to benefit from greater capacity for greatest community development
Characteristics:
local representation, as well as strengthened needs
capacity for First Nations communities with GBA+ Timing:
the greatest community development needs Gender Results Leadership and
Framework Democratic Participation
to benefit from proposal-based investments.

Engagement with Indigenous Peoples

These investments will support Indigenous
Quality of
Representative Organizations and foster
Life Impacts
inclusive engagement processes so that
diverse Indigenous voices, including women, Society – Positive perceptions of diversity; Sense of
youth, elders and other community sub- pride/belonging to Canada
Good Governance – Confidence in public institutions;
groups such as single-parents, people with
Indigenous self-determination
disabilities, 2SLGBTQQIA, and off-reserve
members are heard, leading to more inclusive Target Population: Indigenous peoples

federal policy and program development. Expected Benefits:

Strong representation by Indigenous peoples
Gender:
in democratic processes to advance
reconciliation and close socio-economic gaps Income Distribution:
benefits all Canadians, as Indigenous Inter-generational:
leadership and cultural revitalization make Additional First Nations and Inuit
important contributions to Canada’s character Characteristics: Representative Organizations
and identity.
GBA+ Timing:

Leadership and
Gender Results
Democratic
Framework Participation

438 Annex 5
 Enhancing the Canada Small Business Financing Program
Current data from Statistics Canada Quality of
indicates that 63.5 per cent of small and Life Impacts
medium enterprises are owned by men. This Prosperity – Firm growth; Productivity; Access to capital
measure is expected to have a direct Target Population: Small Businesses
positive impact on women and indirect Expected Benefits:
positive impacts on diverse and Gender:
disadvantaged groups. These positive Income Distribution:
impacts are largely as a result of changes to Inter-generational:
eligibility to extend lending to non-profit Additional
Small Businesses
and charitable social enterprises. Women Characteristics:
account for more than 75 per cent of GBA+ Timing:
employment in the non-profit sector. Youth Gender Results Leadership and
Framework Democratic Participation
are also expected to benefit as 41 per cent
of Canada Small Business Financing
program borrowers are under 40 years old,
compared to 16 per cent of small and
medium sized businesses at large.
Data Sources: Statistics Canada

Supporting Community Service Organizations

This program directly benefits Canada's Quality of
charitable and non-profit sector, in which Life Impacts
women make up the majority of the Prosperity – Employment; Protection from income shocks
workforce. This program also indirectly Society – Sense of belonging to community; Charitable giving;
benefits the diverse populations served by Volunteering
charities and non-profits, including youth, Target Population: Charitable and Non-profit Sector
seniors, women, Indigenous groups, Expected Benefits:
racialized people, persons with disabilities, Gender:
Income Distribution:
LGBTQ2 communities, low-income families,
Inter-generational:
and more. The fund strives to reach Additional Charitable and Non-profit Sector,
organizations across the country in rural, Characteristics: Vulnerable Populations
remote, and urban settings, and particularly GBA+ Timing:
those that are serving and being led by Gender Results Leadership and
vulnerable groups. Framework: Democratic Participation

Data Sources: Statistics Canada, Women

and Gender Equality Canada, Canadian
Social Enterprise Survey, Charity Village,
Imagine Canada, Ontario Nonprofit
Network, Canadian Women's Foundation,
Canada Council for the Arts

Impacts Report 439

 Making the Public Service More Diverse
Legislative amendments to the Public
Quality of
Service Employment Act are aimed at
Life Impacts
ensuring a process to identify and reduce
potential barriers in the public service Society – Positive perceptions of diversity
Good Governance – Discrimination and unfair treatment
staffing process for employment equity and
equity-seeking groups including women, Target Population: Underrepresented Groups

Indigenous peoples, persons with Expected Benefits:

disabilities, and racialized Canadians. For Gender:
example, Indigenous applicants may have Income Distribution:
trouble meeting education requirements Inter-generational:
due to systemic barriers and limited access Additional
Underrepresented Groups
to higher education, particularly in remote Characteristics:
geographical locations. Similarly, new GBA+ Timing:
Gender Results Leadership and
arrivals to Canada, who are more likely to
Framework: Democratic Participation
be members of a visible minority, may have
trouble meeting certification requirements
due to the time and challenges associated
with having foreign credentials recognized.
Data Sources: Treasury Board of Canada
Secretariat, Statistics Canada

Enhancing the Capacity of Superior Courts

All Canadians are expected to benefit from Quality of
the creation of new superior court judicial Life Impacts
positions, which will ultimately increase
Good Governance – Confidence in public institutions; Access
access to justice.
to fair and equal justice; Resolution of serious legal problems
Women made up 45 per cent of the
Target
federally-appointed judiciary as of All Canadians
Population:
March 2021. Recent efforts have focused on
Expected Benefits:
increasing the diversity of the judiciary.
Gender:
Between October 2019 and October 2020,
women comprised 65 per cent of new Income Distribution:
appointments, while visible minorities Inter-generational:
represented 17 per cent and Indigenous Additional
peoples accounted for three per cent. Characteristics:
Data Source: Office of the Commissioner for GBA+ Timing:
Federal Judicial Affairs
Gender Results Leadership and Democratic
Framework: Participation

440 Annex 5
Gender-Based Violence and Access to Justice
The following Budget 2021 measures are expected to advance the Gender-Based
Violence and Access to Justice Pillar under the Gender Results Framework.

Advancing a National Action Plan to End Gender-Based Violence

These investments will directly benefit women Quality of Life
and girls, in particular women and girls with Impacts
disabilities, Black, Indigenous and racialized
Health - Health adjusted life expectancy; Self-rated mental
women and girls, and LGBTQ2 people, groups health; Children vulnerable in early development
that are at a significantly higher risk of Society – Satisfaction with personal relationships
experiencing gender-based violence. These Good Governance - Victimization rate; Childhood
groups also face increased barriers in maltreatment; Access to fair and equal justice
accessing supports and services due to Women, Indigenous Women
Target Population:
systemic inequalities, such as sexism, and Girls, LGBTQ2
homophobia, transphobia, racism and poverty. Expected Benefits:
COVID-19 has further amplified inequalities Gender:
and gender-based violence, disproportionately
Income Distribution:
affecting women with lower incomes.
Inter-generational:
Almost half of all female homicide victims are
Indigenous, Newcomers, Rural
killed by an intimate partner, compared to six Additional
and Remote Regions, Disabilities,
per cent for male victims. Sexual assault is a Characteristics:
LGBTQ2
gendered crime that is far more likely to target
GBA+ Timing:
women, especially young women. In 2017, the
Gender-Based
rate of police-reported violent crimes in Gender Results
Violence and Access to
Canada was higher for girls and young women Framework Justice
aged 24 and younger compared to their male
counterparts (1,394 versus 1,030 incidents per
100,000 population). According to Statistics
Canada, the rate of sexual assault is not
declining, with police-reported sexual assaults
increasing every year from 2015 to 2019.
Indigenous women are more likely to be
affected by all types of violent victimization
with the homicide rate for Indigenous women
and girls nearly seven times higher than
amongst non-Indigenous women and girls in
2019. When taking into account all risk factors,
LGBTQ2 Canadians are twice as likely to
experience violent victimization as non-
LGBTQ2 Canadians.
Data Sources: Statistics Canada, GBV
Knowledge Centre, United Nations

Impacts Report 441

 Addressing Sexual Misconduct and Gender-based Violence in the
Military
These measures will directly benefit people Quality of Life
who have experienced sexual misconduct Impacts
and gender-based violence in the military by
Health – Self-rated mental health; Unmet needs for mental
enhancing support services to victims, health care
increasing the availability of resources for Society – Trust in others
recovery, and enhancing external oversight of Good Governance – Victimization rate; Discrimination and
the Canadian Armed Forces. unfair treatment; Access to fair and equal justice; Confidence
in public institutions
Primarily, these measures will directly benefit
People who have Experienced Sexual
women, as women in the Canadian Armed Target
Misconduct and Gender-based Violence
Forces are 2.5 times to 3 times more likely to Population: in the Military
experience sexual misconduct than men. Expected Benefits:
Additional or specialized support will also be Gender:
provided for LGBTQ2 members that have Income
experienced sexual misconduct and gender- Distribution:
Inter-
based violence in the military.
generational:
In addition, men will benefit from the Additional
LGBTQ2
proposed institutional reforms, as well as an Characteristics:
improved culture. Men will also directly GBA+
benefit from the research to inform targeted Timing:
training and response frameworks, and Gender
Gender-Based Violence and
external expertise on training on the issue of Results
Access to Justice
gender-based violence. Framework
These measures will reinforce the systemic
efforts to change the culture and working
conditions in the Canadian Armed Forces in
relation to sexual misconduct and gender-
based violence with the ultimate goal of
reducing and eliminating sexual misconduct
and gender-based violence among members
of the Canadian Armed Forces, particularly
women members. Ultimately, this will
support the objective of increasing
representation of women in the Forces from
15 to 25 per cent by 2026 which, if achieved,
will further positively reinforce culture
change.
Data Sources: Statistics Canada

442 Annex 5
 Responding to the Tragedy of Missing and Murdered Indigenous
Women and Girls
Indigenous women and girls are 12 times Quality of Life
more likely to be murdered or missing than Impacts
any other women in Canada. In 2019, the rate
Health – Health adjusted life expectancy; Self-rated mental
of homicide for Indigenous women was seven health
times that of non-Indigenous women. Society – Sense of belonging to local community
While comprising roughly five per cent of the Good Governance – Victimization rate; Crime Severity
population of Canada, Indigenous people Index; Access to fair and equal justice; Representation in
corrections custodial populations
accounted for nearly 26 per cent of homicide
Target
victims in 2019 and represent over 30 per cent Indigenous Women and Girls
Population:
of the incarcerated population. The
Expected Benefits:
overrepresentation is even more pronounced
Gender:
for Indigenous women and youth, who Income Distribution:
account for 42 per cent and 43 per cent of the Inter-generational:
women and youth inmate population in Additional 2SLGBTQQIA+, Indigenous
Canada. Characteristics: communities
This investment will primarily benefit First GBA+ Timing:
Nation, Inuit and Métis women, girls and two- Gender Results Gender-Based Violence
Framework and Access to Justice
spirit, lesbian, gay, bisexual, transgender,
queer, questioning, intersex and asexual GBA+ Responsive Approach
(2SLGBTQQIA+) people, as well as survivors of This investment will enhance support for Indigenous
violence and families of victims of violence. women’s and 2SLGBTQQIA+ organizations, ensuring that
This investment will also contribute to the voices and perspectives of Indigenous women and
improved, culturally responsive policing and 2SLGBTQQIA+ people are reflected in all aspects of
decision-making that affects their lives.
community safety services, and will benefit all
Indigenous community members, including
women, girls and 2SLGBTQQIA+ people, who
are disproportionately affected by violence,
and are overrepresented in the justice and
correctional systems.
Lastly, it will support Indigenous-led justice
and culture initiatives, and help ensure the
languages, voices, and perspectives of
Indigenous women and 2SLGBTQQIA+ people
are heard.
Data Sources: Reclaiming Power and Place:
The Final Report of the National Inquiry into
Missing and Murdered Indigenous Women and
Girls, Office of the Correctional Investigator,
Statistics Canada

Impacts Report 443

Strengthening the Canadian Race Relations Foundation and Helping
Communities Respond to an Increase in Racism: Race Relations
Foundation
While funding will benefit all Canadians by Quality of
reducing discrimination and violence, Life Impacts
members of Canada’s racialized
Society – Positive perceptions of diversity; Sense of belonging
communities—Asian, Black and Indigenous to local community; Trust in others
Canadians, cultural and religious minorities, Good Governance – Discrimination and unfair treatment
and newcomers to Canada—are expected Target Population: Canadians at Risk of Racism
to benefit most directly. In 2016, 25 per cent Expected Benefits:
of discrimination complaints received by the Gender:
Canadian Human Rights Commission Income Distribution:
related to race, religion, colour, national or
Inter-generational:
ethnic origin. In Canada in 2017, 43 per cent
Additional Racialized Canadians, Indigenous
of hate crimes were motivated by hatred of Characteristics: peoples, Urban Populations
a race or ethnicity. In Canada, women, GBA+ Timing:
especially racialized women, face a 20 per Gender Results Gender-Based Violence
cent higher victimization rate than men. Framework and Access to Justice
Recent reports indicate rising rates of
COVID-driven, anti-Asian racism. A project
led by the Chinese Canadian National
Council found that between March 10, 2020,
to February 28, 2021, there were 1,150 cases
of racist attacks from across Canada
reported, with children and adolescents
under 18 years of age more likely to report
being physically assaulted. Those in low-
income jobs or those who do not speak
English are also more likely to report feeling
vulnerable to racist attacks.
Data Sources: Statistics Canada, CRRF
Survey of Stakeholders, Canadian Human
Rights Commission, Chinese Canadian
National Council

444 Annex 5
Strengthening the Canadian Race Relations Foundation and Helping
Communities Respond to an Increase in Racism: Protecting Against
Hate-motivated Crimes
This initiative will benefit groups that are at Quality of Life
risk of hate-motivated crimes, including Impacts
racialized Canadians, religious individuals, and
Society – Sense of belonging to local community; Trust in
members of LGBTQ2 communities. In 2019, others; Positive perceptions of diversity
race and ethnicity were the most common Good Governance – Discrimination and unfair treatment;
motivation for police-reported hate crimes, Crime Severity Index
making up about 46 per cent of cases. This Potential Victims of Hate
Target Population:
was followed by crimes motivated by religion Crimes
at 32 per cent, and sexual orientation at 14 per Expected Benefits:
cent. In particular, in the context of the
Gender:
COVID-19 pandemic, there have been
Income Distribution:
indications of heightened levels of
discrimination targeting Asian communities. A Inter-generational:
project led by the Chinese Canadian National Additional Racialized Canadians, Religious
Council found that, between March 10, 2020 Characteristics: Minorities, LGBTQ2
and February 28, 2021, there were 1,150 cases GBA+ Timing:
of race-driven attacks from across Canada Gender-Based
Gender Results
reported, with children and adolescents under Violence and Access
Framework to Justice
18 years of age more likely to report being
physically assaulted. Those in low-income jobs
or those who do not speak English are also
more likely to report feeling vulnerable to
racist attacks.
Data Sources: Statistics Canada, Chinese
Canadian National Council

Impacts Report 445

 Supporting Work to Address Systemic Racism in Institutions
Combatting systemic racism in law Quality of
enforcement is expected to have an impact Life Impacts
on Black, Indigenous, and racialized
Society – Positive perceptions of diversity; Sense of belonging;
communities, who are overrepresented Trust in others
relative to their share of the population. Good Governance – Access to fair and equal justice; Personal
Funding will support efforts to improve the safety; Confidence in public institutions
delivery of policing services to better meet Target Black, Indigenous, and Racialized
the needs of these communities, including Population: Communities
the development of solutions adapted to Expected Benefits:
community needs. Reporting race-based Gender:
data will also help identify issues that need Income Distribution:
addressing. Inter-generational:
Racialized Canadians,
Data Sources: Statistics Canada, Ontario Additional
Communities Policed by the
Characteristics:
Human Rights Commission RCMP
GBA+ Timing:
Gender Results Gender-Based Violence
Framework and Access to Justice

Supporting Greater Equality for LGBTQ2 Communities

Funding will directly benefit LGBTQ2 Quality of
individuals and communities. LGBTQ2 Life Impacts
Canadians and newcomers continue to face
Prosperity – Employment; Financial well-being; Homelessness
inequalities in health, safety, housing, Health – Unmet health care needs; Unmet needs for mental
homelessness, financial security, and health care
employment when compared to non- Society – Sense of belonging to local community; Positive
LGBTQ2 Canadians. These initiatives are perceptions of diversity
expected to raise awareness about LGBTQ2 Good Governance – Discrimination and unfair treatment;
communities and the issues facing them, Victimization rate
decrease stigma, increase LGBTQ2 inclusion, Target Population: LGBTQ2
and strengthen overall social cohesion. The Expected Benefits:
Gender:
ultimate benefit is to help bridge health and
Income Distribution:
socio-economic inequalities between
Inter-generational:
LGBTQ2 and non-LGBTQ2 people in Canada Additional
and to improve the quality of life for LGBTQ2
Characteristics:
LGBTQ2 communities. GBA+ Timing:
Data Sources: Statistics Canada, OECD Gender Results Gender-Based Violence
Framework and Access to Justice

446 Annex 5
 Enhancing Legal Support for Vulnerable Communities: Support for
Asylum Seekers
This measure is expected to benefit Quality of
economically disadvantaged asylum Life Impacts
seekers, most of whom live in poverty and
Society – Sense of belonging to local community
would not be able to afford legal support. Good Governance – Access to fair and equal justice;
Additionally, asylum seekers are likely to be Confidence in public institutions
members of visible, ethnic or religious Target Population: Asylum Seekers
minorities, non-official language speakers, Expected Benefits:
and LGBTQ2 individuals. In 2018, ten Gender:
countries accounted for 57 per cent of all Income Distribution:
Inter-generational:
in-Canada asylum claims. Nine of the ten
Additional Asylum Seekers, Ethnic or
countries are in Asia, Latin America, the Characteristics: Religious Minorities
Caribbean, and Africa, and seven have GBA+ Timing: Early □□□ Later
neither English nor French as an official Gender Results Gender-Based Violence
language. Asylum seekers also tend to be Framework and Access to Justice
younger. In 2017, over 26 per cent of
asylum claimants were aged 0 to 14
compared with 16 per cent of the Canadian
population.
Data Sources: Administrative data; Statistics
Canada

Enhancing Legal Support for Vulnerable Communities: Support for

Racialized Communities
This initiative will directly benefit Black, Quality of
racialized, and Indigenous communities, who Life Impacts
are overrepresented in the criminal justice
Society – Sense of belonging; Positive perceptions
system and face systemic barriers that prevent of diversity
them from accessing justice. For example, Good Governance – Access to fair and equal justice;
Black Canadians account for 7.2 per cent of Discrimination and unfair treatment; Representation in
federal inmates, but only 3.5 per cent of the corrections custodial population
Canadian population. Similarly, Indigenous Target Indigenous peoples, Black and
peoples account for 30 per cent of admissions Population: Racialized Canadians
to federal custody, despite only representing Expected Benefits:
approximately five per cent of the population. Gender:
Racialized Canadians will have greater access Income Distribution:
Inter-generational:
to culturally appropriate legal advice and
Additional Indigenous peoples, Black and
information, to better understand how to
Characteristics: Racialized Canadians
exercise their rights in the justice system. GBA+ Timing:
This initiative is expected to be of particular Gender-Based
Gender Results
benefit to low-income racialized individuals Violence and Access
Framework to Justice
who cannot afford to consult a lawyer.
Data Sources: Statistics Canada, Office of the
Correctional Investigator

Impacts Report 447

 Re-establishing the Law Commission of Canada
All Canadians are expected to benefit from Quality of
a revived Law Commission, and some Life Impacts
groups may be more directly affected given
Good Governance – Confidence in public institutions; Access
the Law Commission’s focus on the most
to fair and equal justice
pressing issues facing Canada’s legal
Target Population: All Canadians
system. Indigenous peoples and racialized
Expected Benefits:
Canadians may benefit from the Law
Gender:
Commission’s examination of issues of
Income Distribution:
systemic racism and establishing a new
relationship with Indigenous peoples. More Inter-generational:
Additional Racialized Minorities, Indigenous
broadly, groups who face barriers may
Characteristics: peoples
benefit from the Law Commission’s efforts
GBA+ Timing:
to make the justice system accessible for all,
including women, lower-income Canadians, Gender Results Gender-Based Violence
persons with disabilities, and racialized Framework and Access to Justice
people.
Data Sources: Statistics Canada, Canadian
Bar Association

Better Data for Better Outcomes: Collection and Use of Justice

System Data
Improving data collection to support Quality of Life
accountability and evidence-based policy Impacts
will benefit groups who are more likely to
Good Governance – Access to fair and equal justice;
encounter the justice system. Confidence in public institutions; Representation in corrections
A critical objective of this measure is to custodial population
better understand and address drivers of the Target Population: All Canadians
overrepresentation of Indigenous peoples in Expected Benefits:
the criminal justice system. Black Canadians
Gender:
account for 7.2 per cent of federal inmates,
but only 3.5 per cent of the Canadian Income Distribution:
population, and Indigenous peoples account Inter-generational:
for 30 per cent of federal inmates, despite
Indigenous peoples, Racialized
representing approximately five per cent of Additional
Canadians, Individuals with Mental
the population. Similarly, Canadians with Characteristics:
Health Challenges
mental health challenges report coming into GBA+ Timing:
contact with the police twice as much as Gender Results Gender-Based Violence
those without a disorder. Framework and Access to Justice
Data Sources: Statistics Canada, Justice
Canada, Office of the Correctional
Investigator

448 Annex 5
 Diverting Youth Away from the Justice System
This measure targets youth aged 12 to 17 who Quality of Life
come into contact with the youth criminal Impacts
justice system, and particularly
Society – Positive perceptions of diversity
overrepresented groups like young men, Good Governance – Access to fair and equal justice;
Indigenous youth, and Black youth. Representation in corrections and custodial population
In 2018-19, young men accounted for 77 per Target
Youth at Risk
cent of admissions into correctional services, Population:
while Indigenous youth were 43 per cent of Expected Benefits:
the youth admitted to correctional services, Gender:
despite accounting for only nine per cent of Income Distribution:
Inter-generational:
the youth population. Evidence also suggests
Additional
that Black youth are overrepresented in the Characteristics:
Indigenous, Black, Racialized Youth
justice system. In 2016, Black youth were 15.3 GBA+ Timing:
per cent of admissions to pre-trial detention in Gender Results Gender-Based Violence
Ontario, despite representing 7.1 per cent of Framework and Access to Justice
youth.
This initiative will enhance programming for
overrepresented groups, including tailored
responses that take into account diverse ethnic
and cultural backgrounds.
Data Sources: Statistics Canada; John Howard
Society

Supporting the Resolution of Indigenous Childhood Claims

This measure seeks to address the negative Quality of
consequences experienced by Indigenous Life Impacts
people who suffered historic harms as Good Governance – Access to fair and equal justice;
Discrimination and unfair treatment
children as a result of past government
policies and programs through the effective Target Population: Indigenous peoples

management and resolution of childhood Expected Benefits:

claims. This includes claims from First Gender:
Nations, Inuit, Métis and Non-Status Income Distribution:
individuals located across Canada, living both Inter-generational:
on and off reserve. Research suggests that Additional Characteristics:
2SLGBTQQIA, Indigenous
women and two-spirit, lesbian, gay, bisexual, peoples
transgender, queer, questioning, intersex and GBA+ Timing:
asexual (2SLGBTQQIA) people experienced Gender-Based
Gender Results
Violence and Access
disproportionate harms from attending Framework to Justice
residential schools. Additionally, Indigenous
people have lower average income than non-
Indigenous Canadians.
Data Sources: 2016 Census; Reclaiming
Power and Place: The Final Report of the
National Inquiry into Missing and Murdered
Indigenous Women and Girls, Office of the
Correctional Investigator, Statistics Canada

Impacts Report 449

Implementation of Legislation on the United Nations Declaration on
the Rights of Indigenous Peoples
Funding will support diverse groups of Quality of
Indigenous people by creating a framework Life Impacts
to guide future activities as they pertain to
Society – Sense of belonging to local community
Indigenous rights. Co-development of an Good Governance – Confidence in public institutions;
action plan to implement the legislation will Indigenous self-determination
support greater self-determination and Target Population: Indigenous peoples
cooperative decision-making, as well as Expected Benefits:
help to advance nation-to-nation, Inuit- Gender:
Crown and government-to-government Income Distribution:
relationships.
Inter-generational:
Additional
Indigenous peoples
Characteristics:
GBA+ Timing:
Gender Results Gender-Based Violence
Framework and Access to Justice

Preventing Radicalization to Violence

All Canadians will benefit from this Quality of
program, which is aimed at reducing the Life Impacts
threat of violence in our society. This
Society – Loneliness
investment will help professionals working Good Governance – Victimization rate; Crime Severity Index;
to prevent violent extremism, and the Domestic security
individuals and populations they work with, All Canadians, Violence Prevention
including outreach to youth and their Target Population: Practitioners and those at Risk of
communities. Radicalization to violence is a Radicalization to Violence
phenomenon that can affect individuals of Expected Benefits:
any background, culture, religion, or socio- Gender:
economic circumstance. Income Distribution:
Some of the funding specifically addresses Inter-generational:
violent misogyny, which will benefit women Violence Prevention Practitioners
Additional
and those at Risk of Radicalization
and girls and support the National Action Characteristics:
to Violence
Plan on Gender-Based Violence.
GBA+ Timing:
Data Sources: Canadian Network for Gender Results Gender-Based Violence
Research on Terrorism Framework and Access to Justice

450 Annex 5
Poverty Reduction, Health and Well-Being
The following Budget 2021 measures are expected to advance the Poverty
Reduction, Health and Well-Being Pillar under the Gender Results Framework.

Enhancing the Canada Workers Benefit

Enhancing the Canada Workers Benefit Quality of Life
(CWB) will benefit 3 million low- and Impacts
modest-income workers, including about
Prosperity – Poverty; Labour market participation;
1 million new recipients through direct
Employment; Financial well-being
income support and by promoting longer- Health – Self-rated mental health
term attachment to the labour force. Target
Women account for just over half of those Low- and Modest-Income Workers
Population:
benefiting from the enhancement and half Expected Benefits:
of new recipients. Gender:
The enhancements will especially benefit Income Distribution:
single workers without children, 52 per Inter-generational:
cent of whom will be men. These workers Additional Immigrants, People with Lower
Characteristics: Levels of Education
often have few other supports available to
them, and 54 per cent of new funding will GBA+ Timing:
benefit this group.
Gender Results Poverty Reduction,
Groups that are more likely to be in
Framework: Health and Well-Being
receipt of the CWB include recent
immigrants, those aged 19-34, and those
without a post-secondary qualification. GBA+ Responsive Approach

By lifting almost 100,000 individuals out of Raising the income threshold where the CWB is
poverty, an enhanced CWB will also have a reduced will help reward full-time work for single
direct, positive impact on economic workers and primary earners. However, the family-
security. Reducing poverty contributes to based design of the CWB means that when a
improved food security, better physical secondary earner enters the workforce, this may
and mental health, and supports dignity cause a decline in their family’s entitlement, especially
and resilience. if their partner’s income is already at or above that
threshold.
Data Sources: Statistics Canada, Tax Data
The secondary earner exemption will allow secondary
earners benefitting from the CWB, about 75 per cent
of whom will be women, to exclude a portion of their
earnings from the benefit’s income test, mitigating or
preventing this decline. This new feature will help
ensure that everyone is able to participate in the
workforce.

Impacts Report 451

 Expanding Access to Drug Treatment Courts
Drug Treatment Courts are targeted to Quality of
non-violent offenders and are focused on Life Impacts
facilitating treatment as an alternative to
Health – Health-adjusted life expectancy; Self-rated mental
incarceration for drug offences. The vast health
majority of participants in Drug Treatment Good Governance – Access to fair and equal justice;
Courts are vulnerable and marginalized with Representation in corrections custodial population
multiple issues, such as problematic Target Population: Non-violent Drug Offenders
substance use, mental health concerns, Expected Benefits:
inadequate housing, reliance on income Gender:
assistance, and low employment or Income Distribution:
education opportunities. Inter-generational:
According to the Association of Drug Drug Offenders, People with
Additional
Treatment Court Professionals, as many as Mental Health Issues, Indigenous
Characteristics:
90 per cent of participants have a history of peoples
prior convictions, and up to 70 per cent GBA+ Timing:
suffer from depression or anxiety disorders. Gender Results Poverty Reduction,
In some Drug Treatment Courts, as many as Framework Health and Well-Being
95 per cent of participants are unemployed
upon entering the program, with 22 per
cent reporting criminal activity as their sole
source of income. Drug Treatment Courts
offer supports to participants to help reduce
substance use, increase employment and
education opportunities, and decrease
likelihood of re-offending.
Between 2009 and 2014, 68 per cent of
Drug Treatment Courts participants were
men, and close to a third were between 30
to 40 years of age. Indigenous peoples, who
are at greater risk of experiencing mental
health and substance use issues,
represented 28 per cent of participants,
despite only representing five per cent of
the population. Some Drug Treatment
Courts offer specialized programming to
address the unique needs of participants,
including Indigenous peoples and women.
Data Sources: Statistics Canada,
Department of Justice, Canadian Association
of Drug Treatment Court Professionals

452 Annex 5
 Ending Homelessness
Government investments in homelessness Quality of
will directly benefit Canadians experiencing Life Impacts
or at risk of homelessness. Economic
Prosperity – Homelessness; Acceptable housing; Poverty
downturns, such as the one caused by Health – Functional health status; Self-rated mental health
COVID-19, increase the risk of Society – Sense of belonging to local community; Trust
homelessness. in others
Homelessness affects a diverse population, Canadians Experiencing
though certain groups are overrepresented. Target Population: Homelessness or at Risk of
Homelessness
In 2017:
Expected Benefits:
 Indigenous people represented 24 per Gender:
cent of shelter users despite accounting Income Distribution:
for five per cent of the population. Inter-generational:
Additional Urban Populations, Indigenous
 Men represented 72 per cent of shelter Characteristics: peoples
users. (Women may be underestimated GBA+ Timing:
due to lack of data from domestic Gender Results Poverty Reduction,
violence shelters, and differences in Framework Health and Well-Being
terms of how women experience
homelessness).
 People aged 25 to 49 made up 53 per
cent of shelter users, well above their
population share (33 per cent).
Veterans are more likely than average to
experience chronic homelessness.
As many as 85 per cent of people
experiencing homelessness report a chronic
health condition. By helping vulnerable
people find housing, this measure will
improve physical and mental health
outcomes.
Data Sources: Internal administrative data
(emergency shelter data), Statistics Canada,
Veterans Affairs Canada

Impacts Report 453

 Establishing a $15 Federal Minimum Wage
This legislative amendment directly benefits Quality of
more than 26,000 workers in the federally Life Impacts
regulated private sector, who are in low-wage
Prosperity – Financial well-being; Wages
jobs that earn less than $15 per hour.
Target Workers in the federally regulated
As 59 per cent of workers earning minimum
Population: private sector
wage in the federally regulated private sector
Expected Benefits:
are men, more men will benefit from this
change. Gender:

Many of these workers were not born in Income Distribution:

Canada. Of the more than 26,000 workers in Inter-generational:
total who will benefit, 36 per cent are Additional
Newcomers, Low-paid Workers
newcomers and recent immigrants to Characteristics:
Canada. GBA+ Timing:
Poverty Reduction, Health
Gender Results
and Well-Being
Framework

More Affordable Housing

Investments will directly benefit Canadians in Quality of
core housing need and women and children Life Impacts
fleeing violence. Relative to the incidence of
Prosperity – Acceptable housing; Homelessness; Poverty
core housing need across all households Good Governance – Victimization rate; Childhood
(13 per cent), women-led households (28 per maltreatment
cent), Indigenous populations (18 per cent), Target
immigrant-led households (18 per cent), Those in Core Housing Need
Population:
refugee-led households (27 per cent), and Expected Benefits:
people living in northern communities (24 Gender:
per cent) – particularly Inuit living in Nunavut Income Distribution:
(54 per cent) – are at higher risk of core Inter-generational:
housing need. Women and Children fleeing
Additional
Violence, Indigenous peoples,
Furthermore, consistent with the objectives Characteristics:
Immigrant Households
of the National Housing Strategy, these GBA+ Timing:
measures will prioritize support to vulnerable Gender Results Poverty Reduction,
populations, including seniors, young adults, Framework Health and Well-Being
and Indigenous peoples. At least 25 per cent
of investments will support projects that
specifically target the unique needs of
women and their children. To date, nearly 40
per cent of all units supported under the
Rapid Housing Initiative have been targeted
to Indigenous peoples.
Data Sources: Statistics Canada, CMHC

454 Annex 5
 Establishing a National Institute for Women's Health Research
Women are more likely to die prematurely Quality of
from largely preventable illnesses, be Life Impacts
diagnosed with mood and anxiety Health – Health-adjusted life expectancy; Self-rated
disorders, bear a higher burden of chronic mental health
illness, and experience higher levels of Society – Positive perceptions of diversity
disability than men; particularly in old age. Target Population: Women with Health Issues
Immigrants and Indigenous women are also Expected Benefits:
at a higher risk of some diseases, like Gender:
cervical cancer, due to access and other Income Distribution:
barriers. This measure is expected to have a Inter-generational:
positive impact on women’s health by Additional
Health Research Sector
addressing under-researched and high Characteristics:
priority areas including ovarian cancer, GBA+ Timing:
menopause, and sexual and reproductive Gender Results Poverty Reduction,
health. Framework Health and Well-Being

Beneficiaries would also include researchers GBA+ Responsive Approach

who receive research grants. Based on The institute would support research that takes into
internal Canadian Institutes of Health consideration how identity characteristics intersect with sex
Research data, approximately 67 per cent of and gender to create unique health challenges.
researchers working in the field of women’s
health self-identify as women.
Data Sources: Internal program data,
Statistics Canada

Supporting Access to Sexual and Reproductive Health Care

Information and Services
The funding for activities at the community level Quality of
will directly support populations who face the Life Impacts
highest sexual health risks and the largest
Health – Unmet health care needs; Self-reported health
barriers to accessing sexual and reproductive
Target Population: All Canadians
health care services and information, including
Expected Benefits:
women, youth, LGBTQ2, racialized Canadians,
Gender:
and Indigenous populations.
Income Distribution:
The national survey will have a positive impact on Inter-generational:
these vulnerable groups, as the survey will create Women, Youth, LGBTQ2,
Additional
a national baseline for data on key factors that Characteristics:
Indigenous and Racialized
influence the determinants of sexual and Communities
reproductive health, such as race, household GBA+ Timing:
income, and sexual orientation. The results of the Poverty Reduction,
Gender Results
Health and Well-
survey will inform initiatives that will target the Framework Being
unmet sexual and reproductive health care needs
of all Canadians.

Impacts Report 455

 Better Data for Better Outcomes: Promote an Inclusive Society
through Race, Gender and Diversity Research
Canada’s population is increasingly diverse. In Quality of
2016, people identifying as a member of a Life Impacts
visible minority group accounted for 22.4 per
Health – Health-adjusted life expectancy
cent of the population, compared to 13.4 per Society – Positive perceptions of diversity
cent in 2001. The proposed research initiative
Target
would build evidence to inform policies that All Canadians
Population:
lead to positive outcomes for diverse Expected Benefits:
populations of women, seniors, Indigenous Gender:
populations, racialized people, and LGBTQ2 Income Distribution:
people. Beneficiaries would also include Inter-generational:
researchers who receive research grants. Recent Additional
Academic Researchers
analysis of Social Sciences and Humanities Characteristics:
Research Council programs found that slightly GBA+ Timing:
more than 50 per cent of funded applicants Gender Results Poverty Reduction,
identified as women. There is also academic Framework Health and Well-Being

evidence that suggests research on issues of

societal inequalities is more often undertaken
by researchers from marginalized groups. For
example, research applications from Black
scientists are significantly more likely to involve
human subjects than White applicants (49.8 per
cent versus 31.8 per cent) and to include fields
of study that are relevant to equality research,
such as population and behavioural sciences.
Data Sources: Internal Program Data, Statistics
Canada data, Scholarly Journals

National Mental Health Standards and Virtual Services

Although mental health issues can affect any
Canadian, certain groups are more vulnerable Quality of
to experiencing mental illness in their Life Impacts
lifetime. Youth, LGBTQ2 and Indigenous Health – Self-rated mental health; Unmet needs for mental
people are particularly vulnerable. Men are at health care
a higher risk of dying by suicide. Men are Target
People with Mental Health Issues
also more likely to suffer from substance Population:
misuse. Women are more likely to be Expected Benefits:
diagnosed with mood and anxiety disorders. Gender:
The COVID-19 pandemic has exacerbated the Income Distribution:
many challenges and inequalities faced by Inter-generational:
these groups by increasing isolation and People living with Mental Health
Additional
limiting Canadians’ ability to access Characteristics:
or Problematic Substance Issues
traditional mental health services (e.g., in- and their families
person counselling). GBA+ Timing:
Gender Results Poverty Reduction,
Data Sources: Statistics Canada
Framework Health and Well-Being

456 Annex 5
 Supporting our Veterans: Mental Health Program for Veterans
Veterans are three to four times as likely to Quality of
suffer from depressive or anxiety disorders, Life Impacts
and more than 15 times more likely to have
Health – Self-rated mental health
post-traumatic stress disorder (PTSD), than
Canadians of comparable age and sex. Target
Veterans
Female veterans are more likely than male Population:
veterans to experience depression (35 per Expected Benefits:
cent vs. 24 per cent) and anxiety (25 per Gender:
cent vs. 21 per cent), but slightly less likely Income Distribution:
than males to report having PTSD (22 per Inter-generational:
cent vs. 24 per cent). In Canada, the Additional Veterans with Mental Health
estimated veteran population is 629,300, of Characteristics: Conditions
which about 119,000 are clients of Veterans GBA+ Timing:
Affairs Canada (VAC). Approximately 12 per Gender Results Poverty Reduction,
cent of VAC clients are women. Since Framework Health and Well-Being

members of the Canadian Armed Forces

are predominantly men, more men are
expected to benefit from this initiative.
Data Sources: VAC, Statistics Canada, Life
After Service Survey

Supporting our Veterans: Support for Veterans’ Well-being

This initiative targets veterans and their Quality of
immediate families. Since members of the Life Impacts
Canadian Armed Forces are predominantly
Prosperity – Adult skills; Employment; Acceptable housing
men, more men are expected to benefit from Health – Self-rated mental health; Self-rated health
this initiative. However, this measure
Target
supports projects tailored to improve the Veterans
Population:
well-being of all veterans and their families,
Expected Benefits:
including veterans who are women, LGBTQ2, Gender:
Indigenous, or experience homelessness. Income Distribution:
There are currently around 3,000 homeless Inter-generational:
veterans in Canada. Veterans are more likely Additional
Veterans and their Families
than the Canadian general population to Characteristics:
experience activity limitations and suffer from GBA+ Timing:
a range of health issues. Many veterans also Gender Results Poverty Reduction,
Framework Health and Well-Being
face challenges transitioning from military to
civilian life. Employment rates amongst
veterans is lower than for Canadians of
similar age and sex (60 per cent vs 73 per
cent). Amongst veterans, women and
recently released veterans are less likely to be
employed.
Data Sources: Veterans Affairs Canada, Life
After Service Survey

Impacts Report 457

 VAC Service Capacity
Direct beneficiaries of this initiative are Quality of
veterans with mental or physical health Life Impacts
issues. Veterans are more likely than the
Health – Self-rated health; Self-rated mental health;
Canadian general population to experience
Functional health status
activity limitations and suffer from a range of Good Governance – Confidence in public institutions
health issues. Hearing loss and tinnitus are (modernizing operations)
the two most common conditions for which Target Population: Veterans
veterans receive disability benefits, followed Expected Benefits:
by post-traumatic stress disorder. Since men Gender:
account for the majority of veterans, more Income Distribution:
men are expected to benefit from this Inter-generational:
initiative. However, this enabling investment Veterans with Disabilities or
will allow Veterans Affairs Canada (VAC) to Additional Characteristics: Physical and Mental Health
continue its efforts to reduce wait times for Issues

disability benefits applications for all GBA+ Timing:

veterans. Poverty Reduction,
Gender Results
Health and Well-
Data Sources: VAC, Life After Service Survey Framework Being

Making Our Communities and Workplaces More Accessible

This program directly benefits persons with Quality of Life
disabilities by making Canadian communities Impacts
and workplaces more accessible.
Prosperity – Employment; Labour market participation;
For example, almost 2.7 million people Future outlook
or 1 in 10 Canadians aged 15 and older have a Health – Self-rated mental health; Self-rated health
mobility disability, making it one of the most Society – Accessible environments
common disability types. Women (11.2 per Target Population: Persons with Disabilities
cent) are more likely than men (7.9 per cent) to Expected Benefits:
have a disability related to mobility. In 2017, Gender:
Income Distribution:
over half (57.4 per cent) of employed Canadians
Inter-generational:
with mobility disabilities aged 25 to 64 said that Additional Persons with Disabilities,
they required one or more workplace Characteristics: Families with Young Children
accommodations to be able to work. GBA+ Timing:
By increasing accessibility in workplaces or Poverty Reduction,
Gender Results
communities, including community spaces such Health and Well-
Framework Being
as parks and public buildings, the program also
benefits seniors without disabilities and families
with young children.
Data Sources: Statistics Canada, 2017 Canadian
Survey on Disability

458 Annex 5
 Towards a New Disability Benefit
The consultations regarding a new disability Quality of Life
benefit are not expected to carry significant Impacts
direct impacts, but may lead to a new benefit
Good Governance – Confidence in public institutions
that supports persons with disabilities, primarily A future benefit would be expected to carry prosperity,
those with low income and those of working health and social benefits.
age. Working-age Persons with
Target Population:
Disabilities
Disability is slightly more prevalent among
women (24 per cent) than men (20 per cent), Expected Benefits:
Gender:
including when it comes to severity. According
Income Distribution:
to the 2017 Aboriginal Peoples Survey, 32 per Inter-generational:
cent of First Nations people living off reserve, Persons with Disabilities who
30 per cent of Métis and 19 per cent of Inuit Additional Characteristics: are Living Alone, Single
reported having one or more disabilities. Parents, Indigenous peoples
Among Indigenous populations, Indigenous GBA+ Timing:
women (36 per cent) have a higher prevalence Poverty Reduction,
Gender Results
Health and Well-
of disability than men (26 per cent) and the Framework Being
disability rate among Indigenous youth (aged
15-34) is much higher at 23 per cent than 13
per cent in the general population.
Data Sources: Statistics Canada, 2017 Canadian
Survey on Disability, 2017 Aboriginal Peoples
Survey

Helping Seniors Age Well at Home

This initiative directly benefits low-income Quality of
seniors, including those with disabilities or Life Impacts
with physical or mental health issues. The
Health – Home care needs met
initiative is also expected to have a slight Society – Sense of belonging to local community; Satisfaction
positive impact on senior women, who with time use
account for 55 per cent of Canadians over Target Population: Seniors
65 years old. The initiative will include Expected Benefits:
projects that focus on meeting the specific Gender:
needs of marginalized seniors, such as Income Distribution:
Indigenous seniors, racialized seniors, Inter-generational:
LGBTQ2 seniors or seniors with disabilities. Additional Seniors with Disability, Physical or
Characteristics: Mental Issues and their families
By improving seniors’ access to practical GBA+ Timing:
supports, the initiative will also indirectly Gender Results Poverty Reduction,
benefit seniors’ unpaid caregivers, of which Framework Health and Well-Being
54 per cent are women and many are
seniors themselves, reducing time
pressures. Almost one-quarter of seniors
aged 65 and older provided care or help to
family members or friends with a long-term
condition, a physical or mental disability, or
problems related to aging.
Data Sources: Statistics Canada

Impacts Report 459

 Common Employment Insurance Entrance Requirements
This measure will have direct benefits for Quality of
workers in part-time and temporary Life Impacts
employment, particularly in low-
Prosperity – Protection from income shocks; Financial
unemployment regions, who are less likely well-being
than full-time permanent workers to have
Target Population: Workers
enough hours of work to meet the
Expected Benefits:
Employment Insurance (EI) entrance Gender:
requirement. As of 2019, 94.2 per cent of Income Distribution:
full-time workers were eligible for EI regular Inter-generational:
benefits, compared to 64.7 per cent of part- Additional Workers in Low-Unemployment
time workers. Special benefit eligibility rates Characteristics: Regions
for part-time workers are also consistently GBA+ Timing:
lower than for full-time workers. Gender Results Poverty Reduction,
Framework Health and Well-Being
Women will benefit more from this measure
as they are twice as likely to work part-time
compared to men.
Data Sources: Employment and Social
Development Canada

Simplifying eligibility rules for multiple job holders

This measure will benefit multiple job
holders and part-time workers in particular Quality of
by only considering a worker’s most recent Life Impacts
reason for separation when determining Prosperity – Protection from income shocks; Financial well-
Employment Insurance (EI) eligibility. being
Women, who are twice as likely as men to Target Population: EI-eligible Multiple Job Holders
work part time, are overrepresented in Expected Benefits:
these work arrangements and are therefore Gender:
more likely to directly benefit from the Income Distribution:
measure. Inter-generational:
This measure will also contribute to Additional Multiple Job Holders, Part-time
accelerating claims processing and benefit Characteristics: Workers
payments for all EI beneficiaries. GBA+ Timing:
Data Sources: Employment and Social Gender Results Poverty Reduction,

Development Canada Framework Health and Well-Being

460 Annex 5
 Ensuring that Severance and other Separation Monies do not Delay
Employment Insurance Benefits
There is currently limited data and
information to provide a full picture of Quality of
workers affected by this policy Life Impacts
simplification. However, available statistics Prosperity – Protection from income shocks; Financial
indicate that women who received well-being
Employment Insurance (EI) regular benefits Target Population: EI Claimants
in 2018 were slightly more likely (23.7 per Expected Benefits:
cent) than men (17.4 per cent) to receive Gender:
severance or vacation pay. Income Distribution:
Generally, severance pay is reserved for Inter-generational:
employees who do not have an end-date in Additional EI Claimants Eligible for Severance
their employment contract and increases Characteristics: or Vacation Pay
with employment tenure. As a result, GBA+ Timing:
workers laid off from jobs that are long- Gender Results Poverty Reduction,
tenured and permanent, and therefore likely Framework Health and Well-Being
higher-paying, are expected to benefit most
from this measure. However, part-time
workers who receive vacation pay on
separation would also benefit.
Data Sources: Employment and Social
Development Canada

Extending Employment Insurance Sickness Benefits to Better Support

Canadians Suffering From Illness or Injury
It is expected that women and older
workers would benefit more from an Quality of
extension of Employment Insurance (EI) Life Impacts
sickness benefits. In 2018-19, the majority
Prosperity – Protection from income shocks
of sickness claims were made by women (56
per cent). Additionally, women were slightly Target Population: EI-eligible workers
more likely to exhaust their sickness
Expected Benefits:
benefits (36 per cent vs. 33 per cent from
Gender:
men). Take-up of sickness claims, their
Income Distribution:
duration, and exhaustion rates increase with
Inter-generational:
age. Claimants aged 55 years and older
Additional Persons Suffering from Illness or
register the longest average duration of EI
Characteristics: Injury
sickness claims (10.2 weeks in 2018-19) and
exhaustion rate (39 per cent in 2018-19). GBA+ Timing:

Data Sources: Employment and Social Gender Results Poverty Reduction,

Development Canada Framework Health and Well-Being

Impacts Report 461

 Supporting Indigenous Communities in the Fight against COVID-19
These investments directly benefit
Indigenous peoples and are gender- Quality of
balanced. Indigenous communities are more Life Impacts
at risk during pandemics, given challenges in Health – Health-adjusted life expectancy; COVID-19
accessing health care, higher incidence of incidence; Unmet health and mental health care needs
pre-existing health conditions and suitability Good Governance – Household emergency preparedness
of housing. Investments are therefore likely Target Population: Indigenous peoples
to be of particular benefit to more remote
Expected Benefits:
communities. Additionally these investments
will particularly benefit seniors and Gender:
individuals with pre-existing medical Income Distribution:
conditions. Inter-generational:
Indigenous peoples, Persons
Additional Characteristics: with Disabilities or Health
Issues
GBA+ Timing:
Poverty
Gender Results
Reduction, Health
Framework and Well-Being

Ensuring Food Security in the North

This measure will benefit northerners and Quality of
Indigenous peoples living in isolated and Life Impacts
semi-isolated communities. Food prices in
Prosperity – Food security
the North can be significantly higher than Health – COVID-19 incidence; Fruit and vegetable
those in the south. For example, across 11 consumption/healthy eating environments
key essential items, in 2018, Nunavummiut Society – Participation in cultural practices
generally paid around 2.2 times more for Target
Northern Communities
the same items than the rest of Canada. In Population:
2017/2018, compared to the national Expected Benefits:
average of 13 per cent, household food Gender:
insecurity in Yukon and Northwest Income Distribution:
Territories was 17 per cent and 22 per cent Inter-generational:
Additional Northern Communities,
respectively. Food insecurity was highest in
Characteristics: Indigenous peoples
Nunavut (whose poverty rate is more than
GBA+ Timing:
double the national average), with 57 per
cent of households living with food Gender Results Poverty Reduction,
insecurity and 78 per cent of Nunavummiut Framework Health and Well-Being
children living in food-insecure households.
Data Source: Nunavut Bureau of Statistics;
Library of Parliament

462 Annex 5
 Improving the Food Security of Vulnerable Canadians
This measure benefits both Canadians who Quality of
are most vulnerable to food insecurity pre- Life Impacts
COVID and those facing increased food
Prosperity – Food security
insecurity risk due to COVID-19. Health – Fruit and vegetable consumption
During COVID-19, the number of individuals Target Population: Individuals facing food insecurity
facing food insecurity increased to 1 in 7, Expected Benefits:
with the impacts disproportionately felt by Gender:
individuals in Black, Indigenous, and Income Distribution:
northern communities. Low-income Inter-generational:
Canadians and those facing job losses due Indigenous Black and Northern
to COVID-19 are at increased risk of food Additional
Populations, Lone-parent
Characteristics:
insecurity. Children and lone-parent families Households
headed by women also tend to be GBA+ Timing: Early □■□ Later
overrepresented among food bank users, Gender Results Poverty Reduction,
according to available data. Framework Health and Well-Being

Data Sources: Statistics Canada, Food Banks

Canada

Indigenous Infrastructure
This measure will benefit First Nations, Inuit
and Métis communities by improving the Quality of
state of infrastructure in communities. Life Impacts
Women, children and Elders in particular Prosperity – Employment; Acceptable housing; Child, student
will benefit from increased access to safe and adult skills; Future outlook
and suitable infrastructure, which could help Health – Functional health stats; Self-rated mental health;
to improve access to clean water, ease Children vulnerable in early development
crowded housing conditions, and improve Environment – Clean drinking water
Society – Sense of belonging to local community
health and education facilities. Improved
First Nations, Inuit and Métis
infrastructure will also contribute to the Target Population:
Communities
mental, physical, spiritual, and emotional
Expected Benefits:
well-being of all members in communities.
Gender:
Indirect benefits resulting from employment Income Distribution:
opportunities are expected to Inter-generational:
disproportionately benefit men in the short Additional
term. However, in the longer-term, this Indigenous peoples
Characteristics:
investment is also expected to create GBA+ Timing:
employment opportunities for women, who Gender Results Poverty Reduction,
are more likely to be employed in positions Framework Health and Well-Being
created with improved health, education
and other types of community
infrastructure. These investments will
support local economies, in rural and
remote parts of the country.

Impacts Report 463

Investing in Clean Energy in Northern and Indigenous Communities:
Hydroelectricity and Grid Interconnection Projects in the North
This measure will benefit northern and Quality of
Indigenous communities by advancing work Life Impacts
to reduce their reliance on diesel for
Prosperity – Affording everyday needs
electricity and heating and reduce energy Environment – Clean energy
costs. This will result in lower energy costs. Indigenous and Northern
In 2016, households in Northwest Territories Target Population:
communities
and Nunavut were paying more than Expected Benefits:
30 cents per kilowatt hour, more than Gender:
double the Canadian average of 12.9 cents Income Distribution:
per kilowatt hour. Inter-generational:
Additional Indigenous and Northern
In the longer-term, providing cleaner Characteristics: communities
energy will yield positive health and GBA+ Timing:
environmental outcomes for all members of
northern and Indigenous communities, Gender Results Poverty Reduction,
particularly for the most vulnerable Framework Health and Well-Being
members, including children and the
elderly.
Data Sources: Canada Energy Regulator

Investing in Clean Energy in Northern and Indigenous Communities:

Strategic Partnerships Initiative
This measure will benefit Indigenous
communities by advancing new economic Quality of Life
opportunities and job creation, including in Impacts
the clean energy sector. Notably, Indigenous Prosperity – Employment; Labour market participation;
populations face higher rates of Adult skills; Future outlook
unemployment (14.2 per cent) than non- Environment – Clean energy; Natural capital
Indigenous populations (9.4 per cent). First Nations, Inuit and Métis
Target Population:
Communities
Women worldwide are approximately 20 to
Expected Benefits:
25 per cent of the workforce in the energy
Gender:
industry in advanced industrialized nations. Income Distribution:
As such, in the short term, benefits are likely Inter-generational:
to disproportionally accrue to men through Additional
Indigenous peoples
improved employment opportunities Characteristics:
associated with this measure. GBA+ Timing:
In the long-term, however, providing cleaner Poverty Reduction,
Gender Results
energy will yield positive health and Health and Well-Being
Framework:
environmental outcomes for all community
members.
Data Sources: Statistics Canada; Electricity
Human Resources Canada

464 Annex 5
 Distinctions-Based Mental Wellness Strategy
This measure will directly benefit Quality of
Indigenous people that face complex Life Impacts
mental health and substance use issues. 12
Health – Self-rated mental health; Unmet needs for mental
per cent of First Nations, 13 per cent of health care
Métis and eight per cent of Inuit report Society – Vibrant communities
being diagnosed with a mood disorder. For Target Population: Indigenous peoples
First Nations and Métis, this is nearly twice Expected Benefits:
as much as non-Indigenous Canadians Gender:
(seven per cent). Suicide rates for Income Distribution:
Indigenous populations are significantly Inter-generational:
higher than non-Indigenous populations. Indigenous peoples with
Additional
Disabilities, Physical or Mental
First Nations are three times higher, Métis Characteristics:
Health Issues
are two times higher, and Inuit are nine
GBA+ Timing:
times higher.
Gender Results Poverty Reduction,
This initiative will directly support Framework Health and Well-Being
communities in the provision of mental
health services for Indigenous peoples,
including low-income families who might
be less likely to afford private care and
treatment.
Data Sources: Statistics Canada; First
Nations Information Governance Centre
Regional Health Survey

On-reserve Income Assistance

This investment will primarily benefit Quality of
low-income First Nations people on reserve. Life Impacts
Impacts are expected to be gender
balanced, in line with current program Prosperity – Protection from income shocks; Poverty; Student
participation. First Nations people with and adult skills; Labour market participation
disabilities may also benefit, as they are less Target Population: Low-income Indigenous People
likely to be employed and more likely to be Expected Benefits:
reliant on income supports. Case Gender:
management and pre-employment Income Distribution:
supports are expected to improve Inter-generational:
educational, skills, and employment Indigenous Individuals with Low
outcomes. Additional
Educational Attainment,
Characteristics:
Disabilities
GBA+ Timing:
Gender Results Poverty Reduction,
Framework Health and Well-Being

Impacts Report 465

 Improving Health Outcomes in Indigenous Communities
Measures are designed to improve health Quality of
outcomes for First Nations and Inuit who Life Impacts
face a lower life expectancy and a higher
Health – Health-adjusted life expectancy; Self-rated health;
disease burden than non-Indigenous Timely access to primary health care provider; Unmet health
people in Canada, including higher rates of care needs
chronic and infectious diseases. These Indigenous peoples, Persons with
measures will improve access to health care Target Population:
Disabilities or Health Issues
services and will directly benefit individuals Expected Benefits:
in remote and isolated communities, Gender:
especially individuals living on reserve. Income Distribution:
Investments will also support the Inter-generational:
transformation of the health system, and Additional First Nations and Inuit, Rural and
ensure that Indigenous perspectives and Characteristics: Remote Populations
knowledge inform the development and GBA+ Timing:
delivery of health supports for Indigenous Gender Results Poverty Reduction,
people. Women, who make up the majority Framework Health and Well-Being
of nurses in First Nations communities, will
also indirectly benefit from these
investments.
Data Sources: Indigenous Services Canada,
Statistics Canada, First Nations Information
Governance Centre

Supporting Indigenous Children and Families

Indigenous children are significantly Quality of
overrepresented in the child welfare system. Life Impacts
In 2016, Indigenous children represented Health – Children vulnerable in early development
7.7 per cent of all children ages 1-14, but Society – Someone to count on; Satisfaction with personal
they represented 52.2 per cent of children in relationships (family and friends)
foster care. Good Governance – Confidence in public institutions;
Indigenous self-determination; Access to fair and equal
These measures are gender balanced and will justice
benefit Indigenous children from low income Indigenous Children and
families and single parent households, who Target Population:
Families
are more likely than other children to enter Expected Benefits:
the child welfare system. These investments
will support the implementation of the Act Gender:
respecting First Nations, Inuit and Métis Income Distribution:
children, youth and families and will also Inter-generational:
support First Nations to adopt preventative Indigenous Children and
measures, under the First Nations Child and Additional Characteristics:
Families
Family Services Program.
GBA+ Timing:
Data Sources: Indigenous Services Canada,
Statistics Canada Poverty Reduction,
Gender Results
Health and Well-
Framework Being

466 Annex 5
 Renewing the Territorial Health Investment Fund
This measure benefits all residents of the Quality of
territories by supporting territorial efforts to Life Impacts
innovate and transform their health system
Health – Unmet health care needs; Functional health status
to improve access to health services for Good Governance – Confidence in public institutions
northerners. The measure will positively (modernizing operations)
affect Indigenous peoples, as they are the Target Population: Northern Communities
demographic majority in Nunavut (86 per Expected Benefits:
cent) and the Northwest Territories (51 per Gender:
cent), and form a significant part of the Income Distribution:
population in Yukon (23 per cent).
Inter-generational:
Data Sources: Statistics Canada Additional Northern Communities,
Characteristics: Indigenous peoples
GBA+ Timing:
Gender Results Poverty Reduction,
Framework Health and Well-Being

Addressing the Opioid Crisis and Problematic Substance Use

Measures will primarily benefit people living Quality of
with or, at risk of, problematic substance Life Impacts
use. A reduction of the societal harms and
Health – Health-adjusted life expectancy; Self-rated mental
costs associated with problematic substance health; Unmet health care needs
use would benefit all Canadians.
People living with Problematic
Compared to other age groups, youth have Target Population:
Substance Use
the highest rate of substance use and are Expected Benefits:
more likely to experience substance-related Gender:
harms. This is especially true of LGBTQ2 Income Distribution:
youth, who face stigma and marginalization; Inter-generational:
and First Nations, Métis and Inuit youth, Additional
Persons with Mental Health Issues
Characteristics:
who often face major social and economic
challenges in addition to historical and GBA+ Timing:
Poverty Reduction,
intergenerational trauma. Gender Results
Health and Well-Being
Data Sources: Statistics Canada Framework

Impacts Report 467

 Strategic Research on Pediatric Cancer
The proposed activities are expected to Quality of
provide evidence to improve health services Life Impacts
and treatments available for Canadian Health – Health-adjusted life expectancy; Unmet health care
children and youth with cancer as well as needs; Children vulnerable in early development
their families and caregivers. It is anticipated Target
All Canadians
that the benefits of the proposed funding Population:
would be broadly gender balanced, as about Expected Benefits:
55 per cent of pediatric cancer patients are Gender:
male. Income Distribution:
Inter-generational:
Beneficiaries of this measure would also Additional Pediatric Cancer Patients and their
include independent researchers who will Characteristics: Families, Health Researchers
receive research grants. Recent analysis of GBA+ Timing:
Canadian Institute of Health Research
Gender Results Poverty Reduction,
programs found that slightly more than
Framework: Health and Well-Being
50 per cent of funded applicants identified as
women.
Data Sources: Internal program data,
Statistics Canada, Cancer in Young People in
Canada (CYP-C) Program

Supporting Canada’s Active Recovery

Funding will benefit all Canadians by Quality of
providing more opportunities to participate Life Impacts
in community-level sport programming. In
Health – Physical activity; Self-rated mental health; Self-rated
addition, funding will be used to reach health
populations that have the lowest rates of Society – Participation in sport; Sense of belonging to local
participation in organized sport, including community
women and girls, LGBTQ2, low-income All Canadians, Underrepresented
Target Population:
Canadians, Indigenous peoples, and Groups
racialized people. Additionally, participation Expected Benefits:
rates tend to decline as people age, so Gender:
Income Distribution:
adults and older Canadians may indirectly
Inter-generational:
benefit. Women and girls in particular quit
Additional LGBTQ2, Indigenous peoples,
sport earlier and more often, are subject to Characteristics: Racialized People
abuse and discrimination in sport, and have GBA+ Timing:
fewer opportunities to participate. For Gender Results Poverty Reduction,
example, one in three girls will drop out of Framework Health and Well-Being
sport during adolescence, whereas only one
in ten boys will drop out of sport during the
same phase of life. Low-income Canadians
will also benefit from this proposal, as
household income heavily influences
participation rates.
Data Sources: Canadian Women & Sport

468 Annex 5
 Supporting Racialized Newcomer Women
Investments will directly benefit racialized
newcomer women. These women tend to Quality of
have limited knowledge of English or Life Impacts
French, have higher unemployment rates Prosperity – Employment; Labour market participation; Child,
than Canadian-born women, and work in student and adult skills; Future outlook
essential front-line occupations, such as Society – Sense of belonging to local community
health care and food and accommodation Target Population: Racialized Newcomer Women
services. In addition, recent newcomer Expected Benefits:
women are more likely to be employed in Gender:
precarious work. They are overrepresented Income Distribution:
in involuntary part-time work and Inter-generational:
temporary work compared to established Additional
Racialized Newcomer Women
immigrant women and Canadian-born Characteristics:
women. Finally, newcomer women have GBA+ Timing:
been disproportionately impacted by the Gender Results Poverty Reduction,
pandemic. About 20 per cent of recent Framework Health and Well-Being
immigrant women employed in March 2020
lost their job by April, compared to only
13 per cent among Canadian-born women.
Data Sources: Statistics Canada; Internal
Administrative Data

Increasing Old Age Security for Canadians 75 and Over

In 2020, 57 per cent of Old Age Security Quality of
(OAS) beneficiaries age 75 and over were Life Impacts
women, compared to 52 per cent among
those age 65 to 74. Prosperity – Household incomes

According to the Canadian Disability Survey, Target Population: Seniors 75 and over
in 2017, 47 per cent of seniors age 75 and Expected Benefits:
over had a disability, compared to Gender:
32 per cent of those aged 65 to 74. Income Distribution:
The overall income distributional impact is Inter-generational:
somewhat progressive. In 2020, Additional
Persons with Disabilities
39 per cent of seniors aged 75 and over Characteristics:

received the Guaranteed Income GBA+ Timing:

Supplement (GIS), compared to 29 per cent Gender Results Poverty Reduction,
Framework Health and Well-Being
of those aged 65 to 74.
Data Sources: Old Age Security
administrative data, Statistics Canada

Impacts Report 469

 Providing Additional Weeks of Recovery Benefits
This measure directly benefits workers who Quality of
have been affected by the pandemic. It Life Impacts
particularly benefits lower-income workers
Prosperity – Protection from income shocks; Financial well-
and youth, as both groups were hardest hit
being
by job losses and employment has been Health – Self-reported health
slow to recover for these groups. Workers who have lost
Target Population:
This measure is also expected to benefit employment
women, who are overrepresented in lower- Expected Benefits:
paying jobs, more vulnerable to work Gender:
stoppages, more likely to work in part‑time Income Distribution:
or temporary jobs and more likely to receive Inter-generational:
parental benefits. Additional
Characteristics:
Data Sources: Canada Revenue Agency
GBA+ Timing:
Gender Results Poverty Reduction,
Framework Health and Well-Being

470 Annex 5
Gender Equality around the World
The following Budget 2021 measures are expected to advance the Gender
Equality around the World Pillar under the Gender Results Framework.

Response to Venezuelan Migrant and Refugee Crisis

According to estimates from the United Quality of
Nations, women represent about 40 per Life Impacts
cent of the Venezuelan migrant and refugee
Good Governance – Canada’s place in the world
population. Vulnerable migrant and refugee
Target Population: All Canadians
populations, such as women and children,
Expected Benefits:
face gender-based violence, forced
Gender:
prostitution, and difficulty in accessing Income Distribution:
sexual and reproductive health services. This Inter-generational:
is why Canada’s response to the Venezuelan Additional Individuals in Other Countries,
crisis will identify specific actions to reduce Characteristics: Refugees
barriers and will contribute, through its GBA+ Timing:
programming in the different sectors, to the Gender Results Gender Equality Around
production of sex-disaggregated data. The Framework the World
data will contribute to identifying the gaps GBA+ Responsive Approach
related to the impact of this crisis on girls,
boys, women, and men. Finally, as a A strong intersectionality approach will be included
majority of Venezuelan migrants and in the response to identify and tackle specific and
refugees have seen their source of income distinctive situations of vulnerability for women
disrupted, intervention in economic Venezuelan migrants and refugees.
integration and access to services will
mostly benefit low-income individuals in the
region.
Data Sources: Internal administrative data,
international organizations including the
United Nations and the World Bank, and
other external data sources.

Impacts Report 471

 Responding to the Rohingya Crisis
Canada’s strategy to respond to the Quality of
Rohingya crisis will target poor and Life Impacts
vulnerable populations, including Rohingya
communities in refugee camps and host Good Governance – Canada’s place in the world
communities in Cox’s Bazar district. It is Target Population: All Canadians
expected that this crisis will have Expected Benefits:
disproportionate effects on women and Gender:
girls given elevated risks of sexual and Income Distribution:
gender-based violence. This programming Inter-generational:
will have a specific focus on strengthening Additional
comprehensive sexual and reproductive Individuals in Other Countries
Characteristics:
health and rights and will be delivered GBA+ Timing:
under Canada’s Feminist International Gender Results Gender Equality Around
Assistance Policy, which places gender Framework the World
equality and the empowerment of women
GBA+ Responsive Approach
and girls at the centre of its efforts.
Gender equality considerations will be integrated into the
Data Sources: Internal administrative data,
planning and design processes of the initiative, accounting
international organizations, other external for the unique gendered vulnerabilities of women and
data sources. children amongst the Rohingya community in Myanmar, and
in the host communities in Bangladesh.

Extending Canada’s Middle East Strategy

Canadian efforts are expected to alleviate Quality of
some of the adverse impacts of conflicts Life Impacts
and displacements in the Middle East, which
Good Governance – Canada’s place in the world
have severely affected the population,
Target Population: All Canadians
particularly women and girls.
Expected Benefits:
The strategy will seek to address barriers to Gender:
gender equality by integrating the needs Income Distribution:
and rights of women and girls through the Inter-generational:
promotion of increased participation in Additional Girls, Individuals in Other
Characteristics: Countries
governance and conflict resolution. The
GBA+ Timing:
strategy will continue to build on the
Gender Results Gender Equality Around
achievements to date. Previous funding has
Framework the World
helped improve the quality of education for
over 1.9 million children, including Syrian GBA+ Responsive Approach
refugees in Jordan and Lebanon. The strategy will also engage boys and men as agents of
The military capacity-building efforts will change, so that they become participants in the process to
also support the meaningful participation of advance gender equality in the target countries.
women in peace and security efforts, by
promoting the recruitment and integration
of women in local security forces, and
funding the construction of separate
accommodations for women.
Data Sources: United Nations

472 Annex 5
 Increasing International Humanitarian Assistance
By providing additional international Quality of
humanitarian assistance resources, this Life Impacts
measure will directly benefit vulnerable
people affected by humanitarian crises in Good Governance – Canada’s place in the world
low-income countries. These groups will Target Population: All Canadians
benefit from this program which is aiming Expected Benefits:
at reducing suffering, increasing and Gender:
maintaining human dignity, and saving lives. Income Distribution:
This program is also guided by Canada’s Inter-generational:
Feminist International Assistance Policy, Additional
which supports well-designed programming Individuals in Other Countries
Characteristics:
that responds to the specific needs of GBA+ Timing:
women and girls. This approach will help Gender Results Gender Equality Around
ensure effective targeting and efficiency of Framework the World
programming in order for humanitarian
assistance to reach those who need it the GBA+ Responsive Approach
most. Canada’s humanitarian assistance programming is guided by
a feminist and human rights-based approach, which ensures
Data Sources: International Organizations,
that it appropriately meets the specific needs of people
Other external data sources. affected by a crisis. Canada will support implementing
partners that integrate beneficiary participation into all
stages of programming.

Canadian Ombudsperson for Responsible Enterprise

Women, children and youth, and Quality of
Indigenous peoples in foreign countries will Life Impacts
benefit most from the opportunity to raise
Good Governance – Canada’s place in the world
human rights abuse complaints related to
Target Population: All Canadians
the operations of Canadian mining, oil and
Expected Benefits:
gas, and garment companies operating
Gender:
abroad with the Canadian Ombudsperson Income Distribution:
for Responsible Enterprise (CORE) and seek Inter-generational:
redress. These groups are at relatively Individuals in Other Countries,
Additional
greater risk of human rights violations, Characteristics:
Mining, Oil and Gas and Apparel
including human trafficking, child labour, Sectors
forced labour, and other abuses with GBA+ Timing:
negative implications for health and safety. Gender Results Gender Equality Around
Framework the World
The CORE’s work will take into account the
gender and cultural needs of potential
victims in all phases of the review process,
with the aim of improving working
conditions in the covered sectors.
Data Sources: UN Working Group on
Business and Human Rights; UN High
Commissioner for Human Rights; World
Bank; Human Rights Watch; International
Work Group for Indigenous Affairs; UNICEF

Impacts Report 473

 Supporting the African Development Bank
The African Development Bank’s Quality of
overarching objective is to foster Life Impacts
sustainable economic growth, support
social progress, and contribute to poverty Good Governance – Canada's place in the world
reduction in its African member countries. Target Population: All Canadians
The Bank’s gender priorities focus on 1) Expected Benefits:
empowering women through access to Gender:
finance and markets; 2) accelerating Income Distribution:
employability and job creation through Inter-generational:
skills enhancement; and, 3) increasing Additional
women’s access to social services through Individuals in Other Countries
Characteristics:
gender-responsive quality infrastructure. GBA+ Timing:
Accelerating Canada’s share payments will Gender Results Gender Equality Around
help the Bank support the continent’s post- Framework: the World
COVID inclusive recovery.
Data Sources: African Development Bank

International COVID-19 Response

By committing to delivering COVID-19- Quality of Life
related international assistance under Impacts
Canada’s Feminist International Assistance
Good Governance - Canada’s place in the world
Policy, Canada is supporting efforts that
Target
have the highest potential to reach groups All Canadians
Population:
that face vulnerability and marginalization.
Expected Benefits:
To date, among its international assistance
Gender:
efforts, Canada has been a key contributor Income
to the Access to COVID-19 Tools Distribution:
Accelerator (ACT-A), which facilitates the Inter-generational:
procurement and delivery of vaccines, Additional
Individuals in Other Countries
diagnostics and therapeutics to developing Characteristics:
countries. This benefits women and other GBA+ Timing:
vulnerable groups, as ACT-A’s goal of 20 Gender Results Gender Equality Around the
per cent global vaccination coverage by the Framework World
end of 2021 prioritizes health care workers
(comprising 70 per cent women, worldwide)
and vulnerable groups such as those with
pre-existing conditions. Canada’s additional
contributions to respond to international
COVID-19 needs will further strengthen
these efforts.
Data Sources: World Health Organization,
United Nations

474 Annex 5
Supporting Developing Economies through the International Finance
Corporation
The International Finance Corporation (IFC) Quality of
made a number of specific commitments Life Impacts
related to gender, as part of the capital Good Governance – Canada's place in the world
increases agreement. Specifically, the IFC
has committed to quadruple the amount of Target Population: All Canadians

its annual financing dedicated to women Expected Benefits:

and women-led small and medium Gender:
enterprises to reach US$1.4 billion by 2030, Income Distribution:
and increase the amount of annual Inter-generational:
commitments to financial intermediaries Additional
Individuals in Other Countries
specifically targeting women to $2.6 billion Characteristics:
by 2030 from the US$1 billion expected in GBA+ Timing:
Gender Results Gender Equality Around
FY2018. The IFC has a strong track record of
Framework: the World
providing economic benefits for women in
developing countries. Fully purchasing the
shares allocated to Canada will enable the
IFC to expand these benefits.
Data Sources: World Bank Group,
International Finance Corporation

Impacts Report 475

Chapter 1: Keeping Canadians Healthy and Safe
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 1.

Strengthening Canada’s Bio-manufacturing and Life Sciences Sector

Improving Canada’s capacity to develop Quality of
and produce new vaccines and treatments Life Impacts
will ultimately benefit all Canadians. In the Prosperity – Investment in R&D; Future outlook; Firm growth
case of improved pandemic preparedness, Health – Health-adjusted life expectancy; Functional health
status; COVID-19 incidence
vulnerable populations, including those with
pre-existing health conditions and older Target Population: All Canadians

Canadians, likely stand to benefit the most, Expected Benefits:

Gender:
based on the impacts of COVID-19.
Income Distribution:
Beneficiaries of this measure will also Inter-generational:
include researchers who receive grants to Vulnerable populations, Bio-
undertake research or to improve their bio- Additional manufacturing and Life Sciences
Characteristics: Sector, Health Researchers and
innovation infrastructure, as well as workers
Universities
and owners of businesses that receive
GBA+ Timing:
support to grow their companies. Recent
analysis of Canadian Institutes of Health
Research programs found that slightly more
than 50 per cent of funded applicants
identified as women. However, women only
comprise 36 per cent of the Canadian bio-
economy workforce. This
underrepresentation is most significant in
small-sized firms. Support to the Vaccine
and Infectious Disease Organization in
Saskatoon has additional benefits for that
region, including students who study at the
University of Saskatchewan.
Data Sources: Internal program data,
Statistics Canada, BioTalent Canada

476 Annex 5
 Action to Address Antimicrobial Resistance
This initiative will directly benefit all Quality of
Canadians, as actions to combat Life Impacts
antimicrobial resistance will contribute to Health – Unmet health care needs; Health-adjusted life
improved health outcomes for the general expectancy; Children vulnerable in early development
population. However, children under the Target Population: All Canadians
age of 18 and people over the age of 60 Expected Benefits:
may benefit more than other demographic Gender:
Income Distribution:
groups, as these groups are among the
Inter-generational:
highest users of antimicrobials in Canada Additional Canadians under the age of 18
and are more susceptible to infections Characteristics: and over the age of 60
caused by resistant bacteria. GBA+ Timing:
Data Sources: Council of Canadian
Academies; World Health Organization

Supporting Safe Air Travel

These measures benefit all Canadians by Quality of
reducing the risk of transmission of COVID- Life Impacts
19 and facilitating the safe restart of air
Prosperity – Employment
travel. Air travellers and workers in the air Health – COVID-19 incidence
transport sector benefit more than other Good Governance – Personal safety; Domestic security
Canadians. Target Population: All Canadians
While people with higher incomes have a Expected Benefits:
greater propensity for air travel, the air Gender:
transport sector employs Canadians from a Income Distribution:
wide range of income groups. However, Inter-generational:
the majority of air transport workers are Additional
Air travellers, Air Sector
men. Characteristics:
Data Source: Statistics Canada GBA+ Timing:
GBA+ Responsive Approach
In advancing the Known Traveller Digital Identity pilot
project, Transport Canada will take steps to ensure that
advanced technologies used for identity verification, such
as facial recognition, do not introduce negative impacts
based on disability, ethnicity, age or gender.

Impacts Report 477

 Continuing to Protect Air Travellers
This measure will benefit air travellers, as Quality
well as workers at airports and on airplanes. of Life
Based on Statistics Canada’s Survey of Impacts
Household Spending (2019), personal Health – COVID-19 incidence
travellers represent 70 per cent of all air Good Governance – Personal safety; Domestic security
travellers. The propensity to fly for personal Target Population: Air Travellers
travel is highly correlated to income, and is Expected Benefits:
roughly comparable by gender. Measures to Gender:
Income Distribution:
prevent the spread of COVID-19 through air
Inter-generational:
travel, such as temperature checks, will Additional
benefit all Canadians. Air Sector
Characteristics:
Maintaining the operations of the Canadian GBA+ Timing:
Air Transport Security Authority will
indirectly benefit those employed as
screeners at Canadian airports. This
workforce is gender balanced.
Data Sources: Statistics Canada

Supporting Temporary Foreign Workers while they Quarantine

The program directly benefits men since Quality of
they make up the majority of agricultural Life Impacts
producers, fish harvesters and food Prosperity – Household wealth
processors who employ temporary foreign Health – COVID-19 incidence
workers. For example, in 2016, 71 per cent Target Population: Agriculture Sector
of farm operators in Canada were men. The Expected Benefits:
men are often older, and earn on average Gender:
more than the median income in their Income Distribution:
province or territories. Inter-generational:
The program will also indirectly benefit Additional Food Producers and Processors,
Characteristics: Temporary Foreign Workers
temporary foreign workers by enabling
GBA+ Timing:
employers to provide adequate isolation
supports for these workers upon their
arrival in Canada.
Overall, the majority of temporary foreign
workers in Canada are male, representing
82 per cent of temporary foreign workers
across all skill levels in 2019.
Data Sources: Statistics Canada

478 Annex 5
 Maintaining Federal COVID-19 Digital Tools to Inform Canadians
This measure will benefit all Canadians by
maintaining digital tools they can use to stay Quality of
informed about COVID-19. The Canada Life Impacts
COVID-19 App is currently used Health – COVID-19 incidence
approximately 13,000 times per day, while Good Governance – Confidence in public institutions
the COVID-19 Self-Assessment Tool is used Target Population: All Canadians
approximately 11,000 times per day.
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Impacts Report 479

Chapter 2: Seeing Canadians and Businesses Through
to Recovery
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 2.

Extending the Canada Emergency Wage Subsidy

The wage subsidy directly benefits employers, Quality of Life
including businesses and their shareholders, Impacts
non-profit organizations, and registered Prosperity – Firm income; Employment; Labour force
charities. By industry, current applicant data attachment; Wages; GDP per capita
show that the largest number of employers Workers and Employers Affected
Target Population:
by COVID-19
receiving support are in accommodation and
Expected Benefits:
food services, followed by construction.
Gender:
Additionally, Indigenous government-owned Income Distribution:
businesses are expected to benefit from the Inter-generational:
wage subsidy. The wage subsidy also Employees of Eligible
Additional
indirectly benefits employees. Current Organizations, Business Owners
Characteristics:
applicant data show that the largest numbers and Other Employers
of employees covered were in manufacturing GBA+ Timing:
(15 per cent of total), followed by
accommodation and food services (15 per
cent). Given the gender breakdown of these
industries (71 per cent of employees are men
in manufacturing, compared to 45 per cent in
accommodation and food services), men may
be slightly more likely to be covered by the
subsidy than women.
Data Sources: Canada Revenue Agency,
Statistics Canada

480 Annex 5
 Extending the Canada Emergency Rent Subsidy
The rent subsidy directly benefits Quality of
organizations and their shareholders, Life Impacts
including businesses, non-profit Prosperity – Firm growth; Employment; Labour force
organizations, and registered charities. By attachment; Wages; GDP per capita
industry, current applicant data show that Businesses and other
Target Population: Organizations affected by COVID-
the largest number of properties receiving
19 and their Employees
support to date are in accommodation and
Expected Benefits:
food services (22 per cent of total), followed Gender:
by other services except public Income Distribution:
administration (14 per cent). Additionally, Inter-generational:
Indigenous government-owned businesses Additional Tenants, Business Owners,
are expected to benefit from the rent Characteristics: Charities, Non-profits
subsidy. The rent subsidy also indirectly GBA+ Timing:
benefits employees. Based on current
applicant data, women may be more likely
to work for organizations receiving the rent
subsidy.
Data Sources: Canada Revenue Agency,
Statistics Canada

Bridging Businesses to the Recovery

Regional Relief and Recovery Fund uptake has Quality of
been high among underrepresented groups Life Impacts
with 32.2 per cent of recipient businesses Prosperity – Firm growth; GDP per capita
women-owned, 3.1 per cent Indigenous- Small and medium-sized
owned, and 59.8 per cent in rural areas. Target Population:
businesses
Approximately 85 per cent of Indigenous Expected Benefits:
Business Initiative lending has supported Gender:
companies in Western Canada. Through this Income Distribution:
measure, 29 per cent of businesses supported Inter-generational:
have been women-owned. Additional Small and medium-sized
Characteristics: businesses in certain regions
Extending application deadlines for these
programs will continue to extend financing to
GBA+ Timing:
firms owned by underrepresented groups.

Impacts Report 481

 Extending temporary work-sharing program enhancements
The temporary work-sharing program Quality of
enhancements would remain available to Life Impacts
employers in all sectors and industries. Prosperity – Employment; Protection from income shocks
Historically, employers in the manufacturing Employers and their EI-eligible
Target Population:
sector and other good-producing industries Employees
have represented the majority of work- Expected Benefits:
Gender:
sharing agreements. However, there has
Income Distribution:
been an increase in take-up across non- Inter-generational:
traditional industries over the last year Additional
Manufacturing Sector
(e.g., professional, scientific and technical Characteristics:
services sector). Men have traditionally been GBA+ Timing:
more likely to benefit from work sharing. In
2018-19, men accounted for 71 per cent of
new work-sharing claims and 74 per cent of
total benefits paid.
Data Sources: Employment and Social
Development Canada

Extending Temporary Support for Seasonal Workers Who Continue

to be affected by the crisis
In 2018-19, men accounted for close to two- Quality of
thirds of seasonal Employment Insurance (EI) Life
regular claims, including in the 13 regions Impacts
targeted by the measure. As a result, Prosperity – Financial well-being; Protection from income
moderately more men will benefit from the shocks
temporary extension of the additional EI Target Seasonal Workers and Self-
support for seasonal workers. Population: Employed Fishers
Expected Benefits:
Similarly, men accounted for 80 per cent of EI
Gender:
fishing claims in 2018-19. They are thus more Income
likely to benefit from the extension of the Distribution:
temporary eligibility changes to EI fishing Inter-generational:
benefits. Historically, Atlantic Canada accounts Additional EI Claimants in Atlantic Canada
for the largest share of EI fishing claims Characteristics: and Eastern Quebec
(82 per cent), with coastal regions in Quebec GBA+ Timing:
and British Columbia also accounting for a
significant number of claims given their
geographic locations.
Data Sources: Employment and Social
Development Canada

482 Annex 5
Support to the Government of Quebec to Align the Quebec Parental
Insurance Plan with Temporary EI Changes
It is anticipated that the temporary changes Quality of
to the Quebec Parental Insurance Plan Life Impacts
(QPIP)–supported by the financial Prosperity – Financial well-being
compensation from the Government of
New Parents Residing in
Canada–will benefit approximately 45 per Target Population: Quebec
cent of all QPIP claimants between
Expected Benefits:
September 2020 and September 2021. Low-
income mothers aged 25 to 34 years old– Gender:

which account for the majority of QPIP Income Distribution:

beneficiaries–are expected to benefit the Inter-generational:
most. Additional Characteristics:

GBA+ Timing:

Impacts Report 483

Chapter 3: New Opportunities for Canadians
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 3.

Better Labour Protection for Gig Workers

The Labour Force Survey (2019) shows that Quality of
men (71 per cent) and individuals over the Life Impacts
age of 45 (73 per cent) are overrepresented
Prosperity – Precarious or gig work
amongst workers in federally regulated
Good Governance – Confidence in public institutions
private sectors who, similar to gig workers,
Gig workers in the federally
work as unincorporated self-employed Target Population:
regulated private sector
workers without employees. Of this group,
Expected Benefits:
65 per cent were not born in Canada.
Gender:
Final amendments to the Canada Labour Income Distribution:
Code will take into account the findings of Inter-generational:
consultations, and will be informed by Additional
Characteristics:
further GBA+ analysis.
GBA+ Timing:
Data Sources: Employment and Social
Development Canada, Statistics Canada

Enhancing Protections for Contract Workers in the Air Transportation

Sector
This legislative amendment directly benefits Quality of
air transportation workers in the federally Life Impacts
regulated private sector. The majority of
Prosperity – Employment; Wages; Financial well-being
those who will benefit are men (61 per cent).
This aligns with the overall demographics of Target Federally regulated contract workers
the federally regulated private sector, where Population: in the air transportation sector

women account for 38 per cent of all Expected Benefits:

workers, compared to 62 per cent for men. Gender:
Income
In general, those who will benefit are likely to Distribution:
be male, low- and middle-income earners, Inter-
many of whom were not born in Canada. generational:
Additional Newcomers, Low- and middle-
Characteristics: income Workers
GBA+ Timing:

484 Annex 5
 Simplifying Wage Earner Protection Program Payments
Simplifying payments through the Wage
Quality of
Earner Protection Program (WEPP) will
Life Impacts
directly benefit Canadian workers who have
lost their job and are owed wages by an Prosperity – Protection from income shocks; Financial
employer who has filed for bankruptcy or is well-being
subject to receivership. Target Population: All Canadians

Since its creation in 2008, the WEPP has paid Expected Benefits:
more than $411 million in eligible wages to Gender:
more than 146,000 Canadians. Any worker Income Distribution:
employed in Canada can qualify for a WEPP Inter-generational:
payment. Benefits of this measure are Additional Characteristics:
Workers of firms filing for
expected to be broadly gender balanced and bankruptcy
not disproportionate to any particular group. GBA+ Timing:

Taking Action to Address Predatory Lending

This consultation has the potential to benefit Quality of
all Canadians and enhance consumer Life Impacts
protection, particularly for lower and modest Prosperity – Financial well-being; Household debt service
income Canadians, who may rely on high- ratio; Future outlook
interest short-term credit to meet everyday Good Governance – Confidence in public/private
living expenses, or unanticipated emergencies. institutions

In 2019, the Financial Consumer Agency of Target Population: All Canadians

Canada found that two per cent of Canadians Expected Benefits:

used payday loans in the previous 12 months. Gender:
That percentage increases for certain Income Distribution:
vulnerable sub-groups, for example, four per Inter-generational:
cent of low-income households, eight per cent Additional Characteristics: Vulnerable groups
of Indigenous peoples, and eight per cent of GBA+ Timing:
single-parent households used payday lenders.
Data Source: Financial Consumer Agency of
Canada

Impacts Report 485

Chapter 4: Helping Canadian Businesses Grow and
Succeed
This section includes gender and diversity impacts analyses for remaining Budget
2021 measures in Chapter 4.

Helping Hard-hit Businesses Hire More Workers

The proposed new Canada Recovery Hiring Quality of Life
Program is expected to benefit employers, Impacts
including businesses and their shareholders, Prosperity – Employment; Wages
non-profit organizations, and registered Target Businesses and Other Organizations
charities. Additionally, Indigenous Population: Affected by COVID-19
government-owned businesses are expected Expected Benefits:
to benefit.
Gender:
The hiring incentive is also expected to Income Distribution:
benefit employees by increasing the number
Inter-generational:
of new jobs available. As employment
Unemployed Individuals, Employees
recovers, more women than men may rejoin Additional of Eligible Organizations, Business
the labour force, as well as younger and Characteristics: Owners and Other Employers
lower-income individuals. As such, it is
GBA+ Timing:
possible that the measure could provide
more benefits to women than men, as well
as younger and lower-income individuals,
although it is still expected to remain
broadly gender-balanced (i.e., women may
comprise 50 to 60 per cent of beneficiaries).
The measure may benefit proportionally
more individuals in provinces where
unemployment is above the national
average. In February 2021, these were
Newfoundland and Labrador, Alberta, Prince
Edward Island, Ontario and New Brunswick.
Data Sources: Internal Administrative Data,
Statistics Canada

486 Annex 5
 Helping Small and Medium-sized Businesses Move into the Digital
Age
This measure targets owners of small and Quality of
medium-sized enterprises (SMEs). This new Life Impacts
program will directly benefit young people Prosperity – Business investment; Productivity; Firm growth
through up to 28,000 job placements. Owners of Small and Medium-
Target Population:
Benefits for small and medium-sized sized Enterprises

enterprises are expected to lean more Expected Benefits:

Gender:
towards men who are 63.5 per cent of
Income Distribution:
majority-owners of SMEs. Inter-generational:
Broad benefits are expected for Canadians, Additional
Employees and Clients of Small
both as employees and clients of small and and Medium-sized Enterprises,
Characteristics:
Young Workers
medium-sized enterprises, and from
economic growth that could result from GBA+ Timing:
more efficient and competitive small and GBA+ Responsive Approach
medium-sized enterprises. There is expected This measure would seek to encourage diverse business
to be positive benefits from increased owners to apply by including specific targets for
digital adoption, including among rural and underrepresented groups. Targets would also ensure a
remote SMEs. diverse group of young people, including those from
underrepresented groups, are recruited and hired.
Data Sources: Statistics Canada

Helping Businesses Seize New Technological Opportunities

This measure is likely to benefit owners of Quality of
small and medium-sized enterprises (SMEs) as Life Impacts
well as students and researchers in scientific Prosperity – Investment in R&D; Firm growth; Productivity
disciplines at colleges, CEGEPs, and
Small and Medium-sized
polytechnics. Higher-educated white men tend Target
Businesses, Students and
to be overrepresented within these groups. Population: researchers
In 2017, 63.5 per cent of SMEs were majority Expected Benefits:
owned by men, and men accounted for 53 per Gender:
cent of college enrolments in science, Income Distribution:
technology, engineering, mathematics and
Inter-generational:
computer sciences programs and about 50 per
Small and Medium-sized
cent of college faculty. Visible minorities and Additional
Businesses, Small and Rural
Indigenous people also remain Characteristics:
Communities
underrepresented among entrepreneurs and GBA+ Timing:
college faculty. Many of Canada’s network of
colleges, CEGEPs and polytechnics are located GBA+ Responsive Approach
in smaller urban and rural areas and those Part of the funding will be targeted towards ensuring
surrounding communities also stand to businesses owned by women, Indigenous people, visible
minorities, persons with a disability, and other
benefit.
underrepresented communities have greater access to
Data Sources: Internal program data, Statistics support from the National Research Council.
Canada

Impacts Report 487

 Supporting Business Investments
This measure is aimed at benefiting all Quality of
Canadians by enabling an increase in economic Life Impacts
activity and contributing to productivity growth. Prosperity – Business investment; GDP per capita; Firm
The immediate expensing for investment in growth; Productivity
eligible property will benefit Canadian- Target Canadian-Controlled Private
Controlled Private Corporations (CCPCs). Based Population: Corporations, All Canadians

on tax data on past CCPC investments, this Expected Benefits:

measure may particularly benefit businesses in Gender:
Income
the following sectors: the finance and insurance
Distribution:
sector; the professional, scientific and technical Inter-generational:
services sector; and the agriculture, forestry, Additional Business Employees, Owners and
fishing and hunting sector. It is expected that Characteristics: Shareholders
the benefits would accrue to shareholders and GBA+ Timing:
owners of businesses benefiting from the
measure, which are more likely to be high-
income individuals and men. Indirectly, benefits
could also be passed on to employees, as well
as their customers. Employees in the sectors
expected to benefit most are relatively gender
balanced, with the exception of the agriculture,
forestry, fishing and hunting sector (29 per cent
women).
Data Sources: Internal Administrative Data,
Statistics Canada

Preparing Canada’s Aerospace Sector for Recovery

Programming targets small and medium- Quality of
sized firms in the aerospace sector. Women Life Impacts
are underrepresented in Canada’s Prosperity – Firm growth; Productivity; Access to capital
aerospace sector, comprising 21 per cent of Target Population: Aerospace Sector
the manufacturing workforce and 24 per Expected Benefits:
cent of the maintenance, repair and Gender:
overhaul workforce. Higher paying Income Distribution:
Inter-generational:
engineering and assembly jobs are largely
Additional Small and Medium-sized Firms in
held by men (90 per cent). As aerospace Characteristics: Aerospace Sector
wages are considerably higher than the GBA+ Timing:
economy-wide average, increasing women’s
employment in the sector could contribute GBA+ Responsive Approach
to higher income jobs for women. The Aerospace Regional Recovery Initiative would prioritize
Data Sources: Statistics Canada support for inclusive businesses that are operated by and
employ underrepresented groups, including women,
Indigenous people, Black and other racialized people and
youth.

488 Annex 5
 Leveraging Procurement Opportunities
Diversity in procurement initiatives will seek Quality of Life
to increase the number of underrepresented Impacts
groups, such as women, racialized people and Prosperity – Firm growth; Labour utilization
persons with disabilities, participating in Good Governance – Confidence in public institutions;
Discrimination and unfair treatment
federal procurement. This will include further
Women, Indigenous, Black
opportunities aimed at increasing the Target Population:
Entrepreneurs
participation of Black entrepreneurs in federal
Expected Benefits:
public procurement. Gender:
Indigenous businesses are expected to Income Distribution:
benefit from increased opportunities to Inter-generational:
Additional Indigenous, Black
access the federal government market, and in
Characteristics: Entrepreneurs
particular from a new target to have at least
GBA+ Timing:
five per cent of federal contracts awarded to
businesses managed and led by Indigenous
peoples.

Expanding the Industrial Research Assistance Program

This program will most directly benefit Quality of Life
owners of technology-intensive small and Impacts
medium-sized enterprises, a majority of Prosperity – Employment; Firm growth; Investment in R&D
whom are well paid and highly educated. Owners and workers of innovative
Target Population: small and medium-sized Canadian
Many of the jobs in these firms are related to businesses
science, technology, engineering and Expected Benefits:
mathematics, and women only represented Gender:
23 per cent of that workforce in 2016. Clean Income Distribution:
tech and health innovation firms are eligible Inter-generational:
for Industrial Research Assistance Program Additional
SMEs in Technology Sectors
Characteristics:
support, which can increase the likelihood of
these products or services reaching market, GBA+ Timing:
with indirect positive environmental and GBA+ Responsive Approach
health care impacts for all Canadians. The program will implement a new preferential scoring
Indirect benefits will accrue to all Canadians system that prioritizes applicant firms that have met equity,
through stronger job creation and overall diversity, and inclusion targets or are actively working
towards meeting them. The program will also build on its
economic growth over time.
work to provide support to women and Indigenous-led firms
Data Sources: Statistics Canada through agreements with not-for-profit organizations.

Impacts Report 489

Investing in Canadian Innovators through a Renewed Venture Capital
Catalyst Initiative
The primary target groups for this initiative Quality of
are entrepreneurs, businesses, and Life Impacts
investors, with an additional focus on those Prosperity – Firm growth; Investment in R&D; Productivity
in the life science technologies sector. Men Target Population: Entrepreneurs and Investors
are expected to benefit more than women Expected Benefits:
as they are overrepresented as venture Gender:
capital fund managers and entrepreneurs Income Distribution:
Inter-generational:
receiving investments from these fund
Additional Entrepreneurs and Investors in Life
managers, including amongst the more Characteristics: Sciences Sector
gender balanced life science technologies GBA+ Timing:
sector. Indirect benefits are expected to
accrue more broadly to workers employed GBA+ Responsive Approach
by entrepreneurs receiving investments. Consistent with previous streams of the Venture Capital
Catalyst Initiative, participants will be required to submit
This initiative may also tend to benefit those
gender balance and diversity strategies and recipients will be
with middle to higher incomes, including required to report on statistics related to the number of
investors as well as employees of high- women and Indigenous, Black and other racialized fund
growth potential companies that receive managers and entrepreneurs supported.
investment. Investments through the new
Inclusive Growth stream are expected to
have positive impacts on enhancing
diversity and gender balance in the
Canadian venture capital industry.

Boosting Canada’s Clean Technology Exports

This program will primarily benefit Canadian Quality of
firms looking to export in the clean Life Impacts
technology sector. These companies are Prosperity – Firm growth; Household incomes
predominately led by owners that are male, Environment – Clean tech; Air quality; Clean drinking water
non-Indigenous, younger in age and Target Population: Canadian Clean Technology Firms
located in urban areas. However, the Expected Benefits:
resulting environmental gains from the Gender:
Income Distribution:
success of these technologies will benefit all
Inter-generational:
Canadians, including future generations, in Clean Technology Firms in
terms of combatting climate change and Additional
Ontario, Quebec and British
Characteristics:
supporting other outcomes such as cleaner Columbia
air and water. GBA+ Timing:
Ontario, Quebec and British Columbia are GBA+ Responsive Approach
expected to benefit more from the
The program will continue to include measures to
program, due to the relative sizes of their specifically support underrepresented groups in the clean
clean technology sectors. technology sector, such as firms led by women, youth,
Data Sources: Global Affairs Canada, Indigenous persons and immigrants and newcomers to
Canada.
Statistics Canada, Natural Resources
Canada, Canadian Electricity Association,
Treasury Board.

490 Annex 5
 Removing Barriers to Internal Trade
The removal of internal trade barriers has Quality of
the potential to increase productivity and Life Impacts
reduce costs of goods and services, Prosperity – Productivity; Firm growth; Household incomes
benefiting Canadians broadly. Lower- Target Population: All Canadians
income Canadians will benefit Expected Benefits:
disproportionately as a result of reduced Gender:
costs of living as this group spends more as Income Distribution:
a percentage of their income on Inter-generational:
Consumers, Small and Medium-
consumption of goods. With lower internal Additional
sized Enterprises, Smaller Regional
trade barriers, Canadian business owners Characteristics:
Economies
could also benefit from increased sales and GBA+ Timing:
productivity. Only 15.7 per cent of small and
medium-sized businesses in the broader
economy are wholly owned by women.
Evidence suggests that smaller regional
economies tend to be more reliant on
imports and have more to gain from trade
liberalization. This could help improve the
quality of life for Canadians living and
working in these regions.
Data Sources: Statistics Canada, the Privy
Council Office research data.

Lowering the Cost of Doing Business by Reducing Credit Card

Transaction Fees
Reducing credit card transaction fees will Quality of
benefit all Canadian businesses that accept Life Impacts
credit card payments, although reductions Prosperity – Household incomes; Firm growth
will be designed to provide greater
assistance to small- and medium-sized Target Population: Businesses in Canada
businesses. The majority of businesses in Expected Benefits:
Canada are owned by men. Gender:
Income Distribution:
Inter-generational:
Additional Characteristics: Businesses in Canada

GBA+ Timing:

Impacts Report 491

 A Fair and Competitive Marketplace
More robust competition law enforcement
would directly benefit all Canadians by Quality of
helping the economy work more efficiently Life Impacts
and providing consumers with competitive
prices, product choices and information to Prosperity – Productivity; Firm growth; Financial well-being
Good Governance – Confidence in public institutions;
make informed decisions. Competition law
Victimization rate
enforcement can also have particular
Target
impacts for diverse groups of Canadians All Canadians
Population:
who are disproportionately harmed by
Expected Benefits:
fraud or unfair market practices. Enhanced
Gender:
enforcement capacity would help ensure
more competitive markets and fairer Income Distribution:
pricing, which could disproportionately Inter-generational:
benefit lower income individuals. Overall, Additional
Consumers
this measure would indirectly benefit Characteristics:
women, persons with disabilities, seniors
and lower-educated individuals. GBA+ Timing:
Data Sources: World Bank, OECD

Maintaining Momentum on Regulatory Modernization

While regulatory modernization initiatives
are designed to benefit all Canadians Quality of
through a stronger and more competitive Life Impacts
economy, small businesses tend to benefit Prosperity – Firm growth; Productivity; GDP per capita
the most. The government’s experience Good Governance – Confidence in public institutions
engaging with businesses has revealed that Target Small and Medium Businesses, All
men are more likely to participate in Population: Canadians
regulatory consultations. Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional
SMEs
Characteristics:
GBA+ Timing:

GBA+ Responsive Approach

Consultation processes have been designed to better
ensure that a diverse set of voices from across Canada
inform regulatory modernization. For example, the
External Advisory Committee on Regulatory
Competitiveness has been comprised to promote gender
balance with five of eight spots currently held by women.

492 Annex 5
 Renewing our National Trade Corridors
This program directly benefits all Canadians
by improving Canada’s overall trade Quality of
competitiveness. Additional funding for the Life Impacts
program will also provide short-term
Prosperity – Employment; Household incomes; GDP per capita
economic stimulus.
The program is expected to benefit workers Target Population: All Canadians
in certain sectors, including the Expected Benefits:
transportation and construction sectors, in Gender:
which men make up the majority of the Income Distribution:
workforce (76 per cent and 87 per cent, Inter-generational:
respectively). Additional Transportation and Construction
Characteristics: Sectors, Exporters
Data Sources: Statistics Canada,
Infrastructure Canada GBA+ Timing:

Modernizing Travel and Trade at Our Borders

Overall, these measures will benefit Quality of
travellers, as well as those involved in the Life Impacts
supply chain including importers, couriers, Good Governance – Domestic security; Confidence in public
shippers, and other service providers. institutions
Additionally, the Canada Border Services Target Population: All Canadians
Agency (CBSA) proposes to utilize new Expected Benefits:
technologies, such as facial recognition and Gender:
Income Distribution:
fingerprint verification, and will develop
Inter-generational:
strategies to ensure the equitable Additional Travellers, Importers, Shippers,
application of these technologies across Characteristics: and Couriers
differences in gender, age, mobility, and GBA+ Timing:
race, to promote the security of all
travellers. GBA+ Responsive Approach
The Canada Border Services Agency will actively monitor,
Data Sources: Canadian Border Services
assess and calibrate new technologies in order to mitigate
Agency, Conference Board of Canada demographic impacts and risks.

Strengthening Canada’s Trade Remedy System

Strengthening of the trade remedy system is
expected to benefit all Canadians by Quality of
promoting economic growth and serving all Life Impacts
sectors of the economy. A public consultation
will be conducted before implementing Good Governance – Canada’s place in the world
resulting measures and any unanticipated Canadian Businesses and
Target Population:
impacts on particular groups of Canadians Workers
raised in the consultations will be taken into Expected Benefits:
consideration in design and implementation. Gender:
Income Distribution:
Inter-generational:
Additional Canadian Businesses and
Characteristics: Workers
GBA+ Timing:

Impacts Report 493

 Administration of Trade Controls
This program will primarily benefit the Quality of
dairy, poultry, egg, steel, aluminum, Life Impacts
aerospace and other arms technology Prosperity – Household incomes; Productivity
sectors, which are generally male- Good Governance – Crime Severity Index; Victimization rate;
Canada’s place in the world
dominated and some of which are
concentrated in rural communities. Target Dairy, Poultry, Steel, Aluminum and Arms

Aspects of the program related to Population: Technology Sectors

cross-border movement of arms will Expected Benefits:

Gender:
also benefit vulnerable populations in
Income Distribution:
Canada and overseas through enhanced Inter-generational:
safety and security. Additional Above sectors, Rural or Remote
Data Sources: Statistics Canada, U.S. Characteristics: Populations
Department of Labour, ISED Canadian GBA+ Timing:
Industry Statistics

Better Supports for Exporters

All Canadians will benefit indirectly from the Quality of
economic benefits conferred by broad- Life Impacts
based improvement in export performance. Prosperity – Employment; Firm growth
The proposed increased focus on small and Good Governance – Canada’s place in the world
medium-sized enterprises (SMEs) will Target Population: All Canadians, SMEs
predominantly support men and Caucasian Expected Benefits:
people as 63.5 per cent of Canadian SMEs Gender:
are owned by men and only 12.2 per cent Income Distribution:
are owned by visible minorities.
Inter-generational:
Data Sources: Global Affairs Canada, Export Additional
SMEs, Caucasian
Development Canada, Statistics Canada Characteristics:
GBA+ Timing:

494 Annex 5
 Supporting Innovation and Industrial Transformation
Funding through the Strategic Innovation Quality of
Fund (SIF) is open to all sectors of the Life Impacts
economy and all regions of Canada. Prosperity – Investment in R&D; Firm Growth; Productivity
Investments in SIF are ultimately intended Target Population: Innovative Companies
to promote innovation and productivity Expected Benefits:
growth, strengthening the Canadian Gender:
economy, and benefitting all Canadians. Income Distribution:
Inter-generational:
More generally, SIF projects may result in a Additional
Innovative Sectors
higher proportion of direct benefits Characteristics:
accruing to workers in highly innovative GBA+ Timing:
sectors or in STEM (Science, Technology ,
GBA+ Responsive Approach
Engineering and Mathematics) fields. While
In addition to a project’s economic and innovation value, the
the SIF is sector agnostic, this could include
SIF’s assessment framework also considers any public
sectors like bio-manufacturing and life
benefits that may accrue, including the degree to which a
sciences, or aerospace and automotive project proposal includes gender sensitive initiatives, has
manufacturing. This could result in slightly considered Indigenous impacts and opportunities, and has
greater benefits for men and higher income inclusive plans to encourage diversity in the work place.
individuals given the demographics of these
sectors. Depending on the projects
ultimately selected it is possible that certain
regions in Canada could see greater
benefits from SIF projects than others.
Data Sources: Internal program data,
Statistics Canada

Renewing the Pan-Canadian Artificial Intelligence Strategy

This measure is primarily expected to Quality of
benefit individuals working in the Life Impacts
information and communications Prosperity – Investment in R&D; Firm growth; Productivity
technology (ICT) sector and STEM (science, Artificial Intelligence Sector; All
Target Population:
technology, engineering and mathematics Canadians

and computer sciences) fields. The Expected Benefits:

Gender:
demographics of this group tend to be
Income Distribution:
highly-educated, higher income men from Inter-generational:
urban regions. 55 per cent of people Additional Workers and Researchers in the
employed in the ICT sector hold advanced Characteristics: Artificial Intelligence Sector
degrees and the annual average salary in GBA+ Timing:
the sector was 53.7 per cent higher than the
GBA+ Responsive Approach
Canadian average in 2019. Within the
artificial intelligence commercial sector, only A portion of the funding to support commercialization
activities will be directed towards small and medium-sized
26.5 per cent of individuals employed in ICT
enterprises led by women and visible minorities.
are women. Individuals located in artificial
intelligence hubs in Alberta, British
Columbia, Ontario and Quebec may benefit
more from some measures in the strategy.
Data Sources: Statistics Canada, The
Information and Communications
Technology Council

Impacts Report 495

 Launching a National Quantum Strategy
A national quantum strategy will directly Quality of
benefit individuals working in higher Life Impacts
education and research, information and Prosperity – Investment in R&D; Firm growth; Productivity
communications technology (ICT), and Quantum Science and Technology
Target Population:
science, technology, engineering and Sector, All Canadians
mathematics (STEM) focused sectors who Expected Benefits:
Gender:
are predominantly highly-educated, higher
Income Distribution:
income men from urban regions. Relative to Inter-generational:
their share of the labour force, visible Workers and Researchers in the
Additional
minorities are also more likely to work in Quantum Science and Technology
Characteristics:
STEM fields. Sector

For example, 55 per cent of people GBA+ Timing:

employed in the ICT sector hold advanced GBA+ Responsive Approach
degrees and the annual average salary in Equity, diversity and inclusion will be considered as the
the sector was 53.7 per cent higher than the strategy is further developed and implemented.
Canadian average in 2019. Benefiting
individuals will likely be primarily located in
the four main quantum hubs in Alberta,
British Columbia, Ontario and Quebec.
Quantum science holds immense promise in
areas such as improving drug development
and battery technology, which could have a
transformative benefit for all Canadians.
Data Sources: Statistics Canada

Revitalizing the Canadian Photonics Fabrication Centre

This initiative will benefit the photonics Quality of
sector and quantum photonics subsector, Life Impacts
specifically photonics researchers and
owners of firms, a majority of whom are Prosperity – Firm growth; Investment in R&D
highly educated and men. Men comprise Target Population: Photonics Sector
62 per cent of science, technology,
Expected Benefits:
engineering and mathematics researchers.
Gender:
The average salary of workers in the
information and communications Income Distribution:
technology sector is also 53 per cent higher Inter-generational:
than the Canadian average. Additional
Researchers and Workers in the
Photonics Sector, including
Data Sources: Statistics Canada, Innovation, Characteristics:
Quantum Photonics
Science and Economic Development Canada
GBA+ Timing:

496 Annex 5
 Launching a Pan-Canadian Genomics Strategy
Over the shorter term, this program is likely to
benefit higher-educated and higher-paid Quality of Life
individuals working in postsecondary Impacts
education and science, technology, Prosperity – Investment in R&D; Employment
engineering and mathematics (STEM) across Health – Functional health status
high-value sectors of the Canadian economy. Environment – Natural capital
Women make up only 34 per cent of STEM Genomics Sector, All
Target Population:
bachelor degree holders and men account for Canadians
53 per cent of university enrolments in STEM Expected Benefits:
programs, which carries through to genomics Gender:
research, where a majority of project leads are Income Distribution:
also men. Inter-generational:
Researchers in Genomics
Over the longer term, participation is expected Additional Characteristics:
Sector
to become more balanced as the strategy GBA+ Timing:
unfolds and more women and
underrepresented groups enter the genomics
talent pipeline. All Canadians will benefit from
the transformative changes that genomics
promises, which should create new economic
opportunities and jobs across many industrial
sectors, improve quality of life and health
solutions, and support efforts to reduce
carbon emissions.
Data Sources: Statistics Canada, Genome
Canada

Conducting Clinical Trials

Advancing the development of new drugs, Quality of
therapies and health interventions through Life Impacts
clinical trials would ultimately benefit all Prosperity – Investment in R&D
Canadians. Historically, there has been an Health – Health-adjusted life expectancy; Unmet health
care needs
issue of bias in clinical research, marked by the
underrepresentation of certain demographic Target
Health Researchers, All Canadians
groups, such as women, children, seniors, Population:
Black and other racialized persons and low- Expected Benefits:
Gender:
income populations in research experiments
Income
and clinical trials. By focusing on ensuring sex, Distribution:
gender and other diversity factors are Inter-generational:
considered in research design and Additional
Health Researchers
implementation, this proposal would Characteristics:
contribute towards addressing health GBA+ Timing:
inequities experienced by minority groups
GBA+ Responsive Approach
unrepresented in clinical trials. Beneficiaries of
The Canadian Institutes of Health Research monitors the
this measure will also include independent
extent to which the research it funds addresses sex and
researchers who will receive research grants. gender equity considerations; the proportion of funding
The Canadian Institute of Health Research that goes to Indigenous health research; provides an
programs found that slightly more than 50 per annual report on the gender equity of its programs; and
cent of funded applicants identified as women. would monitor the diversity of funded researchers to
inform program improvements.
Data Sources: Internal program data, Statistics
Canada

Impacts Report 497

 Supporting the Innovation Superclusters Initiative
This measure is expected to benefit both men Quality of
and women. However, the impacts are Life Impacts
expected to vary depending on the final Prosperity – Investment in R&D; Firm growth; Productivity
projects that are supported given the unique Target
Innovative Companies; All Canadians
demographic characteristics of the sectors in Population:
which the Superclusters operate. Expected Benefits:
Gender:
As the program supports innovative and often
Income
technology intensive projects, it is expected
Distribution:
that many of the direct beneficiaries will be Inter-
highly-educated individuals with middle-to- generational:
high incomes. In 2016 the median Additional Highly educated workers, various
employment income of individuals with post- Characteristics: sectors
secondary certificates, diplomas or degrees GBA+ Timing:
was $11,014 higher than that of workers GBA+ Responsive Approach
without one. However, it is hoped that the
Each of the Superclusters is undertaking ecosystem
higher levels of economic growth and other
building activities that support economic inclusion of
benefits ultimately realized through these under-represented groups. These activities can include
investments will benefit all Canadians. For supporting projects that are led by women entrepreneurs
example, several supercluster clean tech or that create work-integrated learning opportunities for
projects are currently underway with the Indigenous people.
potential to lead to environmental benefits for
all Canadians.
Data Sources: Internal program data, Statistics
Canada

Promoting Canadian Intellectual Property

This program directly benefits innovative small Quality of Life
and medium sized enterprises (SMEs) with the Impacts
potential to own intellectual property. These Prosperity – Firm growth; Investment in R&D; Productivity
businesses tend to operate in sectors with Good Government – Confidence in public institutions
strong representation from the science, Innovative Small and Medium-
Target Population:
sized Businesses
technology, engineering and math (STEM)
Expected Benefits:
fields. Higher-educated men tend to be
Gender:
overrepresented within these groups and Income Distribution:
could see greater benefits from the proposed Inter-generational:
support. Women make up only 34 per cent of Additional
SMEs
STEM bachelor degree holders. While the Characteristics:
number of women inventors named on patent GBA+ Timing:
applications originating in Canada is growing,
men still account for the vast majority.
Data Sources: Canadian Intellectual Property
Office, Statistics Canada

498 Annex 5
 Capitalizing on Space-based Earth Observation
The capacity to use information about Earth Quality of
collected from space is generally expected to Life Impacts
benefit Canadians from all regions and Environment – Coastal and marine protection; Natural
demographics, given the positive impacts for disasters and emergencies; Natural capital
Good Governance – Public safety
public safety, public health, agriculture, climate
change adaption, disaster risk reduction, and Target
All Canadians
responsible resource development. Some Population:
activities will benefit particular groups of Expected Benefits:
Gender:
Canadians. For example, services can provide
Income Distribution:
monitoring of sea ice and weather. Inter-generational:
Indirect employment benefits to the space Additional
Space Sector
sector can be expected to disproportionately Characteristics:
benefit men, who comprised 74 per cent of GBA+ Timing:
new hires by Canadian space firms in 2019.
The construction and repair of the receiver
stations will indirectly benefit the construction
trades and engineering, which tend to have
workforces that are predominantly men.
Data Sources: Canadian Space Agency,
Statistics Canada

Science and Technology Collaboration with Israeli Firms

This program will primarily benefit Canadian Quality of
small and medium enterprises (SME) in Life Impacts
innovative industry sectors. Broadly Prosperity – Investment in R&D; Firm growth; Productivity
speaking, the ownership of SMEs in these
Canadian Innovation-focused
sectors tends to be less diverse than that of Target Population:
SMEs
SMEs overall, with their owners less likely to
Expected Benefits:
be from under-represented demographics,
Gender:
such as women, Indigenous persons or
Income Distribution:
visible minorities. These SME owners are
Inter-generational:
likely to have higher levels of education. The
Additional
potential new technologies resulting from Highly-educated Individuals
Characteristics:
this program are expected to benefit all
GBA+ Timing:
Canadians, by providing innovative
solutions to environmental, social and GBA+ Responsive Approach
public health challenges. Global Affairs Canada will conduct outreach to innovative
Data Sources: Global Affairs Canada, women, indigenous, and other minority-owned SMEs to
encourage their participation in the program.
Statistics Canada, and the Organization for
Economic Co-operation and Development.

Impacts Report 499

 Accelerating Broadband For Everyone
High-speed internet will provide benefits to Quality of Life
Canadians living in rural and remote Impacts
communities, where costs of services are Prosperity – Access to broadband; Employment; Household
often higher. Only 41 per cent of households incomes
Society – Social participation; Sense of belonging to local
in rural areas have access to internet speeds
community; Time use
of 50/10 megabits per second compared to
Target Population: Rural and Remote Communities
nearly 100 per cent of households in large
Expected Benefits:
urban areas. Faster broadband projects
Gender:
support diversity by enabling people to fully Income Distribution:
participate in online spaces, for people of Inter-generational:
different background to share resources, and Additional Rural and Remote Communities,
build connections. High-speed internet can Characteristics: Indigenous communities
create new economic opportunities that GBA+ Timing:
benefit rural households and improve
accesses to services, such as remote health
and distance learning. Average weekly
earnings of residents in large urban areas is
estimated to be 15-25 per cent higher than
average weekly earnings of residents in rural
areas.
Similarly, Indigenous communities located in
remote areas can expect to benefit from
faster speeds and improved access to online
services related to health and public safety.
Data Sources: Canadian Radio-television
and Telecommunications Commission,
Statistics Canada

500 Annex 5
 Establishing a new Data Commissioner
A well-functioning online marketplace and Quality of
thriving data-driven technology sector Life Impacts
benefit all Canadians by ensuring a proper Prosperity – Firm growth; Productivity; Investment in R&D
balance with privacy protections and other Society – Trust in others
Good Governance – Confidence in public/private institutions
social considerations.
(data integrity)
There can be biases in the data used by Target
artificial intelligence systems that inform real All Canadians
Population:
life decisions that affect people’s lives, Expected Benefits:
particularly historically disadvantaged Gender:
demographic groups. For example, an Income Distribution:
algorithm used by U.S. hospitals to predict Inter-generational:
which patients would likely need extra care Additional
Disadvantaged Groups
Characteristics:
heavily favoured white patients over Black
patients, despite race not being a variable. GBA+ Timing:
Healthcare cost history was, however, used in
assessing a person’s healthcare needs, but it
happened to correlate with race.
Collecting bias-free data will help prevent
historical harms from being propagated in
automated decisions. Efforts by the Data
Commissioner to promote positive uses and
outcomes associated with data, while
identifying and mitigating harmful and
negative consequences, are expected to
particularly benefit historically disadvantaged
groups.
Data Sources: American Association for the
Advancement of Science

Enhancing Business Condition Data

This measure will benefit all Canadians Quality of
through increased real-time data regarding Life Impacts
business conditions of Canadian enterprises.
Prosperity – Firm growth
This measure will also benefit researchers
Good Governance – Confidence in public/private institutions
who will have better access to relevant data.
Target Population: All Canadians, Business Sector
Canadian businesses will indirectly benefit
Expected Benefits:
through better policies and programs
Gender:
informed by improved data.
Income Distribution:
Data Sources: Statistics Canada Inter-generational:
Additional
Researchers, Business Sector
Characteristics:
GBA+ Timing:

Impacts Report 501

 Continuing Motor Vehicle Safety Oversight
This measure benefits all Canadians by Quality of Life
reducing motor vehicle collisions through Impacts
monitoring and enforcing compliance with
Health – Health-adjusted life expectancy; Functional
the Motor Vehicle Safety Act and its health status
regulations, and developing new regulations Good Governance – Personal safety
to modernize safety oversight. Target
All Canadians
This measure will indirectly benefit certain Population:
sectors, such as the automotive sector and Expected Benefits:
science, technology, engineering and math Gender:
(STEM) fields, by supporting the introduction Income
of new vehicle technologies. Men make up Distribution:
the majority of the workforce in these sectors. Inter-generational:
Additional
Data source: Statistics Canada Automotive Sector, STEM fields
Characteristics:
GBA+ Timing:

Revitalizing the Canadian Commercial Corporation

This initiative will support Canadian firms Quality of
and workers operating in North American Life Impacts
defence supply chains. The Canadian Prosperity – Household incomes; Employment
Commercial Corporation (CCC) is most Exporters and their Supply Chain
Target Population:
active in sectors where jobs are Partners

predominantly held by men, including Expected Benefits:

Gender:
defence, manufacturing, and aerospace,
Income Distribution:
where men hold 75 per cent, 72 per cent, Inter-generational:
and 70 per cent of jobs, respectively. Men Additional Exporters and their Supply Chain
are also expected to indirectly benefit from Characteristics: Partners
this initiative as they are generally GBA+ Timing:
overrepresented among the workforces of
GBA+ Responsive Approach
the supply chain partners who work with
the exporters directly served by CCC. CCC intends to implement a series of reporting and analysis
measures to give the government a better understanding of
Data Sources: ISED, Canadian the composition of the workforce linked to CCC contracts.
Manufacturers and Exporters, Statistics
Canada, Canadian Council for Aviation &
Aerospace

502 Annex 5
Chapter 5: A Healthy Environment for a Healthy
Economy
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 5.

Propelling Clean Tech Projects

This new financing facility is expected to Quality of Life
directly benefit clean technology Impacts
businesses and their employees. Men are Prosperity – Access to capital; Firm growth
expected to benefit disproportionately as Environment – Greenhouse gas emissions; Waste management
they are overrepresented as clean Target Population: Clean Tech Sector
technology founders, senior management, Expected Benefits:
and employers. In 2019, men made up Gender:
Income Distribution:
approximately 64 per cent of the
Inter-generational:
environmental and clean technology Clean technology businesses
workforce. Additional Characteristics:
and employees
The indirect and long-term benefits are GBA+ Timing:
expected to be more gender balanced. GBA+ Responsive Approach
Climate change directly and indirectly
Supported businesses will be required to have a gender and
affects the health and wellbeing of
diversity strategy in place to improve gender equality and
individuals and communities. Funding diversity in their company and during the project. Project
clean technology projects is expected to evaluation will take into consideration a company’s record of
provide long-term benefits to the gender equality and diversity, including board composition
environment within Canada (e.g. and hiring.
greenhouse gas emissions reductions,
clean air and water), which will be
beneficial to all Canadians, in particular
younger and future generations.
Data Sources: Statistics Canada

Impacts Report 503

 Growing Zero-emission Technology Manufacturing
The measure would directly benefit Quality of
profitable zero-emission technology Life Impacts
manufacturers by reducing their tax rates. Prosperity – Business investment; Employment; Wages
Environment – Greenhouse gas emissions; Air quality
To the extent that the measure increases
Zero-emission Technology
returns to shareholders, men and higher- Target Population:
Manufacturers
income individuals are more likely to benefit Expected Benefits:
from the measure than other groups are, as Gender:
these groups receive disproportionately Income Distribution:
large amounts of investment income. Inter-generational:
Employees, Owners and
Reducing corporate tax rates can benefit Additional
Shareholders of Zero-emission
workers by increasing their wages through a Characteristics:
Technology Manufacturers
higher demand for labour. Employees in GBA+ Timing:
manufacturing are mostly men
(72 per cent); therefore, male workers would
primarily realize the share of the benefit of
the measure that falls on labour. Reduced
business costs may also be passed on to
consumers through lower prices. To the
extent that reduced business costs are
passed on to consumers, some technologies
(e.g. zero-emission vehicles) are
disproportionately consumed by higher-
income individuals. To the extent the
measure leads to a net reduction in
greenhouse gas emissions, this would
benefit all Canadians in the long term.
Data Sources: Internal Administrative Data
and Data from Statistics Canada

504 Annex 5
 Accelerating Investment in Clean Energy Technologies
This tax incentive will directly benefit Quality of
businesses that generate clean energy by, for Life Impacts
example, using pumped hydroelectric energy Prosperity – Firm growth; Business investment
storage to generate electricity, or by Environment – Greenhouse gas emissions; Air quality;
producing renewable fuels or hydrogen. Clean tech
Businesses that use certain fossil-fuelled and Target
Clean Energy Sector, All Canadians
certain waste-fuelled electrical generation Population:
equipment may realize a loss of tax benefits. Expected Benefits:
To the extent the proposal leads to a Gender:
Income Distribution:
reduction in greenhouse gas emissions, this
Inter-generational:
would benefit all Canadians in the long term. Additional Utilities Sector, Renewable Fuels
Some of the benefits may be passed on to Characteristics: and Hydrogen Producers
shareholders and owners of benefitting GBA+ Timing:
businesses. While no information is known
on these shareholders and business owners
specifically, tax data suggests that generally
shareholders are disproportionately male and
high income. Corporate tax incentives can
also benefit workers by increasing their
wages through a higher demand for labour.
Benefitting businesses operate primarily in
the utilities and manufacturing sectors where
workers are disproportionately male: 73 and
72 per cent, respectively.
Businesses that may realize a loss of tax
benefits operate primarily in the utilities, oil
and gas extraction, and wood and paper
product manufacturing sectors, where
workers are also disproportionately male: 73,
74, and 83 per cent, respectively.
Data Sources: Internal Administrative Data,
and Data from Statistics Canada

Impacts Report 505

 Enhancing Canada’s Supply of Critical Minerals
Groups that will benefit directly from this proposal Quality of
include scientists and researchers who develop Life Impacts
critical mineral refining and processing Prosperity – Employment; Household incomes;
technology. Science and research fields in Canada Investment in R&D
Environment – Clean tech
are dominated by men, as women account for less
Good Governance – Domestic security
than 30 per cent of those employed in science and
Target
research occupations. Scientists and Researchers
Population:
Enhancing Canada’s supply of critical minerals will Expected Benefits:
indirectly support workers in the mining sector, Gender:
which is centered in rural and remote areas. The Income Distribution:
mining workforce in Canada is predominantly Inter-generational:
men, with women accounting for only 14 per cent Additional Scientists and Researchers,
Characteristics: Workers in the Mining Sector
of the sector’s workers.
GBA+ Timing:
While mining and processing these critical
minerals will generate negative near-term
environmental impacts, significant positive long-
term environmental impacts are expected as
critical minerals are utilized to increase the
availability of batteries and other clean
technologies that reduce emissions. In addition,
these activities will offer long-term benefits by
securing the domestic supply of minerals that will
be increasingly important to the green economy.
Data Sources: Statistics Canada

Charging and Fueling Zero-emission Vehicles

This measure is expected to benefit current Quality of
and future zero-emission vehicle (ZEV) Life Impacts
owners. Research conducted by Simon
Fraser University indicates that early Environment - Air quality; Greenhouse gas emissions
adopters of ZEVs in Canada are more likely Target Population: Current and Future ZEV Owners
to be men, middle-aged, well-educated, Expected Benefits:
high-income, and to live in urban areas. This Gender:
trend is expected to continue in the short Income Distribution:
term.
Inter-generational:
This measure will eventually benefit all Additional Driving Age Population, Urban
Canadians through the improved air quality Characteristics: Regions
and greenhouse gas emission reductions
associated with large-scale ZEV adoption. GBA+ Timing:

506 Annex 5
 Reducing Transportation and Landfill Emissions
The measures will improve environmental Quality of
outcomes for all Canadians by reducing Life Impacts
greenhouse gas emissions from the Environment – Greenhouse gas emissions; Waste
transportation and waste sectors. The management; Air quality
resulting improved air quality and Target Population: All Canadians
associated health outcomes would benefit Expected Benefits:
those with a sensitivity to pollution, Gender:
Income Distribution:
including the elderly, children, and those
Inter-generational:
with pre-existing medical conditions. Additional
Reducing greenhouse gas emissions will Clean Technology Sector
Characteristics:
benefit future generations by alleviating the GBA+ Timing:
negative impacts of climate change.
GBA+ Responsive Approach
Data Sources: United Nations, California Air
Environment and Climate Change Canada intends to
Resources Board, Environment and Climate
undertake a socio-economic impact assessment for each
Change Canada regulation during the first year of development, which will
include consideration of GBA+ factors.

Investing in the Forest-based Bioeconomy

This measure will predominantly benefit Quality of
men, who represent 83 per cent of the Life Impacts
workers in the forest sector, which is Prosperity – Investment in R&D; Productivity; Employment
centered in rural and remote areas. First Environment – Greenhouse gas emissions; Natural capital;
Waste management
Nations and Métis men are also
overrepresented in the sector compared to Target Population: Workers in the Forest Sector

the general population. The program will Expected Benefits:

Gender:
require participating firms to develop a
Income Distribution:
diversity work plan to track and promote Inter-generational:
inclusive hiring practices and environments. Additional Forest Sector, Rural and
Supporting biomaterials that offset fuel and Characteristics: Indigenous communities
plastic use, new technologies and other GBA+ Timing:
upgrades at forest facilities will also support GBA+ Responsive Approach
the maintenance and creation of well-
Program application and contribution agreement materials
paying jobs, and benefit the rural and will both collect data on existing participation levels of
Indigenous communities located near, and different groups and promote greater diversity and
reliant on, the forest sector, especially in involvement of underrepresented populations.
British Columbia, Ontario, Quebec and New
Brunswick.
Data Sources: Natural Resources Canada,
Statistics Canada

Impacts Report 507

 First Federal Green Bond
Green bonds support investments that pursue Quality of
environmental objectives benefitting all Life
Canadians, which could include projects that Impacts
support climate mitigation adaptation, Environment – Greenhouse gas emissions; Adaptation;
biodiversity and conservation, and pollution Conservation
prevention and control. Target Population: All Canadians
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
GBA+ Timing:

Advancing Carbon Capture, Utilization, and Storage Technologies

Over the near and medium term, men and Quality of
individuals with higher education are expected Life Impacts
to benefit from increased science and research Prosperity – Investment in R&D; Household incomes
activities focused on the energy and industrial Environment – Greenhouse gas emissions, Clean tech
sectors. Men are overrepresented in the science Target Clean Tech Companies and
and research fields, and the energy and Population: Researchers; all Canadians
manufacturing sectors, with women accounting Expected Benefits:
for less than 30 per cent of the workforce in the Gender:
Income
energy and manufacturing sectors. Supporting
Distribution:
the advancement of carbon capture, utilization, Inter-generational:
and storage technologies is expected to benefit Additional Energy Sector, Heavy Industry,
all Canadians through reduced greenhouse gas Characteristics: Certain Regions
emissions in the long term.
GBA+ Timing:
Data Sources: Statistics Canada

508 Annex 5
 Cleaner Fuels for a Cleaner Environment
The implementation of the Clean Fuel Quality of
Standard liquid fuels regulation is expected Life Impacts
to benefit all Canadians, including future Health – Self-rated health
generations, by reducing Canada’s Environment – Greenhouse gas emissions; Air quality
greenhouse gas emissions. The regulation Target Population: All Canadians
will ensure the production of cleaner and Expected Benefits:
less polluting fuels, resulting in improved air Gender:
quality that will benefit those with air Income Distribution:
pollution sensitivities (e.g., seniors, children,
Inter-generational:
and those with pre-existing medical
Additional
conditions). The regulation is also expected Clean Energy Sector
Characteristics:
to benefit lower-carbon fuel providers, such GBA+ Timing:
as biofuel producers and feedstock
providers (e.g., farmers and foresters), and
promote the uptake of advanced vehicle
technologies (e.g., electric and hydrogen
fuel cell vehicles). Compliance strategies
under the regulation will also benefit
providers of carbon capture, utilization, and
storage, and hydrogen production
technologies.
Data Sources: United Nations, Canada
Energy Regulator, Sustainable Prosperity,
Ecofiscal Commission

Supporting the Production and Use of Clean Fuels

The near-term benefits of this measure will Quality of
be focused mainly on companies involved in Life Impacts
the production or distribution of low- Prosperity – Firm growth
carbon fuels, which are part of the broader Environment – Air quality; Greenhouse gas emissions;
Natural capital
energy sector. Men are the predominant
demographic group in the energy sector. Target Population: Clean Energy Sector
Expected Benefits:
Over time, increased production and use of Gender:
low-carbon fuels is expected to support the Income Distribution:
Inter-generational:
long-term resilience of the energy sector,
Additional Heavy Industry, Clean Technology
assist energy-intensive sectors like oil and Characteristics: Sector
gas, steel, and cement in reducing their GBA+ Timing:
emissions, and offer new job opportunities
for Canadians. In the long-term, low-carbon GBA+ Responsive Approach
fuels can reduce greenhouse gas emissions, This measure will give priority to supporting firms that
which will benefit all Canadians. commit to workforce diversity.

Data Sources: Statistics Canada

Impacts Report 509

 Low-Carbon Fuel Procurement Program
Procurement of low-carbon fuels is aimed at Quality of
reducing the pollution from fossil fuels, and Life Impacts
reducing greenhouse gas emissions of Environment – Greenhouse gas emissions
government operations. This will reduce the Target Population: All Canadians
impacts of climate change and Expected Benefits:
environmental degradation to the benefit of Gender:
all Canadians. The program is likely to Income Distribution:
Inter-generational:
directly benefit the working age (18-64)
Additional
population in the clean energy sector. Over Clean Energy Sector
Characteristics:
the longer term, the program will indirectly GBA+ Timing:
support the transition of the air and marine
transportation sectors to more sustainable
operations which will have a slight positive
impact on employment in those industries.
Data Sources: Statistics Canada

Supporting a Centre for Innovation and Clean Energy in British

Columbia
Clean technology firms and the energy sector are Quality of
expected to benefit directly from this support. These Life Impacts
fields in Canada are predominantly occupied by Prosperity – Firm growth; Investment in R&D
men. Environment – Clean tech; Greenhouse gas emissions
Target
Women continue to be significantly Clean tech companies
Population:
underrepresented across the energy sector,
Expected Benefits:
comprising approximately 20 to 25 per cent of the
Gender:
workforce. In addition, small and medium-sized Income
clean tech enterprises tend to be majority owned by Distribution:
men, with only 19 per cent being majority owned by Inter-
women in 2017. generational:
Additional
Supporting the advancement of clean technologies Energy Sector
Characteristics:
will benefit all Canadians through improved GBA+
environmental outcomes and reduced Timing:
greenhouse gas emissions in the long term.

510 Annex 5
 Federal Clean Electricity Fund
This measure will reduce greenhouse gas Quality of
(GHG) emissions and support Indigenous Life Impacts
participation in clean electricity Prosperity – Firm growth
investments. All Canadians are expected to Environment – Greening operations; Greenhouse
gas emissions
benefit from reduced GHG emissions from
government operations, while at least five Target
All Canadians
per cent of program benefits will accrue to Population:
Indigenous businesses. Expected Benefits:
Gender:
Due to the current availability of clean Income Distribution:
electricity, incremental benefits are Inter-generational:
expected to accrue largely to clean Additional
Clean Energy Sector
electricity producers in Alberta. Since Characteristics:
women represent about 20 to 25 per cent GBA+ Timing:
of the workforce in the energy sector,
resulting employment opportunities are
expected to favour men.
Data Sources: Statistics Canada

Steering Canada’s Strengthened Climate Plan

Increasing federal policy development Quality of
capacity for clean tech and addressing Life Impacts
domestic and international climate change
Environment – Greenhouse gas emissions
is expected to benefit all Canadians by
Good Governance – Canada’s place in the world
supporting decision making that
Target Population: All Canadians
contributes to reducing greenhouse gas
Expected Benefits:
emissions. As women and young people are
Gender:
more affected by climate change, they are
Income Distribution:
likely to benefit from deeper action on
Inter-generational:
climate change. The additional federal clean
Additional
tech capacity would also promote the Clean Technology Sector
Characteristics:
deployment and export of these
GBA+ Timing:
technologies. As men represent nearly
three-quarters of the labour force in the
clean tech sector, they are likely to benefit
from growth in this sector.
Data Sources: United Nations, Statistics
Canada.

Impacts Report 511

 Support for Farmers and Agricultural Climate Solutions
The direct beneficiaries of these measures Quality of
are older men since 71 per cent of Life Impacts
operators in the agriculture sector are men Prosperity – Household incomes; Food security
and the average age of all farm operators is Environment – Clean tech
55. The farm population also has a median Agricultural Operators, Specific
Target Population:
Regions
household income 17 per cent higher than
Expected Benefits:
the total population. Communities where
Gender:
producers operate will indirectly benefit Income Distribution:
from these measures as support could Inter-generational:
translate into job creation for clean Additional
Agriculture Sector
solutions to farm emissions or economic co- Characteristics:
benefits. Climate action will have long term GBA+ Timing:
benefits for future generations. Proposed
support to farmers through fuel charge
proceeds only benefits producers and
communities in backstop jurisdictions,
which currently include Alberta, Manitoba,
Saskatchewan and Ontario. Data Sources:
Statistics Canada

Integrating Climate into Federal Decisions

Applying a climate lens is expected to Quality of
benefit all Canadians by ensuring that all Life Impacts
federal government decision-making Environment – Greening operations; Adaptation; Greenhouse
considers climate change mitigation, gas emissions
adaptation. and resilience in a rigorous and Good Governance – Confidence in public institutions
consistent way. Strengthened decision- Target Population: All Canadians
making is anticipated to have indirect Expected Benefits:
positive medium and long-term Gender:
environmental impacts. Income Distribution:
Data Sources: Statistics Canada, Inter-generational:
Organisation for Economic Co-operation and Additional
Public sector
Development, Treasury Board Secretariat, Characteristics:
Environment and Climate Change Canada GBA+ Timing:

Stronger Climate-Related Disclosures

Climate-related financial disclosure is Quality of
designed to focus organizations and Life Impacts
investors (in this case the Crown) on
Prosperity – Firm growth
sustainable financial choices, taking into Environment - Greening operations; Greenhouse
account and disclosing the financial risks gas emissions
associated with climate change, which will Good Governance – Confidence in public institutions
result in positive impacts on income growth Target Population: All Canadians
and the environment that benefit all
Expected Benefits:
Canadians.
Gender:
Crown corporations will also be required to
Income Distribution:
implement gender and diversity reporting,
Inter-generational:
starting in 2022.
Additional Characteristics: Clean Technology Sector

GBA+ Timing:

512 Annex 5
 Lower Home Energy Bills Through Interest-free Loans for Retrofits
This program will directly benefit homeowners Quality of
and landlords, including low-income Canadians. Life Impacts
Homeownership rates increase with income and Prosperity – Employment; Household incomes
age, and are also higher for couples and Environment – Greenhouse gas emissions, Energy
efficiency; Air quality
families when compared to single-individual
households. Improving the energy efficiency of Target Homeowners and Landlords; All
Population: Canadians
homes will lower energy bills, and help to
combat energy poverty. Home energy retrofits Expected Benefits:
Gender:
can also improve the climate resiliency of
Income
homes and reduce greenhouse gas emissions, Distribution:
which will benefit all Canadians, especially low- Inter-generational:
income Canadians who are more vulnerable the Additional Couples and Family Households,
consequences of climate change. Characteristics: Energy Efficiency Sector

The program would indirectly benefit the GBA+ Timing:

energy efficiency sector. A 2019 Environmental
Careers Organization of Canada report noted
that women represent 13 per cent of energy
efficiency construction jobs, which is
significantly higher than the national average in
construction overall of approximately four per
cent. The report also noted that the energy
efficiency workforce had a higher proportion of
younger workers between ages 18 and 34 (42
per cent) than the overall construction
workforce.
Data Sources: Statistics Canada, Environmental
Careers Organization of Canada

Impacts Report 513

 Strengthening Climate Resiliency
These measures will benefit all Canadians by Quality of
improving resilience to climate change. Life Impacts
However, certain groups are particularly Prosperity – Firm growth; Household incomes
vulnerable to climate change and will benefit Health – Self-rated health
Environment – Natural disasters and emergencies; Adaptation
more than other Canadians. These include
Good Governance – Household emergency preparedness
coastal, remote, northern, and Indigenous
All Canadians; Coastal, Small, Rural,
communities, as well as minority groups, Target
Remote, Northern, and Indigenous
low-income communities, women, and Population: Communities
elderly people. The creation of a small-scale Expected Benefits:
project stream under the Disaster Mitigation Gender:
and Adaptation Fund will specifically benefit Income
small, rural, remote, northern, and Distribution:
Indigenous communities, while the renewal Inter-
of the Standards to Support Resilience in generational:
Additional Construction, Trades and Engineering
Infrastructure Program will benefit northern
Characteristics: Sectors
communities by addressing their unique
needs. GBA+
Timing:
Both measures will indirectly benefit certain
industries, such as construction, trades, and GBA+ Responsive Approach
engineering, which tend to have workforces The Community Employment Benefits Reporting Framework
that predominantly employ men. As under the Disaster Mitigation and Adaptation Fund
recorded in the 2016 Census, those encourages all proponents to address inequality and build
employed by the construction sector inclusiveness, thereby increasing employment opportunities
identified as: for apprentices, Indigenous people, women, persons with
disabilities, veterans, youth, and new Canadians.
 87 per cent men;
 18 per cent immigrants; and
 11 per cent visible minorities,
including two per cent Black
Canadians.
Data Sources: Statistics Canada, BuildForce
Canada

514 Annex 5
 Keeping Canadians Safer from Floods
Canadians living in flood-prone areas will Quality of
primarily benefit. Based on preliminary Life Impacts
analysis, this group represents a gender- Prosperity – Protection from income shocks
balanced subset of the Canadian Environment – Natural disasters and emergencies; Adaptation
Good Governance – Household emergency preparedness
population, which is not substantially
Specific Regions (Coastal and
skewed by income. This finding is supported Target Population:
Floodplain)
by a recent Statistics Canada report on five
Expected Benefits:
major flood events from 2019. Gender:
Homeowners and renters, particularly in Income Distribution:
coastal and floodplain regions, will benefit Inter-generational:
Additional Homeowners, Indigenous peoples
from a more accurate understanding of
Characteristics: in Specific Regions
flood risk for insurance purposes. Areas of
GBA+ Timing:
higher flood risk exist in both rural and
urban areas due to construction in GBA+ Responsive Approach
floodplains over time. Where applicable, this program will adhere to Indigenous
Indigenous peoples are more at risk of Ownership Control Access and Possession principles to
disseminate flood hazard information in Indigenous
flooding due to both pre-existing socio-
communities and conduct Indigenous engagement to
economic vulnerabilities and the legacy of
ensure openness and transparency in its data collection and
colonialism. Furthermore, Indigenous publication practices.
communities are more likely to be located
in flood prone areas.
Data Sources: Statistics Canada, Natural
Sciences and Engineering Research Council

Impacts Report 515

 Improving Wildfire Resilience and Preparedness
These measures will primarily benefit Quality of
Canadians who are the most affected by Life Impacts
wildfire. Rural and remote communities are Health – Functional health status; Self-rated mental
particularly vulnerable to wildfire disasters, health
Environment – Natural disasters and emergencies; Air
especially Indigenous communities, with
quality; Adaptation
70 per cent of Indigenous people living in or
Good Governance – Household emergency preparedness
near forested areas. People with pre-existing
Target Rural and Remote Regions
medical conditions (e.g. asthma) can be
Population: exposed to Wildfire Risk
disproportionately affected by wildfire smoke,
Expected Benefits:
while individuals with mental health issues
Gender:
can also be disproportionately affected by
Income
stress and trauma resulting from evacuations.
Distribution:
Food and water shortages resulting from a
Inter-generational:
wildfire event also significantly affect people
Rural and Remote Regions
with either physical or mental health issues. Additional
particularly affected by wildfire,
These initiatives may create employment Characteristics:
Indigenous Communities
opportunities in the forest sector, with non-
GBA+ Timing:
immigrants, men, and people over 45 years of
age being the most likely to benefit as they GBA+ Responsive Approach
The Parks Canada Agency and Natural Resources
respectively represent 88, 83 and 53 per cent
Canada have committed to work with partners to
of forestry workers.
address gender and diversity challenges including
Data Sources: Statistics Canada, International improving the representation of women in fire
Union for Conservation of Nature, Parks management.
Canada Agency, Canadian Parks Council,
International Journal of Wildland Fire,
Association for Fire Ecology

516 Annex 5
Supporting Provincial and Territorial Disaster Response and Recovery
Supporting the Disaster Financial Assistance Quality of
Arrangements (DFAA) program will ensure Life Impacts
that the federal government is able to Environment – Natural disasters and emergencies;
provide financial assistance to provinces and Adaptation
territories affected by large natural disasters Good Governance – Emergency preparedness
such as floods and storms, which is Target Population: All Canadians

increasingly necessary for adapting to Expected Benefits:

climate change. This program benefits all Gender:
Income Distribution:
individuals in areas affected by natural
Inter-generational:
disasters. In recent years, the DFAA funds
Additional Characteristics: Specific Regions
have benefited Canadians all across the
GBA+ Timing:
country, including in British Columbia
(wildfires), Alberta (Calgary flood and Fort
McMurray wildfire), Manitoba (spring floods),
Quebec (spring floods) and New Brunswick
(spring floods).

Addressing Climate Change in Yukon

Working in collaboration with Crown- Quality of
Indigenous Relations and Northern Affairs Life Impacts
Canada and Environment and Climate Environment – Adaptation; Greenhouse gas emissions
Change Canada, this measure directly
Northerners, Residents of the
benefits all residents and communities in Target Population:
Yukon Territory
the Yukon. Climate change has a Expected Benefits:
disproportional impact on Indigenous Gender:
peoples, women, and children. The measure Income Distribution:
positively impacts the Indigenous Inter-generational:
population living in Yukon, who make up 23 Additional Residents of the Yukon Territory,
per cent of the population in the Territory. Characteristics: Indigenous peoples

Children and youth will also GBA+ Timing:

disproportionately benefit from this
measure, given that the benefits of taking
action to address climate change today will
be realized over the medium to longer-
term.
Data Sources: Statistics Canada

Impacts Report 517

 Preserving the HMS Erebus and HMS Terror – Franklin Expedition
This measure is expected to benefit all Quality of
Canadians, including future generations, by Life Impacts
protecting the high cultural value of these Prosperity – Employment
artifacts and meeting Canada’s previous Environment – Conservation areas
Society – Cultural and historical preservation
commitment to the United Kingdom to
manage and protect them. Indigenous Target Population: All Canadians
peoples, specifically Inuit, are expected to Expected Benefits:
Gender:
benefit directly from the initiative, as will
Income Distribution:
rural and remote populations near the Inter-generational:
wrecks. The initiative additionally provides Additional Inuit peoples and/or other
indirect benefits to the communities of Characteristics: populations in the area
Cambridge Bay and Gjoa Haven, due to GBA+ Timing:
employment opportunities for community
members and increased spending in the
area. The wrecks and the Franklin story are
expected to attract an increased number of
cruise ship visits to Gjoa Haven, providing
income to the municipality, community
members, and artists.
Data Sources: Statistics Canada

Historic Investments in Canada’s Natural Legacy

Conserving more land and inland waters in Quality of
Canada, and protecting species at Life Impacts
immediate risk of disappearing from the Environment – Conservation areas; Climate change
wild in Canada, are expected to benefit all adaptation; Canadian Species Index; Natural capital
Society – Sense of belonging to community; Participation in
Canadians by protecting biodiversity,
cultural practices; Connection to land
helping to adapt to climate impacts, and
Target Population: All Canadians
maintaining natural carbon sinks.
Expected Benefits:
These measures are expected to have Gender:
pronounced benefits for Indigenous Income Distribution:
peoples and Canadians employed in the Inter-generational:
conservation field, and long-term benefits Additional Indigenous peoples, Conservation
Characteristics: Workers
for youth and future generations.
Expanding Indigenous Guardians GBA+ Timing:
programming will have a positive impact on
the Indigenous communities implicated in
those activities.
Data Sources: Statistics Canada, United
Nations

518 Annex 5
 Conserving Canada’s Oceans
Marine conservation will directly and
Quality of
indirectly benefit all Canadians through
Life Impacts
broad long-term health and climate change
mitigation impacts. It may directly and Prosperity – Employment; Labour market participation; Future
outlook
indirectly positively impact the socio-
Environment – Conservation areas; Coastal and marine
economic outcomes for some working-age
protection; Climate change mitigation
men in Arctic and coastal communities,
Target Population: All Canadians
including Inuit and other Indigenous
Expected Benefits:
peoples, through economic development
Gender:
activities associated with sustaining natural
Income Distribution:
ecosystems.
Inter-generational:
Further protection of marine areas may Indigenous peoples, Arctic and
directly negatively impact the fishing and oil Additional
Coastal Communities, Tourism,
Characteristics:
and gas industries, which predominately Conservation Industry
employ working-age men, in areas where GBA+ Timing:
certain conservation measures are
GBA+ Responsive Approach
established.
Implementing strategies to promote inclusion and ensure
Data Sources: Parks Canada, Statistics any disproportionate impacts on Indigenous and coastal
Canada communities are mitigated through participation as well as
site management and monitoring opportunities.

Reducing Ocean Plastics that Threaten Marine Life

The ghost gear program is expected to Quality of
generate benefits for Canadians in coastal Life Impacts
communities through improved outcomes Prosperity – Household incomes
for aquatic species, more sustainable Environment– Waste management; Coastal and marine
protection
fisheries, and cleaner coastlines and
waterways for recreational and tourism Target Population: Coastal Communities

activities. The majority of ghost gear Expected Benefits:

Gender:
retrieval operations are carried out by those
Income Distribution:
with experience working in the fisheries Inter-generational:
sector. As a result, the program’s indirect Additional
Commercial Fishing Sector
benefits are primarily realized by men as Characteristics:
they make up 70 to 80 per cent of fish GBA+ Timing:
harvesters. Coastal Indigenous
organizations and communities, which have
lower average incomes compared to
Canada as a whole, also benefit from the
program as their expertise and knowledge
has supported successful projects in the first
call for proposal process. Overall, future
generations will benefit from reduced
pollution and healthier oceans.

Data Sources: Statistics Canada

Impacts Report 519

 Preserving Wild Pacific Salmon
Stabilizing and recovering wild Pacific Quality of
salmon stocks directly benefits men as they Life Impacts
represent the majority of participants in the Prosperity – Household incomes; Food security
recreational and commercial fishing sector. Environment – Conservation areas; Coastal and marine
protection; Water quality in Canadian rivers
This will further benefit rural and remote
Society – Participation in cultural practices
communities by ensuring economic
Pacific Region fishers, Pacific
activities derived from Pacific salmon can Target Population:
region coastal communities
continue into the future. First Nations Expected Benefits:
communities in the Pacific region benefit Gender:
from these actions as approximately 42 per Income Distribution:
cent of commercial salmon licenses are Inter-generational:
Indigenous commercial communal licenses, Additional First Nations, Commercial and
and Pacific salmon are an important species Characteristics: Recreational Pacific region Fishers
harvested for food, social and ceremonial GBA+ Timing:
purposes.
Habitat and biodiversity conservation
measures are expected to generate ultimate
benefits for all Canadians through improved
outcomes for aquatic species and cleaner
waterways and forests that support our
food and freshwater systems, and provide
recreation and tourism opportunities.
Data Sources: Fisheries and Oceans Canada

Sustainable Aquaculture Management

Sustainable aquaculture will benefit Quality of Life
Indigenous and non-Indigenous coastal and Impacts
rural communities through an improved Environment – Coastal and marine protection
environment, economic activity and Good Governance – Confidence in public institutions
additional job opportunities. Target Population: Coastal Communities
All Canadians will indirectly benefit from Expected Benefits:
strengthened environmental regulations that
Gender:
support a cleaner marine ecosystem and
protections for wild fish stock. Income Distribution:
Data Sources: Statistics Canada Inter-generational:
Additional Coastal Communities, Aquaculture
Characteristics: Sector
GBA+ Timing:

520 Annex 5
 Developing the Canada Water Agency
All Canadians will benefit from safe, clean, Quality of Life
and well-managed water and water systems Impacts
across Canada, with particular benefits for Environment – Clean drinking water; Water quality in
farmers and the agricultural sector. This Canadian rivers
initiative is expected to produce direct Target Population: All Canadians
benefits for Indigenous peoples, including Expected Benefits:
First Nations, Inuit, and Métis, through Gender:
Income Distribution:
expanded engagement with regional
Inter-generational:
Indigenous governing bodies and Additional
organizations on the mandate and structure Indigenous Communities
Characteristics:
of the Canada Water Agency. It is expected GBA+ Timing:
to benefit Indigenous women, Indigenous
elders, and Indigenous youth, through the GBA+ Responsive Approach
long-term protection of freshwater resources Funding for this initiative will be used to ensure that
for generations to come. Indigenous governments and representative bodies have
adequate resources to meaningfully contribute to the
Data Sources: Statistics Canada, Lake Simcoe discussion.
Region Conservation Authority, Canada’s
Changing Climate Report (2019), Lake Simcoe
Diagnostique

Better Understanding our Environment

Direct benefits will accrue to members of Quality of
the Canadian public and organizations Life Impacts
wishing to analyze the links between Environment – Natural capital
ecosystems, society, and the economy. In Good Governance – Confidence in public institutions
the longer-term, as comprehensive and up- Target Population: All Canadians
to-date data on Canada’s ecosystems helps Expected Benefits:
promote better decision-making and Gender:
Income Distribution:
environmental management, all Canadians,
Inter-generational:
including future generations, would directly Additional
benefit. This measure could also strengthen Researchers
Characteristics:
our understanding and available data GBA+ Timing:
linking the changing environment to
marginalized and vulnerable communities.
Data Sources: Statistics Canada, Canadian
Institute for Climate Choices, Environment
and Climate Change Canada

Impacts Report 521

 Support for the Polar Continental Shelf Program
This measure will predominantly benefit Quality of
men, who represent 78 per cent of workers Life Impacts
in STEM fields and a similar proportion of Prosperity – Child, student, and adult skills; Employment
program funding recipients. Funding Environment – Satisfaction with local environment; Coastal
and marine protection
directed at engaging with local northern
communities and facilitating access to Target Population: Researchers Working in the North
training for Inuit youth is expected to create Expected Benefits:
Gender:
new economic and employment
Income Distribution:
opportunities for young northerners Inter-generational:
regardless of gender. The program will also Additional Northern and Inuit Communities,
continue to work to promote greater Characteristics: Researchers
inclusion of under-represented groups in GBA+ Timing:
scientific research.
GBA+ Responsive Approach
Improved information about Arctic
Selection criteria have recently been updated to promote
ecosystems will also support communities the greater inclusion of women and diverse groups in
and others in making informed decisions research, support Indigenous peoples as partners, and foster
when faced with land planning and other the next generation of scientists in projects supported by the
questions into the future. program.

Data Sources: Natural Resources Canada,

Statistics Canada, Natural Sciences and
Engineering Research Council of Canada

Continuing Canada’s Chemicals Management Regime

Renewing the Chemicals Management Plan Quality of
is expected to continue to benefit all Life Impacts
Canadians by reducing risks to human Health – Health-adjusted life expectancy; Self-rated health
health and the environment created by Environment – Air quality; Water quality in Canadian rivers;
Waste management
chemicals, including those in foods,
consumer products, cosmetics, pesticides, Target Population: All Canadians

and drugs. Communities and social groups Expected Benefits:

Gender:
who are exposed to higher pollution levels
Income Distribution:
(including women, Indigenous peoples, Inter-generational:
visible minorities, and lower-income Additional
Vulnerable Populations
groups) are expected to benefit from action Characteristics:
in this area, as well as those most vulnerable GBA+ Timing:
to chemicals (e.g. children and elderly
people).
Data Sources: Statistics Canada, Auditor
General of Canada, United Nations,
Canadian Institute for Health Information

522 Annex 5
 Replacing Lost Revenue at Parks Canada due to COVID-19
This measure will support Parks Canada’s Quality of
workforce, 48.8 per cent of whom are Life Impacts
women and 7.7 per cent of whom are
Prosperity – Employment; Protection from income shocks
Indigenous people. This measure also Health – Physical activity
ensures Parks Canada can continue to Environment – Satisfaction with local environment
deliver its outdoor recreational services, Target Population: All Canadians
directly benefitting all Canadians and their Expected Benefits:
well-being. Middle-income Canadians are Gender:
more likely to use Parks Canada spaces Income Distribution:
compared to higher and lower income
Inter-generational:
Canadians. Physical distancing measures Additional
have increased Canadians’ use of green Rural and Remote Communities
Characteristics:
spaces, and Canada’s National Parks GBA+ Timing:
contribute to national culture and identity.
The continued operation of Parks Canada
sites benefits the communities and local
businesses, often in rural and remote areas,
that rely on Parks as the main source of
visitor traffic.
Data Sources: Parks Canada 2019-2020
Employment Equity Annual Report

Continuing to Protect Canada’s Oceans

Extended funding for the Canadian Coast Quality of Life
Guard Auxiliary Chapter in the Arctic and the Impacts
Indigenous Community Boat Volunteer Pilot Environment – Coastal and marine protection
Program will directly benefit Indigenous Good-Governance – Personal safety
coastal communities in Canada’s Arctic. Target Population: Arctic Coastal Communities
Communities involved in the program will Expected Benefits:
benefit from increased capacity and
Gender:
resources to respond to marine safety
incidents and training opportunities related Income Distribution:
to preventing and responding to arctic Inter-generational:
marine emergencies. Additional Arctic Coastal Communities,
Indirectly all northerners will benefit from Characteristics: Indigenous peoples
safer oceans and waterways. GBA+ Timing:

Impacts Report 523

 Accelerating Canada’s Net-zero Transformation Through Innovation
The Strategic Innovation Fund’s Net Zero Quality of
Accelerator will focus on projects intended Life Impacts
to reduce greenhouse gas emissions and Prosperity – Investment in R&D; Firm growth; Productivity
support industrial transformation, those that Environment – Greenhouse gas emission; Clean tech
support decarbonisation of large industrial Target Population: Innovative Companies
emitters and those that lead to meaningful Expected Benefits:
domestic emission reductions. Gender:
Income Distribution:
As men tend to be the predominant Inter-generational:
demographic group in the sectors these Additional
High Emitting Sectors
firms operate in (i.e. the energy sector, Characteristics:
heavy industry), they may accrue a greater GBA+ Timing:
proportion of direct benefits. Net Zero GBA+ Responsive Approach
Accelerator projects may also result in a In addition to a project’s economic and innovation value, the
higher proportion of direct benefits SIF’s assessment framework also considers any public
accruing to workers in STEM fields who benefits that may accrue, including the degree to which a
contribute to technological solutions and project proposal includes gender sensitive initiatives, has
are more likely to be higher-income men. considered Indigenous impacts and opportunities, and has
inclusive plans to encourage diversity in the work place.
A greater proportion of benefits from this
measure may also be felt in regions with
existing concentrations of high emitters and
heavy industry.
Data Sources: Internal program data,
Statistics Canada

Lake of the Woods

This measure will primarily benefit Quality of
communities established in the Lake of the Life Impacts
Woods Basin in Manitoba and Ontario, Environment – Water quality in Canadian lakes and rivers
including Indigenous communities. Reducing People living in Lake of the
Target Population:
phosphorus levels that create toxic algae and Woods Basin
undertaking research will help improve water Expected Benefits:
quality, health and economic activities, such Gender:
as tourism and fishing around the lake. Income Distribution:
Inter-generational:
Additional Characteristics: Indigenous Communities
GBA+ Timing:

524 Annex 5
 Renewing the Clean Growth Hub and Clean Technology Data
Strategy
The continuation of the Clean Growth Hub Quality of
and Clean Technology Data Strategy will Life Impacts
primarily benefit clean technology Prosperity – Employment
companies, particularly small and medium- Environment – Clean tech
sized enterprises (SMEs). These enterprises Target Population: Clean Technology Sector
tend to be owned by men and are less Expected Benefits:
diverse in ownership than SMEs in Canada Gender:
overall. Metrics collected under the data Income Distribution:
strategy (including gender, age, education, Inter-generational:
Additional Characteristics: Clean Technology SMEs
race, etc.) will provide the federal
government with a greater understanding on
how to support inclusivity and address the GBA+ Timing:
gender and pay disparity in the sector.

Interim Capital Asset Program Capacity for Parks Canada

This measure would primarily support Parks Quality of
Canada’s workforce, of which currently Life Impacts
48.8 per cent are women and 7.7 per cent
Prosperity – Employment
are Indigenous people. Environment – Satisfaction with local environment
More broadly, ensuring sufficient internal Target Population: Parks Canada
capacity for Parks Canada’s workforce Expected Benefits:
provides an indirect benefit to the Gender:
communities where Parks Canada national Income Distribution:
parks and sites are located, many of which Inter-generational:
are rural and remote. Additional
Rural and Remote Communities
Data Sources: Parks Canada Agency Characteristics:
GBA+ Timing:
Learning to Camp
The Learn to Camp program is expected to Quality of
benefit all Canadians by allowing more Life Impacts
Canadians to experience the outdoors and
Health – Physical activity
learn about the Canadian environment and Environment – Satisfaction with local environment;
heritage. The renewed funding is expected to Connection to lands
engage up to 40,000 children annually, Society – Sense of pride/belonging to Canada
bringing the total amount of youth engaged Target Population: All Canadians
through the Learn to Camp program to Expected Benefits:
100,000. This measure is not expected to Gender:
affect individuals differently on the basis of Income Distribution:
gender, but will target urban children and Inter-generational:
their families, visible minorities, Canadians Visible Minorities, Canadians
with disabilities, and Indigenous people. Additional Characteristics: with Disabilities, Indigenous
People
Urban Canadians and Indigenous
communities generally have higher numbers GBA+ Timing:
of low-income individuals.

Impacts Report 525

 Continuing Ballast Water Management
This measure directly benefits coastal and Quality of Life
shoreline communities by protecting marine Impacts
ecosystems and infrastructure from the Environment – Coastal and marine protection
establishment and spread of invasive aquatic
Target Population: Coastal Communities
species.
Expected Benefits:
Protecting marine environments from Gender:
invasive species also benefits a wide variety Income Distribution:
of groups that rely on a healthy marine Inter-generational:
ecosystem, including Indigenous Indigenous Communities,
communities, fishers, and recreational Additional Characteristics: Fishers, Recreational
Boaters
boaters.
GBA+ Timing:
Continuing Tanker Safety Inspections
This measure directly benefits coastal and Quality of
shoreline communities by reducing the risk Life Impacts
of hazardous material leaks and spills from
Environment – Coastal and marine protection
marine vessels.
Hazardous material leaks or spills can have Target Population: Coastal Communities
broad and diverse impacts on marine Expected Benefits:
environments. The reduced risk of leaks or
Gender:
spills benefits a variety of groups that rely on
Income Distribution:
a healthy marine ecosystem, including
Inter-generational:
Indigenous communities, fishers, and
Coastal Communities,
recreational boaters.
Additional Characteristics: Indigenous Communities,
Fishers, Recreational Boaters

GBA+ Timing:

526 Annex 5
Chapter 6: Strengthening the Cities and Communities
We Call Home
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 6.

Supporting the National Arts Centre

Employees of the National Arts Centre Quality of
directly benefit from this initiative, as Life Impacts
funding helps the National Arts Centre to
Prosperity – Employment
avoid deficit-reduction activities, such as
Society– Sense of pride/belonging to Canada; Cultural and
laying off employees. The workforce of the historical preservation
National Arts Centre is gender-balanced. Target Population: National Arts Centre Employees
This initiative also directly supports the Expected Benefits:
performing arts sector, which is gender- Gender:
balanced and characterized by high levels of Income Distribution:
education, precarious employment, and low Inter-generational:
median incomes. Artists, performers, composers,
Additional
Data Sources: Government of Canada, choreographers, writers, and other
Characteristics:
Statistics Canada performing arts workers
GBA+ Timing:

Supporting the Recovery of Arts, Culture, Heritage and Sport Sectors”

These measures will primarily benefit those Quality of

working in cultural sectors, including arts, Life Impacts
live events, heritage, sport, and music. Prosperity – Employment; Household incomes
These sectors are roughly gender-balanced Society – Sense of pride/belonging to Canada; Sense of
belonging to local community; Participation in cultural events
and characterized by high levels of
education, precarious employment, and low Target Population: Heritage, Arts, and Sport Sectors
incomes, particularly the arts sector. Expected Benefits:
Gender:
Ongoing support for performing arts
Income Distribution:
festivals and community-based cultural Inter-generational:
events, celebrations, and commemorations Local Community Groups (e.g.,
is also expected to benefit all Canadians Additional Indigenous, LGBTQ2, Racialized
who participate in such events, as well as Characteristics: Canadians), Artists and Cultural
specific groups who use events to celebrate Workers
their shared culture, such as LGBTQ2 pride GBA+ Timing:
festivals and Indigenous pow wows.
Data Sources: Statistics Canada

Impacts Report 527

 Supporting Canadian TV and Film Productions through COVID-19
This measure primarily benefits the Quality of
Canadian television and film production Life Impacts
sector, particularly smaller producers and Prosperity – Employment; Firm growth
productions companies that rely on interim Society – Sense of pride/belonging to Canada
financing. As a result, workers in this sector TV and Film Production Firms and
Target Population:
Workers
may benefit from increased support to their
Expected Benefits:
employers. While women are generally
Gender:
underrepresented in creative roles on film Income Distribution:
and television productions, they are Inter-generational:
overrepresented in other Additional
TV and Film Production Workers
production roles, including costume Characteristics:
designers, hair and makeup specialists, GBA+ Timing:
script supervisors, accountants, and
communications specialists.
Data Sources: Women in View, Canadian
Unions for Equality on Screen

Support for the Canadian Broadcasting Corporation / Radio-Canada

This measure would directly benefit Quality of
CBC/Radio-Canada and its employees, as Life Impacts
well as indirectly benefit all Canadians Prosperity – Employment
through the continued broadcasting of Society – Sense of pride/belonging to Canada; Sense of
CBC/Radio-Canada television and radio belonging to local community
news and entertainment programming. Good Governance – Trust in media
CBC/Radio-Canada employs over 7,500 Target Population: All Canadians

individuals, approximately 49 per cent of Expected Benefits:

whom are women, 14 per cent visible Gender:
minorities, eight per cent LGBTQ2, three per Income Distribution:
cent persons with disabilities, and two per Inter-generational:
Additional
cent Indigenous peoples. CBC/Radio-Canada Employees
Characteristics:
Data Sources: CBC/Radio-Canada internal GBA+ Timing:
data
GBA+ Responsive Approach
To work towards its goal of a workforce and on-air content
that is fully representative of the Canadian population,
CBC/Radio-Canada has been implementing a Diversity and
Inclusion Plan (2018-2021).

528 Annex 5
 Support for the Canadian Book Industry
This measure would directly benefit the Quality of Life
Canadian book industry, specifically Impacts
bookstores and book publishers.
Prosperity – Employment; Protection from income shocks
Support for increasing online sales would Canadian Book Industry and
support many bookstores in all regions of Target Population:
Workers
the country, including bookstores in Expected Benefits:
Francophone minority communities, which Gender:
have been particularly affected by the Income Distribution:
pandemic. As women make up Inter-generational:
approximately 70 per cent of the workforce Additional
Francophone Minority Bookstores
in the English-language book publishing Characteristics:
industry, they may particularly benefit from GBA+ Timing:
increased support for online sales of
Canadian-authored books.
Data Sources: Nordicity (2018)

Memorial to the Victims of Communism

This initiative directly benefits all Canadians
by providing a space to commemorate the Quality of
victims of totalitarian communism. The Life Impacts
memorial indirectly benefits communities Society – Sense of pride/belonging to Canada; Cultural and
who have come to Canada to seek refuge, historical preservation
especially those who came to Canada to Target Population: All Canadians
escape totalitarian communism and their Expected Benefits:
descendants. By offering a space to hold Gender:
ceremonies and facilitating collective Income Distribution:
recognition of specific victim groups, the Inter-generational:
memorial offers indirect benefits to these Additional
communities. Immigrants and Refugees
Characteristics:
GBA+ Timing:

Boosting Charitable Spending in Our Communities

The government will be consulting during
the coming months on increasing the Quality of
disbursement quota. Increasing the Life Impacts
disbursement quota would increase overall
Society – Charitable giving
levels of expenditures by registered
charities on their programs and activities in Target Population: Charitable Sector, All Canadians
Canada. This would directly benefit the Expected Benefits:
public, including beneficiaries of charitable Gender:
programs in Canada and abroad. Income Distribution:
Indirectly, an increase in annual Inter-generational:
disbursements could benefit persons Additional
Charitable Sector
employed in the charitable sector. It is Characteristics:

estimated that approximately 75 per cent of GBA+ Timing:

individuals employed in the non-profit and
charitable sector are women.
Data Sources: Statistics Canada, theonn.ca

Impacts Report 529

 Canada Community-Building Fund
This measure will benefit all Canadians Quality of
through the construction and maintenance Life Impacts
of public infrastructure across Canada, Prosperity – GDP per capita; Productivity; Employment
including roads, bridges, public transit, Environment – Clean drinking water; Water quality in
Canadian rivers; Waste management
community buildings, and water and
wastewater projects. Canadians who use this Target Population: All Canadians
infrastructure will directly benefit from safe Expected Benefits:
Gender:
and reliable transportation networks,
Income Distribution:
revitalized and greener community spaces, Inter-generational:
and clean air and drinking water. These Additional Construction Trades and
projects will also contribute to economic Characteristics: Engineering Sectors
growth and prosperity. GBA+ Timing:
This initiative will indirectly benefit certain
industries, such as construction trades and
engineering, which tend to predominantly
employ men. As recorded in the 2016
Census, those employed by the construction
sector identified as:
 87 per cent men;
 18 per cent immigrants; and
 11 per cent visible minorities, including
two per cent Black Canadians.
Data Sources: Statistics Canada

National Infrastructure Assessment

This measure will benefit all Canadians by
Quality of
strengthening long-term infrastructure Life Impacts
planning, including in the context of
Good Governance – Confidence in public institutions
transitioning to a net zero economy. It will
Additional future quality of life impacts (e.g., prosperity,
help all orders of governments to assess
environment, society)
infrastructure needs and to prioritize
Target
investments that will have the greatest All Canadians
Population:
benefits for all communities, urban and rural
Expected Benefits:
alike. Ultimately, stronger planning and
Gender:
better decision-making today will result in
Income Distribution:
better infrastructure tomorrow, which will
Inter-generational:
benefit younger and future generations,
Additional
promote jobs and growth, foster inclusivity
Characteristics:
and social equality, and reduce greenhouse
gas emissions. GBA+ Timing:

530 Annex 5
Next Step Towards High Frequency Rail in the Toronto-Quebec City
Corridor
The infrastructure investments will reduce Quality of Life
bottlenecks and improve fluidity and Impacts
connectivity. Together, this will improve the Prosperity – Employment; Productivity
quality of life of Canadians living in nearby Environment – Greenhouse gas emissions; Air quality
Society – Time use
areas and those using VIA Rail services in
Travelers in the Quebec City to
the Quebec City-Toronto corridor. Target Population:
Toronto corridor
The construction of these projects will Expected Benefits:
indirectly benefit certain industries, such as Gender:
construction trades and engineering, which Income Distribution:
tend to have workforces that predominantly Inter-generational:
Construction Trades and
are men. Additional Characteristics:
Engineering
Work to further explore the high frequency GBA+ Timing:
rail project will support a final investment
decision on the project, which could result
in direct benefits to people in the Quebec
City- Toronto Corridor in the form of faster,
more reliable rail service. In the long term,
all Canadians could also benefit from lower
greenhouse gas emissions as more
travellers choose to travel by rail.
Data Sources: Statistics Canada

Canada's National Capital Region

This initiative benefits those living in and Quality of
visiting the National Capital Region, who Life Impacts
access the assets and park lands owned and Environment - Satisfaction with local environment;
maintained by the National Capital Conservation areas
Society – Accessible environments; Sense of pride/belonging
Commission, such as the Rideau Canal
to Canada
Skateway. Improved transit integration
Target Population: National Capital Region
could improve mobility for transit users who
Expected Benefits:
are generally lower-income. Indirectly,
Gender:
funding will support men more than women Income Distribution:
through employment of both skilled and Inter-generational:
non-skilled labourers in engineering, Additional
Construction Sector
construction work and landscaping. In the Characteristics:
National Capital Region, 11 per cent of GBA+ Timing:
workers in the construction industry and 39
per cent of workers in professional, scientific
and technical fields are women.
Data Sources: Statistics Canada

Impacts Report 531

 Jobs and Growth in all Communities and the Canada Community
Revitalization Fund
The pandemic has profoundly affected Quality of Life
businesses in every region of Canada, Impacts
accelerating structural changes and exposing Prosperity – Employment; Household incomes; Firm growth
vulnerable workers and communities. Society – Vibrant communities
Small Businesses and Regional
Underrepresented Canadians Target Population:
Economies
disproportionately depend on employment in Expected Benefits:
sectors most impacted by the pandemic, Gender:
including retail, tourism and Income Distribution:
accommodations. Inter-generational:
These measures will broadly benefit Additional SMEs in Rural and Remote
businesses, including those in rural and Characteristics: Communities
remote areas. GBA+ Timing:
Data Sources: Statistics Canada GBA+ Responsive Approach
Regional development agencies will help foster inclusive
recovery by prioritizing projects that support businesses
operated by, and employing, underrepresented groups,
including: women, Black Canadians, racialized
communities, Indigenous people, youth, LGBTQ2, new
Canadians, official language minority communities, and
people with disabilities.

Creating a New Regional Development Agency for British Columbia

Creating a new regional development agency
Quality of Life
for British Columbia will have regional
Impacts
impacts as there will be greater support for
businesses and communities in B.C., including Prosperity – Firm growth
Society – Sense of belonging to local community
in rural areas. The new regional development
agency will result in a limited change in Target Population: SMEs in British Columbia
expected gender and diversity impact. More Expected Benefits:
generally, funding through regional Gender:
development agencies largely benefits SME
Income Distribution:
owners, who are predominantly men as
63.5 per cent of SMEs are majority owned by Inter-generational:
men, 15.6 per cent of SMEs are majority Additional
SMEs in British Columbia
owned by women, while 20.9 per cent of Characteristics:
SMEs are equally owned by men and women. GBA+ Timing:
Additionally, SME owners are 12.2 per cent
visible minorities, 1.4 per cent Indigenous GBA+ Responsive Approach
persons, and 0.5 per cent persons with a Western Economic Diversification has an employment
disability. equity strategy and will work to reduce barriers in the
hiring process in order to better serve clients This strategy
Data Sources: ISED, Statistics Canada includes targets to promote recruitment and development
of employees from marginalized communities, including
women, Indigenous people, Black and other racialized
communities.

532 Annex 5
 Investing in Small Craft Harbours
The primary users and expected
Quality of
beneficiaries of these investments reflect
Life Impacts
the small coastal, rural, and water-side
Prosperity – Employment; Firm growth
communities where harbours are located, Environment – Natural disasters and emergencies; Coastal
which will benefit from revitalized harbour and marine protection
facilities and community economic Target Population: Communities in Coastal Areas
development. Expected Benefits:
The replacement and construction of new Gender:
small craft harbours directly benefit Income Distribution:
Inter-generational:
individual users, primarily those involved in
Additional Commercial Fisheries, Marine
commercial fisheries. This mostly benefits Characteristics: Industry, Rural Communities
men with relatively lower incomes, as they GBA+ Timing:
represent 79 per cent of commercial fish
harvesters.
Those who work in the engineering and
construction industries are also expected to
benefit from this measure. This workforce is
predominantly working age men, as they
make up 87 per cent of construction
workers.
Data Sources: Internal Data, Statistics
Canada

Extending the Northern Residents Deduction

This measure will benefit people living in Quality of
the prescribed Northern and Intermediate Life Impacts
Zones. Sixty-two per cent of new travel
claimants are expected to be men. New Prosperity – Household incomes
claimants are also likely to be high-income, Residents of the Territories
of working age, and less likely to hold a Target Population: and the Northern Regions of
university degree. most Provinces
Expected Benefits:
Spouses of new claimants may benefit
Gender:
indirectly from an improvement in family
Income Distribution:
finances. Assuming that the higher-income
Inter-generational:
spouse claims the deduction on behalf of
Additional Characteristics: Northern Residents
their family, up to 80 per cent of spouses
benefitting indirectly from this measure GBA+ Timing:
would be women. GBA+ Responsive Approach
Data Sources: Statistics Canada, tax data To mitigate possible negative impacts of the rule limiting
claims to spouses or common-law partners and children, this
measure includes an exception for adult dependants who
are wholly dependent on the taxpayer and who are, except
in the case of a parent or grandparent, so dependent by
reason of physical or mental infirmity.

Impacts Report 533

 Supporting the Canadian Wine Industry
There is limited gender disaggregated data Quality of
on direct beneficiaries of this measure. In Life Impacts
2019 however, women represented roughly Prosperity – GDP per capita; Domestic market share
35 per cent of the beverage manufacturing Target Population: Wineries
sector. At the same time, the majority in the Expected Benefits:
industry were between the age of 25 and 44 Gender:
years old. Wineries tend to be small Income Distribution:
Inter-generational:
businesses, centered in rural areas with the
Additional
majority employing between 1 and 19 Agriculture Sector
Characteristics:
people. In 2016, 57 per cent of grape GBA+ Timing:
growers, who stand to indirectly benefit,
were 55 years old and over and were mostly
men. Seventy per cent of all grape growers
operated small farms with gross revenues
between $25,000 and $100,000. Indirect
benefits are also expected for communities
where wine production and wine tourism
occur. In 2019, women held just over half
(56.3 per cent) of the jobs in the food and
accommodation industry. Younger
Canadians also held 40.6 per cent of jobs in
the industry.
Data Sources: Statistics Canada

Supporting Food Processors Following Ratification of New Trade

Agreements
Funding to subsidize capital investments for Quality of
dairy, poultry, and egg processing industries Life Impacts
will primarily benefit the owners of the
Prosperity – Household wealth; Business investment
recipient firms.
Canadian dairy and poultry processing is Target Population: Dairy, Poultry and Egg Processors

concentrated among a few large firms. Expected Benefits:

Gender:
Three and five firms, respectively, control a
majority of dairy and poultry processing. Income Distribution:
These include firms privately owned by Inter-generational:
individuals, publicly listed multinational Additional Large dairy, Poultry and Egg
Characteristics: Processing Firms
companies, and farmer-owned co-ops.
Overall benefits are expected to be skewed GBA+ Timing:
toward men of higher-income. GBA+ Responsive Approach
Farmers have already received and will The program will provide advantageous terms to small and
continue to receive compensation for trade- medium enterprises relative to large firms to mitigate, but
related impacts. not eliminate, the risk of primarily supporting already
dominant firms.

534 Annex 5
 Delivering a Modern Immigration Platform
This investment will benefit newcomers by Quality of
reducing application processing times and Life Impacts
making client service and enhanced Good Governance – Confidence in public institutions
supports more accessible. This will help (modernizing operations)
mitigate cost barriers for low-income Target
Newcomers
newcomers, who might require Population:
professional assistance to navigate the Expected Benefits:
current paper based process. All Canadians, Gender:
including firms requiring skilled labour, will Income
benefit from more efficient processing of Distribution:
immigrant applications. Inter-generational:
Canada’s immigration targets are gender Additional
Newcomers, International Students
Characteristics:
neutral, however men have tended to be
over-represented due to a focus on GBA+ Timing:
economic immigration. However, in 2019
women represented 50.7 per cent of
admissions to Canada.

Enhancing the Temporary Foreign Worker Program

Investments are more likely to directly Quality of
benefit men since they comprised 82 per Life Impacts
cent of all work permit holders in 2019 Prosperity – Employment
under the Temporary Foreign Worker Good Governance – Discrimination and unfair treatment
Program. These workers also tend to be Target Population: Temporary Foreign Workers
racialized, have limited knowledge of Expected Benefits:
English or French, have lower wages, and Gender:
reside in rural or remote areas while Income Distribution:
working in Canada. In addition, more than Inter-generational:
half, 57 per cent in 2019, of all workers are Additional
Agriculture Sector
in the agriculture sector, such as general Characteristics:
farm workers, nursery and greenhouse GBA+ Timing:
workers and harvesting labourers. Some
workers return year after year, or go on to
become permanent residents or citizens.
Data Sources: Internal Administrative Data

Impacts Report 535

 Streamlining Express Entry
This legislative amendment directly benefits Quality of
newcomers looking to make Canada their Life Impacts
home. From a gender perspective, the impact
Good Governance – Confidence in public institutions
of this amendment will depend on the
criteria used to qualify applicants for the Target Population: Newcomers
Express Entry process. For example, men Expected Benefits:
have historically accounted for a larger Gender:
proportion of Express Entry candidates (59 Income Distribution:
per cent) than women (41 per cent). Inter-generational:
However, if gender is chosen as a selection Additional Characteristics: Newcomers

criteria, it could result in a more gender

balanced selection of applicants. GBA+ Timing:

Enhancing Client Service and Support

While there are no gender specific impacts Quality of
associated with this investment, it will permit Life Impacts
Immigration, Refugees and Citizenship Canada Good Governance – Confidence in public institutions
to maintain enhanced support to its diverse (service delivery)
client base. Newcomers and their
Target Population:
Families
Canadian citizens, permanent residents, Expected Benefits:
visitors (tourists, international students, Gender:
foreign workers) and prospective permanent Income Distribution:
residents will benefit from better service via Inter-generational:
the Client Support Centre improving call Additional Newcomers, International
answer rates and email response times. Characteristics: Students
GBA+ Timing:

536 Annex 5
 Support for National Museums and the National Battlefields
Commission
By enabling the National Museums and Quality of
National Battlefields Commission to Life Impacts
maintain operations and retain jobs in the Prosperity – Employment
wake of financial pressures, this initiative is
Society – Sense of pride/belonging to Canada; Cultural and
expected to directly benefit employees of historical preservation
these organizations. The majority of workers Employees of the National
employed by these organizations reside in Target Population: Museums and the National
the National Capital Region, but employees Battlefields Commission
also live in Winnipeg, Québec City, and Expected Benefits:
Halifax. The workforce of the National Gender:
Battlefields Commission is gender-balanced, Income Distribution:
while the National Museums Inter-generational:
disproportionately employ women over Employees of the National
Additional
men. This initiative will ultimately benefit Museums, Students, Researchers,
Characteristics:
those who utilize the services of the Educators, Museum Visitors
National Museums and National Battlefields GBA+ Timing:
Commission, such as educators, researchers,
students, and museum visitors. Data show
that men, people with higher levels of
educational attainment, those with higher
household incomes, and people living in
urban centres are more likely to visit
museums.
Data Source: Government of Canada,
Statistics Canada

Enhancing Digital Access to our Heritage

COVID-19 has had a substantial impact on non- Quality of
national museums and heritage institutions. This Life Impacts
measure would benefit these organizations and Prosperity – Employment
their workers. Women account for approximately Society – Historical and cultural preservation
66 per cent of all paid employees in the heritage Employees of Non-national
Target
Museums and Heritage
sector. The information technology sector is Population: Institutions, All Canadians
expected to indirectly benefit. This sector is
Expected Benefits:
comprised predominantly of men (70 per cent). Gender:
All Canadians would benefit from the digitization Income Distribution:
of information and collections and the creation Inter-generational:
of original content such as educational materials Employees of Museums
or virtual activities. Data show that youth and Additional and Heritage Institutions,
those aged 25-49 are most likely to view heritage Characteristics: Information Technology
Sector
collections virtually.
GBA+ Timing:
Data Sources: Statistics Canada

Impacts Report 537

 Continuing Support for Critical Food Inspection
All Canadians benefit from greater food
safety surveillance and inspection. Quality of
Agriculture and agri-food businesses that are Life Impacts
regulated by the Canadian Food Inspection Prosperity – Household incomes
Agency directly benefit from this measure. Health – Food safety
These businesses are typically operated by Good Governance – Confidence in public/private institutions
older men in rural areas, as 84 per cent of the All Canadians, Agriculture and
Target Population:
farm population live in a rural area, with 71 Agri-Food Sector
per cent of agricultural operators being men, Expected Benefits:
and the average age of all farm operators Gender:
being 55. Similar demographics exist for food Income Distribution:
processing, as 60 per cent of employees in
Inter-generational:
food processing are men with 46 per cent
Additional Characteristics: Rural Communities
being 45 or older.
GBA+ Timing:
Extending Emergency Towing Leases
The presence of emergency towing vessels in Quality of
Pacific waters benefits those in the marine Life Impacts
industry, in and around British Columbia,
Environment – Natural disasters and emergencies; Coastal
which primarily employs men. Indirectly, and marine protection
emergency towing capacity benefits those Good Governance – Personal safety; Emergency
living in Indigenous and coastal communities preparedness
in British Columbia, by preventing marine Marine Sector in British
Target Population:
incidents, negative environmental impacts, Columbia
and coastal pollution. Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Coastal British Columbia
Additional Characteristics:
Communities
GBA+ Timing:
Supporting Clean Technology Adoption in Fisheries and Aquaculture
This measure benefits individuals and small Quality of
to medium-sized companies involved in Life Impacts
fisheries and aquaculture enterprises. These Environment – Clean tech; Coastal and marine protection
operations tend to be located in small
Commercial Fisheries,
coastal and Indigenous communities across Target Population:
Aquaculture Sector
Canada, with about 70 to 80 per cent of their
Expected Benefits:
workforces being men. Clean technology
suppliers in Canada and internationally will Gender:
also benefit through increased demand. Income Distribution:
Inter-generational:
Coastal and Remote
Additional
Populations, Clean Tech
Characteristics:
Suppliers
GBA+ Timing:

538 Annex 5
 Continuing the Remote Passenger Rail Program
This measure benefits Indigenous and Quality of
remote communities in Manitoba, Quebec Life Impacts
and Labrador, many of which are only Prosperity – Household incomes
accessible by rail. Residents of these Society – Social cohesion and connections
communities are more likely to be low- Health – Unmet needs for health and mental health care
income, and to rely on rail services in order Target
Remote Communities
to access economic opportunities and Population:
essential goods and services, including health Expected Benefits:
care. Gender:
Income Distribution:
Inter-generational:
Indigenous and Remote
Additional
Communities in Manitoba,
Characteristics:
Quebec, and Labrador
GBA+ Timing:

Protecting Canada’s Historic Places

Having an approach and legal framework to Quality of
protect and present nationally significant Life Impacts
examples of Canada’s cultural heritage Environment - Conservation
should benefit all Canadians. The initiative Society – Sense of pride/belonging to Canada; Historical
and cultural preservation; Social participation
will directly benefit Indigenous peoples,
including First Nations, Inuit, and Métis, Target
All Canadians
through the addition of distinction-based Population:
representation on the Historic Sites and Expected Benefits:
Gender:
Monuments Board of Canada, as well as
Income
greater opportunities to protect and present Distribution:
the contributions of Indigenous peoples to Inter-
Canada’s natural and cultural heritage. generational:
Additional
By renewing visitor experiences at historic Tourism
Characteristics:
places across Canada, this measure will also
GBA+ Timing:
benefit middle- and higher-income
individuals, highly educated individuals, and GBA+ Responsive Approach
individuals over the age of 60, who are the Parks Canada’s Framework for History and
primary clientele of culture and heritage Commemoration includes the history of Indigenous
tourism. Tourism businesses in communities peoples and diversity among its priorities. Parks Canada
that are home to historic places may also will identify priority designations for review based on
Indigenous perspectives and other GBA+ lenses, including
benefit from these investments.
women and racialized Canadians, with the goal of
Data Sources: Statistics Canada; Canada acknowledging missing layers of history and removing
Association of University Teachers; controversial historical content.
Commonwealth of Australia; The College of
Estate Management;
EconomicDevelopment.org

Impacts Report 539

 Maintaining Temporary Resident Processing Capacity
Investments will benefit temporary residents
Quality of
in Canada, who have diverse characteristics
Life Impacts
and are broadly gender-balanced. In 2019,
there were over 3.4 million temporary
Good Governance – Confidence in public institutions
residents in Canada. While visitors and
international students were gender- Target Population: Temporary Residents
balanced – 52 per cent and 47 per cent
Expected Benefits:
were women, respectively – temporary
Gender:
foreign workers were more likely to be men,
Income Distribution:
comprising 63 per cent of all work permit
Inter-generational:
holders.
Visitors, International Students,
Additional
and Temporary Foreign Workers
Characteristics:
Data Sources: Immigration, Refugees and and their Employers
Citizenship Canada GBA+ Timing:

Granville Island Emergency Relief Fund Extension

Emergency funding will benefit small Quality of Life
businesses on Granville Island, which are Impacts
predominately in the arts and culture, Prosperity – Income; Employment; Firm growth
tourism, and food service industries. This Society – Vibrant communities
will positively impact the employees of Small Businesses on Granville
these businesses, many of whom are artists Target Population:
Island
and cultural workers or work in the food Expected Benefits:
service industry, and who earn on average Gender:
less than the overall workforce. It indirectly Income Distribution:
benefits metro Vancouver by allowing Inter-generational:
Granville Island to remain an important Vancouver Region,
tourist and cultural hub in Canada. Additional Characteristics: Businesses and Employees
on Granville Island
GBA+ Timing:

540 Annex 5
Chapter 7: A More Equal Canada
This section includes gender and diversity impact analyses for remaining Budget 2021
measures in Chapter 7.

Better Data for Better Outcomes: Understanding the Causes of

Inequity through Disaggregated Data
This measure will benefit all Canadians, but Quality of
particularly racialized sub-populations, Life Impacts
Indigenous peoples, and other marginalized Society – Positive perceptions of diversity
groups, including LGBTQ2 individuals and Good Governance – Confidence in public institutions;
persons with a disability, in Canada through Discrimination and unfair treatment

better policies and programs informed by Target Population: All Canadians

improved data about social and economic Expected Benefits:

inequalities. Gender:
Income Distribution:
This measure will also benefit Canadian
Inter-generational:
researchers who will have better access to
Additional Racialized Canadians, LGBTQ2 and
relevant data.
Characteristics: Other Marginalized groups
Data Sources: Statistics Canada
GBA+ Timing:

Improving Access to the Disability Tax Credit

These changes will directly benefit persons Quality of
with disabilities by increasing the number of Life Impacts
individuals that have access to tax relief and Prosperity – Household incomes; Affording everyday needs
other federal supports. This group is Health – Unmet health and mental health care needs; Self-
rated health and mental health
expected to include persons with diabetes,
Society – Accessible environments
inherited metabolic conditions, and impaired
Target Persons with Disabilities and their
mental functions since the changes relate to
Population: Caregivers
disability impacts they experience. Within
Expected Benefits:
these groups, lower-income Canadians are
Gender:
expected to benefit the most, since they Income Distribution:
make up a larger portion of persons with Inter-generational:
disabilities, and a larger portion of Additional Persons with Disabilities and their
beneficiaries of the measures affected by the Characteristics: Caregivers
changes (i.e. those with eligibility linked to GBA+ Timing:
the Disability Tax Credit), several of which are
designed to provide additional benefits to
low-income Canadians. Parents and other
family caregivers will also benefit directly,
through access to measures such as the Child
Disability Benefit, or the ability to claim a
transferred Disability Tax Credit.
Data Sources: Canadian Survey on Disability,
Canada Revenue Agency

Impacts Report 541

 Recognizing the Contributions of Atomic Workers
Over 99 per cent of the former Atomic Quality of
Energy of Canada Limited employees who Life Impacts
participated in the clean-ups of the two Prosperity – Household incomes
accidents that occurred at Chalk River Society – Sense of meaning and purpose
Laboratories in the 1950s are men and as Good Government – Confidence in public institutions
such the beneficiaries are senior citizen Former Atomic Energy of Canada
Target Population:
Limited Employees
men. If the former employee has passed
Expected Benefits:
away, close kin will be eligible to receive the
Gender:
recognition. The families of the former
Income Distribution:
employees will also indirectly benefit from
the recognition of their family member. Inter-generational:
Additional Families of Former Atomic Energy
Data Sources: Atomic Energy of Canada Characteristics: of Canada Limited Employees
Limited GBA+ Timing:

National Autism Strategy

A national autism strategy would target all Quality of
Canadians living with autism spectrum Life Impacts
disorder and their families. Autism spectrum
Health – Children vulnerable in early development; Functional
disorder is usually diagnosed in childhood health status; Unmet health care needs; Unmet needs for
so this proposal will include consideration mental health care
of children and youth. In addition, males are Society – Satisfaction with time use; Sense of belonging to
four to five times more likely to be local community; Accessible environments
diagnosed with autism spectrum disorder People with Autism Spectrum
Target Population:
than females. Disorder
Expected Benefits:
Data Sources: Statistics Canada
Gender:
Income Distribution:
Inter-generational:
Additional People with Autism Spectrum
Characteristics: Disorder, Caregivers
GBA+ Timing:

542 Annex 5
 Establishing a National Framework for Diabetes
Approximately 3.2 million Canadians are Quality of
living with diabetes and 200,000 new cases Life Impacts
are diagnosed each year. People living with
Health – Physical activity; Fruit and vegetable consumption;
pre-existing chronic health conditions, such Self-rated health
as obesity, are at increased risk for Target Population: All Canadians
developing type 2 diabetes, which make up Expected Benefits:
90 per cent of cases. The rate of diabetes is Gender:
approximately 16 per cent higher among
Income Distribution:
men and more than twice as high among
Inter-generational:
South Asian and Black adults as compared
South Asian, Black, and First
to Caucasian adults. Further, First Nations Additional Nations Communities, Canadians
adults living on reserve and in northern Characteristics: with Lower Education levels,
communities have a significantly higher rate Health Researchers
of diabetes. Supporting further research GBA+ Timing:
into the causes, treatment, and
development of a potential cure for
diabetes is also expected to benefit children
with juvenile diabetes. Although diabetes is
generally more common in men,
inequalities in the rates of diabetes by
income, education level, and employment
are greater among women. For example,
women with no high school diploma are 2.2
times more likely to be obese than female
university graduates.
Data Sources: Statistics Canada, Pan-
Canadian Health Inequalities Reporting
Initiative, Canadian Institute of Health
Information, Public Health Agency of Canada

Taxation of Vaping Products

This measure has both direct benefits and Quality of
negative impacts that will primarily accrue Life Impacts
to youth and to men, since these groups
Prosperity – Federal Debt-to-GDP ratio
consume vaping products at a higher rate Health – Health-adjusted life expectancy
than other demographic groups. Target Population: All Canadians
Data Sources: Health Canada Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional
Students
Characteristics:
GBA+ Timing:

Impacts Report 543

 Taxation of Tobacco
There is higher than average consumption of Quality of
tobacco products among a range of Life Impacts
demographic groups. To the extent these users Prosperity – Federal Debt-to-GDP ratio
are unable to reduce their tobacco Health – Health-adjusted life expectancy
consumption, this measure will carry somewhat Target
All Canadians
regressive impacts as lower income smokers Population:
spend more on tobacco products as a share of Expected Benefits:
their income than smokers with higher income. Gender:
These impacts are not expected to be large, it is Income
estimated that the average daily smoker spent Distribution:
Inter-generational:
about $3,150 on cigarettes in 2020. The
Additional Smokers who are able to reduce
measure would increase the amount of excise
Characteristics: consumption
duty embedded in the price of cigarettes by
GBA+ Timing:
about $100 annually. This may have the effect
of disincenting tobacco consumption, which
may benefit smokers who are able to reduce
consumption.

Data Sources: Statistics Canada, Public Health

Agency of Canada

Support for Canadian Blood Services

This initiative directly benefits Canadians Quality of
with medical conditions who rely on Life Impacts
plasma-derived products (PDPs) as a life- Prosperity – Employment
saving treatment. The conditions for which Health – Health-adjusted life expectancy; Functional health
status
PDPs are prescribed do not affect one
Canadians with Specific Medical
specific demographic group over another, Target Population:
Conditions
but rather span across all dimensions of sex,
Expected Benefits:
age, gender, and diversity. Gender:
This initiative indirectly benefits workers in Inter-generational:
the construction sector in the short-term Additional Construction and Health Care
Characteristics: Sectors
and workers in the health care sector in the
long-term. Indirect benefits are gender- GBA+ Timing:
balanced, as 87 per cent of workers in the
construction industry are men and 82 per
cent of workers in the health care and social
assistance sector are women.
Data Sources: Statistics Canada, Canadian
Immunodeficiencies Patient Organization

544 Annex 5
Ensuring Appropriate Access and Safeguards for Medical Assistance
in Dying in Canada
This funding will benefit all Canadians by
ensuring that as Canada’s MAID framework Quality of
evolves over time it is implemented in a way Life Impacts
that ensures appropriate attention to Health – End of life care (access, quality, cultural suitability)
access, protections, and consistency across Good Governance – Confidence in public institutions
all of Canada. This will help ensure that Target Population: All Canadians
Canadians have equitable access to MAID, Expected Benefits:
regardless of their jurisdiction or medical Gender:
care provider. Income Distribution:
Data Sources: Health Canada (e.g., Inter-generational:
Monitoring System for Medical Assistance in Additional
Dying in Canada), Canadian Institute for Characteristics:
Health Information
GBA+ Timing:

Impacts Report 545

Chapter 8: Strong Indigenous Communities
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 8.

First Nations Election Cancellation and Postponement Regulations

(Prevention of Diseases)
The amendments to the regulations directly
benefit all members of First Nations Quality of
communities where elections are delayed Life Impacts
due to public health concerns until they are Health – COVID-19 incidence
safe to be held. This reduces the potential Good Governance – Confidence in public institutions
for community spread of COVID-19 by Target Population: First Nations
avoiding gatherings of people, while Expected Benefits:
ensuring that communities are not faced Gender:
with a governance gap in the midst of the Income Distribution:
pandemic. Inter-generational:
Additional
Characteristics:
GBA+ Timing:

Supporting Indigenous Economies

93 per cent of Indigenous businesses Quality of
located within Indigenous communities Life Impacts
reported that COVID-19 has had a negative Prosperity – Household incomes; Firm growth; Protection from
economic impact. Negative impacts income shocks
identified by survey respondents included a Society – Vibrant communities
decrease in revenues, shutdown of offices Target
Indigenous peoples
and facilities, and, in some cases, temporary Population:
or permanent shutdown of their business. Expected Benefits:
These investments will directly benefit Gender:
Income Distribution:
Indigenous communities and businesses,
Inter-generational:
helping them to maintain jobs and essential Additional Indigenous peoples, First Nation
services through the pandemic. It will also Characteristics: Communities
support local Indigenous micro-businesses GBA+ Timing:
which directly benefit the well-being of
individual families and are majority owned
by Indigenous women.
Investments to support the resilience of the
First Nation Finance Authority will directly
support First Nations, benefiting the
community as a whole (men, women, youth,
and elders).
Data Sources: Canadian Council for
Aboriginal Businesses

546 Annex 5
 Securitization of First Nations Goods and Services Tax and First
Nations Sales Tax Revenues under the First Nations Fiscal
Management Act (FNFMA)
This initiative benefits the members of First
Nations with First Nations Goods and Quality of
Services Tax or First Nations Sales Tax Life Impacts
revenues seeking long-term financing from Good Governance – Indigenous self-determination
the First Nations Finance Authority. The Target Population: First Nations
extent to which it will benefit different Expected Benefits:
genders or demographic groups will Gender:
depend on how First Nations use the funds Income Distribution:
raised. This initiative is not expected to have Inter-generational:
negative impacts for any gender or Additional
Indigenous peoples
demographic group. Characteristics:

GBA+ Timing:

Redesigning the Additions to Reserve Policy

This program directly benefits all members Quality of
of participating First Nations communities Life Impacts
by increasing capacity to make additions to Prosperity – Financial well-being; Acceptable housing
reserve lands and ultimately improving the Society – Sense of belonging to local community
Good Governance – Indigenous self-determination
pace of land acquisition. Access to land can
result in improved economic opportunities, Target Population: First Nations
capacity to develop community Expected Benefits:
Gender:
infrastructure and housing, and improved
Income Distribution:
sense of belonging to local culture and Inter-generational:
community. Further, this will support a Additional
First Nations
policy redesign process that will advance Characteristics:
self-determination for all community GBA+ Timing:
members, while incorporating a wide range
of perspectives, with particular attention to
the rights and special needs of elders,
women, youth, and persons with disabilities,
as well as members living off-reserve.

Impacts Report 547

 Advancing Specific Claims Settlements
Replenishment of the Specific Claims
Quality of
Settlement Fund will ensure resources are
Life Impacts
available to pay out settlements. Canada
does not influence or track how First Nations Good Governance – Confidence in public institutions;
choose to use settlement funds; however, Indigenous self-determination
Indigenous peoples, First
some communities have previously decided Target Population:
Nations
to make investments in social services,
infrastructure, and education. Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Indigenous peoples, First
Additional Characteristics:
Nations

GBA+ Timing:

Commemorating the Legacy of Residential Schools

This measure is gender balanced and will Quality
benefit all Canadians that want to of Life
participate in events held throughout the Impacts
country on the proposed National Day for Society – Sense of belonging to Canada; Sense of belonging to
Truth and Reconciliation. Events may local community; Social participation
target and encourage participation of Target
certain groups such as Indigenous peoples All Canadians, Indigenous peoples
Population:
and young Canadians. Expected Benefits:
By providing ongoing support for events Gender:
to commemorate and raise awareness of Income
Distribution:
the history and legacy of residential
Inter-
schools, this measure will also support generational:
reconciliation with Indigenous peoples. Additional
Indigenous peoples
Characteristics:
GBA+ Timing:

Escalating 10-Year Grant Funding

This investment benefits First Nations bands
who receive funding through the 10-Year Quality of
Grants and their community members. Life Impacts
Escalating program funding to respond to Good Governance – Confidence in public institutions;
price and population growth ensures First Indigenous self-determination
Nations communities can continue to Additional quality of life impacts (e.g. prosperity, health,
provide services that reflect their needs and society) based on First Nations community investments
priorities. It is likely that a range of social Target Population: First Nations
and quality of life benefits will result from Expected Benefits:
such investments; however, recipient bands Gender:
choose how to allocate these funds. Income Distribution:
Inter-generational:
Additional
First Nations
Characteristics:
GBA+ Timing:

548 Annex 5
 Support for Indigenous-led Data Strategies
Indigenous peoples generally experience Quality of
poorer socio-economic outcomes than Life Impacts
Canada’s non-Indigenous peoples do, Society – Vibrant communities; Cultural and historical
including in the areas of health and well- preservation
being, income, and education. This proposal Good Governance – Indigenous self-determination;
Confidence in public institutions
will benefit Indigenous peoples by helping
Target Population: Indigenous peoples
to ensure that Indigenous governments,
Expected Benefits:
organizations, and communities have the
Gender:
data they need to implement evidence
Income Distribution:
based governance and service delivery that
is founded on culturally relevant visions of Inter-generational:
well-being. This will help improve outcomes Additional
Indigenous peoples
Characteristics:
for Indigenous peoples as measured by
Indigenous-led and co-developed
indicators of health and well-being. GBA+ Timing:

Parks Canada Capacity for Indigenous Engagement

This program directly benefits Indigenous
Quality of
peoples by expanding Parks Canada’s
Life Impacts
capacity to negotiate rights-based
agreements, thereby increasing the Environment – Satisfaction with local environment; Natural
likelihood of reaching agreements sooner capital
Society – Sense of belonging to local community
and with a greater number of Indigenous
Good Governance – Confidence in public institutions;
groups. The program is expected to foster
Indigenous self-determination
reconnection between Indigenous peoples
Target Population: Indigenous peoples
and their traditional territories and restore
Expected Benefits:
the historic responsibility of Indigenous
Gender:
peoples to manage their traditional lands Income Distribution:
and resources, resulting in nation-building Inter-generational:
and stronger socio-economic outcomes, Additional Characteristics: Indigenous peoples
accruing to women, men and non-binary
Indigenous peoples. GBA+ Timing:

Supporting Indigenous Partners for Meaningful Crown Consultation

and Engagement
This program benefits Indigenous peoples. Quality of
The expected outcomes are gender-balanced Life Impacts
and will increase opportunities for all
Good Governance – Confidence in public institutions;
community members to participate in Indigenous self-determination
consultation and engagement activities. Target Population: Indigenous peoples
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics: Indigenous peoples

GBA+ Timing:

Impacts Report 549

Chapter 9: Protecting Our Shared Values
This section includes gender and diversity impact analyses for remaining Budget
2021 measures in Chapter 9.

Gun Control
These measures will directly benefit all Quality of Life
Canadians, but may disproportionately affect Impacts
men and women in different ways. Men Good Governance –Victimization rate; Crime Severity Index;
represented the vast majority of those with a Personal safety
firearms licence who owned restricted or Target Population: All Canadians
prohibited firearms in 2020, and 90 per cent
Expected Benefits:
of those who committed a firearms-related
violent crime in 2016. Women are much Gender:
more likely to be victims of intimate partner Income Distribution:
violence, representing 86 per cent of victims Inter-generational:
in police-reported incidents involving a Additional
Indigenous people
firearm in 2018. Characteristics:
These measures may also have GBA+ Timing:
disproportionate impacts on Indigenous GBA+ Responsive Approach
communities, which have higher rates of Public awareness and education campaigns to promote
violent firearms offences and intimate responsible and safe use of firearms will make efforts to
partner violence than non-Indigenous target men.
communities.
Data Sources: Statistics Canada; RCMP

Better Job Protections for Parents of Young Victims of Crime

This legislative amendment directly benefits Quality of
workers in the federally regulated private Life Impacts
sector. As there have been fewer than 100
Prosperity – Protection from income shocks
applications since 2013, detailed and reliable
gender and demographic data is not Workers in the Federally
Target Population:
available. However, while men account for Regulated Private Sector
62 per cent of the federally regulated work Expected Benefits:
force, administrative data shows that a Gender:
majority of applicants were women. Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

550 Annex 5
 Reforming the Judicial Conduct Review Process
All Canadians will benefit from a reformed Quality of Life
review process that will reduce delays, enhance Impacts
accountability, and ultimately increase public Good Governance – Access to fair and equal justice;
confidence in the courts and justice system. In Resolution of serious legal problems
particular, this measure will benefit those with Target Population: All Canadians
matters before federally-appointed judges by Expected Benefits:
ensuring any complaints of misconduct are Gender:
Income Distribution:
addressed efficiently and transparently.
Inter-generational:
Women made up 45 per cent of the federally- Additional
Federally-appointed Judiciary
appointed judiciary as of March 2021. Recent Characteristics:
efforts have focused on increasing the diversity GBA+ Timing:
of the judiciary. Between October 2019 and
October 2020, women comprised 65 per cent
of new appointments, while visible minorities
represented 17 per cent and Indigenous
peoples accounted for three per cent.
Data Sources: Office of the Commissioner for
Federal Judicial Affairs

Freezing Pension Accrual for Judges Recommended for Removal

This initiative will help protect public Quality of
confidence in the integrity of Canada’s Life Impacts
federally-appointed judiciary. The proposed
Good Governance – Confidence in public institutions
legislative amendment will apply to
federally-appointed judges regardless of any Target Population: Federally-appointed judges

personal characteristics. Expected Benefits:

Gender:
Women made up 45 per cent of the
federally-appointed judiciary as of Income Distribution:
March 2021. Recent efforts have focused on Inter-generational:
increasing the diversity of the judiciary.
Additional Characteristics:
Between October 2019 and October 2020,
GBA+ Timing:
women comprised 65 per cent of new
appointments, while visible minorities
represented 17 per cent and Indigenous
peoples accounted for three per cent.
Data Source: Office of the Commissioner for
Federal Judicial Affairs

Impacts Report 551

 Maintaining Federal Court Services during COVID-19
This initiative will benefit all Canadians by
enabling access to justice during the Quality of
COVID-19 pandemic. Canadians who bring Life Impacts
matters before the federal courts represent a Good Governance – Access to fair and equal justice;
spectrum of Canada's diverse society, with Resolution of serious legal problems
cases from individuals, businesses and Target Population: All Canadians
organizations, and government agencies.
Expected Benefits:
Additionally, public health measures will
Gender:
directly benefit individuals who work in
federal courts, such as court members, legal Income Distribution:
professionals, administrative staff, and Inter-generational:
human resources. Additional Characteristics:
Individuals who Work in
Federal Courts

GBA+ Timing:

Preventing the Spread of COVID-19 in Correctional Institutions

This funding will disproportionately benefit Quality of Life
Correctional Service of Canada staff and Impacts
groups that are disproportionately Health – Health-adjusted life expectancy; COVID-19
incarcerated, notably Black and Indigenous incidence
communities, as well as men and people Correctional Service of Canada
Target Population:
Inmates and Staff
with disabilities and health problems.
Expected Benefits:
For example, Black Canadians account for Gender:
7.2 per cent of federal inmates, but only Income Distribution:
3.5 per cent of the Canadian population. Inter-generational:
Similarly, Indigenous peoples account for Additional
Black, Indigenous, Inmates
Characteristics:
30 per cent of those in federal custody,
despite only representing approximately GBA+ Timing:
five per cent of the population. Among
women inmates, 42 per cent are Indigenous.
Over 95 per cent of inmates at federal
institutions are men.
Data Sources: Statistics Canada,
Correctional Service of Canada, Office of the
Correctional Investigator

552 Annex 5
 Enhancing Data Collection on Cyber Security Threats
This initiative is to continue the Cyber Quality of
Security and Cybercrime Survey program, Life Impacts
which allows the government to monitor Good Governance – Domestic security (cyber);
trends, collect data, and better respond to Misinformation/trust in media; Victimization rate
cyber security threats that could affect Target Population: All Canadians
people and businesses across the country. Expected Benefits:
Gender:
In 2019, 21 per cent of Canadian businesses
Income Distribution:
reported being impacted by cyber security
Inter-generational:
incidents. The industrial sectors most Additional Characteristics: Canadian Businesses
commonly impacted were the information GBA+ Timing:
and cultural industries sector, the wholesale
trade sector, and the professional, scientific
and technical services sector. Better
monitoring and information collection of
cyber threats to the private sector is
expected to benefit all Canadians

Improving How Access to Information Works for Canadians

The review of the Access to Information Act Quality of
and improvements to the Access to Life Impacts
Information Program will benefit all
Canadians through strengthened Good Governance – Confidence in public institutions
transparency and accountability of Canada’s Target Population: All Canadians
federal institutions. Those in the top user Expected Benefits:
groups for access to information services Gender:
are expected to benefit in particular. These Income Distribution:
include the media, scholars, librarians, and Inter-generational:
statisticians. Additionally, Indigenous Media, Scholars, Librarians,
organizations are expected to benefit as Additional
Statisticians, Indigenous
Characteristics:
they are significant users of access to Organizations
information, particularly when seeking GBA+ Timing:
information related to land and other
claims.
Data Sources: Treasury Board of Canada
Secretariat

Impacts Report 553

 Supporting NORAD Modernization
These measures will directly benefit all
Canadians by improving Canada’s national Quality of
defence capabilities. Life Impacts

The economic activity generated by these Prosperity – Investment in R&D

measures is expected to benefit Indigenous Good Governance – Domestic security; Confidence in public
communities in the North. This measure will institutions
also indirectly benefit certain industries, Target Population: All Canadians
such as construction trades, engineering, Expected Benefits:
and aerospace, which tend to have Gender:
workforces that predominantly are men. Income Distribution:
Inter-generational:
Data Sources: Innovation, Science and
Northern Communities,
Economic Development Canada, and Additional
Construction Trades and
Statistics Canada Characteristics:
Engineering
GBA+ Timing:
GBA+ Responsive Approach
To minimize the potential for negative impacts on
marginalized and underrepresented groups, the Department
of National Defence will consult with local Indigenous
groups and apply a GBA+ screen for research and
development agreements with academia and the private
sector.

Increasing Canada’s Contributions to NATO

All Canadians will benefit from an increase Quality of
in their defence and security, and the Life Impacts
promotion of peace. Good Governance – Domestic security; Canada’s place in the
The increased contribution to the NATO world
Readiness Initiative will lead to increased Target Population: All Canadians
expenditures on the maintenance of Expected Benefits:
defence equipment. This will indirectly Gender:
benefit Canada’s defence industries, whose Income Distribution:
employees are predominantly men. For Inter-generational:
example, 81 per cent of employees in Additional
Canada’s Defence Industries
aerospace and 87 per cent of employees in Characteristics:
shipbuilding are men. GBA+ Timing:
Data Sources: Statistics Canada, NATO

554 Annex 5
 Advancing the Safer Skies Initiative
This measure will benefit all Canadians by Quality of Life
reducing civil aviation safety risk. As people Impacts
with higher incomes have a greater
Good Governance – Personal safety
propensity for air travel, they are expected
Target Population: All Canadians
to benefit more from this measure than
Expected Benefits:
other Canadians. Canadian travellers who
Gender:
fly more frequently near conflict zones due
Income Distribution:
to family ties or work obligations will
Inter-generational:
benefit relatively more than other Canadian
Travellers to conflict-prone
travellers. Additional Characteristics:
areas, Air Sector workers
Data Source: Statistics Canada GBA+ Timing:

Sustaining Health Services for the Canadian Armed Forces

This measure benefits all Canadians by Quality of
ensuring that members of the Canadian Life Impacts
Armed Forces receive quality health care so
Health – Unmet health care needs
that they are able to deploy when needed. Good Governance – Domestic security
It will also directly benefit members of the Target Population: Canadian Armed Forces members
Canadian Armed Forces, who are Expected Benefits:
predominantly men (84 per cent). Indirectly, Gender:
this measure will benefit health care Income Distribution:
professionals, who are more highly Inter-generational:
educated and earn higher incomes than the Additional
Canadian population. While Canadian Canadian Armed Forces members
Characteristics:
Armed Forces health care personnel are GBA+ Timing:
predominantly men, employees in the
Canadian health care sector are
predominantly women (78.7 per cent).

Data Sources: Statistics Canada

Impacts Report 555

 Better Equipping Our Coast Guard and Military
The efficient procurement of equipment and Quality of
ships in support of Canada’s defence policy Life Impacts
and in support of the Canadian Coast Guard Environment – Coastal and marine protection
will directly benefit all Canadians. Good Governance – Domestic security
Target
Indirectly, this measure will benefit workers All Canadians
Population:
employed as procurement specialists, who
Expected Benefits:
are generally more highly educated and earn
Gender:
higher incomes than the Canadian Income
population. Distribution:
Data Sources: Statistics Canada Inter-generational:
Additional
Procurement specialists
Characteristics:
GBA+ Timing:

Ensuring Procurement Partners Respect Canada’s Economic Interests

This measure could incentivize bidders on Quality of
defence procurements not to harm Life Impacts
Canada’s economic interests, potentially Prosperity – GDP per capita; Household incomes
benefiting Canadian jobs. However, there is
a risk that bidders may decide to withdraw Target Population: Canadian Defence Industries

work from Canada as a result of a negative Expected Benefits:

Gender:
assessment, or due to perceptions that the
policy will reduce their opportunities in Income Distribution:
Canada. Inter-generational:
Additional
Any impacts would likely directly affect Canadian Defence Industries
Characteristics:
Canada’s defence industries, whose
GBA+ Timing:
employees are predominantly men. For
example, 81 per cent of employees in
aerospace and 87 per cent of employees in
shipbuilding are men.
Data Sources: Statistics Canada

556 Annex 5
 Recapitalization of FinDev Canada
This initiative benefits lower-income
workers, including female workers, in the Quality of
agribusiness, financial services, and Green Life Impacts
Growth Sectors in sub-Saharan Africa, Latin
Good Governance – Canada’s place in the world
America and the Caribbean.
The indirect beneficiaries of this Target Population: All Canadians

recapitalization are lower-income Expected Benefits:

Gender:
individuals in sub-Saharan Africa, Latin
America and the Caribbean. All Canadians Income Distribution:
benefit since they are safer and more Inter-generational:
prosperous when the rest of the world is Additional
Workers in Other Countries
Characteristics:
more prosperous and healthy.
GBA+ Timing:
Data Sources: United Nations, UN Women,
OECD, World Bank, ILO, IEA, GTAP

Supporting Parole Board of Canada Operations

This funding will support the Parole Board of Quality of Life
Canada staff, and offenders in Canada Impacts
seeking parole. Groups that are
Good Governance – Access to fair and equal justice;
disproportionately incarcerated and
Representation in corrections custodial population
therefore seeking parole will benefit, notably
Parole Board of Canada Staff and
Black and Indigenous communities, as well Target Population:
Offenders Seeking Parole
as men and people with disabilities and
Expected Benefits:
health problems. For example, Black
Gender:
Canadians account for 7.2 per cent of federal Income Distribution:
inmates, but only 3.5 per cent of the Inter-generational:
Canadian population. Similarly, Indigenous Additional Black, Indigenous, and Offenders
peoples account for 30 per cent of those in Characteristics: Seeking Parole
federal custody, despite only representing GBA+ Timing:
approximately five per cent of the
population. Among women inmates, 42 per
cent are Indigenous. Over 95 per cent of
inmates at federal institutions are men.
Data Sources: Statistics Canada,
Correctional Service of Canada, Office of the
Correctional Investigator

Impacts Report 557

 Enhancing IM/IT Systems to Support Transparent Lobbying
Effective systems to support transparent Quality of Life
lobbying in Canada benefit all Canadians. Impacts
Indirect benefits of hiring and spending Good Governance – Confidence in public institutions
related to IM/IT systems are expected to Target Population: All Canadians
accrue unequally to men, due to the over- Expected Benefits:
representation of men in IM/IT fields. Gender:
Income Distribution:
Inter-generational:
Additional
IM/IT sector
Characteristics:
GBA+ Timing:
Leaders' Debates Commission
Enhanced independence and structure Quality of
around the organization of leaders’ debates Life Impacts
during federal elections will benefit all Good Governance – Confidence in public institutions
Canadians. Groups generally disadvantaged Target Population: All Canadians
when it comes to broadcasting accessibility,
Expected Benefits:
such as minority language communities and
Gender:
Canadians with disabilities, would particularly
Income Distribution:
benefit as part of the Commission's mandate
Inter-generational:
is to ensure accessibility.
Disability, Minority language
Additional Characteristics
communities
GBA+ Timing:
Modernizing the Department of National Defence’s Information
Systems
These measures will enhance the Quality of
operational efficiency and readiness of the Life Impacts
Canadian Armed Forces, which will benefit Good Governance – Domestic security; Confidence in public
all Canadians. These measures will also institutions (modernizing operations)
directly benefit members of the Canadian Target
All Canadians
Armed Forces and employees of the Population:
Department of National Defence, who Expected Benefits:
benefit from these information systems to Gender:
manage the equipment they need to do Income Distribution:
their jobs, and to ensure the accuracy of Inter-generational:
Additional
civilian pay. These groups are Military Personnel
Characteristics:
predominantly men (84 per cent and
GBA+ Timing:
59 per cent, respectively). These measures
will indirectly benefit workers in the
computer science and engineering
professions, who will benefit from the
associated employment opportunities. This
occupational group is approximately 80 per
cent men, and of higher education and
income than the Canadian population.
Data Sources: Statistics Canada

Chapter 10: Responsible Government

558 Annex 5
This section includes gender and diversity impact analyses for remaining Budget 2021 measures in
Chapter 10.

Digital Services Tax

The measure would have a direct impact on Quality of
large corporations earning revenue from Life Impacts
specified digital services. It would benefit all Prosperity – Federal Debt-to-GDP ratio
Canadians by ensuring that corporations Good Governance – Confidence in public institutions
pay a fair share of tax in respect of their Target Population: All Canadians
activity in Canada. In terms of indirect Expected Benefits:
impacts, to the extent that Canadian Gender:
individuals are shareholders of large Income Distribution:
Inter-generational:
corporations that pay higher taxes as a
Additional
result of the measure, and higher taxes Characteristics:
result in lower dividend distributions, men GBA+ Timing:
and higher-income individuals are more
likely to be negatively affected. To the
extent that any of the tax is passed on
directly or indirectly to Canadian
consumers, the impact is likely to be greater
on men.
Data Sources: Canada Revenue Agency,
Statistics Canada

Luxury Tax
This measure will likely have negative Quality of
impacts on higher-income Canadians, as Life Impacts
they are more likely to purchase luxury cars, Prosperity – Federal Debt-to-GDP ratio
personal aircraft, and boats. The Target
All Canadians
automobile, aviation and boating sectors Population:
may also be affected. Expected Benefits:
Gender:
Based on vehicle retail sales data and
Income
assumptions regarding vehicle sale prices,
Distribution:
high income individuals (more likely male) Inter-
between 30-60 years old in Ontario, Alberta, generational:
Quebec, and British Columbia would be the Additional
most affected by the tax. Characteristics:
GBA+
Data Sources: Statistics Canada
Timing:

Impacts Report 559

 Tax on Unproductive Use of Canadian Housing by Foreign Non-
resident Owners
This measure benefits all Canadians by Quality of
discouraging the underutilization of Life Impacts
Canadian housing by foreign, non-resident Prosperity – Acceptable housing
owners. The measure predominantly Target Population: All Canadians
benefits low- and middle-income Expected Benefits:
individuals and households living in urban Gender:
areas by improving housing affordability Income Distribution:
through increasing the supply of rental Inter-generational:
Additional Specific Regions, Individuals of
housing and homes available for sale for
Characteristics: Particular Socio-economic Status
owner occupancy.
GBA+ Timing:

Tackling Tax Avoidance and Evasion and Strengthening the CRA

The Canadian Revenue Agency (CRA) will Quality of
further increase targeted audits with a focus Life Impacts
on large businesses and better collection of Prosperity – Federal Debt-to-GDP ratio
outstanding tax debt. When considering Good Governance – Confidence in public institutions
Canadian individuals that are shareholders of Target
All Canadians
large enterprises, tax data show that men, Population:
older Canadians and those with higher Expected Benefits:
incomes receive a larger share of taxable Gender:
dividends compared to other groups. Income Distribution:
Inter-generational:
This will benefit all Canadians via a fair and Additional
equitable tax system, increased federal Characteristics:
revenues and, lower debt charges. GBA+ Timing:
Tax evasion and aggressive tax planning can GBA+ Responsive Approach
be found among all segments of the The CRA will establish a monitoring approach that will
population but mostly among the wealthiest identify and track certain diversity factors of Canadian
taxpayers that are selected for compliance actions and/or
groups. CRA data also indicate that men are
educational outreach.
more likely to be non-compliant.
Data Sources: Canada Revenue Agency,
Organisation for Economic Co-operation and
Development

560 Annex 5
 Limitations on Excessive Interest Deductions
This measure aims at protecting the tax Quality of
base and therefore benefits all Canadians. Life Impacts
The primary group targeted by the measure Prosperity – Debt-to-GDP ratio
is larger enterprises, and the proposal Good Governance – Confidence in public/private institutions
would affect this group negatively by Target Population: All Canadians
placing a limit on the amounts of interest Expected Benefits:
they may deduct. To the extent that Gender:
Canadian individuals are shareholders of Income Distribution:
Inter-generational:
these enterprises, it may be assumed that
Additional
men, older Canadians and those with higher Characteristics:
incomes would be more likely to be GBA+ Timing:
adversely affected than others. Tax data
show that: men received 65 per cent of the
value of taxable dividends in 2018;
taxpayers in the top income bracket
received about 43 per cent of dividends,
even though they only comprised one per
cent of all tax filers; and seniors and other
adults over 30 received 98 per cent of the
value of dividends.
Data Sources: Internal administrative data

Hybrid Mismatch Arrangements

This measure aims at protecting the tax base Quality of
and therefore benefits all Canadians. The Life Impacts
primary group targeted for enforcement is Prosperity – Federal Debt-to-GDP ratio
large multinational enterprises that use Good Governance – Confidence in public institutions
hybrid mismatch arrangements in structuring Target
All Canadians
their cross-border investments. By Population:
eliminating the Canadian tax benefit arising Expected Benefits:
from these arrangements, the proposal Gender:
would affect this group negatively. To the Income Distribution:
Inter-generational:
extent that Canadian individuals are
Additional
shareholders of these enterprises, it may be Characteristics:
assumed that men and higher-income GBA+ Timing:
individuals would be more likely to be
adversely affected. Tax data indicate that
corporate distributions are generally received
disproportionately by men (who received
63.1 per cent of total dividends paid by
corporations to Canadian individuals in 2015)
and higher-income individuals.
Data Sources: Canada Revenue Agency

Impacts Report 561

 Consultation on Mandatory Disclosure Rules
These measures are aimed at combatting Quality of
aggressive tax avoidance and evasion. If Life Impacts
these measures are enacted, it is expected Prosperity – Federal Debt-to-GDP ratio
that the government will be able to collect Good Governance - Confidence in public/private institutions
more tax revenues which will benefit all Target Population: All Canadians
Canadians. Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional
Characteristics:
GBA+ Timing:

Action Against Money Laundering and Terrorist Financing

These initiatives will help reduce potential Quality of
threats to the security and stability of Life Impacts
Canada's financial system stemming from Prosperity – Financial stability
money laundering and terrorist financing. Good Governance – Domestic security
Strengthening Canada’s Anti-Money Target Population: All Canadians
Laundering and Anti-Terrorist Financing Expected Benefits:
Regime may benefit people victimized by Gender:
money laundering, terrorist financing, and Income Distribution:
offences linked to these crimes. Victimized Inter-generational:
groups are more likely to include women, Additional Characteristics: Victimized groups
children, the elderly, persons with disabilities, GBA+ Timing:
persons suffering from addiction, and
newcomers to Canada.

Action Against Money Laundering and Terrorist Financing-Tax

Measures
These initiatives will strengthen the ability of Quality of
the Canada Revenue Agency to protect the Life Impacts
charitable registration system from being
Good Governance – Confidence in public institutions;
abused for terrorist financing purposes. Domestic security
This specific proposal is targeted at Target Population: All Canadians
registered charities but is expected to benefit Expected Benefits:
all Canadians, particularly vulnerable and Gender:
marginalized persons in communities that Income Distribution:
are likely to be targeted by those supporting Inter-generational:
terrorism or seeking to radicalize individuals Additional Charitable and Non-profit
towards violence. Young men are more likely Characteristics: Sector
to be susceptible to radicalization efforts. GBA+ Timing:

562 Annex 5
 Beneficial Ownership Transparency
Advancing a beneficial ownership registry will Quality of
help Canada counter a broad array of crimes, Life Impacts
for which the gender, ethnicity, age, and
Good Governance – Confidence in public/private
socio-economic status of the victims vary
institutions; Victimization rate
greatly. All Canadians are expected to
Target Population: All Canadians
benefit.
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:
GBA+ Timing:
Combatting Abusive Tax Collection Avoidance Schemes
This is a tax integrity measure that targets Quality of
aggressive tax planning and the avoidance Life Impacts
of the collection of tax debt by a small
Prosperity – Federal Debt-to-GDP ratio
number of tax planners that are marketing Good Governance – Confidence in public/private institutions
these schemes to wealthy and corporate Target Population: All Canadians
taxpayers. This measure protects the tax Expected Benefits:
base on behalf of all Canadians to benefit Gender:
the Canadian population in general.
Income Distribution:
Data Sources: Canada Revenue Agency Inter-generational:
Additional
Characteristics:
GBA+ Timing:

Improving Duty and Tax Collection on Imported Goods

This initiative is a customs duty compliance Quality of
measure designed to ensure that all Life Impacts
importers value their imported goods on the Prosperity – Federal Debt-to-GDP ratio
same basis. This initiative promotes fairness
Target Population: All Importers, All Canadians
by ensuring that all importers are treated
equally. Similarly, the payment process Expected Benefits:
modernizations apply to all importers. Gender:
This initiative will result in increased duty Income Distribution:
revenues to the government, benefiting all Inter-generational:
Canadians. Additional Characteristics: Importers
GBA+ Timing:

Impacts Report 563

 Retail Payment Oversight Framework
The retail payment oversight framework will Quality of
ensure safer and more secure payment Life Impacts
services for Canadian businesses and Prosperity – Financial stability
consumers, which broadly represent the Good Governance – Confidence in public private institutions
Canadian population. While the framework is Target Population: All Canadians
expected to benefit all Canadians, those with Expected Benefits:
lower levels of financial literacy are expected Gender:
to greatly benefit from stronger regulatory Income Distribution:
oversight. Inter-generational:
Additional Characteristics:
GBA+ Timing:
E-Payroll to Help Businesses
The Canada Revenue Agency will lead Quality of
consultations and government-wide efforts to Life Impacts
analyse and develop potential options to Good Governance – Confidence in public institutions
implement an e-payroll solution for the (modernizing operations)
Government of Canada. Target
All Canadians, Employers
A fully operational e-payroll system has the Population:
potential to deliver a range of benefits to Expected Benefits:
Gender:
Canadians. In particular, it could enhance and
Income Distribution:
streamline the delivery of services and benefit Inter-generational:
payments, which would primarily benefit lower- Additional Lower-income Canadians,
income Canadians such as single parents and Characteristics Employers
the working poor, through more timely access GBA+ Timing:
to income-tested benefits. E-payroll could also
lower costs and facilitate compliance for
employers. The reduction of administrative
burden will support all employers in Canada. As
of December 2019, 97.9 per cent of businesses
in Canada were small businesses.
Data Sources: Canada Revenue Agency;
Organisation for Economic Co-operation and
Development; Innovation, Science and Economic
Development Canada

Protecting Taxpayer Information

These investments are designed to protect Quality of
taxpayers’ and benefit recipients’ data from Life
unauthorized access and loss, which will Impacts
directly benefit all Canadians. The Canada Good Governance – Confidence in public institutions
Revenue Agency notes that the increased Target
All Canadians
protection of data could be seen as an indirect Population:
benefit for groups most often targeted by Expected Benefits:
identity theft – seniors, individuals with an Gender:
income larger than $75,000, and individuals Income
Distribution:
between 25 and 34 years of age. However,
Inter-generational:
these indirect benefits are difficult to quantify. Additional
Seniors
Data Sources: Canada Revenue Agency Characteristics:
GBA+ Timing:

564 Annex 5
 Modernizing CRA Services
The Canada Revenue Agency (CRA) processes Quality of Life
over 2 million adjustments to personal income Impacts
tax returns requested by taxpayers each year. Prosperity – Household incomes; Poverty; Financial well-
Timely resolution of these adjustments will being
improve service to all Canadians by ensuring Good Governance – Confidence in public institutions
(modernizing operations)
that credits and benefits to which they are
All Canadians, Indigenous
entitled are calculated accurately and received Target Population:
peoples
in a timely manner. Benefits are expected to
Expected Benefits:
accrue for all Canadians that adjust their tax Gender:
returns. Timeliness of provision of income- Income Distribution:
tested benefits and government transfers will be Inter-generational:
positive for diverse groups of vulnerable Additional
Low-income Canadians
Canadians, particularly lower-income individuals. Characteristics:
In addition, the simplified credit and benefit GBA+ Timing:
return and Canada Child Benefit form for
Indigenous individuals will further enable quick
and easy access to benefits and credits for this
group.
Data Sources: Canada Revenue Agency

Canadian Digital Service

The Canadian Digital Service (CDS) directly Quality of
benefits Canadians and all other users of Life Impacts
government on-line services. The CDS Society – Time use
focuses on services that achieve high Good Governance – Confidence in public institutions
standards of accessibility and on meeting (modernizing operations)
the needs of diverse populations, such as Target Population: All Canadians
veterans, businesses seeking to respond to Expected Benefits:
government tenders, and those applying for Gender:
Income Distribution:
COVID-19 economic relief measures. In
Inter-generational:
particular, the CDS focuses on those who Additional
might be otherwise underserved or Characteristics:
marginalized. Recent work of the CDS has GBA+ Timing:
included development of the COVID Alert
App, and GC Notify, a platform to provide
vital email and text messaging services for
an array of COVID-19 services.
Data Sources: Treasury Board of Canada
Secretariat

Impacts Report 565

 Measuring What Matters
Improving Statistics Canada’s capacity for
quality of life measurement is expected to Quality of
benefit all Canadians. In particular, Life Impacts
addressing data gaps will help shed light on Good Governance – Confidence in public institutions
how non-economic, societal, and Additional quality of life impacts across all domains
environmental factors are contributing to Target Population: All Canadians
Canadians’ quality of life. Better data will Expected Benefits:
also help to identify and close gaps in Gender:
socio-economic outcomes for different Income Distribution:
demographic groups such as women, Inter-generational:
persons at risk of poverty, black and Additional Vulnerable and Disadvantaged
racialized communities, Indigenous Characteristics: Groups
communities, and seniors. Greater emphasis GBA+ Timing:
on long-term implications of decision-
making benefits younger generations.
Data Sources: Statistics Canada

Reducing Government Travel

All Canadians will benefit from fiscal cost Quality of

savings and the efficient use of federal Life Impacts
government resources.
Prosperity – Federal Debt-to-GDP ratio
This initiative will lead to somewhat lower Good Governance – Confidence in public institutions
travel and other expenditures within federal Target Population: All Canadians
departments, but it is hard to predict how
Expected Benefits:
these reductions will be implemented across
departments. In aggregate, these impacts will Gender:
be more than offset by the increased Income Distribution:
expenditures associated with new budget Inter-generational:
measures. Additional Characteristics:

GBA+ Timing:

566 Annex 5
 Government Information Technology Operations
Measures to support Improving and Defending
Quality of
our Cyber Networks, Modernizing Critical IT
Life Impacts
Infrastructure by Shared Services Canada,
Supporting Efficient, Stable Digital Applications, Good Governance – Confidence in public institutions
and the Office of the Chief Information Officer (modernizing operations)
of the Government of Canada are expected to Target All Canadians, Federal Public
benefit all Canadians through more secure and Population: Service Employees
reliable digital government services and internal Expected Benefits:
operations. Persons with disabilities, over the Gender:
age of 60, or living in rural or remote areas may Income Distribution:
benefit most from investments in networking Inter-generational:
and digital applications if they have difficulty Additional
Technology Workers
accessing government services in person. Characteristics:
Indirectly, men may benefit disproportionately GBA+ Timing:
as new IT staff and procurements come from
the science, technology, engineering, and math
(STEM) field, which has predominantly male
workers.

Modernizing Critical IT Infrastructure: Service Canada

This initiative is intended to improve the Quality of Life
efficiency of government operations and Impacts
improve service to beneficiaries. About Good Governance – Confidence in public institutions
55 per cent of the 6.7 million Old Age (modernizing operations)
Security (OAS) beneficiaries are women, while All Canadians, Service Canada
Target Population:
about 54 per cent of roughly 1.8 million new Beneficiaries

Employment Insurance (EI) claimants Expected Benefits:

Gender:
annually in recent pre-pandemic years were
Income Distribution:
men. The initiative will also lead to more Inter-generational:
work for those in the information Additional Service Canada Beneficiaries, IMIT
management / information technology (IMIT) Characteristics: Workers
field, which is male dominated. GBA+ Timing:
The intergenerational impact is balanced, as GBA+ Responsive Approach
beneficiaries include EI claimants, OAS/GIS The Benefits Delivery Modernization initiative will include
recipients and IMIT sector workers. an examination of legislative, regulatory, policy and
operational barriers to reduce the complexity of applying
The overall distributional impact is neutral: for and processing applications for the major entitlement
the improved service for EI recipients and programs. Once implemented, these new measures will
about 2.2 million lower income seniors who make it easier for clients to apply to and receive benefits.
receive the Guaranteed Income Supplement
(GIS) under the OAS program is balanced by
the positive effects on the higher incomes of
IMIT workers.
Data Sources: EI Monitoring and Assessment
Report; Old Age Security and Canada Pension
Plan Statistical Bulletin

Impacts Report 567

 Eliminating the Backlog of Pay Problems and Stabilizing Human
Resources, Pay, and Pensions
All federal public service employees are
expected to benefit from an HR-Pay- Quality of
Pension system that provides timely and Life Impacts
accurate pay and supports employees from Prosperity – Household incomes
recruitment through retirement. Specific Good Governance – Confidence in public institutions
employee groups who have been affected Target Population: Federal Public Service Employees
the most by pay issues may benefit the Expected Benefits:
most, including employees on maternity, Gender:
parental, or disability leave; new employees Income Distribution:
(particularly students); employees departing Inter-generational:
the public service; and single-income Additional
households. Pay Workers
Characteristic:
Data Sources: Treasury Board of Canada GBA+ Timing:
Secretariat
Advancing Public Service Job Classification
The Classification Program supports a Quality of
diverse workplace that ensures that the Life Impacts
value of work performed by public servants Prosperity – Household incomes; Employment
is determined fairly and transparently. It Good Governance – Confidence in public institutions
also ensures that qualification standards are Target Population: Federal Public Service Employees
free from bias based on gender, age, Expected Benefits:
education, language, culture, and income. Gender:
This also supports the modernization of Income Distribution:
Inter-generational:
various occupational groups in the public
Additional Those Seeking Employment in the
service, some of which are comprised Characteristics: Federal Public Service
mainly of women, ensuring that the GBA+ Timing:
principle of equal pay for work of equal
value is upheld.
Data Sources: Treasury Board of Canada
Secretariat, Statistics Canada

Modernizing Leave Without Pay Provisions

Amendments to the Public Service Quality of
Superannuation Regulations will directly Life Impacts
benefit federal employees covered by the Prosperity – Household incomes
Public Service Superannuation Act, in Society – Someone to count on; Time use
particular caregivers, who are Public Service Employees Covered
disproportionally women. Reducing the Target Population: by the Public Service
gendered financial impact of taking Superannuation Act
caregiving leave can reduce financial Expected Benefits:
pressures on caregivers who opt to take Gender:
leave without pay. Income Distribution:
Data Sources: Public Services and Inter-generational:
Procurement Canada, Treasury Board of Additional Characteristics:
Canada Secretariat GBA+ Timing:

568 Annex 5
 Justice Canada Employee Benefit Plan Rate Change
This is a technical adjustment to account for Quality of
a change to Employee Benefit Plan rates Life Impacts
charged on legal services to federal Good Governance – Confidence in public institutions
departments. Target Population: All Canadians
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:
GBA+ Timing:
Improving Federal Asset Management
This measure is expected to benefit all Quality of Life
Canadians through improved management Impacts
of federal assets and greener operations of Environment – Greening operations
government by helping to integrate Society – Historical and cultural preservation; Accessible
greenhouse gas reduction into real property environments
planning. The real property industry is Good Governance – Confidence in public institution

expected to benefit as consultants are Target Population: All Canadians

engaged from that sector. Men are slightly Expected Benefits:

more common than women in the federal Gender:
Income Distribution:
real property field, representing 59 per cent
Inter-generational:
of the workforce, but women are slightly
Additional Characteristics: Federal Real Property Sector
more represented in the overall public
GBA+ Timing:
service at around 55 per cent.
Data Sources: Treasury Board of Canada
Secretariat

Supporting Government Translation and Interpretation Services

This support benefits all Canadians by Quality of
promoting both official languages and Life Impacts
facilitating greater engagement for Society – Knowledge of official languages
unilingual speakers. According to the 2016 Good Governance – Confidence in public institutions
Census, approximately 90 per cent of Target Population: All Canadians
people in Canada self-report English-only or Expected Benefits:
French-only as their official language of Gender:
choice. Translation and interpretation Income Distribution:
services also improve accessibility for those Inter-generational:
requiring sign-language interpretation. Additional
Characteristics:
Data Sources: Statistics Canada
GBA+ Timing:

Impacts Report 569

 Procurement Workforce
All Canadians are expected to benefit from Quality of
an efficient and effective public service. Life Impacts
Additionally, current and future public Prosperity – Employment; Productivity
servants of Public Services and Procurement Environment – Greening operations
Canada will benefit from an increase in the Good Governance – Confidence in public institutions
procurement workforce, and the support for Target Population: Federal Public Service Employees
complex contracts. Indirectly, Canadian Expected Benefits:
federal suppliers will benefit from the Gender:
greater resources available to procurement Income Distribution:
officers. As of March 31, 2019, Public Inter-generational:
Services and Procurement's workforce Additional
identified as 59.6 per cent women; Characteristics:
3.5 per cent Indigenous peoples; GBA+ Timing:
5.1 per cent persons with disabilities; and,
15.5 per cent members of a visible minority
group.

Public Services and Procurement Canada Program Integrity

All Canadians will ultimately benefit from the Quality of
measure, which will allow Public Services and Life
Procurement Canada (PSPC) to continue Impacts
providing procurement support to other Prosperity – Employment; Productivity
departments, including the Public Health Health – Health-adjusted life expectancy; COVID-19
Agency of Canada, for personal protective incidence
Good Governance – Confidence in public institutions
equipment, vaccines, and other necessary
Target Population: All Canadians
services in the fight against COVID-19. Public
servants of PSPC will directly benefit from the Expected Benefits:
Gender:
measure. As of March 31, 2019, PSPC's
Income Distribution:
workforce identified as: 59.6 per cent women,
Inter-generational:
3.5 per cent Indigenous peoples, 5.1 per cent Federal Public Service
persons with disabilities, and 15.5 per cent Additional Characteristics:
Employees
members of a visible minority group.
GBA+ Timing:

570 Annex 5
 Supporting the Public Service Occupational Health Program
This program directly benefits federal public
service employees. In particular, employees Quality of
in high-risk and scientific positions from the Life Impacts
program's five major client departments
Health – Self-rated health; Functional health status
(Canada Border Services Agency,
Department of Fisheries and Oceans, Global Target Population: Federal Public Service Employees
Affairs Canada, Department of National Expected Benefits:
Defence, and Correctional Services Canada) Gender:
benefit from increased support for the Income Distribution:
program. Workforces for most of these Inter-generational:
departments are gender-balanced, with the Additional Employees in High-risk and
exception of the Department of Fisheries Characteristics: Scientific Positions
and Oceans and the Department of GBA+ Timing:
National Defence. These departments
disproportionately employ men, at 64 per
cent and 60 per cent, respectively. The
average age of employees across all
departments is 43 years old, and the
majority of employees speak English as their
first language.
Data Source: Government of Canada

Renewing funding for the Office of Public Service Accessibility

This initiative directly benefits persons with Quality of Life
disabilities in the Public Service by addressing Impacts
barriers and improving representation, Society – Accessible environments
accessibility and inclusion. Currently, the Good Governance – Confidence in public institutions;
representation of persons with disabilities is Discrimination and unfair treatment
5.3 per cent while the latest workforce Target Population: Persons with Disabilities
availability number for persons with disabilities Expected Benefits:
is nine per cent. Gender:
Income Distribution:
Data Sources: Statistics Canada, 2017 Canadian Inter-generational:
Survey on Disability, Public Service Employee Additional
Public Service
Survey and Employment Equity Data Characteristics:
GBA+ Timing:

Impacts Report 571

 Addressing Financial Impacts on Atomic Energy of Canada Limited
Construction and trade workers undertaking Quality of
capital projects at Chalk River Laboratories, Life Impacts
who are mostly men, will benefit from the Prosperity – Household incomes
government addressing COVID-19’s Target Population: All Canadians
financial impacts on Atomic Energy of Expected Benefits:
Canada Limited’s operations. Scientific staff Gender:
undertaking research projects, who are Income Distribution:
predominantly older men, will also directly Inter-generational:
Additional Nuclear Sector, Chalk River
benefit.
Characteristics: Community
This proposal will provide an indirect GBA+ Timing:
stimulus effect on the communities
surrounding Chalk River Laboratories in
Renfrew County, Ontario.
Data Sources: Statistics Canada

Strengthening Capital Markets Stability and Enforcement

The funding to the Canadian Securities Quality of
Transition Office will support advice to the Life Impacts
Government of Canada on strengthening
Prosperity – Financial stability
capital markets systemic risk management Good Governance – Confidence in public institutions
and enhancing criminal enforcement. All
Target Population: All Canadians
Canadians benefit from this support.
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

572 Annex 5
 CRA Administrative Funding for Certain Budget 2019 Measures
This measure provides funding to the Canada Quality of
Revenue Agency (CRA) for previously Life Impacts
announced measures including the Good Governance – Confidence in public institutions
administration of the Qualifying Canadian Target Population: All Canadians
Journalism Organizations designation process, Expected Benefits:
Canadian Journalism Labour Tax Credit, Gender:
Canada Training Credit, and permitting new Income Distribution:
types of annuities under registered plans.
Inter-generational:
This funding is expected to benefit recipients Additional Characteristics: Recipients of these credits
of these credits and other CRA support who GBA+ Timing:
would be able to better access these tax
measures and avail themselves of additional or
enhanced services provided by the CRA. It will
also provide new jobs within the federal public
service. This measure is expected to be gender
balanced. According to statistics from the
Treasury Board Secretariat, approximately 55
per cent of employees in the core federal
public service were women, and the public
service is representative of the broader
Canadian population.
Data Sources: Treasury Board Secretariat:
2018-2019 Annual report to Parliament on
Employment Equity in the Public Service of
Canada.

Supporting the Ongoing Delivery of Benefits to Canadians

This measure will benefit all Canadians by Quality of
ensuring in-person services continue to be Life Impacts .
safely delivered and benefits continue to be Prosperity – Protection from income shocks
delivered on time. This measure indirectly Good Governance – Confidence in public institutions
benefits economically vulnerable Canadians Target Population: All Canadians
who access programs delivered by Service Expected Benefits:
Canada such as Employment Insurance, Old Gender:
Age Security and the Canada Pension Plan. Income Distribution:
Investments that support in-person access Inter-generational:
in Service Canada Centres are likely to Additional Rural Communities, Indigenous
benefit Canadians living in rural areas, Characteristics: peoples
individuals that are not familiar with digital GBA+ Timing:
technologies, and Indigenous people, as
data show they are more likely to access in-
person services.
Data Sources: Service Canada

Impacts Report 573

Budget 2021 Annex Measures
Amendment of the Government Annuities Improvement Act
This initiative has no distributional impact, Quality of
as it simply eliminates duplicative audit Life Impacts
requirements for Government Annuities.
Good Governance – Confidence in public institutions
Annuitants will continue to have access to
the same information through the Public Target Population: All Canadians
Accounts or the actuarial reports published Expected Benefits:
by the Chief Actuary. Gender:
Income Distribution:
Inter-generational:
Additional
Characteristics:
GBA+ Timing:
Extending Temporary Provisions Related to the Employment
Insurance Emergency Response Benefit
Extending these provisions should benefit
women and men relatively equally, as EI ERB Quality of
claims were largely gender-balanced. Men Life Impacts
and women accounted for 51.4 per cent and Prosperity – Protection from income shocks; Financial well-
48.5 per cent of all claims, respectively. being
Individuals ages 25 and 54 accounted for Target Population: Former EI ERB claimants
the majority of claimants. About 3.7 million Expected Benefits:
unique clients received this benefit between Gender:
March and October 2020. Income Distribution:
Data Sources: Employment and Social Inter-generational:
Development Canada. Additional
EI ERB claimants
Characteristics:
GBA+ Timing:

Labour Program Authority to use the Social Insurance Number

This legislative amendment directly benefits Quality of
all workers in the federally regulated private Life Impacts
sector who need to access program supports Good Governance – Confidence in public institutions
(e.g., occupational health and safety) through Workers in the federally
Target Population:
the Labour Program at Employment and regulated private sector
Social Development Canada. Expected Benefits:
Gender:
Providing the Labour Program with authority
Income Distribution:
to use the Social Insurance Number is
Inter-generational:
expected to benefit more men than women, Additional Characteristics:
as men make up 61 per cent of workers in GBA+ Timing:
the federally regulated private sector.

574 Annex 5
 Social Security Tribunal Reforms
This initiative will have a direct positive
impact on a gender-balanced population of Quality of
individuals above the age of 50, and, in Life Impacts
particular, for those with disabilities. Canada
Good Governance – Confidence in public institutions
Pension Plan disability applicants
represented 79 per cent of all appeals in the Persons with Disabilities,
Target Population:
Income Security stream in 2018-19. The Individuals Above Age 50
average age of Canada Pension Plan Expected Benefits:
disability beneficiaries is around 55 years. Gender:
Income Distribution:
Data Sources: Administrative data
Inter-generational:
Additional
Persons with Disabilities
Characteristics:
GBA+ Timing:
Modernizing the Fiscal Stabilization Program
All provincial governments are eligible for
Fiscal Stabilization payments if eligibility Quality of
criteria are met. The provincial governments Life Impacts
have the flexibility to direct Fiscal Prosperity – Provincial fiscal capacity; Protection from
Stabilization payments according to their income shocks
priorities and the needs of their residents. Target Population: All Canadians
The federal government does not place
restrictions on, or require reporting on, Expected Benefits:
provincial use of Fiscal Stabilization Gender:
payments. Income Distribution:
Inter-generational:
Additional Characteristics: Provinces

GBA+ Timing:

Additional Fiscal Equalization Offset Payments to Nova Scotia

This proposal will exclusively benefit
residents of the province of Nova Scotia. The Quality of
government of Nova Scotia will have the Life Impacts
flexibility to direct the payments according to Prosperity – Provincial fiscal capacity; Protection from
its priorities and the needs of its residents. income shocks
The federal government does not place All Canadians Living in Nova
Target Population:
restrictions on, or require reporting on, Scotia
provincial use of additional fiscal equalization Expected Benefits:
offset payments. Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Impacts Report 575

 Financial Sector Legislative Measures
The measures seek to improve the Quality of
governance and functioning of Canada’s Life Impacts
financial sector and institutions, changes Prosperity – Financial well-being
which are expected to benefit all Canadians Good Governance – Confidence in public institutions
through a strong economy and strong public Target Population: All Canadians
institutions such as strengthening the Expected Benefits:
Canada Deposit Insurance Corporation, Gender:
enhancing consumer protection, and Income Distribution:
ensuring the integrity of Canada’s financial Inter-generational:
system through strong anti-money Additional Characteristics: Vulnerable Groups
laundering and anti-terrorist financing GBA+ Timing:
policies. Combatting money laundering and
terrorist financing will benefit people who
are victimized by these and other related
crimes, particularly vulnerable groups, such
as women and children, who are more likely
to be victimized.

Financial Institution Restructuring Powers (FIRP) Extension

These are technical measures that would
improve the resolution framework. These Quality of
powers apply when CDIC takes control of a Life Impacts
failing bank and are intended to mitigate Prosperity – Protection from economic shocks
contagion and loss of value – they do not Target Population: All Canadians
affect deposits and payouts.
Expected Benefits:
A sound resolution framework is a
Gender:
foundational element of financial stability in
Income Distribution:
Canada, which will benefit all Canadians, even
Inter-generational:
those who do not rely on the financial
Additional Characteristics:
security of deposits at CDIC member
institutions. GBA+ Timing:

Strengthening the Canadian Deposit Insurance Framework

These are technical measures that would Quality of
improve the deposit insurance framework Life Impacts
which is a foundational element of financial Prosperity – Protection from economic shocks
stability in Canada. Improved financial stability Target Population: All Canadians
will benefit all Canadians, even those who do Expected Benefits:
not rely on the financial security of deposits at Gender:
CDIC member institutions.
Income Distribution:
Canadians are a highly banked population. 99 Inter-generational:
per cent of Canadians have a bank account. Additional Characteristics:
GBA+ Timing:

576 Annex 5
 2023 Sunset Date of Financial Institutions Statutes
This measure benefits all Canadians by Quality of
ensuring federally regulated financial Life Impacts
institutions, on which many Canadians rely, Prosperity – Financial stability; Firm growth; Protection
can continue to operate beyond 2023. from income shocks
Good Governance – Confidence in public/private
institutions
Target Population: All Canadians
Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional
Characteristics:
GBA+ Timing:
Revised Framework for Negotiated Contribution Pension Plans
The revised framework will benefit all active Quality of
workers of federally regulated negotiated Life Impacts
contribution pension plans, as well as retirees, Prosperity – Financial well-being
and other beneficiaries such as surviving Beneficiaries of Private Sector
spouses, regardless of identity characteristics. Federally Regulated
Target Population:
Employees participating in federally regulated Negotiated Contribution
pension plans are broadly gender-balanced, Pension Plans
with women accounting for approximately Expected Benefits:
45 per cent of active workers participating in Gender:
federally regulated private pension plans. Income Distribution:
Inter-generational:
Beneficiaries of federally
Additional Characteristics:
regulated pension plans
GBA+ Timing:
Audit Authorities
This measure will benefit all Canadians by
enhancing the ability of the Canada Revenue Quality of
Agency to administer the Income Tax Act and Life Impacts
other federal statutes. Good Governance – Confidence in public institutions
Target Population: All Canadians

Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Impacts Report 577

 Optimizing Digital in a COVID-19 Environment
These measures encourage the take up of
Quality of Life
digital services and remove outdated
Impacts
requirements for paper interactions
between the Canada Revenue Agency and Society – Time use
taxpayers. The measures would allow the Good Governance – Confidence in public/private institutions
Canada Revenue Agency to more efficiently Target
All Canadians
administer the tax system and result in Population:
faster, more convenient and accurate Expected Benefits:
service, while also enhancing security. Gender:
Income
While some Canadians may have limited Distribution:
access to electronic services, such as Inter-generational:
internet usage, certain aspects of the Additional
measures are intended to mitigate this Characteristics:
negative impact. GBA+ Timing:
Postdoctoral Fellowship Income
This measure directly benefits postdoctoral
fellows who contribute to RRSPs. Men Quality of
represent approximately 58 per cent of Life Impacts
postdoctoral fellows and approximately
53 per cent of RRSP contributors. Prosperity – Financial well-being

Data Sources: Internal administrative data; Target Population: Postdoctoral Fellows

Canadian Association of Postdoctoral Scholars Expected Benefits:

Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Taxes Applicable to Registered Investments

The measure directly benefits mutual funds Quality of
that are registered investments, indirectly Life Impacts
providing tax relief to taxpayers who invest by
Prosperity – Household wealth
means other than their registered retirement
savings. It will likely have a small distributional Target Population: All Canadians

effect in favour of higher-income investors. Expected Benefits:

Gender:
Data Sources: Canada Revenue Agency
Income Distribution:
Inter-generational:
Additional Characteristics: High-income Individuals
GBA+ Timing:

578 Annex 5
 Fixing Contribution Errors in Defined Contribution Pension Plans
This measure provides an efficient process
for employers to correct errors in Quality of
contributions to registered pension plans in Life Impacts
prior taxation years. It has a marginal impact Prosperity – Financial well-being
on the growth of individuals’ retirement
Target Population: All Canadians
savings.
Expected Benefits:
Data Sources: Canada Revenue Agency
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Input Tax Credit Information Requirements

This measure will amend certain information Quality of
requirements for businesses that claim input Life Impacts
tax credits to recover the Goods and Services Prosperity – Reducing compliance burden
Tax/Harmonized Sales Tax that they pay in Target Population: All Canadians
respect of goods and services used as inputs in Expected Benefits:
their commercial activities. It is expected that Gender:
the amendments will not have measurable Income Distribution:
benefits or negative consequences for
Inter-generational:
individuals in Canada on the basis of their
Additional Characteristics:
gender, age, ethnicity, or other demographic
characteristics. GBA+ Timing:

GST New Housing Rebate Conditions

This measure benefits individuals buying a Quality of
new home that may require a co-signor or Life Impacts
guarantor in order to secure the necessary
Prosperity – Acceptable housing
financing. These individuals tend to be lower-
or middle-income individuals with a Target Population: New Homeowners
particular income or credit profile. Expected Benefits:
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Impacts Report 579

 Extending Timelines for the Film or Video Production Tax Credits
This measure directly benefits shareholders of Quality of
film and video production companies. While Life Impacts
shareholders are predominantly male and Society – Sense of pride/belonging to Canada
higher income, no data is available on Companies Involved in Film
Target Population:
shareholders in this specific sector. This and Video
measure is also expected to indirectly benefit Expected Benefits:
employees in the film or video sector. Gender:
Statistics Canada data from 2020 for the Income Distribution:
Inter-generational:
information, culture and recreation sector
Shareholders and workers
indicates that roughly 44 per cent of
Additional Characteristics: involved in film and video
employees are women. productions
Data Sources: Statistics Canada
GBA+ Timing:

Clarifying the Provincial-Use Rebate under the Excise Tax Act

The measure is a technical amendment Quality of
providing additional clarification on the Life Impacts
provincial-use rebate for the excise tax on
Good Governance – Confidence in public institutions
products such as gasoline and diesel. The
measure is not expected to affect individuals Target Population: All Canadians
differently on the basis of gender, income, Expected Benefits:
age, or other demographic characteristics.
Gender:
Income Distribution:
Inter-generational:
Additional Characteristics:

GBA+ Timing:

Tax Treatment of Emergency Benefit Amounts

This measure is expected to Quality of
disproportionately benefit lower-income Life Impacts
individuals. Lower-income individuals are Prosperity – Protection from income shocks
more likely to have experienced unusually Recipients of COVID-19
Target Population:
high income due to emergency benefit Benefits
receipt, and could thus benefit from a Expected Benefits:
deduction available in the year of benefit Gender:
receipt as opposed to the year of repayment. Income Distribution:
Inter-generational:
Recipients of COVID-19
Additional Characteristics:
Benefits
GBA+ Timing:

580 Annex 5
Annex 6
Tax Measures:
Supplementary Information
Table of Contents
Annex 6 Tax Measures: Supplementary Information .................................... 583
Overview ................................................................................................................................... 585
Personal Income Tax Measures ....................................................................................... 588
Disability Tax Credit ..................................................................................................... 588
Canada Workers Benefit ............................................................................................ 591
Northern Residents Deductions ............................................................................. 593
Postdoctoral Fellowship Income ............................................................................ 596
Tax Treatment of COVID-19 Benefit Amounts.................................................. 596
Fixing Contribution Errors in Defined Contribution Pension Plans .......... 597
Taxes Applicable to Registered Investments ..................................................... 598
Registration and Revocation Rules Applicable to Charities ........................ 599
Electronic Filing and Certification of Tax and Information Returns .......... 601
Business Income Tax Measures ....................................................................................... 603
Emergency Business Supports ................................................................................ 603
Canada Emergency Wage Subsidy .................................................................... 604
Canada Emergency Rent Subsidy and Lockdown Support...................... 610
Canada Recovery Hiring Program.......................................................................... 610
Immediate Expensing ................................................................................................. 614
Rate Reduction for Zero-Emission Technology Manufacturers ................. 617
Capital Cost Allowance for Clean Energy Equipment .................................... 620
Film or Video Production Tax Credits................................................................... 628
Mandatory Disclosure Rules .................................................................................... 629
Avoidance of Tax Debts ............................................................................................. 639
Audit Authorities........................................................................................................... 641
International Tax Measures ............................................................................................... 642
Base Erosion and Profit Shifting ............................................................................. 642
Interest Deductibility Limits ................................................................................. 643
Hybrid Mismatch Arrangements ........................................................................ 647
Sales and Excise Tax Measures ........................................................................................ 649

Tax Measures: Supplementary Information 583

 Application of the GST/HST to E-commerce ..................................................... 649
Input Tax Credit Information Requirements ...................................................... 652
GST New Housing Rebate Conditions.................................................................. 653
Rebate of Excise Tax for Goods Purchased by Provinces ............................. 654
Excise Duty on Tobacco ............................................................................................. 654
Excise Duty on Vaping Products ............................................................................. 655
Tax on Select Luxury Goods ..................................................................................... 659
Customs Tariff and Tax Measures................................................................................... 661
Duty and Tax Collection on Imported Goods.................................................... 661
Previously Announced Measures.................................................................................... 662

Notice of Ways and Means Motion to amend the Income Tax Act and Other
Related Legislation

Notice of Ways and Means Motion to amend the Excise Tax Act

Notice of Ways and Means Motion to amend the Excise Act, 2001 and Other
Legislation

Notice of Ways and Means Motion to introduce an Act to implement a Tax

on Select Luxury Goods

Draft Amendments to Various GST/HST Regulations

584 Annex 6
Overview
This annex provides detailed information on tax measures proposed in the
Budget.

Table 1 lists these measures and provides estimates of their fiscal impact.

The annex also provides Notices of Ways and Means Motions to amend the
Income Tax Act, the Excise Tax Act, the Excise Act, 2001 and other legislation and
draft amendments to various regulations.

In this annex, references to “Budget Day” are to be read as references to the day
on which this Budget is presented.

Tax Measures: Supplementary Information 585

Table 1
Cost of Proposed Tax Measures1, 2
Fiscal Costs (millions of dollars)
2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026 Total
Personal Income Tax
Disability Tax Credit - 19 84 90 91 92 376
Canada Workers Benefit 460 1,795 1,670 1,665 1,665 1,675 8,930
Northern Residents Deductions - 26 26 26 26 26 128
Postdoctoral Fellowship Income - - - - 1 1 2
Tax Treatment of COVID-19 Benefit
Amounts - - - - - - -
Fixing Contribution Errors in Defined
Contribution Pension Plans - 1 - - - - 1
Taxes Applicable to Registered
Investments 2 6 6 6 6 6 32
Registration and Revocation Rules
Applicable to Charities - - - - - - -
Electronic Filing and Certification of Tax
and Information Returns - - - - - - -
Business Income Tax Measures
Emergency Business Supports
Canada Emergency Wage Subsidy - 10,140 - - - - 10,140
Canada Emergency Rent Subsidy and
Lockdown Support - 1,920 - - - - 1,920
Canada Recovery Hiring Program - 595 - - - - 595
Immediate Expensing - 615 1,055 985 -145 -265 2,245
Rate Reduction for Zero-Emission
Technology Manufacturers - 1 10 10 10 15 46
Capital Cost Allowance for Clean Energy
Equipment - 14 22 30 34 42 142
Film or Video Production Tax Credits - - 20 25 15 5 65
Mandatory Disclosure Rules - - - - - - -
Avoidance of Tax Debts - - - - - - -
Audit Authorities - - - - - - -

586 Annex 6
Table 1
Cost of Proposed Tax Measures1, 2
Fiscal Costs (millions of dollars)
2020– 2021– 2022– 2023– 2024– 2025–
2021 2022 2023 2024 2025 2026 Total
International Tax Measures
Base Erosion and Profit Shifting
Interest Deductibility Limits3 - -26 -398 -1,329 -1,754 -1,809 -5,316
Hybrid Mismatch Arrangements - - -130 -205 -215 -225 -775
Sales and Excise Tax Measures
Application of the GST/HST to E-
commerce4 - - - - - - -
Input Tax Credit Information
Requirements - - - - - - -
GST New Housing Rebate Conditions - - - - - - -
Rebate of Excise Tax for Goods
Purchased by Provinces - - - - - - -
Excise Duty on Tobacco - -415 -440 -435 -425 -420 -2,135
Tax on Select Luxury Goods - -34 -140 -140 -145 -145 -604
Customs Tariff and Tax Measures
Duty and Tax Collection on Imported
Goods - -88 -150 -150 -150 -150 -688
Other Tax Measures5
Digital Services Tax - -200 -700 -800 -800 -900 -3,400
Less: Amounts Provisioned in the Fiscal
Framework - 200 700 800 800 900 3,400
Administrative Costs - 17 7 4 4 4 35
Tax on Unproductive Use of Canadian
Housing by Foreign Non-resident
Owners - - -200 -170 -165 -165 -700
1
A “–” indicates a nil amount, a small amount (less than $500,000) or an amount that cannot be determined in
respect of a measure that is intended to protect the tax base.
2
Totals may not add due to rounding.
3
An important proportion of the overall projected revenue impact (75%) relates to the expectation that the
measure will help in preventing the shifting of debt into Canada.
4
The projected revenues from the GST/HST e-commerce proposals are set out in the 2020 Fall Economic
Statement and have already been provisioned in the fiscal framework. This budget describes revisions to those
proposals and the associated draft legislation in the attached Notice of Ways and Means Motion, following
consultations with stakeholders.
5
Details of these proposed tax measures are presented in Annex 7.

Tax Measures: Supplementary Information 587

Personal Income Tax Measures
Disability Tax Credit
The Disability Tax Credit (DTC) is a non-refundable tax credit that is intended to
recognize the impact of non-itemizable disability-related costs on the ability to
pay tax. For 2021, the value of the credit is $1,299.

To be eligible for the DTC, an individual must have a certificate confirming that
they have a severe and prolonged impairment in physical or mental functions.
The effects of the impairment must be such that, even with appropriate devices,
medication and therapy, the individual is blind or is:

 markedly restricted in their ability to perform a basic activity of daily

living, or would be so restricted were it not for certain therapy
(commonly referred to as “extensive life-sustaining therapy”); or
 significantly restricted in their ability to perform more than one basic
activity of daily living where the cumulative effect of those restrictions is
comparable to being markedly restricted in a basic activity of daily
living.
For these purposes, the Income Tax Act recognizes the following basic activities of
daily living: walking; feeding or dressing oneself; mental functions necessary for
everyday life; speaking; hearing; eliminating bodily waste; and, for the purposes
of the “significantly restricted” test noted above, includes seeing.

A valid DTC certificate is also a requirement for accessing certain other tax-
related measures, including Registered Disability Savings Plans, the Child
Disability Benefit and the disability supplement to the Canada Workers Benefit.

Mental Functions Necessary for Everyday Life

Under current rules, mental functions necessary for everyday life include:
 memory;
 problem-solving, goal-setting and judgement (taken together); and
 adaptive functioning.
To ensure that the eligibility criteria for the DTC better articulate the range of
mental functions necessary for everyday life, Budget 2021 proposes that, for the
purposes of the DTC, mental functions necessary for everyday life include:
 attention;
 concentration;
 memory;
 judgement;
 perception of reality;

588 Annex 6
 problem-solving;
 goal-setting;
 regulation of behaviour and emotions;
 verbal and non-verbal comprehension; and
 adaptive functioning.

Life-Sustaining Therapy
Under current rules, extensive life-sustaining therapy is therapy that:
 is essential to sustain a vital function;
 is required to be administered at least three times each week for a total
duration averaging not less than 14 hours a week; and
 cannot reasonably be expected to be of significant benefit to an
individual who does not have a severe and prolonged impairment in
physical or mental functions.

These requirements are intended to allow individuals to qualify for the DTC
where they are undergoing therapies that have a significant impact on everyday
living, comparable to the impact of being directly restricted in basic activities of
daily living.

Under the current rules, time spent on the following activities may be included in
determining time spent receiving therapy:

 activities that require the individual to take time away from normal,
everyday activities in order to receive the therapy;
 where the therapy requires a regular dosage of medication that needs
to be adjusted on a daily basis, activities directly involved in
determining the appropriate dosage; and
 in the case of a child who is unable to perform the activities related to
the therapy as a result of their age, the time spent by the child’s primary
caregivers to perform and supervise these activities for the child.

Time spent on the following activities cannot be included in determining time

spent receiving therapy: activities related to dietary or exercise restrictions or
regimes (even if those restrictions or regimes are a factor in determining the daily
dosage of medication), travel time, medical appointments, shopping for
medication and recuperation after therapy.

Tax Measures: Supplementary Information 589

These rules can result in important components of therapy being excluded from
the calculation of therapy time. For example, the determination of the
appropriate dosage of medicine for treating diabetes in individuals who are
insulin-dependent may require precise recording of dietary intake. In a similar
fashion, therapy that involves the consumption of medical food or medical
formula (such as for treating certain inherited metabolic conditions) may require,
as part of the treatment, the precise recording of the dietary intake of particular
compounds.

To better recognize these aspects of therapy for the purposes of calculating time
spent on therapy, while ensuring that everyday activities (such as normal
management of a healthy diet) and discretionary activities are not taken into
account for that purpose, Budget 2021 proposes to:

 allow reasonable time spent determining dietary intake and/or physical

exertion to be considered part of the therapy, where this information is
essential to, and is undertaken for the purpose of, determining the
dosage of medication that must be adjusted on a daily basis;
 clarify that the exclusion of time for medical appointments does not
apply to appointments to receive therapy or to determine the daily
dosage of medication;
 provide that the exclusion of time for recuperation after therapy does
not apply to medically required recuperation; and
 in the case of therapy that requires the daily consumption of a medical
food or medical formula to limit intake of a particular compound to
levels required for the proper development or functioning of the body,
allow reasonable time spent on activities that are directly related to the
determination of the amount of the compound that can be safely
consumed to be considered part of the therapy.
Budget 2021 also proposes that, where an individual is incapable of performing
their therapy on their own due to the impacts of their disability, the time
reasonably required by another person to assist the individual in performing and
supervising the therapy would be allowed to be counted.

Budget 2021 further proposes that the requirement that therapy be administered
at least three times each week be reduced to two times each week. The
requirement that therapy be of a duration averaging not less than 14 hours a
week would remain unchanged.

These proposed changes would apply to the 2021 and subsequent taxation years,
in respect of DTC certificates filed with the Minister of National Revenue on or
after Royal Assent.

590 Annex 6
Canada Workers Benefit
The Canada Workers Benefit (CWB) is a non-taxable refundable tax credit that
supplements the earnings of low- and modest-income workers and improves
their work incentives. Under current law, in 2021, the CWB grows by 26 cents for
every dollar of “working income” (generally employment and business income) in
excess of $3,000, up to a maximum entitlement of $1,395 for single individuals
without dependants, or $2,403 for families (couples and single parents). The
benefit is then reduced by 12 per cent of adjusted net income in excess of
$13,194 for single individuals without dependants, or $17,522 for families.

Budget 2021 proposes to enhance the CWB starting in 2021. This enhancement
would increase:

 the phase-in rate from 26 per cent to 27 per cent for single individuals
without dependants as well as families;
 the phase-out thresholds from $13,194 to $22,944 for single individuals
without dependants and from $17,522 to $26,177 for families; and
 the phase-out rate from 12 per cent to 15 per cent.
Chart 1 shows the proposed enhancement of the CWB in 2021 for a single
individual without dependants and Chart 2 shows the same for families.

Chart 1
Enhanced Canada Workers Benefit—2021
(Single Individuals without Dependants)
Entitlements ($)
1,600
1,395 Status Quo
1,400 Proposal
1,200

1,000

800

600

400

200
3,000 22,944 32,244
0
0 10,000 20,000 30,000
Working Income / Adjusted Net Income ($)
Note: It is assumed that adjusted net income is equal to working income.

Tax Measures: Supplementary Information 591

 Chart 2
Enhanced Canada Workers Benefit—2021
(Single Parents and Couples)
Entitlements ($)
3,000 Status Quo
Proposal
2,403
2,500

2,000

1,500

1,000

500
3,000 26,177
42,197
0
0 10,000 20,000 30,000 40,000
Working Income / Adjusted Net Income ($)
Note: It is assumed that adjusted net income is equal to working income.

The CWB also features a supplement that is available to individuals who are
eligible for the Disability Tax Credit. Corresponding changes would be made to
the disability supplement’s phase-in and reduction rates as well as the reduction
threshold. Specifically, the supplement would phase out at a rate of 7.5 per cent
for each individual in a couple where both individuals are in receipt of the
supplement, and at a rate of 15 per cent otherwise. The reduction threshold
would be increased to align with the point at which the base benefit is phased
out completely (i.e., from $24,815 under current rules to $32,244, for single
individuals without children, and from $37,548 under current rules to $42,197, for
families).

To improve work incentives for secondary earners in a couple, Budget 2021 also
proposes to introduce a “secondary earner exemption” to the CWB, a special rule
for individuals with an eligible spouse. This would allow the spouse or common-
law partner with the lower working income to exclude up to $14,000 of their
working income in the computation of their adjusted net income, for the purpose
of the CWB phase-out.

For example, in the absence of the secondary earner exemption, a dual-earner

couple with adjusted family net income of $50,000 would receive no CWB in
2021. Suppose the secondary earner in this couple earned $20,000 of working
income. With the introduction of the secondary earner exemption, the secondary
earner’s adjusted net income would be reduced by the lesser of their working
income ($20,000) and $14,000. The resulting adjusted family net income of
$36,000 would entitle the couple to a benefit of $930.

The government recognizes the efforts that provinces and territories have taken

592 Annex 6
to improve work incentives for low- and modest-income individuals and families.
To ensure that benefits are harmonized and that the CWB builds on these efforts,
the government will continue to allow for province- or territory-specific changes
to the design of the benefit through reconfiguration agreements, guided by the
following principles:
 they build on actions taken by the province or territory to improve work
incentives;
 they are cost-neutral to the federal government;
 they provide for a minimum benefit for all recipients of the benefit; and
 they preserve harmonization of the benefit with existing federal
programs.
These measures would apply to the 2021 and subsequent taxation years.
Indexation of amounts relating to the CWB would continue to apply after the
2021 taxation year, including the secondary earner exemption.

Northern Residents Deductions

Individuals who live in prescribed northern areas of Canada for at least six
consecutive months beginning or ending in a taxation year may claim the
Northern Residents Deductions in computing their taxable income for that year.
These include both a residency component and a travel component.

The travel component allows a taxpayer receiving employer-provided travel

benefits to deduct, in respect of a trip taken by the taxpayer or a member of the
taxpayer’s household, up to the least of:
 the amount of the employer-provided travel benefit received in respect
of the trip;
 the total travel expenses paid for the trip; and
 the cost of the lowest return airfare to the nearest city designated in the
Income Tax Regulations.
A taxpayer may deduct amounts in respect of travel for any number of trips made
to obtain medical services not available locally and up to two trips per person per
year for non-medical personal reasons. Residents of the prescribed Northern
Zone may claim 100 per cent of the amounts described above, while residents of
the prescribed Intermediate Zone may claim 50 per cent.

Budget 2021 proposes to expand access to the travel component of the Northern
Residents Deductions. Under the new approach, subject to the other restrictions
noted above, a taxpayer would have the option to claim, in respect of each of the
taxpayer and each “eligible family member”, up to:
 the amount of employer-provided travel benefits the taxpayer received
in respect of travel by that individual; or

Tax Measures: Supplementary Information 593

 a $1,200 standard amount that may be allocated across eligible trips
taken by that individual.
After application of the 50-per-cent factor for residents of the Intermediate Zone,
the second limit effectively becomes a $600 standard amount.

For these purposes, an eligible family member would be an individual living in the
taxpayer’s household who is:

 the spouse or common-law partner of the taxpayer;

 a child of the taxpayer (including a child of the taxpayer’s spouse or
common-law partner) under the age of 18; or
 another individual who is related to the taxpayer and who is wholly
dependent on the taxpayer (and/or on the taxpayer’s spouse or
common-law partner) for support, and who is, except in the case of a
parent or grandparent of the taxpayer, so dependent by reason of
mental or physical infirmity.
If any taxpayer claims a deduction in respect of an employer-provided benefit for
travel by the taxpayer or an eligible family member of the taxpayer in a year, no
other taxpayer would be allowed to also claim all or part of the $1,200 standard
amount in respect of travel by that first mentioned taxpayer or that eligible family
member in that year. If any taxpayer claims all or part of the $1,200 standard
amount in respect of travel by an individual, the maximum total amount that
could be claimed in respect of that individual by all taxpayers would be $1,200.

Budget 2021 proposes that across all taxpayers in a given individual’s household,
a maximum of two trips taken by that individual would be allowed to be claimed
in total for non-medical personal travel in a year. A taxpayer would continue to
be able to claim any number of trips for medical purposes.

In light of the proposed changes described above, claims for a given trip would
be limited to the least of:
 the amount of the employer-provided travel benefit received in respect
of the trip or the amount allocated to that particular trip by the taxpayer
out of the $1,200 standard amount;
 the total travel expenses paid for that trip; and
 the cost of the lowest return airfare to the nearest designated city.

594 Annex 6
 Example:
 Kim and her husband Ryan live in Whitehorse and have a 10-year-old
child. Kim has higher income than her husband and claims all travel
expenses for the household.
 Kim receives a travel benefit of $1,500 from her employer in respect
of each of two non-medical trips she took herself. She also receives a
benefit of $1,000 in respect of a non-medical trip that Ryan took.
Kim, Ryan, and their child also take one non-medical trip together,
but do not receive any travel benefit for this trip.
 Kim may claim up to two trips for non-medical reasons. She decides
to claim the two trips for which she received a travel benefit, as the
amount of her travel benefit is greater than the $1,200 standard
amount. Kim is eligible to claim up to the amount of her travel
benefit of $1,500, subject to a limit of her actual expenses and the
lowest return airfare, in respect of each trip.
 Kim decides not to claim the amount of the travel benefit she
received for Ryan’s travel, as the amount she received is less than the
$1,200 standard amount. Instead, she allocates the $1,200 standard
amount across the two trips that Ryan took, and is eligible to deduct
the amount allocated to each trip, subject to the actual expenses and
the lowest return airfare for each trip.
 Kim allocates the full $1,200 standard amount to the one trip her
child took, and is eligible to deduct up to $1,200 for her child’s travel,
subject to the actual expenses and the lowest return airfare in respect
of that trip.

This measure would apply to the 2021 and subsequent taxation years.

Tax Measures: Supplementary Information 595

Strategic Environmental Assessment Statement
The proposal would effectively expand access to a rebate on the cost of travel,
including carbon-intensive air travel. This may encourage additional travel among
northern residents and result in associated greenhouse gas emissions. However,
the rules of the deduction allow only two trips to be claimed in respect of any
individual for non-medical personal reasons, and further limit the amount that
may be claimed in respect of any trip. These rules constrain the circumstances in
which an individual may receive a rebate in respect of additional travel taken in
response to the proposal. Accordingly, any negative environmental impacts are
expected to be negligible.

Postdoctoral Fellowship Income

For income tax purposes, postdoctoral fellows are generally not considered to be
students. Thus, postdoctoral fellowship income generally does not qualify for the
scholarship exemption from income tax. Although fully included in taxable
income, and similar in nature to employment income, postdoctoral fellowship
income does not currently qualify as “earned income” for the purpose of
determining an individual’s contribution limit for a registered retirement savings
plan (RRSP).

Budget 2021 proposes to include postdoctoral fellowship income in “earned

income” for RRSP purposes. This would provide postdoctoral fellows with
additional RRSP room in order to make deductible RRSP contributions.

This measure would apply in respect of postdoctoral fellowship income received

in the 2021 and subsequent taxation years. This measure would also apply in
respect of postdoctoral fellowship income received in the 2011 to 2020 taxation
years, where the taxpayer submits a request in writing to the Canada Revenue
Agency for an adjustment to their RRSP room for the relevant years.

Tax Treatment of COVID-19 Benefit Amounts

A range of taxable benefits have been made available to qualified individuals in
response to the COVID-19 pandemic. Generally, if a benefit amount is repaid (for
example, where an individual determines that they were not eligible for the
benefit in question), this amount can only be deducted for income tax purposes
in the year the repayment takes place. Therefore, if the repayment does not occur
in the same year as the year of receipt of the benefit, an individual may owe tax in
respect of the benefit for the year of receipt, while obtaining a deduction for the
repayment amount in a future tax year.

596 Annex 6
Budget 2021 proposes to amend the Income Tax Act to allow individuals the
option to claim a deduction in respect of the repayment of a COVID-19 benefit
amount in computing their income for the year in which the benefit amount was
received rather than the year in which the repayment was made. This option
would be available for benefit amounts repaid at any time before 2023.

For these purposes, COVID-19 benefits would include:

 Canada Emergency Response Benefits/Employment Insurance
Emergency Response Benefits;
 Canada Emergency Student Benefits;
 Canada Recovery Benefits;
 Canada Recovery Sickness Benefits; and
 Canada Recovery Caregiving Benefits.
Individuals may only deduct benefit amounts once they have been repaid. An
individual who makes a repayment, but who has already filed their income tax
return for the year in which the benefit was received, would be able to request an
adjustment to the return for that year.

Budget 2021 also proposes to amend the Income Tax Act to ensure that the
COVID-19 benefit amounts noted above, and similar provincial or territorial
benefit amounts, are included in the taxable income of those individuals who
reside in Canada but are considered non-resident persons for income tax
purposes. As a result, COVID-19 benefits received by these non-resident persons
would be taxable in Canada in a manner generally similar to employment and
business income earned in Canada.

Fixing Contribution Errors in Defined Contribution

Pension Plans
The rules in the Income Tax Act do not currently permit pension plan
administrators to accept retroactive contributions to employee accounts under a
defined contribution pension plan in order to correct under-contribution errors in
respect of prior years. Although in some circumstances over-contribution errors
may be corrected by refunding the excess to the contributor, these rules have
been found to be cumbersome.

Budget 2021 proposes to provide more flexibility to plan administrators of

defined contribution pension plans to correct for both under-contributions and
over-contributions. The proposals would permit certain types of errors to be
corrected via additional contributions to an employee’s account under a defined
contribution pension plan to compensate for an under-contribution error made
in any of the preceding five years, subject to a dollar limit. The proposals would
also permit plan administrators to correct for pension over-contribution errors in

Tax Measures: Supplementary Information 597

respect of an employee for any of the five years prior to the year in which the
excess amount is refunded to the employee or employer, as the case may be,
who made the contribution.

To simplify reporting requirements, the proposed rules would require the plan
administrator to file a prescribed form in respect of each affected employee,
rather than to amend T4 slips for prior years. Additional contributions to correct
for under-contributions would reduce the employee’s registered retirement
savings plan (RRSP) contribution room for the taxation year following the year in
which the retroactive contribution is made. To the extent this results in negative
RRSP room, it would only impact the employee’s contributions in future years.
Refunds of over-contributions would generally restore the employee’s RRSP
contribution room for the taxation year in which the refund is made.

This measure would apply in respect of additional contributions made, and

amounts of over-contributions refunded, in the 2021 and subsequent taxation
years.

Taxes Applicable to Registered Investments

A trust or corporation that satisfies certain requirements can apply to the Canada
Revenue Agency to be a registered investment for registered retirement savings
plans (RRSPs), registered retirement income funds or deferred profit sharing
plans. The units of a trust, or shares of a corporation, that is a registered
investment are qualified investments for the types of plans for which it is
registered.

Certain categories of registered investments (e.g., mutual fund trusts and mutual
fund corporations) must have a minimum number of investors. A trust or
corporation that is a registered investment and is not sufficiently widely held
(e.g., a trust that does not have the 150 unit holders required to qualify as a
mutual fund trust) is limited to holding investments that would be qualified
investments for the types of registered plans for which it is registered. For
example, if a trust or corporation is a registered investment for RRSPs, it can hold
only investments that are qualified investments for an RRSP.

If a registered investment that is subject to this investment restriction holds

property that is not a qualified investment for the type of registered plans for
which it is registered, the registered investment is liable to pay a tax under Part
X.2 of the Income Tax Act. This tax is equal to one per cent of the property’s fair
market value, at the time it was acquired, for each month that the registered
investment holds the property. However, in some cases the effect of the tax can
be disproportionate because the tax applies without regard to the proportion of
the shares or units of the registered investment that are held by investors that are
themselves subject to the qualified investment rules.

598 Annex 6
Budget 2021 proposes that the tax imposed under Part X.2 of the Income Tax Act
be pro-rated based on the proportion of shares or units of the registered
investment that are held by investors that are themselves subject to the qualified
investment rules. For example, if a registered investment is registered for RRSPs
and 20 per cent of its units are held by RRSPs while 80 per cent of its units are
held by individuals via their non-registered accounts, the monthly tax imposed
under Part X.2 would now be 20 per cent of 1 per cent of the fair market value of
a non-qualified investment at the time it was acquired.
This measure would apply to taxes imposed under Part X.2 of the Income Tax Act
in respect of months after 2020. However, the measure would also apply to
taxpayers whose tax liability under Part X.2 in respect of months before 2021 has
not been finally determined by the Canada Revenue Agency as of Budget Day.

Registration and Revocation Rules Applicable to

Charities
In order to further strengthen Canada’s Anti-Money Laundering and Anti-
Terrorist Financing Regime, Budget 2021 proposes a number of amendments to
the Income Tax Act in order to limit opportunities for the abuse of charitable
registration status for terrorist financing purposes. Budget 2021 also proposes
changes to the rules applicable to all registered charities in respect of certain
false statements.

Listed Terrorist Entities

Currently, under the Income Tax Act, the registration of a charity or other
qualified donee may be revoked for non-compliance with the rules, but the
Canada Revenue Agency must follow a series of steps in order to do so. In certain
cases, a registered charity or other qualified donee may be listed as a terrorist
entity under the Criminal Code by the Minister of Public Safety and Emergency
Preparedness causing it to no longer qualify for registration. There is an
administrative process that must be followed for an entity to be listed as a
terrorist entity, with appeal rights to the courts.
Budget 2021 proposes to allow the Minister of National Revenue to immediately
revoke the registration of a charity or other qualified donee upon its listing as a
terrorist entity under the Criminal Code.

Tax Measures: Supplementary Information 599

Ineligible Individuals
Where a charity or Canadian amateur athletic association has an “ineligible
individual” as a director, trustee, officer or like official, or where such an individual
controls or manages the charity or association, the Income Tax Act provides the
Minister of National Revenue with the discretion to refuse or revoke its
registration, or to suspend its authority to issue official donation receipts. Under
current rules, an ineligible individual includes, in general terms:
 an individual who has been convicted of a criminal offence involving
financial dishonesty; and
 an individual who – during a period in which a registered charity
engaged in conduct that constituted a serious breach of the
requirements for its registration and for which its registration was
revoked within the previous five years – was a director, trustee, officer
or like official of the charity, or controlled or managed the charity.
Budget 2021 proposes to amend the “ineligible individual” definition so that it
includes an individual who:

 is, or is a member of, a listed terrorist entity; or

 in respect of a listed terrorist entity, was, during a period in which the
entity supported or engaged in terrorist activities,
 a director, trustee, officer or like official of the entity; or
 an individual that controlled or managed, directly or indirectly, in
any manner whatever, the entity.
The existing rule that requires the Canada Revenue Agency to only consider
circumstances occurring within the preceding five-year period would not apply in
relation to this measure.

False Statements
The Income Tax Act currently allows for the revocation of the registration of a
charity where a false statement amounting to culpable conduct is made for the
purpose of obtaining registration.

Budget 2021 proposes to allow the Minister of National Revenue to suspend the
authority of a registered charity to issue official donation receipts for one year or
to revoke its registration where a false statement amounting to culpable conduct
was made for the purpose of maintaining its registration.

All of these amendments would apply on Royal Assent.

600 Annex 6
Electronic Filing and Certification of Tax and
Information Returns
To improve the administration of, and compliance with, the tax system, Budget
2021 proposes various amendments to the Income Tax Act, Income Tax
Regulations, Excise Tax Act, Excise Act, 2001, Tax Rebate Discounting Act, Air
Travellers Security Charge Act, Part 1 of the Greenhouse Gas Pollution Pricing Act,
and Electronic Filing and Provision of Information (GST/HST) Regulations. These
proposed measures would improve the Canada Revenue Agency’s (CRA) ability to
operate digitally, resulting in faster, more convenient and accurate service, while
also enhancing security.

Default Method of Correspondence

Notices of Assessment
Budget 2021 proposes to amend the Income Tax Act to provide the CRA with the
ability to send certain notices of assessment electronically without the taxpayer
having to authorize the CRA to do so. This proposal would apply in respect of
individuals who file their income tax return electronically and those who employ
the services of a tax preparer that files their income tax return electronically.
Taxpayers who continue to file their income tax returns with the CRA in paper
format would continue to receive a paper notice of assessment from the CRA.

This measure would come into force on Royal Assent of the enacting legislation.

Correspondence with Businesses

Budget 2021 proposes to change the default method of correspondence for
businesses that use the CRA’s My Business Account portal to electronic only.
However, businesses could still choose to also receive paper correspondence.
This measure would apply in respect of the Income Tax Act, Excise Tax Act, Excise
Act, 2001, Air Travellers Security Charge Act and Part 1 of the Greenhouse Gas
Pollution Pricing Act.

This measure would come into force on Royal Assent of the enacting legislation.

Information Returns
Budget 2021 proposes to amend the Income Tax Regulations to allow issuers of
T4A (Statement of Pension, Retirement, Annuity and Other Income) and T5
(Statement of Investment Income) information returns to provide them
electronically without having to also issue a paper copy and without the taxpayer
having to authorize the issuer to do so.

This measure would apply in respect of information returns sent after 2021.

Tax Measures: Supplementary Information 601

Electronic Filing Thresholds
Tax Preparers
Budget 2021 proposes to amend the rule in the Income Tax Act that requires,
subject to the exception below, professional preparers of income tax returns to
file electronically where they prepare more than 10 income tax returns of
corporations or 10 income tax returns of individuals (other than trusts) to apply
instead where they file more than 5 of either type of return for a calendar year.
Furthermore, the exception for trusts would be removed.

Budget 2021 also proposes to amend the exception in the Income Tax Act
whereby a tax preparer is allowed to a file a maximum of 10 paper income tax
returns of corporations and 10 paper income tax returns of individuals per
calendar year to instead allow only a maximum of 5 paper returns of each type
per calendar year.

These measures would apply in respect of calendar years after 2021.

Filer of Information Returns

Budget 2021 proposes that the threshold for mandatory electronic filing of
income tax information returns for a calendar year under the Income Tax Act be
lowered from 50 to 5 returns, in respect of a particular type of information return.
As such, persons or partnerships that file more than 5 information returns of a
particular type for a calendar year would be required to file them electronically.

This measure would apply in respect of calendar years after 2021.

Corporations and GST/HST Registrants

Budget 2021 proposes to eliminate the mandatory electronic filing thresholds for
returns of corporations under the Income Tax Act, and of Goods and Services
Tax/Harmonized Sales Tax (GST/HST) registrants (other than for charities or
Selected Listed Financial Institutions) under the Excise Tax Act. As such, returns of
most corporations and GST/HST registrants under these acts would be required
to be filed electronically.

This measure would apply in respect of taxation years that begin after 2021 for
the Income Tax Act amendments and in respect of reporting periods that begin
after 2021 for the Excise Tax Act.

Electronic Payments
Budget 2021 proposes to clarify that payments required to be made at a financial
institution under the Income Tax Act, the GST/HST portion of the Excise Tax Act,
the Excise Act, 2001, the Air Travellers Security Charge Act and Part 1 of the

602 Annex 6
Greenhouse Gas Pollution Pricing Act, include online payments made through
such an institution. Budget 2021 also proposes that electronic payments be
required for remittances over $10,000 under the Income Tax Act and that the
threshold for mandatory remittances to be made at a financial institution under
the GST/HST portion of the Excise Tax Act, the Excise Act, 2001, the Air Travellers
Security Charge Act and Part 1 of the Greenhouse Gas Pollution Pricing Act be
lowered from $50,000 to $10,000.

This measure would apply to payments made on or after January 1, 2022.

Handwritten Signatures
Budget 2021 proposes to eliminate the requirement that signatures be in writing
on certain prescribed forms, as follows:

 Forms prescribed under the Income Tax Act:

 T183, Information Return for Electronic Filing of an Individual’s
Income Tax and Benefit Return;
 T183CORP, Information Return for Corporations Filing Electronically;
and
 T2200, Declaration of Conditions of Employment.
 Forms prescribed under the Tax Rebate Discounting Act:
 RC71, Statement of Discounting Transaction; and
 RC72, Notice of the Actual Amount of the Refund of Tax.
This measure would come into force on Royal Assent of the enacting legislation.

Business Income Tax Measures

Emergency Business Supports
The government has introduced a number of support measures to help
businesses and other organizations affected by the COVID-19 pandemic,
including the Canada Emergency Wage Subsidy, the Canada Emergency Rent
Subsidy and the Lockdown Support.

Program details in respect of these three measures have been announced

through June 5, 2021 and the application of these measures cannot be extended
by regulation beyond June 2021.

Budget 2021 proposes to extend the Canada Emergency Wage Subsidy, the
Canada Emergency Rent Subsidy and the Lockdown Support until September
2021. The subsidy rates would gradually decline over the July-to-September
period. The proposed details of these programs from June 6, 2021 to September
25, 2021 are described below.

Tax Measures: Supplementary Information 603

Budget 2021 also proposes to provide the government with the legislative
authority to add additional qualifying periods for the wage subsidy, the rent
subsidy and the Lockdown Support until November 20, 2021, should the
economic and public health situation warrant it.

Canada Emergency Wage Subsidy

The government introduced the Canada Emergency Wage Subsidy to prevent
further job losses and encourage employers to quickly rehire workers previously
laid off as a result of COVID-19. The measure provides eligible employers that
have experienced a decline in revenues with a wage subsidy for eligible
remuneration paid to their employees.

Support for Active Employees

The wage subsidy for active employees includes a base subsidy for employers
that have experienced a decline in revenues as well as a top-up wage subsidy
that is available to employers that have experienced a decline in revenues of at
least 50 per cent. The maximum combined base subsidy and top-up wage
subsidy rate is set at 75 per cent through the qualifying period ending on June 5,
2021.

Budget 2021 proposes the wage subsidy rate structures set out in Table 2 for
June 6, 2021 to September 25, 2021. As illustrated in the table, the subsidy rates
would be gradually phased out starting on July 4, 2021. Furthermore, only
employers with a decline in revenues of more than 10 per cent would be eligible
for the wage subsidy as of that date.

604 Annex 6
Table 2
Canada Emergency Wage Subsidy Base and Top-up Rate Structure, Periods
17 to 20
(June 6, 2021 to September 25, 2021)
Period 17 Period 18 Period 19 Period 20
June 6 – July 3 July 4 – July 31 August 1 – August 29 –
August 28 September 25
Maximum $847 $677 $452 $226
weekly benefit
per employee*
Revenue
decline:
70% and over 75% 60% 40% 20%
(i.e., Base: 40% (i.e., Base: 35% (i.e., Base: 25% (i.e., Base: 10%
+ + + +
Top-up: 35%) Top-up: 25%) Top-up: 15%) Top-up: 10%)
50-69% Base: 40% + Base: 35% + Base: 25% + Base: 10% +
Top-up: Top-up: Top-up: Top-up:
(revenue (revenue (revenue (revenue
decline - 50%) x decline - 50%) x decline - 50%) x decline - 50%) x
1.75 1.25 0.75 0.5
(e.g., 40% + (e.g., 35% + (e.g., 25% + (e.g., 10% +
(60% revenue (60% revenue (60% revenue (60% revenue
decline - 50%) x decline - 50%) x decline - 50%) x decline - 50%) x
1.75 = 57.5% 1.25 = 47.5% 0.75 = 32.5% 0.5 = 15%
subsidy rate) subsidy rate) subsidy rate) subsidy rate)
>10-50% Base: revenue Base: (revenue Base: (revenue Base: (revenue
decline x 0.8 decline - 10%) x decline - 10%) x decline - 10%) x
(e.g., 30% 0.875 0.625 0.25
revenue decline (e.g., (30% (e.g., (30% (e.g., (30%
x 0.8 = 24% revenue decline revenue decline revenue decline
subsidy rate) - 10%) x 0.875 - 10%) x 0.625 - 10%) x 0.25 =
= 17.5% = 12.5% 5% subsidy
subsidy rate) subsidy rate) rate)
0-10% Base: revenue 0% 0% 0%
decline x 0.8
(e.g., 5%
revenue decline
x 0.8 = 4%
subsidy rate)
* The maximum weekly benefit per employee is equal to the maximum combined base subsidy and top-up
wage subsidy for the qualifying period applied to the amount of eligible remuneration paid to the employee
for the qualifying period, on remuneration of up to $1,129 per week.

Tax Measures: Supplementary Information 605

Requirement to Repay Wage Subsidy
Budget 2021 proposes to require a publicly listed corporation to repay wage
subsidy amounts received for a qualifying period that begins after June 5, 2021 in
the event that its aggregate compensation for specified executives during the
2021 calendar year exceeds its aggregate compensation for specified executives
during the 2019 calendar year.

For the purpose of this proposed rule, a publicly listed corporation’s specified
executives will be its Named Executive Officers whose compensation is required
to be disclosed under Canadian securities laws in its annual information circular
provided to shareholders, or similar executives in the case of a corporation listed
in another jurisdiction. This generally includes its chief executive officer, chief
financial officer, and three other most highly compensated executives. A
corporation’s executive compensation for a calendar year will be calculated by
prorating the aggregate compensation of its specified executives for each of its
taxation years that overlap with the calendar year.

The amount of the wage subsidy required to be repaid would be equal to the
lesser of:
 the total of all wage subsidy amounts received in respect of active
employees for qualifying periods that begin after June 5, 2021; and
 the amount by which the corporation’s aggregate specified executives’
compensation for 2021 exceeds its aggregate specified executives’
compensation for 2019.
This requirement to repay would be applied at the group level and would apply
to wage subsidy amounts paid to any entity in the group.

Support for Furloughed Employees

A separate wage subsidy rate structure applies for furloughed employees. The
wage subsidy for furloughed employees is aligned with the benefits provided
through Employment Insurance (EI) through June 5, 2021 to ensure equitable
treatment of such employees between the two programs.

To ensure that the wage subsidy for furloughed employees remains aligned with
benefits available under EI, Budget 2021 proposes that the weekly wage subsidy
for a furloughed employee from June 6, 2021 to August 28, 2021 be the lesser of:

 the amount of eligible remuneration paid in respect of the week; and

 the greater of:
 $500; and
 55 per cent of pre-crisis remuneration for the employee, up to a
maximum subsidy amount of $595.

606 Annex 6
The wage subsidy for furloughed employees would continue to be available to
eligible employers that qualify for the wage subsidy for active employees for the
relevant period until August 28, 2021. Employers will also continue to be entitled
to claim under the wage subsidy their portion of contributions in respect of the
Canada Pension Plan, EI, the Quebec Pension Plan and the Quebec Parental
Insurance Plan in respect of furloughed employees.

Reference Periods
For the purposes of the wage subsidy, an employer’s decline in revenues is
generally determined by comparing the employer’s revenues in a current
calendar month with its revenues in the same calendar month, pre-pandemic. An
employer may also elect to use an alternative approach, which compares the
employer’s monthly revenues relative to the average of its January 2020 and
February 2020 revenues. A deeming rule provides that an employer’s decline in
revenues for any particular qualifying period is the greater of its decline in
revenues for the particular qualifying period and the immediately preceding
qualifying period.

Budget 2021 proposes the reference periods set out in Table 3 for determining
an eligible employer’s decline in revenues for the qualifying periods from June 6,
2021 to September 25, 2021.

Table 3
Canada Emergency Wage Subsidy Reference Periods, Periods 17 to 20
(June 6, 2021 to September 25, 2021)
Timing Period 17 Period 18 Period 19 Period 20
June 6 – July 3 July 4 – July 31 August 1 – August 29 –
August 28 September 25
General June 2021 over July 2021 over August 2021 September
approach
June 2019 or July 2019 or over August 2021 over
May 2021 over June 2021 over 2019 or July September
May 2019 June 2019 2021 over July 2019 or August
2019 2021 over
August 2019
Alternative June 2021 or July 2021 or August 2021 or September
approach
May 2021 over June 2021 over July 2021 over 2021 or August
average of average of average of 2021 over
January and January and January and average of
February 2020 February 2020 February 2020 January and
February 2020

Employers that had chosen to use the general approach for prior periods would
be required to continue to use that approach. Similarly, employers that had
chosen to use the alternative approach would be required to continue to use the
alternative approach.

Tax Measures: Supplementary Information 607

Baseline Remuneration
Under the general rules, an eligible employer’s entitlement to the wage subsidy
for a furloughed employee, as well as an active employee in certain
circumstances, is determined through a calculation that takes into account both
the employee’s current and baseline (pre-crisis) remuneration.

Baseline remuneration means the average weekly eligible remuneration paid to

an eligible employee by an eligible employer during the period beginning
January 1, 2020 and ending March 15, 2020. Any period of seven or more
consecutive days for which the employee was not remunerated is excluded from
the calculation. However, the eligible employer may elect, for each qualifying
period in respect of an employee, an alternative baseline period for calculating
the average weekly eligible remuneration.

To ensure that the alternative baseline remuneration periods for a particular

qualifying period continue to generally reflect the corresponding calendar
months covered by the qualifying period, Budget 2021 proposes to allow an
eligible employer to elect to use the following alternative baseline remuneration
periods:

 March 1 to June 30, 2019 or July 1 to December 31, 2019, for the
qualifying period between June 6, 2021 and July 3, 2021; and
 July 1 to December 31, 2019, for qualifying periods beginning after July
3, 2021.

Canada Emergency Rent Subsidy

The government introduced the Canada Emergency Rent Subsidy to provide
direct relief to organizations that continue to be economically impacted by the
COVID-19 pandemic. Under the rent subsidy, qualifying organizations that have
experienced a decline in revenues are eligible for a subsidy on qualifying
expenses.

Rate Structure
The maximum base rent subsidy rate is set at 65 per cent through the qualifying
period ending on June 5, 2021.

Budget 2021 proposes the base rent subsidy rate structures set out in Table 4 for
June 6, 2021 to September 25, 2021. As illustrated in the table, the subsidy rates
would be gradually phased out starting on July 4, 2021. Furthermore, only
organizations with a decline in revenues of more than 10 per cent would be
eligible for the base rent subsidy and, as discussed below, the Lockdown Support.

608 Annex 6
Table 4
Canada Emergency Rent Subsidy Base Rate Structure*, Periods 17** to 20
(June 6, 2021 to September 25, 2021)
Period 17 Period 18 Period 19 Period 20
June 6 – July 3 July 4 – July 31 August 1 – August 29 –
August 28 September 25
Revenue
decline:
70% and over 65% 60% 40% 20%
50-69% 40% + (revenue 35% + (revenue 25% + (revenue 10% + (revenue
decline - 50%) x decline - 50%) x decline - 50%) x decline - 50%) x
1.25 1.25 0.75 0.5
(e.g., 40% + (e.g., 35% + (e.g., 25% + (e.g., 10% +
(60% revenue (60% revenue (60% revenue (60% revenue
decline - 50%) x decline - 50%) x decline - 50%) x decline - 50%) x
1.25 = 52.5% 1.25 = 47.5% 0.75 = 32.5% 0.5 = 15%
subsidy rate) subsidy rate) subsidy rate) subsidy rate)
>10-50% Revenue (Revenue (Revenue (Revenue
decline x 0.8 decline - 10%) x decline - 10%) x decline - 10%) x
(e.g., 30% 0.875 0.625 0.25
revenue decline (e.g., (30% (e.g., (30% (e.g., (30%
x 0.8 = 24% revenue decline revenue decline revenue decline
subsidy rate) - 10%) x 0.875 - 10%) x 0.625 - 10%) x 0.25 =
= 17.5% = 12.5% 5% subsidy
subsidy rate) subsidy rate) rate)
0-10% Revenue 0% 0% 0%
decline x 0.8
(e.g., 5%
revenue decline
x 0.8 = 4%
subsidy rate)
* Expenses for each qualifying period are capped at $75,000 per location and are subject to an overall cap of
$300,000 that is shared among affiliated entities.
** Period 17 of the Canada Emergency Wage Subsidy would be the tenth period of the Canada Emergency
Rent Subsidy. Period identifiers have been aligned for ease of reference.

Revenue-Decline Calculation
Both the rent subsidy and the wage subsidy use the same calculation to
determine an organization’s revenue decline. As a result, the same reference
periods are used to calculate an organization’s decline in revenues for the wage
subsidy and the rent subsidy. Likewise, if an organization elects to use an
alternative method for computing its revenue decline under the wage subsidy, it
must use that alternative method for the rent subsidy.

Purchase of Business Assets

In order to qualify for the wage subsidy, an applicant must have had a payroll
account with the Canada Revenue Agency (or engaged a qualifying payroll

Tax Measures: Supplementary Information 609

service provider). For the purpose of the rent subsidy, an applicant is required to
have a business number with the CRA.

If certain conditions are met, the wage subsidy rules provide that an eligible
entity that purchases the assets of a seller will be deemed to meet the payroll
account requirement if the seller met the requirement.

Budget 2021 proposes to introduce a similar deeming rule that would apply in
the context of the rent subsidy, where the seller met the business number
requirement. This measure would apply as of the start of the rent subsidy.

Lockdown Support
For locations that must cease operations or significantly limit their activities under
a public health order issued under the laws of Canada, a province or territory, the
government introduced the Lockdown Support through the Canada Emergency
Rent Subsidy program to provide additional help. In order to qualify for the
Lockdown Support, an applicant must qualify for the base rent subsidy.

Budget 2021 proposes to extend, for the qualifying periods from June 6, 2021 to
September 25, 2021, the current 25-per-cent rate for the Lockdown Support.

Canada Recovery Hiring Program

Budget 2021 proposes to introduce the 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, 2021 and November
20, 2021.

An eligible employer would be permitted to claim either the hiring subsidy or the
Canada Emergency Wage Subsidy for a particular qualifying period, but not both.

The proposed details of the hiring subsidy are described below.

Eligible Employers
Employers eligible for the Canada Emergency Wage Subsidy would generally be
eligible for the hiring subsidy. However, a for-profit corporation would be eligible
for the hiring subsidy only if it is a Canadian-controlled private corporation
(including a cooperative corporation that is eligible for the small business
deduction). Other eligible employers would include individuals, non‑profit
organizations, registered charities, and certain partnerships.

Corporations and trusts that are ineligible for the Canada Emergency Wage
Subsidy because they are public institutions would not be eligible for the hiring
subsidy. Public institutions generally include municipalities and local
governments, Crown corporations, wholly owned municipal corporations, public
universities, colleges, schools and hospitals.

610 Annex 6
Eligible employers (or their payroll service provider) would be required to have
had a payroll account open with the Canada Revenue Agency on March 15, 2020.

Eligible Employees
An eligible employee must be employed primarily in Canada by an eligible
employer throughout a qualifying period (or the portion of the qualifying period
throughout which the individual was employed by the eligible employer).

The hiring subsidy would not be available for furloughed employees. A

furloughed employee is an employee who is on leave with pay, meaning they are
remunerated by the eligible employer but do not perform any work for the
employer. An employee would not be considered to be on leave with pay for the
purposes of the hiring subsidy if they are on a period of paid absence, such as
vacation leave, sick leave, or a sabbatical.

Eligible Remuneration and Incremental Remuneration

The types of remuneration eligible for the Canada Emergency Wage Subsidy
would also be eligible for the hiring subsidy. Eligible remuneration generally
includes salary, wages, and other remuneration for which employers are required
to withhold or deduct amounts on account of the employee’s income tax
obligations. However, it does not include severance pay, or items such as stock
option benefits or the personal use of a corporate vehicle. The amount of
remuneration for employees would be based solely on remuneration paid in
respect of the qualifying period.

Incremental remuneration for a qualifying period means the difference between

an employer’s total eligible remuneration paid to eligible employees for the
qualifying period and its total eligible remuneration paid to eligible employees
for the baseline period. In both the qualifying period and the baseline period,
eligible remuneration for each eligible employee would be subject to a maximum
of $1,129 per week.

As is currently the case for the Canada Emergency Wage Subsidy, the eligible
remuneration for a non-arm’s length employee for a week could not exceed their
baseline remuneration determined for that week. More information on baseline
remuneration is available in the supplementary information on Emergency
Business Supports.

The applicable dates for the calculation of the incremental remuneration are
shown in Table 5.

Tax Measures: Supplementary Information 611

Table 5
Canada Recovery Hiring Program Dates Used to Calculate Incremental
Remuneration, Periods 17* to 22
(June 6, 2021 to November 20, 2021)
Qualifying Period 17 Period 18 Period 19 Period 20 Period 21 Period 22
period
Qualifying June 6 to July 4 to August 1 August 29 September October 24
period
dates July 3, 2021 July 31, to August to 26 to to
2021 28, 2021 September October November
25, 2021 23, 2021 20, 2021
Baseline March 14 to April 10, 2021
period
*Period 17 of the Canada Emergency Wage Subsidy would be the first period of the Canada Recovery Hiring
Program. Period identifiers have been aligned for ease of reference.

Subsidy Amount
Provided that an eligible employer’s decline in revenues exceeds the revenue-
decline threshold for a qualifying period (see Revenue-Decline Threshold below),
its subsidy in that qualifying period would be equal to its incremental
remuneration multiplied by the applicable hiring subsidy rate for that qualifying
period. These hiring subsidy rates are shown in Table 6.

Table 6
Canada Recovery Hiring Program Rates, Periods 17* to 22
(June 6, 2021 to November 20, 2021)
Period 17 Period 18 Period 19 Period 20 Period 21 Period 22

June 6 – July 4 – August 1 – August 29 – September 26 – October 24 –

July 3 July 31 August 28 September 25 October 23 November 20
Hiring 50% 50% 50% 40% 30% 20%
subsidy
rate
*Period 17 of the Canada Emergency Wage Subsidy would be the first period of the Canada Recovery Hiring
Program. Period identifiers have been aligned for ease of reference.

Revenue-Decline Threshold
To qualify for a hiring subsidy in a qualifying period, an eligible employer would
have to have experienced a decline in revenues sufficient to qualify for the
Canada Emergency Wage Subsidy in that qualifying period. For qualifying periods
where the Canada Emergency Wage Subsidy is no longer in effect, an eligible
employer would have to have experienced a decline in revenues of more than 10
per cent. As such, an eligible employer’s decline in revenues would have to be
more than:
 0 per cent, for the qualifying period between June 6, 2021 and July 3,
2021; and

612 Annex 6
 10 per cent, for qualifying periods between July 4, 2021 and November
20, 2021.
An employer’s decline in revenues would be determined in the same manner as
under the Canada Emergency Wage Subsidy. This method compares the
employer’s revenues in a current calendar month with its revenues in the same
calendar month, pre-pandemic. An employer can also elect to use an alternative
approach, which compares the employer’s monthly revenues relative to the
average of its January 2020 and February 2020 revenues. A deeming rule
provides that an employer’s decline in revenues for any particular qualifying
period is the greater of its decline in revenues for the particular qualifying period
and the immediately preceding qualifying period.

Employers that had chosen to use the general approach for prior periods of the
Canada Emergency Wage Subsidy would be required to continue to use that
approach for the hiring subsidy. Similarly, employers that had chosen to use the
alternative approach would be required to continue to use the alternative
approach.

The reference periods set out in Table 7 would be used to determine an eligible
employer’s decline in revenues for the qualifying periods from June 6, 2021 to
November 20, 2021.

Table 7
Canada Recovery Hiring Program Reference Periods, Periods 17* to 22
(June 6, 2021 to November 20, 2021)
Timing Period 17 Period 18 Period 19 Period 20 Period 21 Period 22

June 6 – July 4 – August 1 – August 29 – September 26 October 24 –

July 3 July 31 August 28 September 25 – October 23 November 20
General June 2021 July 2021 August 2021 September 2021 October 2021 November
approach over June over July over August over September over October 2021 over
2019 or May 2019 or 2019 or July 2019 or August 2019 or November
2021 over June 2021 2021 over 2021 over September 2019 or
May 2019 over June July 2019 August 2019 2021 over October 2021
2019 September over October
2019 2019
Alternative June 2021 July 2021 August 2021 September 2021 October 2021 November
approach or May 2021 or June or July 2021 or August 2021 or September 2021 or
over 2021 over over over average of 2021 over October 2021
average of average of average of January and average of over average
January and January January and February 2020 January and of January and
February and February February 2020 February 2020
2020 February 2020
2020
*Period 17 of the Canada Emergency Wage Subsidy would be the first period of the Canada Recovery Hiring
Program. Period identifiers have been aligned for ease of reference.

An application for the hiring subsidy for a qualifying period would be required to
be made no later than 180 days after the end of the qualifying period.

Tax Measures: Supplementary Information 613

Immediate Expensing
The capital cost allowance (CCA) system determines the deductions that a
business may claim each year for income tax purposes in respect of the capital
cost of its depreciable property. With some exceptions, depreciable property is
divided into CCA classes and a CCA rate for each class of property is prescribed in
the Income Tax Regulations.

Prior to November 21, 2018, the CCA allowed in the first year that a property was
available for use was generally limited to half the amount that would otherwise be
available (the “half-year” rule). On November 21, 2018, the government
announced a temporary enhanced first-year allowance, referred to as the
Accelerated Investment Incentive, equal to up to three times the previously
applicable first-year allowance. In addition, the government announced immediate
expensing for investments in machinery and equipment used in manufacturing or
processing, as well as for specified clean energy generation equipment.

Budget 2021 proposes to provide temporary immediate expensing in respect of

certain property acquired by a Canadian-Controlled Private Corporation (CCPC).
This immediate expensing would be available for “eligible property” acquired by
a CCPC on or after Budget Day and that becomes available for use before January
1, 2024, up to a maximum amount of $1.5 million per taxation year. The
immediate expensing would only be available for the year in which the property
becomes available for use. The $1.5 million limit would be shared among
associated members of a group of CCPCs. The limit would be prorated for
taxation years that are shorter than 365 days. The half-year rule would be
suspended for property for which this measure is used. For those CCPCs with less
than $1.5 million of eligible capital costs, no carry-forward of excess capacity
would be allowed.

Eligible Property
Eligible property under this new measure would be capital property that is
subject to the CCA rules, other than property included in CCA classes 1 to 6, 14.1,
17, 47, 49 and 51, which are generally long lived assets.

614 Annex 6
Interactions of the Immediate Expensing with Other
Provisions
CCPCs with capital costs of eligible property in a taxation year that exceed
$1.5 million would be allowed to decide to which CCA class the immediate
expensing would be attributed and any excess capital cost would be subject to
the normal CCA rules. The availability of other enhanced deductions under
existing rules – such as the full expensing for manufacturing and processing
machinery and equipment and for clean energy equipment, introduced in the
2018 Fall Economic Statement – would not reduce the maximum amount
available under this new measure. In other words, a CCPC may expense up to
$1.5 million in addition to all other CCA claims under existing provisions of the
Income Tax Act, provided the total CCA deduction does not exceed the capital
cost of the property.

Immediate expensing under this new rule would not change the total amount
that can be deducted over the life of a property – the larger deduction taken in
the first year in respect of a property would eventually be offset by a smaller
deduction, if any, in respect of the property in future years.

Example of Benefits of Immediate Expensing of $1.5 million

A CCPC invests $2,000,000 in equal amounts for two properties, one falling
under CCA Class 7, and the other under Class 10. Under this scenario, the CCPC
would be allowed a total first-year deduction of up to $1,725,000 versus
$675,000 under the existing rules, as illustrated in the table below. This would
represent an additional deduction of $1,050,000 in the first year.

1st Year
Allowance Total 1st Current 1st
CCA Class Cost of Immediate
on Year Year
(rate) Acquisitions Expensing
Remainder Allowance Allowance*
of Class*
Class 7 1,000,000 1,000,000 0 1,000,000 225,000
(15%)
Class 10 1,000,000 500,000 225,000 725,000 450,000
(30%)
Total 2,000,000 1,500,000 225,000 1,725,00 675,000
*Assuming eligible for the triple first-year allowance under the Accelerated Investment Incentive

Restrictions
The Income Tax Act and the Income Tax Regulations include a series of rules
designed to protect the integrity of the CCA regime and the tax system more
broadly. These include rules related to limited partners, specified leasing properties,

Tax Measures: Supplementary Information 615

specified energy properties and rental properties. In certain circumstances, these
rules can restrict a CCA deduction, or a loss in respect of such a deduction, that
would otherwise be available. These integrity rules would continue to apply.
Certain additional restrictions would be placed on property eligible for this new
measure. Property that has been used, or acquired for use, for any purpose
before it was acquired by the taxpayer would be eligible for the immediate
expensing only if both of the following conditions are met:
 neither the taxpayer nor a non-arm’s length person previously owned the
property; and
 the property has not been transferred to the taxpayer on a tax-deferred
“rollover” basis.

Coming Into Force

This measure would apply for eligible property that is acquired on or after Budget
Day and that becomes available for use before 2024.

Strategic Environmental Assessment Statement

This temporary measure is expected to encourage capital investments across all
sectors of the economy and in a variety of assets. It is unclear whether it would
result in net positive or negative environmental effects.
The consumption, transportation and fabrication of capital assets can lead to
various negative environmental effects. These effects would be unequal across
sectors and types of investments. For example, investment in certain capital
intensive industries is associated with higher greenhouse gas and air pollutant
emissions, water and soil pollution, and faster depletion of natural resources.
These activities are subject to applicable federal and provincial environmental
regulations. There may be positive offsetting environmental impacts if the
measure causes businesses to upgrade to the latest technology, as newer
technologies are generally more efficient and greener than older technologies.
Overall, the measure could have both positive and negative impacts on the
achievement of some of the Federal Sustainable Development Strategy goals, in
particular those of Effective Action on Climate Change, Clean Growth, Pristine
Lakes and Rivers, Sustainably Managed Lands and Forests, and Safe and Healthy
Communities. Based on available data, it is not possible to assess whether the net
environmental impact would be positive or negative in the short run. In the long
run, the net environmental impact is not expected to be significant, given that the
measure would be temporary.

616 Annex 6
Rate Reduction for Zero-Emission Technology
Manufacturers
Budget 2021 proposes a temporary measure to reduce corporate income tax
rates for qualifying zero-emission technology manufacturers. Specifically,
taxpayers would be able to apply reduced tax rates on eligible zero-emission
technology manufacturing and processing income of:

 7.5 per cent, where that income would otherwise be taxed at the 15 per
cent general corporate tax rate; and
 4.5 per cent, where that income would otherwise be taxed at the 9 per
cent small business tax rate.

Eligible Zero-Emission Technology Manufacturing or

Processing Activities
This measure would apply in respect of income from the following zero-emission
technology manufacturing or processing activities:
 manufacturing of solar energy conversion equipment, such as solar
thermal collectors, photovoltaic solar arrays and bespoke supporting
structures or frames, but excluding passive solar heating equipment
(e.g., a masonry wall installed to absorb solar energy);
 manufacturing of wind energy conversion equipment, such as wind
turbine towers, nacelles and rotor blades;
 manufacturing of water energy conversion equipment, such as
hydroelectric, water current, tidal and wave energy conversion
equipment;
 manufacturing of geothermal energy equipment;
 manufacturing of equipment for a ground source heat pump system;
 manufacturing of electrical energy storage equipment used for storage
of renewable energy or for providing grid-scale storage or other
ancillary services (e.g., voltage regulation), including battery,
compressed air and flywheel storage systems;
 manufacturing of zero-emission vehicles (i.e., plug-in hybrid vehicles
with a battery capacity of at least seven kilowatt-hours, electric vehicles
and hydrogen-powered vehicles) and the conversion of vehicles into
zero-emission vehicles;
 manufacturing of batteries and fuel cells for zero-emission vehicles;
 manufacturing of electric vehicle charging systems and hydrogen
refuelling stations for vehicles;
 manufacturing of equipment used for the production of hydrogen by
electrolysis of water;

Tax Measures: Supplementary Information 617

 production of hydrogen by electrolysis of water; and
 production of solid, liquid or gaseous fuel (e.g., wood pellets, renewable
diesel and biogas) from either carbon dioxide or specified waste
material (i.e., wood waste, municipal waste, sludge from an eligible
sewage treatment facility, plant residue, spent pulping liquor, food and
animal waste, manure, pulp and paper by-product and separated
organics), but excluding the production of by-products which is a
standard part of another industrial or manufacturing process (e.g., the
production of wood chips, black liquor or hog fuel as part of another
wood transformation process).
For each of the manufacturing activities described above, eligible activities would
include the manufacturing of components or sub-assemblies only if such
equipment is purpose-built or designed exclusively to form an integral part of the
relevant system. For example, manufacturing of wind turbine rotor blades may be
an eligible activity, but manufacturing of general use tires, fasteners, wiring,
transformers, paint, piping or concrete would not.

Eligible activities would exclude all activities that do not qualify as manufacturing
or processing for the purposes of the capital cost allowance rules.

Calculation of Eligible Income

It is proposed that a taxpayer’s eligible income generally be equal to its “adjusted
business income” multiplied by the proportion of its total labour and capital costs
that are used in eligible activities. The definition of “adjusted business income” as
well as the method used to determine labour and capital costs would be
substantially based on those used in calculating manufacturing and processing
profits under current tax rules.
All of a taxpayer’s labour and capital costs would be deemed to be labour and
capital costs that are used in eligible activities if all or substantially all of its labour
and capital costs are related to eligible activities.
The government welcomes feedback from stakeholders on the proposed
allocation method for these purposes. Interested parties are invited to send
written representations by June 18, 2021 to the Department of Finance Canada,
Tax Policy Branch at: [email protected].

Minimum Proportion of Eligible Activities

A taxpayer would qualify for the reduced tax rates on its eligible income only if at
least 10 per cent of its gross revenue from all active businesses carried on in
Canada is derived from eligible activities.

618 Annex 6
Reduced Rate for Small Businesses
Certain small businesses currently benefit from a reduced federal corporate
income tax rate of 9 per cent – a preference relative to the general corporate
income tax rate of 15 per cent. This rate reduction is provided through the “small
business deduction” and applies on up to $500,000 per year of qualifying active
business income (i.e., up to the business limit) of a Canadian-controlled private
corporation (CCPC).

For taxpayers with income subject to both the general and the small business
corporate tax rates, taxpayers would be able to choose to have their eligible
income taxed at either the reduced rate of 4.5 per cent for small businesses or
the general reduced rate of 7.5 per cent. The amount of income taxed at the
4.5 per cent rate plus the amount of income taxed at the small business rate of
9 per cent would not be allowed to exceed the business limit.

Treatment of Dividends
The tax system has two dividend tax credit (DTC) rates and gross-up factors to
recognize the two different corporate income tax rates that generally apply to
corporations. The enhanced DTC and gross-up are applied to dividends
distributed to an individual from corporate income taxed at the general corporate
tax rate (“eligible dividends”). The ordinary DTC and gross-up are applied to
dividends distributed to an individual from corporate income not taxed at the
general corporate tax rate (“non-eligible dividends”). At the federal level, the
enhanced and ordinary dividend tax credit correspond to 15 per cent and 9 per
cent of the grossed-up amount of the dividend, respectively.

Given the targeted application, temporary nature, and gradual phase-out of the
proposed measure, no changes to the DTC rates or the allocation of corporate
income for the purpose of dividend distributions are proposed. That is, income
subject to the general reduced rate would continue to give rise to eligible
dividends and the enhanced dividend tax credit, while income subject to the
reduced rate for small businesses would continue to give rise to non-eligible
dividends and the ordinary dividend tax credit.
Application and Phase-Out
The reduced tax rates would apply to taxation years that begin after 2021. The
reduced rates would be gradually phased out starting in taxation years that begin
in 2029 and fully phased out for taxation years that begin after 2031 (as shown in
Table 8).

Tax Measures: Supplementary Information 619

Table 8
Schedule of Reduced Tax Rates
2022 to 2032 or
Taxation years that begin in:
2028 2029 2030 2031 later

Reduced Tax Rate on Income

Eligible for the Small Business 4.5% 5.625% 6.75% 7.875% 9%
Deduction

Reduced Tax Rate on Other

7.5% 9.375% 11.25% 13.125% 15%
Eligible Income

Strategic Environmental Assessment Statement

Overall, the measure is expected to have positive environmental impacts by
lowering emissions of greenhouse gases and air particulates.

The measure could indirectly lower the price of zero-emission technology

equipment, which could lead to a greater adoption of zero-emission technology
in Canada, helping to reduce emissions of greenhouse gases and air particulates.
This would contribute to achieving the Federal Sustainable Development Strategy
targets relating to increasing the percentage of Canadians living in areas where
air quality standards are achieved to 85 per cent by 2030, and having 90 per cent
of electricity generated from renewable and non-emitting sources by 2030. In
addition, the proposal would help advance the government’s commitment to
exceed Canada’s target of reducing total greenhouse gas emissions by 30 per
cent relative to 2005 levels by 2030, and the government’s commitment of net-
zero greenhouse gas emissions by 2050.

However, increased manufacturing activities in Canada could directly increase

emissions of greenhouse gases and air particulates, as well as increase
production of industrial waste. This could partially offset some of the positive
environmental impacts of the measure.

Capital Cost Allowance for Clean Energy Equipment

Under the Income Tax Act taxpayers are entitled to deduct a portion of the capital
cost of a depreciable property, as capital cost allowance (CCA), in computing their
income for each taxation year. With some exceptions, CCA deductions are
claimed by class of property and are calculated on a declining-balance basis.

Under the CCA regime, Classes 43.1 and 43.2 of Schedule II to the Income Tax
Regulations provide accelerated CCA rates (30 per cent and 50 per cent,
respectively) for investments in specified clean energy generation and energy
conservation equipment. Class 43.2 generally includes property that would
otherwise be included in Class 43.1, except that in certain cases Class 43.2
imposes stricter eligibility criteria. In addition, property in these classes that is

620 Annex 6
acquired after November 20, 2018 and that becomes available for use before
2024 is eligible for immediate expensing while property that becomes available
for use after 2023 and before 2028 is subject to a phase-out from these
immediate expensing rules.

Providing accelerated CCA is an exception to the general practice of setting CCA

rates based on the useful life of assets. Accelerated CCA provides a financial
benefit by deferring taxation.

In addition, if the majority of the tangible property in a project is eligible for

inclusion in Class 43.1 or 43.2, certain intangible project start-up expenses (e.g.,
engineering and design work, and feasibility studies) are treated as Canadian
Renewable and Conservation Expenses. These expenses can be deducted in full in
the year incurred, carried forward indefinitely for use in future years, or
transferred to investors using flow-through shares.

To support investment in clean technologies, Budget 2021 proposes to expand

Classes 43.1 and 43.2 to include the following:

 pumped hydroelectric storage equipment;

 electricity generation equipment that uses physical barriers or dam-like
structures to harness the kinetic energy of flowing water or wave or
tidal energy;
 active solar heating systems, ground source heat pump systems, and
geothermal energy systems that are used to heat water for a swimming
pool;
 equipment used to produce solid and liquid fuels (e.g., wood pellets
and renewable diesel) from specified waste material or carbon dioxide;
 a broader range of equipment used for the production of hydrogen by
electrolysis of water; and
 equipment used to dispense hydrogen for use in hydrogen-powered
automotive equipment and vehicles.
Accelerated CCA would be available in respect of these types of property only if,
at the time the property becomes available for use, the requirements of all
Canadian environmental laws, by-laws and regulations applicable in respect of
the property have been met.

Classes 43.1 and 43.2 currently include certain systems that burn fossil fuels
and/or waste fuels to produce either electricity or heat, or both. The eligibility
criteria for these systems have not been modified since they were first set
approximately 25 and 15 years ago, for Classes 43.1 and 43.2 respectively.
Additionally, Classes 43.1 and 43.2 include certain systems that derive up to one
half of their fuel energy input from fossil fuels.

To ensure the incentive provided by Classes 43.1 and 43.2 is consistent with the

Tax Measures: Supplementary Information 621

government’s current environmental objectives, Budget 2021 proposes changes
in the eligibility criteria for the following types of equipment:

 fossil-fuelled cogeneration systems;

 fossil-fuelled enhanced combined cycle systems;
 specified waste-fuelled electrical generation systems with an electrical
capacity greater than 3 megawatts;
 specified waste-fuelled heat production equipment for which more than
one quarter of the total fuel energy input is from fossil fuels; and
 producer gas generating equipment for which more than one quarter of
the total fuel energy input is from fossil fuels.
Each of these measures is discussed in more detail below.

Pumped Hydroelectric Energy Storage Equipment

Pumped hydroelectric storage is one type of electrical energy storage system that
uses electricity to pump water uphill into a reservoir, where it can be held until
needed and released for the generation of electricity. This form of storage can
provide environmental benefits by displacing fossil-fuelled power generation
when demand is highest and by facilitating the integration of electricity
generated from intermittent renewable energy sources. A range of electrical
energy storage equipment, other than pumped hydroelectric storage, is currently
eligible under Classes 43.1 and 43.2.

Budget 2021 proposes to expand Class 43.1 and 43.2 eligibility for electrical
energy storage property by removing the exclusion for pumped hydroelectric
storage. Eligible pumped hydroelectric storage property would include reversing
turbines, transmission equipment, dams, reservoirs and related structures, but not
buildings or property used solely for backup electrical energy.

Water Current, Wave or Tidal Energy Technologies Using

Physical Barriers
The current rules generally include in Class 43.1 and 43.2 equipment that
generates electricity using kinetic energy of flowing water or wave or tidal energy.
Equipment that generates electricity by diverting or impeding the natural flow of
water, or by using physical barriers or dam-like structures, is currently ineligible.

Budget 2021 proposes to expand Class 43.1 and 43.2 eligibility by removing
these restrictions.

622 Annex 6
Active Solar Heating, Ground Source Heat Pump and
Geothermal Energy Systems Used to Heat a Swimming Pool
Ground source heat pump, active solar heating and geothermal energy systems
can provide renewable energy for various residential, commercial and industrial
applications, such as water or space heating. Active solar heating systems use a
solar collector to heat an actively circulated liquid or gas medium. Ground source
heat pump systems exchange heat with the earth at depths of tens of metres
while geothermal energy systems extract steam or hot water directly from the
earth through wells drilled to depths of up to several thousand metres. Most
active solar heating, ground source heat pump and geothermal energy systems
are eligible under Classes 43.1 and 43.2, other than systems used to heat water
for use in a swimming pool.

Budget 2021 proposes to expand Class 43.1 and 43.2 eligibility by removing the
exclusion of active solar heating and ground-source heat pump systems used to
heat swimming pools. Similarly, it is proposed to remove the exclusion for
geothermal energy systems used to heat swimming pools, except where
geothermal water is used directly in a pool or spa.

Equipment Used to Produce Fuel from Specified Waste

Material or Carbon Dioxide
Solid, liquid and gaseous renewable fuels may be derived from organic material
through a broad range of mechanical, bio-chemical and thermo-chemical
processes. It is also possible to produce liquid synthetic fuels from carbon
dioxide. Depending on the type of fuels, different applications are possible, for
example: direct combustion to generate electricity or heat; injection into natural
gas distribution networks; and fuelling vehicles. Equipment used for the
production of gaseous renewable fuels (e.g., biogas and producer gas) from
certain waste material (e.g., wood, food and animal waste) is generally eligible
under Class 43.1 and 43.2. Certain equipment used to produce liquid renewable
fuels is eligible under Class 43.1 and 43.2 if it is used to convert wood waste or
plant residue into bio-oil that is used primarily for the purpose of generating heat
used directly in an industrial process or a greenhouse, generating electricity, or
generating electricity and heat.

Budget 2021 proposes to expand eligibility under Class 43.1 and 43.2 to
equipment used to convert specified waste material into bio-coal or pellets
(including torrefied pellets), but excluding standard equipment used to make
wood chips, hog fuel and black liquor. Eligible property would include equipment
where all or substantially all of the use of the equipment is in a system that
produces bio-coal or pellets (including torrefied pellets) from specified waste
material, including storage equipment, materials handling equipment and ash-

Tax Measures: Supplementary Information 623

handling equipment. However, eligible property would not include the following:
 equipment used for shredding, drying or cutting organic material (other
than equipment all or substantially all of the use of which is to produce
fuel for sale);
 vehicles; and
 buildings or other structures.
Budget 2021 also proposes to expand eligibility under Class 43.1 and 43.2 to a
broader range of equipment used to produce liquid biofuels (e.g., ethanol,
biodiesel and renewable diesel) from specified waste material or carbon dioxide.
Eligible property would include equipment where all or substantially all of the use
of the equipment is to produce liquid fuels from specified waste material,
including related piping, storage equipment, materials handling equipment, ash-
handling equipment and equipment used to remove non-combustibles and
contaminants from the fuels produced. However, eligible property would not
include the following:
 equipment used to produce spent pulping liquor;
 vehicles; and
 buildings or other structures.
For all of these proposed changes, “specified waste material” would include wood
waste, municipal waste, sludge from an eligible sewage treatment facility, plant
residue, spent pulping liquor, food and animal waste, manure, pulp and paper by-
product, and separated organics.

Hydrogen Production by Electrolysis of Water

Hydrogen can provide a clean source of energy with which to generate electricity
or heat, or to fuel zero-emission vehicles, and it can also be used in a variety of
industrial processes. Currently, hydrogen is mainly produced by steam methane
reformation, but it can also be produced by electrolysis of water. When powered by
renewable energy, hydrogen produced by electrolysis of water maximizes the
environmental benefits of using hydrogen as an energy supply by minimizing its
lifecycle carbon intensity. Equipment used to produce hydrogen by electrolysis of
water is eligible under Classes 43.1 and 43.2 when it is ancillary to a fixed-location
fuel cell and all or substantially all of the electricity used to power the production
process is generated using specified renewable energy sources. These renewable
energy sources include: the kinetic energy of flowing water; wave or tidal energy;
geothermal, photovoltaic or wind energy conversion; and hydroelectric equipment.

Budget 2021 proposes to expand eligibility under Classes 43.1 and 43.2 to
include a broader range of equipment used to produce hydrogen by electrolysis
of water. Eligible property would include: equipment where all or substantially all
of the use of the equipment is to produce hydrogen by electrolysis of water,
including electrolysers, rectifiers and other ancillary electrical equipment; water

624 Annex 6
treatment and conditioning equipment; and equipment used for hydrogen
compression and storage. Eligible property would not include:
 hydrogen transmission or distribution equipment;
 electrical transmission or distribution equipment;
 vehicles or auxiliary electrical generating equipment; and
 buildings or other structures.
For greater certainty, eligible property would not be required to be powered by
renewable energy sources eligible for inclusion in Class 43.1 or 43.2.

Hydrogen Refuelling Equipment

Hydrogen fuel cell electric vehicles are a nascent zero-emission mode of
transportation in Canada that require specific refuelling infrastructure. In Budget
2016, the government announced support for business investments in electric
vehicle charging infrastructure by expanding Class 43.1 to include electric vehicle
charging stations capable of supplying more than 10 kilowatts of continuous
power, and by expanding Class 43.2 to include such stations that are capable of
supplying at least 90 kilowatts of continuous power.

To support greater use of hydrogen-powered vehicles, Budget 2021 proposes to

expand eligibility under Classes 43.1 and 43.2 to include hydrogen refuelling
equipment. Eligible property would include equipment used to dispense
hydrogen for use in hydrogen-powered automotive equipment and vehicles,
including vaporization, compression, storage and cooling equipment. Eligible
property would not include:
 hydrogen production equipment;
 hydrogen transmission equipment;
 electrical transmission and distribution equipment;
 vehicles or auxiliary electrical generating equipment; and
 buildings or other structures.

Fossil-Fuelled Cogeneration Systems

Fossil-fuelled cogeneration systems generate both electricity and useful heat
using fossil fuels as the energy source (typically natural gas). Due to the use of
heat that would otherwise be wasted, these systems offer an efficient use of fossil
fuels. However, they still produce greenhouse gas emissions and, as such, cannot
achieve net-zero emissions on a lifecycle basis.

Budget 2021 proposes to remove these systems from Classes 43.1 and 43.2.

Fossil-Fuelled Enhanced Combined Cycle Systems

A combined cycle system uses two different heat engines simultaneously to

Tax Measures: Supplementary Information 625

produce electricity. It is usually composed of a gas turbine and a steam turbine,
where the residual heat from the gas turbine is used to generate steam to drive
the steam turbine, resulting in higher efficiency than using the gas turbine alone.
An “enhanced combined cycle system” is a type of combined cycle system in
which thermal waste from one or more natural gas compressor systems is
recovered and used to contribute at least 20 per cent of the energy input of a
combined cycle process in order to enhance the generation of electricity.

These systems burn natural gas as a fuel and must be located where there is no
other viable host for the waste heat. Similar to fossil-fuelled cogeneration
systems, enhanced combined cycle systems offer an efficient use of fossil fuels
but cannot achieve net-zero emissions on a lifecycle basis.

Budget 2021 proposes to remove these systems from Classes 43.1 and 43.2.

Specified Waste-Fuelled Electrical Generation Systems

Specified waste-fuelled electrical generation systems generate electricity (and, in
the case of cogeneration systems, electricity and useful heat) using certain
specified waste fuels, or a mix of specified waste fuels and fossil fuels (co-fired
systems). These specified waste fuels include “eligible waste fuel” (biogas, bio-oil,
digester gas, landfill gas, municipal waste, plant residue, pulp and paper waste,
and wood waste), producer gas and spent pulping liquor. The co-firing of
specified waste fuels with fossil fuels may be done for technical, economic, or fuel
availability reasons.

Budget 2021 proposes to remove from Classes 43.1 and 43.2 specified waste-
fuelled electrical generation systems for which more than one quarter of their
total fuel energy input is from fossil fuels, determined on an annualized basis.

Classes 43.1 and 43.2 apply energy efficiency requirements for specified waste-
fuelled electrical generation systems that co-fire with fossil fuels. These energy
efficiency requirements are expressed in the form of maximum heat rate
thresholds, which are defined as the ratio of the fuel energy input over the
electrical and heat energy output. In contrast, there are no heat rate thresholds
for systems that burn only specified waste fuels.

To promote the efficient use of waste fuels, Budget 2021 proposes that eligibility
for Classes 43.1 and 43.2 for all specified waste-fuelled electrical generation
systems be subject to a heat rate threshold. Systems with an electrical output
capacity of three megawatts or less will be exempt from this requirement.

626 Annex 6
Eligible specified waste-fuelled electrical generation systems would be those that
do not exceed a heat rate threshold of 11,000 BTU per kilowatt-hour. The heat
rate would be calculated as shown below:

(2 × 𝐹𝑓𝑜𝑠𝑠𝑖𝑙 ) + 𝐹𝑤𝑎𝑠𝑡𝑒
𝐻𝑒𝑎𝑡 𝑅𝑎𝑡𝑒 =
𝐸 + (𝐻 ÷ 3412)

where:

 Ffossil is the energy content of the fossil fuel consumed by the system in
a year in BTU (excluding solution gas), calculated based on the fuel’s
higher heating value;
 Fwaste is the energy content of the specified waste fuel consumed by the
system in a year in BTU, calculated based on the fuel’s higher heating
value;
 E is the gross electrical energy produced by the system in a year in
kilowatt-hours; and
 H is the net useful energy in the form of heat exported from the system
to a thermal host in a year in BTU.

Specified Waste-Fuelled Heat Production Equipment

Specified waste-fuelled heat production equipment produces heat primarily from
eligible waste fuel or producer gas, meaning that more than half of the total fuel
energy input must be eligible waste fuel or producer gas. The remaining fuel
energy input may be from fossil fuels.

To align with the changes proposed to the eligibility requirements for specified
waste-fuelled electrical generation systems, Budget 2021 proposes to remove
from Classes 43.1 and 43.2 specified waste-fuelled heat production equipment
for which more than one quarter of the total fuel energy input is from fossil fuels,
determined on an annualized basis.

Producer Gas Generating Equipment

Producer gas generating equipment generates producer gas from eligible waste
fuel using a thermo-chemical conversion process (generally referred to as
“gasification”). More than half of the total fuel energy input must be eligible
waste fuel, while the remaining fuel energy input may be from fossil fuels.

To align with the changes proposed to the eligibility requirements for specified
waste-fuelled electrical generation systems and specified waste-fuelled heat
production equipment, Budget 2021 proposes to exclude from Classes 43.1 and
43.2 producer gas generating equipment for which more than one quarter of the
total fuel energy input is from fossil fuels, determined on an annualized basis.

Tax Measures: Supplementary Information 627

Similarly, there is currently a requirement for producer gas to be generated
primarily from eligible waste fuel for it to be an eligible fuel for specified waste-
fuelled electrical generation systems and for specified waste-fuelled heat
production equipment.

For specified waste-fuelled electrical generation systems and specified waste-

fuelled heat production equipment, Budget 2021 proposes to remove from the
eligible fuels producer gas generated from more than one-quarter fossil fuel
energy input.

Timing of Changes
The expansion of Classes 43.1 and 43.2 would apply in respect of property that is
acquired and that becomes available for use on or after Budget Day, where it has
not been used or acquired for use for any purpose before Budget Day.

The removal of certain property from eligibility for Classes 43.1 and 43.2, as well
as the application of the new heat rate threshold for specified waste-fuelled
electrical generation systems, would apply in respect of property that becomes
available for use after 2024.

Strategic Environmental Assessment Statement

These measures are expected to have a positive environmental impact by
encouraging investment in technologies that would reduce emissions of
greenhouse gases and air pollutants. This would help advance the government’s
commitments to exceed Canada’s target of reducing total greenhouse gas
emissions by 30 per cent relative to 2005 levels by 2030, and to achieve net-zero
greenhouse gas emissions by 2050. These measures would also contribute to the
Federal Sustainable Development Strategy goals of growing the clean technology
industry in Canada, and ensuring all Canadians have access to affordable, reliable
and sustainable energy.

Film or Video Production Tax Credits

In recognition of the disruptions caused by the COVID-19 pandemic on film and
video productions, Budget 2021 proposes to temporarily extend certain timelines
for the Canadian Film or Video Production Tax Credit (CPTC) and the Film or
Video Production Services Tax Credit (PSTC).

The CPTC provides a 25-per-cent refundable tax credit on qualified labour

expenditures and is available to productions certified to be Canadian film or
video productions. The PSTC provides a 16-per-cent refundable credit on
qualified Canadian labour expenditures and is available to foreign films and
videos produced in Canada.

628 Annex 6
Extending Timelines for the CPTC
Budget 2021 proposes to extend by 12 months the following timelines with
respect to the CPTC:

 The 24-month period to incur qualifying expenditures before the date

that principal photography begins.
 The timeline to submit a certificate of completion to the Canadian
Audiovisual Certification Office within 24 months of the end of the tax
year in which principal photography began. This new 12-month
extension would apply in addition to the existing 18-month extension
that is available in this respect.
 The requirement that there be a written agreement with a Canadian
distributor or with a broadcaster licensed by the Canadian Radio-
television and Telecommunications Commission to show the production
in Canada within 24 months of its completion.

Extending Timelines for the PSTC

Budget 2021 also proposes to extend by 12 months the 24-month timelines in
respect of when aggregate expenditure thresholds must be met for film or video
productions for the purposes of the PSTC.

In respect of both the CPTC and the PSTC, taxpayers would be required to file a
waiver with the Canada Revenue Agency and the Canadian Audiovisual
Certification Office in order to extend the assessment limitation period in respect
of the relevant years to take into account this 12-month extension.

These measures would be available in respect of productions for which eligible

expenditures were incurred by taxpayers in their taxation years ending in 2020 or
2021.

Mandatory Disclosure Rules

The lack of timely, comprehensive and relevant information on aggressive tax
planning strategies is one of the main challenges faced by tax authorities
worldwide. Early access to such information provides the opportunity to respond
quickly to tax risks through informed risk assessments, audits and changes to
legislation.

The Income Tax Act contains rules requiring that certain transactions be reported
to the Canada Revenue Agency (CRA). However, the CRA’s experience with these
rules since their introduction indicates that they are not sufficiently robust to
address these concerns.

Tax Measures: Supplementary Information 629

The Base Erosion and Profit Shifting Project, Action 12: Final Report (BEPS Action
12 Report) of the Organisation for Economic Co-operation and Development and
the Group of 20 makes a number of recommendations relating to the enactment
of mandatory disclosure rules. Many of the measures recommended in the BEPS
Action 12 Report have been implemented in countries with comparable tax
systems. In addition to measures recommended by the BEPS Action 12 Report,
the United States and Australia both have reporting requirements for specified
taxpayers that reflect uncertainty in relation to tax in their audited financial
statements. The experience in these countries provides a useful model for
developing similar rules in Canada.

The government is consulting on proposals to enhance Canada’s mandatory

disclosure rules. This consultation will address:

 changes to the Income Tax Act’s reportable transaction rules;

 a new requirement to report notifiable transactions;
 a new requirement for specified corporations to report uncertain tax
treatments; and
 related rules providing for, in certain circumstances, the extension of the
applicable reassessment period and the introduction of penalties.
It is proposed that, to the extent the proposed measure applies to taxation years,
amendments made as a result of this consultation would apply to taxation years
that begin after 2021. To the extent the proposed measure applies to
transactions, the amendments would apply to transactions entered into on or
after January 1, 2022. However, the penalties would not apply to transactions that
occur before the date on which the enacting legislation receives Royal Assent.

Stakeholders are invited to provide comments on the proposals set out below, as
well as on draft legislation and sample notifiable transactions which are expected
to be released in the coming weeks as part of the consultation. Comments should
be directed to the Department of Finance by September 3, 2021. Please send
your comments to [email protected].

Reportable Transactions
The Income Tax Act contains rules that require that certain transactions entered
into by, or for the benefit of, a taxpayer be reported to the CRA. In order for a
transaction to be reportable under those rules, it must be an “avoidance
transaction”, as that term is defined for the purposes of the general anti-
avoidance rule in the Income Tax Act. As well, the transaction must bear at least
two of the following three generic hallmarks:

 A promoter or tax advisor in respect of the transaction is entitled to

fees, often referred to as “contingent fees”, that are to any extent:
 attributable to the amount of the tax benefit from the transaction;

630 Annex 6
  contingent upon the obtaining of a tax benefit from the transaction;
or
 attributable to the number of taxpayers who participate in the
transaction or who have been provided access to advice given by
the promoter or advisor regarding the tax consequences of the
transaction.
 A promoter or tax advisor requires “confidential protection” with
respect to the transaction.
 The taxpayer, or the person who entered into the transaction for the
benefit of the taxpayer, obtains “contractual protection” in respect of
the transaction (otherwise than as a result of a fee described in the first
hallmark). For these purposes, contractual protection includes:
 any form of insurance (other than standard professional liability
insurance) or other protection (including an indemnity,
compensation or a guarantee) that, either immediately or in the
future and either absolutely or contingently:
 protects a person against a failure to achieve any tax benefit
from the transaction; or
 pays for or reimburses any expense, fee, tax, interest, penalty or
similar amount that may be incurred by a person in the course
of a dispute in respect of a tax benefit from the transaction; and
 any form of undertaking provided by a promoter, or by any person
who does not deal at arm’s length with the promoter, that provides,
either immediately or in the future and either absolutely or
contingently, assistance, directly or indirectly in any manner
whatever, to a person in the course of a dispute in respect of a tax
benefit from the transaction.
A reportable transaction includes all the transactions in a series of transactions if
at least one of the transactions in the series is an avoidance transaction. If more
than one party is required to report the transaction, a report by any of the parties
can satisfy the requirement. A reportable transaction must be reported to the
CRA on or before June 30 of the calendar year following the calendar year in
which the transaction first became a reportable transaction.

While the current rules are intended to provide the CRA with the information it
needs, they currently result in only limited reporting by taxpayers.

The BEPS Action 12 Report recommends that countries introducing mandatory

disclosure regimes include a mixture of generic and specific hallmarks, with the
existence of each of them resulting in a requirement for disclosure. Generic
hallmarks target features that are common to promoted schemes, such as the
requirement for confidentiality or the payment of a contingent fee. Specific
hallmarks target particular areas of concern, such as trading in losses.

Tax Measures: Supplementary Information 631

The BEPS Action 12 Report notes that the purpose of a mandatory disclosure
regime is to provide the relevant tax administration with information on a wider
range of tax policy and revenue risks than those raised by transactions that would
be classified as avoidance under a general anti-avoidance rule. A “reportable
scheme” for disclosure purposes should generally be broader than the definition
of tax avoidance schemes covered by a general anti-avoidance rule and should
also cover transactions that are perceived to be aggressive or high-risk from a tax
planning perspective.

The BEPS Action 12 Report also notes that Canada’s current June 30 reporting
deadline renders it less able than other countries to react quickly to tax avoidance
planning. It also concludes that the advantage of requiring both promoters and
taxpayers to report is that this may have a stronger deterrent effect on both the
supply (promoter) and demand (taxpayer) side of avoidance schemes. A dual
reporting approach can also reduce the risk of inadequate disclosure because, for
example, a taxpayer’s disclosure can be checked against the promoter’s
disclosure to assess whether the information provided is accurate and complete.

To improve the effectiveness of Canada’s mandatory disclosure rules and to bring

them in line with international best practices, amendments to the reportable
transaction rules are proposed. In particular, it is proposed that only one generic
hallmark need be present in order for a transaction to be reportable. It is also
proposed that the definition of “avoidance transaction” for these purposes be
amended so that a transaction be considered an avoidance transaction if it can
reasonably be concluded that one of the main purposes of entering into the
transaction is to obtain a tax benefit.

It is proposed that a taxpayer who enters into a reportable transaction, or another

person who enters into such a transaction in order to procure a tax benefit for
the taxpayer, would be required to report the transaction to the CRA within 45
days of the earlier of:

 the day the taxpayer becomes contractually obligated to enter into the
transaction or a person who entered into the transaction for the benefit of
the taxpayer becomes contractually obligated to enter into the transaction;
and
 the day the taxpayer enters into the transaction or a person who entered into
the transaction for the benefit of the taxpayer enters into the transaction.
It is further proposed that reporting (as a reportable transaction) of a scheme
that, if implemented, would be a reportable transaction be required to be made
by a promoter or advisor (as well as by persons who do not deal at arm’s length
with the promoter or advisor and who are entitled to receive a fee with respect to
the transaction) within the same time limits. In addition, it is proposed that an
exception to the reporting requirement be available for advisors to the extent
that solicitor-client privilege applies.

632 Annex 6
Notifiable Transactions
As noted above, the BEPS Action 12 Report recommends that an effective
mandatory disclosure regime include a mixture of specific and generic hallmarks.
Specific hallmarks target particular areas of concern. The report recommends the
timely disclosure of specific tax schemes to allow governments to quickly develop
targeted and appropriate responses to them.

The United States has mandatory disclosure regimes relating to “listed

transactions” and “transactions of interest”, which are noted in the BEPS Action 12
Report. A U.S. listed transaction is a transaction that is the same as, or
substantially similar to, one that the Internal Revenue Service (IRS) has
determined to be a tax avoidance transaction and has identified by notice or
other form of published guidance. A U.S. transaction of interest is a transaction
that the IRS and the U.S. Treasury Department consider to be a transaction that
has the potential for tax avoidance or evasion, but for which they lack sufficient
information to make that determination.

Similar rules are also in force in the United Kingdom (disclosure of tax avoidance
schemes or DOTAS), Australia (disclosed in the reportable tax position schedule,
under category C), and the European Union. Quebec has also enacted a measure
that requires taxpayers who have carried out certain transactions to file an
information return with Revenu Québec.

To provide the CRA with pertinent information relating to tax avoidance

transactions (including series of transactions) and other transactions of interest
on a timely basis, it is proposed to introduce a category of specific hallmarks
known as “notifiable transactions”. Under this approach, the Minister of National
Revenue would have the authority to designate, with the concurrence of the
Minister of Finance, a transaction as a notifiable transaction.

Similar to the approach taken by the United States, notifiable transactions would
include both transactions that the CRA has found to be abusive and transactions
identified as transactions of interest. The description of a notifiable transaction
would set out the fact patterns or outcomes that constitute that transaction in
sufficient detail to enable taxpayers to comply with the disclosure rule. It would
also include examples in appropriate circumstances. Sample descriptions of
notifiable transactions will be issued as part of the consultation.

A taxpayer who enters into a notifiable transaction, or a transaction or series of

transactions that is substantially similar to a notifiable transaction – or another
person who enters into such a transaction or series in order to procure a tax
benefit for the taxpayer – would be required to report the transaction or series in
prescribed form to the CRA within 45 days of the earlier of:

 the day the taxpayer becomes contractually obligated to enter into the

Tax Measures: Supplementary Information 633

 transaction or series or a person who entered into the transaction or
series for the benefit of the taxpayer becomes contractually obligated
to enter into the transaction or series; and
 the day the taxpayer enters into the transaction or series or a person
who entered into the transaction or series for the benefit of the
taxpayer enters into the transaction or series.
A promoter or advisor who offers a scheme that, if implemented, would be a
notifiable transaction, or a transaction or series of transactions that is
substantially similar to a notifiable transaction – as well as a person who does not
deal at arm’s length with the promoter or advisor and who is entitled to receive a
fee in respect of the transaction – would be required to report within the same
time limits. In addition, it is proposed that an exception to the reporting
requirement be available for advisors to the extent that solicitor-client privilege
applies.

These proposed amendments are intended to provide information to the CRA

and would not change the tax treatment of a transaction.

For example, in a recent decision of the Tax Court of Canada (Paletta v. The
Queen) involving a taxpayer who entered into an aggressive series of transactions
referred to as straddle planning, which was designed to defer indefinitely tax
payable under the Income Tax Act, the CRA tried unsuccessfully to reassess the
taxpayer for relevant taxation years outside the normal reassessment period. This
series of transactions resulted in an immediate loss realization and an indefinite
gain deferral for the taxpayer. Since the burden associated with the reassessment
of a taxation year made after the normal reassessment period in a case such as
Paletta requires the CRA to prove that the taxpayer made a misrepresentation on
their tax return that was attributable to neglect, carelessness or wilful default,
such a reassessment is challenging and time consuming for the CRA. If the
transactions associated with this aggressive straddle planning had been
designated as a notifiable transaction, the CRA would have been notified in time
to be able to assess the taxpayer within the normal reassessment period. The
proposed notifiable transaction regime would allow the CRA to challenge
planning like this in a timely manner, based on their merits.

Uncertain Tax Treatments

An uncertain tax treatment is a tax treatment used, or planned to be used, in an
entity’s income tax filings for which there is uncertainty over whether the tax
treatment will be accepted as being in accordance with tax law. At present, there
is no requirement in Canada to disclose uncertain tax treatments. However, both
the United States and Australia have reporting requirements related to uncertain
tax treatments. In addition, the United Kingdom recently conducted a public
consultation with respect to the introduction of uncertain tax treatment reporting
requirements and has announced its intention to enact the required legislation. In

634 Annex 6
this regard, it was noted that large corporations are already familiar with the
Australian and the U.S. reporting regimes, and that this would facilitate
transitioning taxpayers into a similar regime in the United Kingdom. The same
can be said for the introduction of a similar regime in Canada.

Under the U.S. uncertain tax positions rule, a corporation meeting an asset
threshold, and certain other conditions, must report (under Schedule UTP) when
it has taken a tax position on a U.S. income tax return and either the corporation
or a related party has recorded a reserve with respect to that tax position in its
audited financial statements. Similarly, under the Australian rules, a corporation
meeting a revenue threshold, and certain other conditions, must report (under
category B: Tax uncertainty in financial statements) when it has taken a tax
position on an Australian income tax return for a year and either the corporation
or a related party has recognized or disclosed uncertainty with respect to that tax
position in its audited financial statements.

It is proposed that a similar reporting regime be implemented in Canada. As

such, specified corporate taxpayers would be required to report particular
uncertain tax treatments to the CRA.

Introducing such requirement in Canada would:

 allow the CRA to more efficiently identify issues and allocate its
resources for compliance activities; and
 ensure the CRA is able to conduct its audit activities with respect to
transactions at issue in a timely manner.
Accounting Rules Regarding Uncertain Tax Treatments
If a corporation’s financial statements, or those of its corporate parent, are
prepared in accordance with Canadian generally accepted accounting principles
(GAAP) and there is uncertainty regarding a tax position taken, or planned to be
taken, in its tax return, the effect of that uncertainty might need to be reflected in
those financial statements. Canadian GAAP provides that International Financial
Reporting Standards (IFRS) are to be used by public corporations, and may be
adopted by private corporations if they choose to do so. IFRS provide that an
entity shall consider whether it is probable that a taxation authority will accept an
uncertain tax treatment. “Taxation authority” in this context refers to the body or
bodies that decide whether tax treatments are acceptable under tax law, and in
the Canadian context ultimately means the courts. If an entity concludes it is
probable that the taxation authority will accept an uncertain tax treatment, IFRS
provide that the entity shall determine the taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits or tax rates consistently with the tax
treatment used, or planned to be used, in its income tax filings.

Tax Measures: Supplementary Information 635

However, if an entity concludes it is not probable that the taxation authority will
accept a particular uncertain tax treatment (and thus, as described by the IFRS
Interpretations Committee, it is probable that the entity will receive or pay
amounts relating to the uncertain tax treatment), the entity shall reflect the effect
of that uncertainty in determining the related taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits or tax rates by using either the most likely
amount or the expected value, depending on which method the entity expects to
better predict the resolution of the uncertainty.

As such, Canadian public corporations, and those Canadian private corporations

that choose to use IFRS, have an existing requirement to identify uncertain tax
treatments for financial statement purposes. When such a corporation
determines that it is not probable that the taxation authority will accept an
uncertain tax treatment (including an uncertain tax treatment relating to an entity
controlled by the corporation), the effect of that uncertainty is reflected in the
corporation’s financial statements (which would be presented on a consolidated
basis with those entities it controls).

Requirement to Report Uncertain Tax Treatments

It is proposed that specified corporate taxpayers be required to report particular
uncertain tax treatments to the CRA. A reporting corporation would generally be
required to report an uncertain tax treatment in respect of a taxation year where
the following conditions are met:

 The corporation is required to file a Canadian return of income for the

taxation year. That is, the corporation is a resident of Canada or is a
non-resident corporation with a taxable presence in Canada.
 The corporation has at least $50 million in assets at the end of the
financial year that coincides with the taxation year (or the last financial
year that ends before the end of the taxation year). This threshold
would apply to each individual corporation.
 The corporation, or a related corporation, has audited financial
statements prepared in accordance with IFRS or other country-specific
GAAP relevant for domestic public companies (e.g., U.S. GAAP).
 Uncertainty in respect of the corporation’s Canadian income tax for the
taxation year is reflected in those audited financial statements (i.e., the
entity concluded it is not probable that the taxation authority will
accept an uncertain tax treatment and thus, as described by the IFRS
Interpretations Committee, it is probable that the entity will receive or
pay amounts relating to the uncertain tax treatment).
The determination of whether a corporation has $50 million in assets would be
made using the carrying value of the assets on the corporation’s balance sheet at
the end of the financial year. If the corporation did not prepare a balance sheet,

636 Annex 6
or did not prepare a balance sheet in accordance with Canadian GAAP (or other
country-specific GAAP relevant for domestic public companies), the amounts
used would be those that would have been reflected in a balance sheet prepared
in accordance with GAAP. Banks and insurance corporations that are regulated by
the Superintendent of Financial Institutions, or a similar provincial authority,
would use the amounts in the statements accepted by that authority for
regulatory purposes.

As noted above, Canadian GAAP require that the audited financial statements of
public corporations be prepared in accordance with IFRS. As a result, the
requirement to report particular uncertain tax treatments would apply to
Canadian public corporations, subject to the asset threshold. Since IFRS require
that a public corporation’s financial statements be prepared on a consolidated
basis with those corporations that it controls, the requirement to report particular
uncertain tax treatments would also apply, subject to the asset threshold, to
those corporations that are controlled by a Canadian public corporation.

The requirement to report particular uncertain tax treatments would apply to a

private corporation that meets the asset threshold if it, or a related corporation,
has audited financial statements prepared in accordance with IFRS. While
normally a private corporation would not have audited financial statements
prepared in accordance with IFRS, where it does, those statements would be
presented on a consolidated basis with those corporations it controls and would,
when appropriate, reflect uncertainty pertaining to uncertain tax treatments
relating to those corporations.

The requirement to report particular uncertain tax treatments would also apply to
a corporation if it meets the asset threshold and it, or a related corporation, has
audited financial statements prepared in accordance with another country-
specific GAAP relevant for domestic public corporations (e.g., U.S. GAAP). For
example, the requirement to report would apply, subject to the asset threshold, if
a U.S.-resident corporation had taken a tax position on its Canadian income tax
return for a year and recorded a reserve with respect to that tax position in its
audited financial statements prepared in accordance with U.S. GAAP. This part of
the proposal is meant to ensure that the requirement to report particular
uncertain tax treatments would apply appropriately where a corporation is a
Canadian corporation controlled by a non-resident corporation or is a non-
resident corporation with a taxable presence in Canada (e.g., carrying on business
in Canada through a permanent establishment).

For each reportable uncertain tax treatment of a corporation, the corporation

would be required to provide prescribed information, such as the quantum of
taxes at issue, a concise description of the relevant facts, the tax treatment taken
(including the relevant sections of the Income Tax Act) and whether the
uncertainty relates to a permanent or temporary difference in tax. It is expected

Tax Measures: Supplementary Information 637

that there would be a limited administrative burden for reporting corporations as
the information to be reported would not be extensive and would be readily
available given the need to analyze uncertain tax treatments as part of the
preparation of financial statements.

It is proposed that uncertain tax treatments be required to be reported at the

same time that the reporting corporation’s Canadian income tax return is due.
The introduction of a requirement to report particular uncertain tax treatments is
intended to provide information to the CRA to allow it to more efficiently
administer and enforce the Income Tax Act. It would not directly impact the
income tax liabilities of corporate taxpayers.

Reassessment Period
When a taxpayer files an income tax return for a taxation year, the CRA is
required to perform an initial examination of the return and to assess tax payable,
if any, with all due dispatch. The CRA then normally has a fixed period, referred to
as the “normal reassessment period”, after its initial examination beyond which it
is precluded from reassessing the taxpayer (i.e., reassessment of the taxation year
becomes statute-barred). The normal reassessment period is generally three or
four years, depending on the type of taxpayer.

In support of the new mandatory disclosure rules, it is proposed that, where a

taxpayer has a reporting requirement in respect of a transaction relevant to the
taxpayer’s income tax return for a taxation year, the normal reassessment period
would not commence in respect of the transaction until the taxpayer has
complied with the reporting requirement. As a result, if a taxpayer does not
comply with a mandatory disclosure reporting requirement for a taxation year in
respect of a transaction, a reassessment of the year in respect of the transaction
would not become statute-barred.

Penalties
The BEPS Action 12 Report recommends that countries introduce financial
penalties that apply when disclosure rules are not complied with and that
consideration be given to percentage-based penalties based upon transaction
size or the extent of any tax savings.

Taxpayer Penalty
To support the proposed reporting requirements, it is proposed that, with respect
to persons who enter into reportable or notifiable transactions, or for whom a tax
benefit results from a reportable or notifiable transaction, a penalty of $500 per
week apply for each failure to report a reportable transaction or a notifiable
transaction,

638 Annex 6
 up to the greater of $25,000 and 25 per cent of the tax benefit; or
 for corporations that have assets that have a total carrying value of $50
million or more, a penalty of $2,000 per week, up to the greater of
$100,000 and 25 per cent of the tax benefit.
Promoter Penalty
It is also proposed that, with respect to advisors and promoters of reportable or
notifiable transactions, as well as with respect to persons who do not deal at
arm’s length with them and who are entitled to a fee with respect to the
transactions, a penalty be imposed for each failure to report equal to the total of:
 100 per cent of the fees charged by that person to a person for whom a
tax benefit results;
 $10,000; and
 $1,000 for each day during which the failure to report continues, up to a
maximum of $100,000.
In order to avoid imposing two sets of penalties upon a person who both 1)
enters into a reportable or notifiable transaction for the benefit of another
person, and 2) is a person who does not deal at arm’s length with an advisor or
promoter in respect of the reportable or notifiable transaction and is entitled to a
fee, it is proposed that such a person be subject only to the greater of the
penalties discussed above.

Uncertain Tax Treatment Penalty

For corporations subject to the requirement to report uncertain tax treatments, it
is proposed that the penalty for failure to report each particular uncertain tax
treatment be $2,000 per week, up to a maximum of $100,000.

Avoidance of Tax Debts

The Income Tax Act has an anti-avoidance rule (the “tax debt avoidance rule”)
that is intended to prevent taxpayers from avoiding their tax liabilities by
transferring their assets to non-arm’s length persons for insufficient
consideration. In these circumstances, the rule causes the transferee to be jointly
and severally liable with the transferor for tax debts of the transferor for the
current or any prior taxation year, to the extent that the value of the property
transferred exceeds the amount of consideration given for the property.

Some taxpayers are engaging in complex transactions that attempt to circumvent

the tax debt avoidance rule. This planning seeks to avoid the technical application
of the rule by:
 arranging for a tax debt to crystallize after the end of the taxation year
in which the property transfer occurs;

Tax Measures: Supplementary Information 639

 arranging for the transferor to be dealing at arm’s length with the
transferee at the time of the property transfer; or
 stripping out net asset value of the transferor using a series of
transactions that does not breach the point-in-time valuation test for
the property transferred and consideration given therefor.
This planning is often packaged with highly aggressive tax plans that attempt to
eliminate the underlying tax liability of the transferor so that, if the latter planning
fails, the Canada Revenue Agency would be unable to collect the tax debt
because the indebted taxpayer has been stripped of their assets.

Budget 2021 proposes a number of measures to address this planning, as well as

a penalty for those who devise and promote such schemes. The specific
proposals are outlined below.

Deferral of Tax Debts

An anti-avoidance rule would be introduced that would provide that, for the
purposes of the tax debt avoidance rule, a tax debt would be deemed to have
arisen before the end of the taxation year in which a transfer of property occurs if
it is reasonable to conclude that:

 the transferor (or a person that does not deal at arm’s length with the
transferor) had knowledge (or would have knowledge if they had made
reasonable inquiries) that there would be a tax amount owing by the
transferor (or there would be a tax amount owing if not for additional
tax planning done as part of the series of transactions that includes the
transfer) that would arise after the end of the taxation year; and
 one of the purposes for the transfer of property was to avoid the
payment of the future tax debt.

Avoidance of Non-Arm’s Length Status

Budget 2021 proposes an anti-avoidance rule that would provide that, for the
purposes of the tax debt avoidance rule, a transferor and transferee that, at the
time of a transfer of property, would otherwise be considered to be dealing with
each other at arm’s length, would be deemed to have not been dealing with each
other at arm’s length at that time if:

 at any time within a series of transactions or events that includes the

transfer, the transferor and transferee do not deal at arm’s length; and
 it is reasonable to conclude that one of the purposes of a transaction or
event (or a series of transactions or events) within that series was to
cause the transferor and transferee to deal at arm’s length at the time
of transfer.

640 Annex 6
Valuations
A rule would be introduced such that, for transfers of property that are part of a
series of transactions or events, the overall result of the series would be
considered in determining the values of the property transferred and the
consideration given for the property, rather than simply using those values at the
time of the transfer.

Penalty
A penalty would also be introduced for planners and promoters of tax debt
avoidance schemes. The penalty would be equal to the lesser of:
 50 per cent of the tax that is attempted to be avoided; and
 $100,000 plus the promoter’s or planner’s compensation for the
scheme.
This penalty would mirror an existing penalty in the so-called “third-party civil
penalty” rules in the Income Tax Act in respect of certain false statements,
including the standard for its application.

Application
The rules would apply in respect of transfers of property that occur on or after
Budget Day.

Other Statutes
Similar amendments would be made to comparable provisions in other federal
statutes (e.g., section 325 of the Excise Tax Act, section 297 of the Excise Act, 2001
and section 161 of the Greenhouse Gas Pollution Pricing Act).

Audit Authorities
The Income Tax Act provides the Canada Revenue Agency (CRA) with the authority
to audit taxpayers and otherwise ensure compliance with the Income Tax Act. The
scope of this authority was the subject of a recent court decision which called into
question the extent to which CRA officials can require persons to answer all proper
questions and to provide all reasonable assistance relating to the administration
or enforcement of the Income Tax Act. The decision also called into question the
extent to which CRA officials can require that questions be answered orally.

To ensure that the CRA has the authority it needs to conduct audits and
undertake other compliance activities, Budget 2021 proposes amendments to the
Income Tax Act, the Excise Tax Act, the Excise Act, 2001, the Air Travellers Security
Charge Act and Part 1 of the Greenhouse Gas Pollution Pricing Act. These
amendments would confirm that CRA officials have the authority to require

Tax Measures: Supplementary Information 641

persons to answer all proper questions, and to provide all reasonable assistance,
for any purpose related to the administration or enforcement of the relevant
statute. They would also provide that CRA officials have the authority to require
persons to respond to questions orally or in writing, including in any form
specified by the relevant CRA official. These amendments would allow the CRA to
undertake audit and other compliance activities in the same manner as it did
prior to the decision.

These measures would come into force on Royal Assent.

International Tax Measures

Base Erosion and Profit Shifting
The government is committed to safeguarding Canada’s tax system and to that
end continues to be an active participant in multilateral efforts to address base
erosion and profit shifting (BEPS). BEPS primarily refers to international tax
planning arrangements used by multinational enterprises to reduce their taxes by
exploiting the interaction between domestic and international tax rules – for
example, through shifting profits earned in Canada to other jurisdictions. (Some
BEPS issues also have implications for domestic tax avoidance arrangements, and
need not focus exclusively upon planning arrangements used by multinational
enterprises.) The government has already implemented the measures agreed to
as minimum standards under the action plan developed by the Organisation for
Economic Co-operation and Development (OECD) and the Group of 20 (G20) to
address BEPS (the BEPS Action Plan). These minimum standards address:

 the exchange of information on confidential tax rulings to counter

harmful tax practices;
 the adoption of treaty rules to address treaty shopping and other forms
of abuse of Canada’s tax treaties;
 the exchange of country-by-country reports on the global distribution
of income, taxes and business activities of multinational enterprises; and
 making dispute resolution mechanisms in tax treaties more effective.
Canada has followed through on other BEPS recommendations by accepting the
new transfer pricing guidance developed under the BEPS project, continuing to
strengthen its robust foreign affiliate regime, and ratifying the Multilateral
Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and
Profit Shifting (which allows countries to modify the application of their existing
tax treaties to put in place anti-BEPS measures without having to individually
renegotiate those treaties).

642 Annex 6
Budget 2021 builds on this work by proposing to implement the best practices
recommended by the BEPS Action Plan on interest deductibility and hybrid
mismatch arrangements. More details on the interest deductibility and hybrid
mismatch arrangements measures are set out below. In addition, the government
is proposing consultations on enhancements to Canada’s transfer pricing and
mandatory disclosure rules. The transfer pricing and mandatory disclosure
measures are discussed elsewhere in these budget documents.

Interest Deductibility Limits

In general, businesses obtain external funding for their operations through either
debt or equity. In Canada, as in most jurisdictions, interest expenses in respect of
such debt are generally deductible against the income of the borrower. However,
the deductibility of interest raises the potential that excessive debt or interest
expense can be placed in Canadian businesses in a way that erodes the tax base,
for example, through:

 interest payments to related non-residents in low-tax jurisdictions;

 the use of debt to finance investments that earn non-taxable income; or
 having Canadian businesses bear a disproportionate burden of a
multinational group’s third-party borrowings.
A number of rules provide some measure of protection of the Canadian tax base
from erosion due to excessive debt and interest expense. These include the thin
capitalization rules, which limit the deductibility of interest expense where the
amount of debt owing to specified non-residents exceeds a 1.5-to-1 debt-to-
equity ratio. However, the scope of these rules is limited.

A number of countries – notably other members of the G7 and the European

Union member states – have introduced, or are in the process of introducing,
limitations on interest deductibility that are consistent with the recommendations
in the Action 4 Report of the BEPS Action Plan. The recommended approach
described in that report limits the amount of net interest expense (i.e., interest
expense, including payments economically equivalent to interest, as well as other
financing-related expenses, less interest and financing-related income) that may
be deducted to a fixed share of earnings. This “earnings-stripping” approach to
limiting interest deductibility provides broad protection against base erosion,
while still allowing businesses to deduct reasonable amounts of interest.

Budget 2021 proposes to introduce an earnings-stripping rule consistent with the

recommendations in the Action 4 Report. The new rule would limit the amount of
net interest expense that a corporation may deduct in computing its taxable
income to no more than a fixed ratio of “tax EBITDA”, which is that corporation’s
taxable income before taking into account interest expense, interest income and
income tax, and deductions for depreciation and amortization, where each of
these items is as determined for tax purposes. For these purposes:

Tax Measures: Supplementary Information 643

 As it is based on a corporation’s taxable income, tax EBITDA would
exclude, among other things, dividends to the extent they qualify for
the inter-corporate dividend deduction or the deduction for certain
dividends received from foreign affiliates.
 Interest expense and interest income would include not only amounts
that are legally interest, but also certain payments that are economically
equivalent to interest, and other financing-related expenses and
income.
 The measure of interest expense would exclude interest that is not
deductible under existing income tax rules, including the thin
capitalization rules, which would continue to apply.
 Interest expense and interest income related to debts owing between
Canadian members of a corporate group would generally be excluded.
This is intended to ensure, among other things, that the new rule does
not impact on corporate transactions that are undertaken within
Canadian corporate groups to allow the losses of one group member to
be offset against the income of another group member. In addition, a
mechanism would be included to ensure that the new rule does not
impact on certain variants of these transactions that involve the
generation of a loss in a group entity through the payment of interest
on intra-group debt and the subsequent absorption of this entity by
another group entity in order to claim a carryforward of the loss.
The new earnings-stripping rule would also apply to trusts, partnerships and
Canadian branches of non-resident taxpayers.

Exemptions from the new rule would be available for:

 Canadian-controlled private corporations that, together with any

associated corporations, have taxable capital employed in Canada of
less than $15 million (i.e., the top end of the phase-out range for the
small business deduction); and
 groups of corporations and trusts whose aggregate net interest
expense among their Canadian members is $250,000 or less.
Interest denied under the earnings-stripping rule would be able to be carried
forward for up to twenty years or back for up to three years. Denied interest
would be allowed to be carried back to taxation years that begin prior to the
effective date of the rule, to the extent that the taxpayer would have had the
capacity to absorb these denied expenses, had the proposed rule been in effect
for those years. In determining whether the taxpayer would have had the capacity
to absorb the denied expenses in those years, any such capacity would be
reduced by overall net interest expense, in aggregate for all those years, of
Canadian members of the taxpayer’s group that exceeded the fixed ratio (or the
group ratio, discussed below, if higher).

644 Annex 6
Canadian members of a group that have a ratio of net interest to tax EBITDA
below the fixed ratio would generally be able to transfer the resultant unused
capacity to deduct interest to other Canadian members of the group whose net
interest expense deductions, including denied deductions carried over from
another year, would otherwise be limited by the rule. The definition of a group
for this purpose will be included in the draft legislative proposals.

The proposed measure also includes a “group ratio” rule that would allow a
taxpayer to deduct interest in excess of the fixed ratio of tax EBITDA where the
taxpayer is able to demonstrate that the ratio of net third party interest to book
EBITDA of its consolidated group implies that a higher deduction limit would be
appropriate. The determination of the amount of unused capacity to deduct
interest, which can be transferred between the Canadian members of a group,
would take into consideration the higher group ratio.

The consolidated group, for purposes of the group ratio rule, would comprise the
parent company and all of its subsidiaries that are fully consolidated in the
parent’s audited consolidated financial statements. Measures of net third party
interest expense and book EBITDA under this rule would be based on the group’s
audited consolidated financial statements with appropriate adjustments,
including an exclusion for certain interest payments to creditors that are outside
the consolidated group but are related to, or are significant shareholders of,
Canadian group entities. As set out in the Action 4 report, adjustments would
also be necessary to address the impact of entities with negative book EBITDA.
These adjustments would ensure that, where a group has negative book EBITDA,
such that it is not possible to calculate a meaningful group ratio, the group can
nonetheless benefit from the group ratio rule. Adjustments would also be made
to ensure that, where the group as a whole has positive book EBITDA but
includes one or more entities with negative book EBITDA, the group does not
benefit from an inappropriately high group ratio.

Consistent with the rationale of the group ratio rule, it is expected that standalone
Canadian corporations and Canadian corporations that are members of a group
none of whose members is a non-resident would, in most cases, not have their
interest expense deductions limited under the proposed rule. Measures to reduce
the compliance burden on these entities and groups will be explored.

While there are base erosion risks associated with interest deductions by financial
institutions, there are challenges in applying an earnings-stripping rule to certain
types of financial institutions, and there is no clear way to address these
challenges. One reason is that many financial institutions earn substantial
amounts of interest income as part of their regular business activity and these
amounts may frequently exceed their interest expense. As the proposal is based
on a concept of net interest expense, this could result in the proposed earnings-
stripping rule having no impact on these financial institutions, and could provide

Tax Measures: Supplementary Information 645

significant capacity to shelter the interest expense of other members of the
financial institution’s group. It is therefore proposed to not allow banks and life
insurance companies to transfer unused capacity to deduct interest to other
members of their corporate groups that are not also regulated banking or
insurance entities. Further consideration will be given to whether there are
targeted measures that could address base erosion concerns associated with
excessive interest deductions by regulated banks and life insurance companies,
and comments are invited from stakeholders in this regard.

In order to facilitate transition to the new rule and in particular having regard to
the impact of the pandemic on corporate earnings, it would be phased in, with a
fixed ratio of 40 per cent for taxation years beginning on or after January 1, 2023
but before January 1, 2024 (the transition year), and 30 per cent for taxation years
beginning on or after January 1, 2024. In addition, taxpayers that have interest
deductions denied for the transition year would be able to carry back the denied
interest and deduct it in any of the three preceding years, as discussed above,
using the 40-per-cent fixed ratio (or the group ratio for that earlier year, if higher)
to determine their capacity to absorb carried-back interest in those preceding
years. Where interest deductions are denied for a year following the transition
year, carrybacks of denied interest to the transition year or an earlier year would
be allowed using the 30-per-cent fixed ratio (or the group ratio for the transition
year or that earlier year, as the case may be, if higher) to determine their capacity
to absorb carried-back interest in those preceding years. Carrybacks to the
transition year would also be subject to the constraint, similar to the provision
described above in relation to pre-transition years, that the taxpayer’s capacity in
the transition year to absorb carried-back denied interest would be reduced by
the overall deductible net interest expense of Canadian members of the
taxpayer’s group that exceeded the 30-per-cent ratio (or the group ratio, if
higher) in the transition year. For example, the unused capacity in the transition
year of an entity with a tax-EBITDA ratio of 25 per cent (and ignoring the group
ratio for purposes of this example) would be reduced to the extent another
Canadian group entity incurred net interest expense in the transition year in
excess of 30 per cent of its tax EBITDA and the deduction of this excess interest
expense was not denied in the transition year by virtue of the 40-per-cent fixed
ratio in that year.

This measure would apply to taxation years that begin on or after January 1, 2023
(with an anti-avoidance rule to prevent taxpayers from deferring the application
of the measure, or of the 30-per-cent fixed ratio) and would apply with respect to
existing as well as new borrowings. Draft legislative proposals are expected to be
released for comment in the summer.

646 Annex 6
Hybrid Mismatch Arrangements
Hybrid mismatch arrangements are cross-border tax avoidance structures that
exploit differences in the income tax treatment of business entities or financial
instruments under the laws of two or more countries to produce mismatches in
tax results.

The Action 2 report of the BEPS Action Plan recommends detailed rules for
countries to adopt in their domestic legislation to ensure that multinational
enterprises cannot derive tax benefits from the use of hybrid mismatch
arrangements. The two main forms of hybrid mismatch addressed by the Action 2
recommendations are:

 Deduction/non-inclusion mismatches: These arise where a country

allows a deduction in respect of a cross-border payment, the receipt of
which is not included within a reasonable period of time in ordinary
income in the other country. For these purposes, “ordinary income”
generally means income that is subject to income tax at the recipient’s
full tax rate and does not benefit from any exemption, exclusion,
deduction, credit or comparable tax relief.
 Double deduction mismatches: These arise where a tax deduction is
available in two or more countries in respect of a single economic
expense.
The Action 2 recommendations also address a form of hybrid mismatch known as
imported mismatches. These generally arise where a payment is deductible by an
entity resident in one country and included in the ordinary income of a recipient
entity resident in a second country, but that ordinary income is set off against a
deduction under a hybrid mismatch arrangement between the second entity and
an entity resident in a third country.

A supplement to the Action 2 report recommends additional rules to address

branch mismatch arrangements, which generally produce mismatches similar to
hybrid mismatch arrangements. These mismatches occur where the residence
country of a taxpayer takes a different view from that of the country where the
taxpayer’s branch is located as to the allocation of income and expenditures
between the two countries.

The Action 2 recommendations reflect a broad international consensus that

hybrid mismatch and branch mismatch arrangements (collectively, hybrid
arrangements) significantly erode the tax bases of affected countries. Hybrid
arrangements may also have other adverse effects, such as distorting investment
decisions and providing an unfair competitive advantage to multinational
enterprises over domestic businesses.

Tax Measures: Supplementary Information 647

The Action 2 report recognizes that coordinated international action is required
in order to address the negative impacts of hybrid arrangements, without giving
rise to double taxation or other unintended consequences. Accordingly, the
Action 2 recommendations outline a common approach that is intended to
ensure countries have consistent rules that operate in a coordinated manner. A
number of countries (including the United States, the United Kingdom, Australia
and the European Union member states) have already implemented, or
committed to implement, rules consistent with the Action 2 recommendations.

There are existing Canadian income tax rules that the government can use to
challenge certain hybrid arrangements. However, further specific legislative
measures would provide certainty and, as noted above, there are significant
advantages to adopting the common approach in the Action 2 report.

Budget 2021 proposes to implement rules consistent with the Action 2

recommendations, with appropriate adaptations to the Canadian income
tax context.

In general terms, under the main proposed rules, payments made by Canadian
residents under hybrid mismatch arrangements would not be deductible for
Canadian income tax purposes to the extent that they give rise to a further
deduction in another country or are not included in the ordinary income of a
non-resident recipient. Conversely, to the extent that a payment made under
such an arrangement by an entity that is not resident in Canada is deductible for
foreign income tax purposes, no deduction in respect of the payment would be
permitted against the income of a Canadian resident. Any amount of the
payment received by a Canadian resident would also be included in income, and,
if the payment is a dividend, it would not be eligible for the deduction otherwise
available for certain dividends received from foreign affiliates. In effect, these
rules would neutralize a mismatch by aligning the Canadian income tax treatment
with the income tax treatment in the foreign country.

Rules implementing other Action 2 recommendations – such as those on branch

mismatch arrangements, imported mismatch arrangements and reverse hybrids
(i.e., entities that are fiscally transparent under the laws of the country where they
are formed, but are treated as a separate entity under the laws of an investor’s
country) – would be introduced to the extent relevant and appropriate in the
Canadian context.

Consistent with the Action 2 recommendations:

 The proposed rules would be mechanical in nature and would not be
conditioned on a purpose test.
 With limited exceptions, the proposed rules would apply in respect of
payments between related parties and payments under certain arrangements
between unrelated parties that are designed to produce a mismatch.

648 Annex 6
 The ordering rules recommended by the report would also apply to
ensure that the proposed rules are coordinated with similar rules in
other countries.
The proposed rules to address hybrid arrangements would be implemented in
two separate legislative packages. The first package would comprise rules
implementing (with any modifications required for the Canadian income tax
context) the recommendations in Chapters 1 and 2 of the Action 2 report. These
would generally be intended to neutralize a deduction/non-inclusion mismatch
arising from a payment in respect of a financial instrument.

The first legislative package would be released for stakeholder comment later in
2021, and those rules would apply as of July 1, 2022.

The second legislative package would be released for stakeholder comment after
2021, and those rules would apply no earlier than 2023. This package would
comprise rules consistent with the Action 2 recommendations that were not
addressed in the first package.

Sales and Excise Tax Measures

Application of the GST/HST to E-commerce
In the Fall Economic Statement 2020, the Government of Canada proposed a
number of changes to the Goods and Services Tax/Harmonized Sales Tax
(GST/HST) system to ensure that the GST/HST applies in a fair and effective
manner to the growing digital economy:

 The government proposed that non-resident vendors supplying digital

products or services (including traditional services) to consumers in Canada be
required to register for the GST/HST and to collect and remit the tax on their
taxable supplies to Canadian consumers. Distribution platform operators
would also be required to register for the GST/HST and to collect and remit
the tax on the supplies to Canadian consumers that they facilitate. To support
compliance with these requirements, a simplified GST/HST registration and
remittance framework would be available to non-resident vendors and non-
resident distribution platform operators that are not carrying on business in
Canada (e.g., have no permanent establishment in Canada).
 The government proposed that distribution platform operators be required to
register under the normal GST/HST rules and to collect and remit GST/HST in
respect of sales of goods shipped from a fulfillment warehouse or another place
in Canada, when those sales are made by non-registered vendors through
distribution platforms. Non-resident vendors that make sales on their own (i.e.,
not made through a distribution platform) would also be required to register
under the normal GST/HST rules and to collect and remit GST/HST in respect of
sales of goods shipped from a fulfillment warehouse or another place in Canada.

Tax Measures: Supplementary Information 649

 The government proposed to apply the GST/HST on all supplies of short-term
accommodation in Canada facilitated through a digital accommodation
platform. Under the proposal, the GST/HST would be required to be collected
and remitted on short-term accommodations supplied in Canada through an
accommodation platform by either the property owner or the accommodation
platform operator. A simplified GST/HST registration and remittance framework
would be available to non-resident accommodation platform operators that are
not carrying on business in Canada.
These measures would come into force on July 1, 2021.

The government also released draft legislative proposals in relation to the

measures and invited interested parties to submit comments on these proposals
and the associated draft legislation.

Budget 2021 proposes amendments to these proposals and the associated draft
legislation, which take into consideration comments received from stakeholders.
These amendments are intended to ensure that the proposals and draft
legislation operate effectively and to clarify the application of certain provisions.
The substantive proposed amendments are set out below.

Proposed Amendments
Safe Harbour Rules
Under the proposals, platform operators would be required to collect and remit
the GST/HST on the supplies they facilitate by third parties that are not registered
under the existing GST/HST framework. In many cases, platform operators may
rely on information provided by third parties on the transactions they make for
determining whether the platform operator is required to collect and remit tax.
Budget 2021 proposes additional rules that would:

 impose joint and several, or solidary, liability on a platform operator and

a third-party supplier for the collection and remittance of tax, if the
third-party supplier provides false information to the platform operator;
and
 limit the liability of a platform operator for failure to collect and remit
tax, if the platform operator reasonably relied on the information
provided by a third-party supplier.
These proposed rules would ensure that a platform operator is not held liable for
failing to collect and remit tax as a result of having relied in good faith on
information provided by a third-party supplier. Under the proposed rules, the
platform operator would be relieved from liability to the extent that it did not
collect and remit tax (i.e., where it partially collected tax, it would remain liable for
those amounts) and the third-party supplier that provided false information
would be liable for any amounts not collected.

650 Annex 6
Eligible Deductions
Budget 2021 proposes an amendment to clarify that suppliers registered for the
GST/HST under the simplified framework are eligible to deduct amounts for bad
debts and certain provincial HST point-of-sale rebates to purchasers (e.g., in
respect of audio books) from the tax that they are required to remit, and that
public libraries and similar institutions are eligible to claim a rebate for the GST
paid on audio books acquired from those suppliers. For instance, a supplier that
writes off a bad debt in respect of an amount of GST/HST that they had remitted
but for which they are subsequently unable to collect from a purchaser, would be
able to deduct the uncollectable bad debt amount from the GST/HST that they
are required to remit for a reporting period.

Threshold Amount Determination

Under the proposal for cross-border digital products and services, a non-resident
vendor or distribution platform operator with sales to consumers in Canada that
exceed, or are expected to exceed, $30,000 over a 12-month period is required to
register for the GST/HST under the simplified framework and charge the GST/HST
on their sales. Budget 2021 proposes an amendment to the proposals to clarify
that supplies of digital products or services that are GST/HST-free (i.e., zero-
rated) are not included in the calculation of the threshold amount for
determining if a person is required to be registered for the GST/HST under the
simplified framework.

Platform Operator Information Return

Under the proposals, platform operators would be required to file an annual
information return if they facilitate a supply of short-term accommodation
situated in Canada or a sale by a non-registered vendor of goods that are located
in a fulfillment warehouse in Canada. Budget 2021 proposes an amendment to
clarify that the requirement to file an annual information return applies only to
platform operators that are registered or are required to be registered for the
GST/HST.

Authority for the Minister of National Revenue to Register a Person

The proposals describe the non-resident vendors and platform operators that are
required to register under the simplified framework and obligations for these
entities. Budget 2021 proposes an amendment to provide the Minister of
National Revenue the authority to register a person that the Minister believes
should be registered under the simplified framework. This authority already exists
in respect of the existing GST/HST framework and in the rules of other
jurisdictions that have adopted similar e-commerce measures.

Tax Measures: Supplementary Information 651

Administration and Compliance Approach
The government expects that affected businesses and platform operators will
comply with their obligations to register, collect and remit the GST/HST as set out
under the new rules and legislative provisions to ensure that the GST/HST applies
effectively and fairly to e-commerce transactions.

In line with the best practices of other jurisdictions that have adopted similar
measures, the Canada Revenue Agency (CRA) will work closely with affected
businesses and platform operators to assist them in meeting their obligations.
Where the affected businesses and platform operators show that they have taken
reasonable measures but are unable to meet their new obligations for
operational reasons, the CRA will take a practical approach to compliance and
exercise discretion in administering these measures during a 12-month transition
period, starting from the July 1, 2021 coming into force date.

Additional Technical Information and Contact Information

Persons seeking additional technical information regarding the proposed
measures may contact the CRA at 1-833-585-1463 (for calls from Canada and the
United States – toll-free) or 1-613-221-3154 (for calls from elsewhere – collect
calls accepted). Persons may also request a written technical explanation from the
CRA. https://www.canada.ca/en/revenue-agency/services/forms-
publications/publications/1-4/excise-gst-hst-rulings-interpretations-service.html

Input Tax Credit Information Requirements

Under the GST/HST, businesses can claim input tax credits (ITCs) to recover the
GST/HST that they pay for goods and services used as inputs in their commercial
activities. Allowing businesses to recover the GST/HST in this manner helps
ensure that the tax that they pay on their inputs does not become embedded in
the final price of goods and services, and thereby makes Canadian businesses
more competitive.

Information Requirements to Support ITC Claims

Businesses must obtain and retain certain information in order to support their
ITC claims. The required information is contained in documents provided by their
suppliers, such as invoices or receipts.

The information requirements for these documents are graduated, with

progressively more information required when the amount paid or payable in
respect of a supply equals or exceeds thresholds of $30 or $150.

In addition, under the ITC information rules, either the supplier or an intermediary
(i.e., a person that causes or facilitates the making of a supply on behalf of the

652 Annex 6
supplier) must provide its business name and, depending on the amount paid or
payable in respect of the supply, its GST/HST registration number, on the
supporting documents. However, for the purposes of these rules, an intermediary
currently does not include a billing agent (i.e., an agent that collects
consideration and tax on behalf of an underlying vendor but does not otherwise
cause or facilitate a supply). Billing agents therefore currently cannot provide
their GST/HST registration number and/or business name as part of the required
ITC information. Instead, the recipient of the supply must obtain the business
name and registration number of the underlying vendor.

To simplify tax compliance for businesses, Budget 2021 proposes to increase the
current ITC information thresholds to $100 (from $30) and $500 (from $150), and
to allow billing agents to be treated as intermediaries for purposes of the ITC
information rules.

These measures would come into force on the day after Budget Day.

GST New Housing Rebate Conditions

The GST New Housing Rebate entitles homebuyers to recover 36 per cent of the
GST (or the federal component of the HST) paid on the purchase of a new home
priced up to $350,000. The maximum rebate is $6,300. The GST New Housing
Rebate is phased out for new homes priced between $350,000 and $450,000.
There is no GST New Housing Rebate for new homes priced at $450,000 or more.

In addition to the above price thresholds, several other conditions must be met in
order for a purchaser to qualify for the GST New Housing Rebate. In particular,
the purchaser must be acquiring the new home for use as their primary place of
residence or as the primary place of residence of a relation (i.e., an individual
related by blood, marriage, common-law partnership or adoption, or a former
spouse or former common-law partner). Under the current rules, if two or more
individuals who are not considered relations for GST New Housing Rebate
purposes buy a new home together, all of those individuals must meet this
condition – otherwise none of them will be eligible for the GST New Housing
Rebate.

Budget 2021 proposes to remove the condition that where two or more
individuals buy a new home together, each of them must be acquiring the home
for use as their primary place of residence or the primary place of residence of a
relation. Instead, the GST New Housing Rebate would be available as long as the
new home is acquired for use as the primary place of residence of any one of the
purchasers or a relation of any one of the purchasers.

In addition to new homes purchased from a builder, the GST New Housing
Rebate is available in respect of owner-built homes, co-op housing shares and
homes constructed on leased land. The proposed change to the rebate

Tax Measures: Supplementary Information 653

conditions would also be applicable in these circumstances. The proposed
change would also apply to new housing rebates in respect of the provincial
component of the HST.

This measure would apply to a supply made under an agreement of purchase and
sale entered into after Budget Day. However, in the case of a rebate for owner-
built homes, the measure would apply where construction or substantial
renovation of the residential complex is substantially completed after Budget Day.

Rebate of Excise Tax for Goods Purchased by

Provinces
Under the Excise Tax Act, provinces are provided relief from the federal excise tax
embedded in the price of motive fuels, air conditioners in automobiles, and fuel
inefficient vehicles (i.e., the “green levy”), which they purchase or import for the
province’s own use. In particular, when these goods are sold to a province, for the
province’s own use, either the province or the vendor is entitled to a rebate equal
to the amount of the embedded tax (the “provincial-use rebate”).

The provincial-use rebate applies only in a province that does not have an
agreement with the federal government under which, in general terms, the
province and the federal government mutually agree to pay each other’s taxes.
Where a province that does not have such an agreement with the federal
government purchases these goods from a vendor, the provincial-use rebate can
either be claimed by the province itself (in which case the province would be
expected to have paid the embedded tax) or by the vendor (in which case the
province would be expected not to have paid the embedded tax). Only one party
(either the vendor or the province) is entitled to the rebate.

To clarify which party is eligible to claim the provincial-use rebate, Budget 2021
proposes to create a joint election mechanism to specify that the vendor alone
would be eligible to apply for the rebate only if it jointly elects with the province
to be the eligible party. If no joint election were made, then only the province
would be eligible to apply for the rebate.

This measure would apply in relation to these goods purchased or imported by a

province on or after January 1, 2022.

Excise Duty on Tobacco

Budget 2021 proposes to increase the tobacco excise duty rate by $4 per carton
of 200 cigarettes, along with corresponding increases to the excise duty rates for
other tobacco products outlined in Table 9.

654 Annex 6
Inventories of cigarettes held by certain manufacturers, importers, wholesalers
and retailers at the beginning of the day after Budget Day would be subject to an
inventory tax of $0.02 per cigarette (subject to certain exemptions). Taxpayers
would have until June 30, 2021 to file a return and pay the cigarette inventory tax.

Table 9
Tobacco Excise Duty Rate Structure
Current Excise Duty Rates Proposed Excise Duty Rates
Products (Effective April 1, 2021) after Budget Day
Cigarettes $0.62725 $0.72725
(per five cigarettes or
fraction thereof)
Tobacco Sticks $0.12545 $0.14545
(per stick)
Manufactured Tobacco $7.84062 $9.09062
(per 50 grams or fraction
thereof)
Cigars $27.30379 per 1,000 cigars $31.65673 per 1,000 cigars
plus the greater of plus the greater of
$0.09814 per cigar and 88 per $0.11379 per cigar and 88 per
cent of the sale price or duty- cent of the sale price or duty-
paid value paid value

This measure would come into force on the day after Budget Day.

Excise Duty on Vaping Products

Budget 2021 proposes to implement a tax on vaping products in 2022 through
the introduction of a new excise duty framework.

The government invites input from industry and stakeholders on these proposals
to help ensure the effective imposition and collection of excise duties on vaping
products. Written comments should be sent by June 30, 2021 to: fin.vaping-
[email protected].

Tax Measures: Supplementary Information 655

Tax Base
A new excise duty framework on vaping products is proposed to be introduced
as part of the existing Excise Act, 2001 (“the Act”), which currently applies excise
duties on tobacco, wine, spirits, and cannabis products. The new duty would
apply solely to vaping liquids that are produced in Canada or imported and that
are intended for use in a vaping device in Canada. These liquids generally contain
vegetable glycerin, as well as any combination of propylene glycol, flavouring,
nicotine, or other ingredients, all of which must comply with Health Canada
regulations. The new duty would apply to these vaping liquids whether or not
they contain nicotine. Cannabis-based vaping products would be explicitly
exempt from this framework, as they are already subject to cannabis excise duties
under the Act.

Duty Rate
The proposed framework would impose a single flat rate duty on every 10 millilitres
(ml) of vaping liquid or fraction thereof, within an immediate container (i.e., the
container holding the liquid itself). This rate could be in the order of
$1.00 per 10 ml or fraction thereof, and the excise duty would be calculated and
imposed based on the volume of the smallest immediate container holding the
liquid.

 To illustrate, if a retail package contains four separate pods of 1.0 ml of

vaping liquid, each pod would be considered a separate container for
the purpose of the duty. The duty would be calculated based on the
volume of liquid in each separate pod (i.e., $1.00 per pod, for a total of
$4.00 for the retail package), and not on the total volume of liquid in
the package.
 Larger volumes of liquids, a 30 ml container for example, would be
subject to excise duties of $3.00, while a 100 ml container would bear
an excise duty burden of $10.00.
Generally, the flat rate would be imposed and payable at the time of packaging
or importation. The last federal licensee in the supply chain who packaged the
vaping product for final retail sale, including vape shops holding an excise
licence, as applicable, would be liable to pay the applicable excise duty.

Administration
The Canada Revenue Agency (CRA) would be responsible for administering and
enforcing the new excise duty framework for vaping products, including ensuring
compliance with the general application and administrative rules contained within
the Act. The Canada Border Services Agency (CBSA) would be responsible for
administering and enforcing the framework at the border. To promote compliance
with the taxation of vaping products, penalty and offence provisions broadly

656 Annex 6
similar to those applying to alcohol, tobacco and cannabis duties would apply.

Licensing and Registration Requirements

Manufacturers and importers of dutiable vaping products would be required to
obtain a licence for their activities from the CRA. This would include any vape
shops that would like to obtain and then use non-duty paid, bulk vaping products
to mix or manufacture new vaping products on-site for immediate or subsequent
sale to final customers, upon which duty would apply and need to be remitted.

Applicants who wished to obtain licences from the CRA would be expected to
meet a number of criteria, similar to those for other excisable products already
enumerated under the Act and its regulations, such as not having acted to
defraud the government in the past five years. Licences for vaping product
manufacturers and importers would be issued for a maximum of three years and
would not be automatically renewed.

Excise Stamping Requirements

It is proposed that all dutiable vaping products removed from the premises of a
federal licensee to enter the Canadian duty-paid market would be required to be
packaged in a container intended for sale at the retail level (a “retail package”),
and would be required to bear an excise stamp showing that duties have been
paid. As with the current tobacco and cannabis stamping programs, a stamp
would need to be affixed to a retail package:
 in a conspicuous place on the package;
 in a manner that seals the package (i.e., once the package is opened the
stamp cannot be in a condition to be re-used);
 in a manner that the stamp remains affixed to the package after the
package is opened; and
 in a manner that does not obstruct any information that is required
under an Act of Parliament to appear on the package, including
potential Health Canada warnings.
The issuance of stamps would be administered by the CRA, and the stamps
would be sold through an authorized provider.

The Act would also prohibit the possession or sale of any unstamped dutiable
vaping products by a person unless otherwise allowed under the Act. These
allowances would include those made for persons licensed or registered with the
CRA, and could further include those for:
 A person who is transporting the product under circumstances and
conditions prescribed by regulations; or
 A licensee who has imported bulk vaping liquids intended for use in a vaping
device but which require further processing, manufacturing, or packaging.

Tax Measures: Supplementary Information 657

Reporting Requirements
All licensees would be required to submit to the CRA a monthly duty and
information return. The return would include the following required information:

 the quantity (e.g., liquid volume) of products manufactured or imported;

 the amount of excise duty payable;
 inventory details, such as opening, additions, reductions, and closing;
and
 the quantity of products sent for export under any special permit
authorizations.

Imports and Exports

Importations of vaping products subject to the proposed taxation framework
would be subject to excise duties, unless duty is not payable (e.g., if the product
is not yet in a state where it could be entered into the retail market for sale to a
final consumer). Exportations of vaping products would not be subject to excise
duties. Stamps would also be made available to producers outside of Canada, as
is the case for tobacco products.

Non-Dutiable Vaping Products

Aside from exports of non-duty paid vaping products, the Act could provide for
certain circumstances in which vaping products would be non-dutiable. For
example, duty would not be payable on vaping products taken for analysis or re-
worked/destroyed (in a manner approved by the Minister) by a licensee or by the
Minister. This would include vaping products delivered to a person prescribed by
regulations for destruction by that person in circumstances prescribed by
regulations.

Personal Use
Registration and licensing would not be required for individuals who mix vaping
liquids strictly for their own personal consumption.

Federal-provincial-territorial Taxation Coordination

The government will also work collaboratively with any provinces and territories
that may be interested in a federally coordinated approach to taxing these
products, which could be achieved through the implementation of taxation on a
common base of vaping products through federal legislation.

A coordinated framework for the taxation of vaping products could include an

initial federal rate, with an additional rate to follow in respect of products
intended for consumption in provinces and territories choosing to participate.

658 Annex 6
Licensees would have to apply an excise stamp with an indicator (e.g., colour) of
the intended provincial or territorial market.

Tax on Select Luxury Goods

Budget 2021 proposes to introduce a tax on the retail sale of new luxury cars and
personal aircraft priced over $100,000, and boats priced over $250,000, effective
as of January 1, 2022. For vehicles, aircraft and boats sold in Canada, the tax
would apply at the point of purchase if the final sale price paid by a consumer
(not including the GST/HST or provincial sales tax) is above the $100,000 or
$250,000 price threshold, as the case may be. Importations of vehicles, aircraft
and boats would also be subject to the tax.

Tax Base
Luxury Vehicles
It is proposed that all new passenger vehicles typically suitable for personal use
be included in the base, including coupes, sedans, station wagons, sports cars,
passenger vans and minivans equipped to accommodate less than 10 passengers,
SUVs, and passenger pick-up trucks.

It is proposed that the following vehicles typically purchased for personal use be
excluded from the base:

 Motorcycles and certain off-road vehicles, such as all-terrain vehicles

and snowmobiles;
 Racing cars (i.e., vehicles that are not street legal and are owned solely
for on-track or off-road racing); and
 Motor homes (commonly known as recreational vehicles, or RVs) that
are designed to provide temporary living, sleeping, or eating
accommodation for travel, vacation, seasonal camping, or recreational
use.
For greater certainty, off-road, construction, and farm vehicles would fall outside
the scope of the tax. Similarly, certain commercial (e.g., heavy-duty vehicles such
as some trucks and cargo vans) and public sector (such as buses, police cars and
ambulances) vehicles, as well as hearses, would not be subject to the tax.

Aircraft
It is proposed that the tax apply to all new aircraft typically suitable for personal
use, including aeroplanes, helicopters and gliders. As a general rule, it is
proposed that large aircraft typically used in commercial activities, such as those
equipped for the carriage of passengers and having a certified maximum carrying
capacity of more than 39 passengers, be excluded from the base. Smaller aircraft

Tax Measures: Supplementary Information 659

used in certain commercial (such as public transportation) and public sector
(police, military and rescue aircraft, air ambulances) activities would also be
excluded from the base.

Boats
It is proposed that the tax apply to new boats such as yachts, recreational
motorboats and sailboats, typically suitable for personal use. Smaller personal
watercraft (e.g., water scooters) would be excluded from the base. For greater
certainty, floating homes, commercial fishing vessels, ferries, and cruise ships
would fall outside the scope of the tax.

Tax Rate
For vehicles and aircraft priced over $100,000, the amount of the tax would be
the lesser of 10 per cent of the full value of the vehicle or the aircraft, or 20 per
cent of the value above $100,000.

For boats priced over $250,000, the amount of the tax would be the lesser of 10
per cent of the full value of the boat or 20 per cent of the value above $250,000.

Point of Imposition
The tax would generally apply at the final point of purchase of new luxury
vehicles, aircraft and boats in Canada. In the case of imports, application would
generally be either at the time of importation (in cases where there will not be a
further sale of the goods in Canada) or at the time of the final point of purchase
in Canada following importation.

Upon purchase or lease, the seller or lessor would be responsible for remitting
the full amount of the federal tax owing, regardless of whether the good was
purchased outright, financed, or leased over a period of time.

Exports will not be subject to the tax, in line with their treatment under other
taxation regimes.

Treatment under the GST/HST

The GST/HST would apply to the final sale price, inclusive of the proposed tax.

Next Steps
Further details will be announced in the coming months.

660 Annex 6
Customs Tariff and Tax Measures
Duty and Tax Collection on Imported Goods
Budget 2021 proposes amendments to the Customs Act to improve the collection
of duties and taxes on imported goods.

Currently, some importers with foreign ties value their goods at a lower price
than most Canadian importers by using a previous foreign sale price. This
practice results in a lower value of duties and taxes paid when importing these
goods into Canada. The amendments to the Customs Act and related regulations
would ensure that all importers value their goods using the value of the last sale
for export to a purchaser in Canada, ensuring fairness for all importers and
enhancing consistency with international rules.

A second element to the proposal would support a broad modernization of

payment processes for commercial importers in the Customs Act and regulations.
These changes will support the implementation and enforcement of a
streamlined and harmonized billing cycle for commercial importations that will
include flexibility to make good-faith corrections without incurring penalties or
interest. These changes would coincide with implementation of key functionalities
of the CBSA Assessment and Revenue Management initiative that is set to serve
as a single portal for commercial importers.

Tax Measures: Supplementary Information 661

Previously Announced Measures
Budget 2021 confirms the government’s intention to proceed with the following
previously announced tax and related measures, as modified to take into account
consultations and deliberations since their release:

 Legislative proposals released on March 3, 2021 in respect of “baseline

remuneration” for the Canada Emergency Wage Subsidy.
 Legislative proposals released on February 24, 2021 in respect of the
Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy
and the Lockdown Support.
 Legislative proposals released on January 19, 2021 in respect of
temporary adjustments to the Child Care Expense and Disability
Supports deductions.
 Legislative proposals released on December 21, 2020 relating to
temporary adjustments to the automobile standby charge to take into
account COVID-19.
 Legislative proposals released on December 16, 2020 extending
timelines in respect of flow-through shares by 12 months.
 Legislative proposals released on December 15, 2020 relating to capital
cost allowance claims for purchases of zero-emission automotive
equipment and vehicles.
 The anti-avoidance rules consultation and the income tax measures
announced on November 30, 2020 in the Fall Economic Statement in
respect of:
 registered disability savings plans;
 employee stock options; and
 patronage dividends paid in shares.
 Measures announced on November 30, 2020 in the Fall Economic Statement
regarding Goods and Services Tax/Harmonized Sales Tax relief on face masks
and face shields.
 Legislative proposals announced on November 27, 2020 to facilitate the
conversion of Health and Welfare Trusts to Employee Life and Health Trusts.
 Regulatory proposals announced on July 2, 2020 providing relief for Deferred
Salary Leave Plans and Registered Pension Plans during the COVID-19
pandemic.
 Legislative proposals released on April 17, 2020 to clarify support for
Canadian journalism.
 The income tax measure announced on December 20, 2019 to extend the
maturation period of amateur athletes trusts maturing in 2019 by one year,
from eight years to nine years.

662 Annex 6
 The income tax measure announced on December 9, 2019 to increase
the Basic Personal Amount to $15,000 by 2023.
 The income tax measure announced on August 29, 2019 to clarify the
definition of a shared-custody parent.
 Legislative proposals released on July 30, 2019 to implement Budget
2019 income tax measures in respect of:
 multi-unit residential properties;
 permitting additional types of annuities under registered plans;
 contributions to specified multi-employer pension plans for older
members;
 pensionable service under an individual pension plan;
 the allocation to redeemers methodology for mutual funds;
 character conversion transactions;
 electronic delivery of requirements for information;
 the transfer pricing rules;
 the foreign affiliate dumping rules; and
 cross-border share lending arrangements.
 Measures released on July 30, 2019 modifying previously enacted
measures from the November 21, 2018 Fall Economic Statement and
Budget 2019, in respect of:
 the Accelerated Investment Incentive;
 the expensing of the cost of machinery and equipment used in the
manufacturing or processing of goods and the cost of specified
clean energy equipment; and
 the expensing of the cost of certain zero-emission vehicles.
 Legislative proposals released on May 17, 2019 relating to the Goods
and Services Tax/Harmonized Sales Tax.
 Remaining regulatory proposals released on July 27, 2018 relating to
the Goods and Services Tax/Harmonized Sales Tax.
 The income tax measures announced in Budget 2018 to implement
enhanced reporting requirements for certain trusts to provide
additional information on an annual basis.
 Measures confirmed in Budget 2016 relating to the Goods and Services
Tax/Harmonized Sales Tax joint venture election.
Budget 2021 also reaffirms the government’s commitment to move forward as
required with technical amendments to improve the certainty and integrity of the
tax system.

Tax Measures: Supplementary Information 663

 Notices of Ways
and Means Motions
Notice of Ways and Means Motion to Amend the Income Tax Act
and Other Related Legislation
That it is expedient to amend the Income Tax Act (the “Act”) and other related
legislation as follows:
Disability Tax Credit
1 The Act is modified to give effect to the proposals relating to the Disability Tax Credit as described in
the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Canada Workers Benefit

2 (1) The portion of subsection 117.1(1) of the Act before paragraph (b) is replaced by the following:

Annual adjustment
117.1 (1) Each specified amount in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjust-
ed so that the amount to be used for the year under the provision for which the amount is relevant is the total of

(a) the amount that would, but for subsection (3), be the amount to be used under the relevant provision for the pre-
ceding taxation year, and

(2) Section 117.1 of the Act is amended by adding the following after subsection (1):

Annual adjustment — amounts

(2) For the purposes of subsection (1), each of the following amounts is a specified amount in relation to tax payable
under this Part or Part I.2 for a taxation year:

(a) the amount of $300 referred to in subparagraph 6(1)(b)(v.1);

(b) the amount of $1,000 referred to in the formula in paragraph 8(1)(s);

(c) the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a);

(d) each of the amounts expressed in dollars in subsection 117(2);

(e) each of the amounts expressed in dollars in the description of B in subsection 118(1);

(f) the amount of $12,298 in the description of A in subsection 118(1.1);

(g) the amount of $15,000 in paragraph (d) of the description of F in subsection 118(1.1);

(h) each of the amounts expressed in dollars in subsection 118(2);

(i) the amount of $1,000 referred to in subsection 118(10);

(j) the amount of $15,000 referred to in subsection 118.01(2);

(k) each of the amounts expressed in dollars in subsection 118.2(1);

(l) each of the amounts expressed in dollars in subsection 118.3(1);

(m) each of the amounts expressed in dollars in subsection 122.5(3);

 (n) the amount of $2,500 referred to in subsection 122.51(1);

(o) each of the amounts expressed in dollars in subsection 122.51(2);

(p) the amounts of $14,000 referred to in subsection 122.7(1.3);

(q) the amounts of $1,395 and $2,403 in the description of A, and each of the amounts expressed in dollars in the
description of B, in subsection 122.7(2);

(r) the amount of $720 in the description of C, and each of the amounts expressed in dollars in the description of D, in
subsection 122.7(3);

(s) the amount of $10,000 in the description of B in subsection 122.91(2); and

(t) each of the amounts expressed in dollars in Part I.2.

(3) Subsections (1) and (2) apply to the 2021 and subsequent taxation years. However, the adjustment
provided for in subsection 117.1(1) of the Act, as enacted by subsection (1), does not apply

(a) for the 2021 to 2023 taxation years, in respect of paragraph 117.1(2)(g) of the Act, as enacted by sub-
section (2); and

(b) for the 2021 taxation year, in respect of paragraphs 117.1(2)(p), (q) and (r) of the Act, as enacted by
subsection (2).

3 (1) Section 122.7 of the Act is amended by adding the following after subsection (1.2):

Secondary earner exemption

(1.3) For the purposes of subsections (2) and (3),

(a) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligi-
ble individual was less than the working income for the year of the eligible spouse, the eligible individual’s adjusted
net income for the year is deemed to be the amount, if any, by which the eligible individual’s adjusted net income for
the year (determined without reference to this subsection) exceeds the lesser of

(i) the eligible individual’s working income for the year, and

(ii) $14,000; and

(b) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligi-
ble individual was greater than or equal to the working income for the year of the eligible spouse, the eligible spouse’s
adjusted net income for the year is deemed to be the amount, if any, by which the eligible spouse’s adjusted net in-
come for the year (determined without reference to this subsection) exceeds the lesser of

(i) the eligible spouse’s working income for the year, and

(ii) $14,000.

(2) The descriptions of A and B in subsection 122.7(2) of the Act are replaced by the following:
A is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser
of $1,395 and 27% of the amount, if any, by which the individual’s working income for the taxation year ex-
ceeds $3,000, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,403
and 27% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of
the eligible spouse, for the taxation year, exceeds $3,000; and
 B is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the
amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $22,944, and
(b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, 15% of the amount,
if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse,
for the taxation year, exceeds $26,177.

(3) The descriptions of C and D in subsection 122.7(3) of the Act are replaced by the following:
C is the lesser of $720 and 27% of the amount, if any, by which the individual’s working income for the taxation year
exceeds $1,150; and
D is
(a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the
amount, if any, by which the individual’s adjusted net income for the taxation year exceeds $32,244,
(b) if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount un-
der subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 15% of the
amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible
spouse, for the taxation year, exceeds $42,197, and
(c) if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under
subsection 118.3(1) for the taxation year, 7.5% of the amount, if any, by which the total of the adjusted net in-
comes of the individual and of the eligible spouse, for the taxation year, exceeds $42,197.

(4) Subsections (1) to (3) are deemed to have come into force on January 1, 2021.

Northern Residents Deductions

4 The Act is modified to give effect to the proposals relating to Northern Residents Deductions as de-
scribed in the budget documents tabled by the Minister of Finance in the House of Commons on Budget
Day.

Postdoctoral Fellowship Income

5 (1) The definition earned income in subsection 146(1) of the Act is amended by adding the following af-
ter paragraph (b):

(b.01) an amount included under paragraph 56(1)(n) in computing the taxpayer’s income for a period in the year
throughout which the taxpayer was resident in Canada in connection with a program that consists primarily of re-
search and does not lead to a diploma from a college or a Collège d’enseignement général et professionnel, or a bache-
lor, masters, doctoral or equivalent degree,

(2) Subsection (1) applies in respect of the definition “earned income” under subsection 146(1) of the
Act for taxation years after 2020. However, it also applies in respect of the definition “earned income”
under subsection 146(1) of the Act for the 2011 to 2020 taxation years, for the purpose of determining the
taxpayer’s “RRSP deduction limit” under subsection 146(1) of the Act in respect of a taxation year after
2020 during which the taxpayer makes a request in writing with the Minister of National Revenue for an
adjustment to their “earned income” for any of those prior years.

Tax Treatment of COVID-19 Benefit Amounts

6 (1) Subparagraph 56(1)(r)(iv) of the Act is replaced by the following:
 (iv) financial assistance provided under a program established by a government, or government agency, in Canada
that provides income replacement benefits similar to income replacement benefits provided under a program
established under the Employment Insurance Act, other than amounts referred to in subparagraph (iv.1),

(iv.1) financial assistance provided under

(A) the Canada Emergency Response Benefit Act,

(B) Part VIII.4 of the Employment Insurance Act,

(C) the Canada Emergency Student Benefit Act,

(D) the Canada Recovery Benefits Act, or

(E) a program established by a government, or government agency, of a province, that provides income replace-
ment benefits similar to income replacement benefits provided under a program established under an Act re-
ferred to in any of clauses (A) to (D), or

(2) Subsection (1) is deemed to have come into force on January 1, 2020.

7 (1) Section 60 of the Act is amended by adding the following after paragraph (v.2):

COVID-19 – other bene t repayments

(v.3) any benefit repaid by the taxpayer before 2023 to the extent that the amount of the benefit was included in com-
puting the taxpayer’s income for the year under any of clauses 56(1)(r)(iv.1)(A) to (D), except to the extent that the
amount is

(i) deducted in computing the taxpayer’s income for any year under paragraph (n), or

(ii) deductible in computing the taxpayer’s income for any year under paragraph (v.2);

(2) Subsection (1) is deemed to have come into force on January 1, 2020.

8 (1) Paragraph 115(1)(a) of the Act is amended by adding the following after subparagraph (iii.21):

(iii.22) the total of all amounts, each of which is an amount included under subparagraph 56(1)(r)(iv.1) in comput-
ing the non-resident person’s income for the year,

(2) Subsection (1) is deemed to have come into force on January 1, 2020.

Fixing Contribution Errors in Defined Contribution Pension Plans

9 The Act is modified to give effect to the proposals relating to Fixing Contribution Errors in Defined
Contribution Pension Plans as described in the budget documents tabled by the Minister of Finance in
the House of Commons on Budget Day.

Taxes Applicable to Registered Investments

10 (1) Subsection 204.6(1) of the Act is replaced by the following:

Tax payable
204.6 (1) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(b), (d)
or (f) holds property that is not a prescribed investment for that taxpayer, it shall, in respect of that month, pay a tax
under this Part equal to the total of all amounts each of which is an amount determined in respect of such a property by
the formula
0.01(A × B/C)
where
A is the fair market value of the property at the time of its acquisition by the taxpayer;
B is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment
held at the end of the month by
(a) registered retirement savings plans,
(b) deferred profit sharing plans,
(c) registered retirement income funds, or
(d) registered investments described in paragraphs 204.4(2)(b), (d) or (f); and
C is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment
at the end of the month.

(2) Subsection (1) applies in respect of months after 2020. It also applies to a taxpayer in respect of a
month before 2021 if, on or before Budget Day,

(a) no notice of assessment in respect of an amount payable under subsection 204.6(1) of the Act for
the month has been sent to the taxpayer in respect of the month, or

(b) if such a notice of assessment has been sent to the taxpayer in respect of the month, it is not the
case that the taxpayer has no further right of objection and appeal in respect of the assessment.

Registration and Revocation Rules Applicable to Charities

11 (1) The definition ineligible individual in subsection 149.1(1) of the Act is amended by striking out “or”
at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after
paragraph (e):

(f) a listed terrorist entity or a member of a listed terrorist entity,

(g) a director, trustee, officer or like official of a listed terrorist entity during a period in which that entity supported
or engaged in terrorist activities, including a period prior to the date on which the entity became a listed terrorist
entity, or

(h) an individual who controlled or managed, directly or indirectly, in any manner whatever, a listed terrorist entity
during a period in which that entity supported or engaged in terrorist activities, including a period prior to the date
on which the entity became a listed terrorist entity; (particulier non admissible)

(2) Subsection 149.1(1) of the Act is amended by adding the following in alphabetical order:

listed terrorist entity, at any time, means a person, partnership, group, fund, unincorporated association or organiza-
tion that is at that time a listed entity, as defined in subsection 83.01(1) of the Criminal Code; (entité terroriste
inscrite)

(3) Section 149.1 of the Act is amended by adding the following after subsection (1.01):

Deeming rule — listed terrorist entity

(1.02) If, but for this subsection, a person, partnership, group, fund, unincorporated association or organization be-
comes a listed terrorist entity at a particular time and ceases to be a listed terrorist entity at a later time further to an
application made under subsection 83.05(2), or as a result of paragraph 83.05(6)(d), of the Criminal Code, then the entity
is deemed not to have become a listed terrorist entity and not to have been a listed terrorist entity throughout that peri-
od.

(4) Paragraph 149.1(4.1)(c) of the Act is replaced by the following:

 (c) of a registered charity, if a false statement (as defined in subsection 163.2(1)) was made in circumstances
amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of information for the purpose of
obtaining or maintaining its registration;

12 Section 168 of the Act is amended by adding the following after subsection (3):

Listed terrorist entities

(3.1) Notwithstanding subsections (1), (2) and (4), if a qualified donee is a listed terrorist entity for the purposes of
section 149.1, the registration of the qualified donee is revoked as of the date on which it became a listed terrorist entity.

13 The portion of subsection 188(1) of the Act before paragraph (a) is replaced by the following:

Deemed year-end on notice of revocation

188 (1) If on a particular day the Minister issues a notice of intention to revoke the registration of a taxpayer as a reg-
istered charity under any of subsections 149.1(2) to (4.1) and 168(1), it becomes a listed terrorist entity or it is deter-
mined, under subsection 7(1) of the Charities Registration (Security Information) Act, that a certificate served in re-
spect of the charity under subsection 5(1) of that Act is reasonable on the basis of information and evidence available,

14 Subsection 188.2(2) of the Act is amended by striking out “or” at the end of paragraph (d), by adding
“or” at the end of paragraph (e) and by adding the following after paragraph (e):

(f) in the case of a person that is a registered charity, if a false statement (as defined in subsection 163.2(1)) was
made in circumstances amounting to culpable conduct (as defined in subsection 163.2(1)) in the furnishing of infor-
mation for the purpose of maintaining its registration.

Electronic Filing and Certification of Tax and Information Returns

15 The Act is modified to give effect to the proposals relating to Electronic Filing and Certification of
Tax and Information Returns as described in the budget documents tabled by the Minister of Finance in
the House of Commons on Budget Day.

Emergency Business Supports and Canada Recovery Hiring Program

16 Paragraph 87(2)(g.6) of the Act is replaced by the following:

COVID-19 – wage subsidy

(g.6) for the purposes of section 125.7, the new corporation is deemed to be the same corporation as, and a continua-
tion of, each predecessor corporation unless it is reasonable to consider that one of the main purposes of the amalga-
mation is to cause the new corporation to qualify for the deemed overpayment under any of subsections 125.7(2) to
(2.2) or to increase the amount of that deemed overpayment;

17 (1) The portion of paragraph (a) of the definition base percentage in subsection 125.7(1) of the Act be-
fore subparagraph (i) is replaced by the following:

(a) for the fifth qualifying period,

(2) The portion of paragraph (b) of the definition base percentage in subsection 125.7(1) of the Act before
subparagraph (i) is replaced by the following:

(b) for the sixth qualifying period,

(3) The portion of paragraph (c) of the definition base percentage in subsection 125.7(1) of the Act before
subparagraph (i) is replaced by the following:

(c) for the seventh qualifying period,

(4) The portion of paragraph (d) of the definition base percentage in subsection 125.7(1) of the Act before
subparagraph (i) is replaced by the following:

(d) for the eighth qualifying period,

(5) The portion of paragraph (e) of the definition base percentage in subsection 125.7(1) of the Act before
subparagraph (i) is replaced by the following:

(e) for the ninth qualifying period,

(6) The portion of paragraph (f) of the definition base percentage in subsection 125.7(1) of the Act before
subparagraph (i) is replaced by the following:

(f) for the tenth qualifying period,

(7) Paragraph (g) of the definition base percentage in subsection 125.7(1) of the Act is replaced by the fol-
lowing:

(g) for the eleventh qualifying period to the seventeenth qualifying period,

(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 40%, and

(ii) in any other case, the amount determined by the formula

0.8 × A
where
A is the revenue reduction percentage;

(h) for the eighteenth qualifying period,

(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 35%, and

(ii) in any other case, the amount determined by the formula

0.875 × (A − 10%)
where
A is the revenue reduction percentage;

(i) for the nineteenth qualifying period,

(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 25%, and

(ii) in any other case, the amount determined by the formula

0.625 × (A − 10%)
where
A is the revenue reduction percentage;

(j) for the twentieth qualifying period,

(i) if the entity’s revenue reduction percentage is greater than or equal to 50%, 10%, and

(ii) in any other case, the amount determined by the formula

0.25 × (A − 10%)
where
 A is the revenue reduction percentage; and

(k) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of
the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage
de base)

(8) Subparagraphs (b)(i) to (iv) of the definition baseline remuneration in subsection 125.7(1) of the Act
are replaced by the following:

(i) begins on March 1, 2019 and ends on May 31, 2019, in respect of any of the first qualifying period to the third
qualifying period,

(ii) begins on March 1, 2019 and ends on June 30, 2019, in respect of the fourth qualifying period, unless the eligi-
ble entity elects to use the period that begins on March 1, 2019 and ends on May 31, 2019 for that qualifying period,

(iii) begins on July 1, 2019 and ends on December 31, 2019, in respect of any of the fifth qualifying period to the
thirteenth qualifying period,

(iii.1) begins on March 1, 2019 and ends on June 30, 2019, in respect of any of the fourteenth qualifying period to
the seventeenth qualifying period, unless the eligible entity elects to use the period that begins on July 1, 2019 and
ends on December 31, 2019 for that qualifying period,

(iii.2) begins on July 1, 2019 and ends on December 31, 2019, in respect of the eighteenth qualifying period and any
subsequent qualifying period, or

(iv) if the eligible employee was on leave for any reason mentioned in subsection 12(3) of the Employment Insur-
ance Act or section 2 of the Act respecting parental insurance, CQLR, c. A-29.011 throughout the period that be-
gins on July 1, 2019 and ends on March 15, 2020, begins 90 days prior to the date on which the employee com-
menced that leave and ends on the day prior to the date on which they commenced their leave, in respect of the
fifth qualifying period and any subsequent qualifying period. (rémunération de base)

(9) Paragraphs (a) to (c.7) of the definition current reference period in subsection 125.7(1) of the Act are
replaced by the following:

(a) for the first qualifying period, March 2020;

(b) for the second qualifying period, April 2020;

(c) for the third qualifying period, May 2020;

(c.1) for the fourth qualifying period, June 2020;

(c.2) for the fifth qualifying period, July 2020;

(c.3) for the sixth qualifying period, August 2020;

(c.4) for the seventh qualifying period, September 2020;

(c.5) for the eighth qualifying period, October 2020;

(c.6) for the ninth qualifying period, November 2020;

(c.7) for the tenth qualifying period, December 2020;

(c.8) for the eleventh qualifying period, December 2020;

(c.9) for the twelfth qualifying period, January 2021;

 (c.91) for the thirteenth qualifying period, February 2021;

(c.92) for the fourteenth qualifying period, March 2021;

(c.93) for the fifteenth qualifying period, April 2021;

(c.94) for the sixteenth qualifying period, May 2021;

(c.95) for the seventeenth qualifying period, June 2021;

(c.96) for the eighteenth qualifying period, July 2021;

(c.97) for the nineteenth qualifying period, August 2021;

(c.98) for the twentieth qualifying period, September 2021;

(c.99) for the twenty-first qualifying period, October 2021;

(c.991) for the twenty-second qualifying period, November 2021; and

(10) The definition eligible employee in subsection 125.7(1) of the Act is replaced by the following:

eligible employee, of an eligible entity in respect of a week in a qualifying period, means an individual employed by the
eligible entity primarily in Canada throughout the qualifying period (or the portion of the qualifying period throughout
which the individual was employed by the eligible entity), other than, if the qualifying period is any of the first qualifying
period to the fourth qualifying period, an individual who is without remuneration by the eligible entity in respect of 14 or
more consecutive days in the qualifying period. (employé admissible)

(11) Subparagraphs (a)(i) to (x) of the definition prior reference period in subsection 125.7(1) of the Act
are replaced by the following:

(i) for the first qualifying period, March 2019,

(ii) for the second qualifying period, April 2019,

(iii) for the third qualifying period, May 2019,

(iv) for the fourth qualifying period, June 2019,

(v) for the fifth qualifying period, July 2019,

(vi) for the sixth qualifying period, August 2019,

(vii) for the seventh qualifying period, September 2019,

(viii) for the eighth qualifying period, October 2019,

(ix) for the ninth qualifying period, November 2019,

(x) for the tenth qualifying period, December 2019,

(xi) for the eleventh qualifying period, December 2019,

(xii) for the twelfth qualifying period, January 2020,

(xiii) for the thirteenth qualifying period, February 2020,

(xiv) for the fourteenth qualifying period, March 2019,

 (xv) for the fifteenth qualifying period, April 2019,

(xvi) for the sixteenth qualifying period, May 2019,

(xvii) for the seventeenth qualifying period, June 2019,

(xviii) for the eighteenth qualifying period, July 2019,

(xix) for the nineteenth qualifying period, August 2019,

(xx) for the twentieth qualifying period, September 2019,

(xxi) for the twenty-first qualifying period, October 2019, and

(xxii) for the twenty-second qualifying period, November 2019;

(12) Paragraphs (e) to (g) of the definition public health restriction in subsection 125.7(1) of the Act are
replaced by the following:

(e) it does not result from a violation by the eligible entity – or a party with which the eligible entity does not deal at
arm's length that rents, directly or indirectly, the qualifying property from the eligible entity (referred to in this defini-
tion as the "specified tenant") – of an order or decision that meets the conditions in paragraphs (a) to (d);

(f) as a result of the order or decision, some or all of the activities of the eligible entity – or the specified tenant – at,
or in connection with, the qualifying property (that it is reasonable to expect the eligible entity – or the specified ten-
ant – would, absent the order or decision, otherwise have engaged in) are required to cease (referred to in this defini-
tion as the "restricted activities") based, for greater certainty, on the type of activity rather than the extent to which an
activity may be performed or limits placed on the time during which an activity may be performed;

(g) it is reasonable to conclude that at least approximately 25% of the qualifying revenues of the eligible entity – or
the specified tenant – for the prior reference period that were earned from, or in connection with, the qualifying prop-
erty were derived from the restricted activities; and

(13) The portion of paragraph (c) of the definition qualifying entity in subsection 125.7(1) of the Act be-
fore subparagraph (i) is replaced by the following:

(c) if the qualifying period is any of the first qualifying period to the fourth qualifying period, its qualifying revenues
for the current reference period are equal to or less than the specified percentage, for the qualifying period, of

(14) Paragraphs (a) to (d) of the definition qualifying period in subsection 125.7(1) of the Act are replaced
by the following:

(a) the period that begins on March 15, 2020 and ends on April 11, 2020 (referred to in this section as the “first quali-
fying period”);

(b) the period that begins on April 12, 2020 and ends on May 9, 2020 (referred to in this section as the “second qualify-
ing period”);

(c) the period that begins on May 10, 2020 and ends on June 6, 2020 (referred to in this section as the “third qualifying
period”);

(c.1) the period that begins on June 7, 2020 and ends on July 4, 2020 (referred to in this section as the “fourth qualify-
ing period”);

(c.2) the period that begins on July 5, 2020 and ends on August 1, 2020 (referred to in this section as the “fifth qualify-
ing period”);
 (c.3) the period that begins on August 2, 2020 and ends on August 29, 2020 (referred to in this section as the “sixth
qualifying period”);

(c.4) the period that begins on August 30, 2020 and ends on September 26, 2020 (referred to in this section as the
“seventh qualifying period”);

(c.5) the period that begins on September 27, 2020 and ends on October 24, 2020 (referred to in this section as the
“eighth qualifying period”);

(c.6) the period that begins on October 25, 2020 and ends on November 21, 2020 (referred to in this section as the
“ninth qualifying period”);

(c.7) the period that begins on November 22, 2020 and ends on December 19, 2020 (referred to in this section as the
“tenth qualifying period”);

(c.8) the period that begins on December 20, 2020 and ends on January 16, 2021 (referred to in this section as the
“eleventh qualifying period”);

(c.9) the period that begins on January 17, 2021 and ends on February 13, 2021 (referred to in this section as the
“twelfth qualifying period”);

(c.91) the period that begins on February 14, 2021 and ends on March 13, 2021 (referred to in this section as the “thir-
teenth qualifying period”);

(c.92) the period that begins on March 14, 2021 and ends on April 10, 2021 (referred to in this section as the “four-
teenth qualifying period”);

(c.93) the period that begins on April 11, 2021 and ends on May 8, 2021 (referred to in this section as the “fifteenth
qualifying period”);

(c.94) the period that begins on May 9, 2021 and ends on June 5, 2021 (referred to in this section as the “sixteenth
qualifying period”);

(c.95) the period that begins on June 6, 2021 and ends on July 3, 2021 (referred to in this section as the “seventeenth
qualifying period”);

(c.96) the period that begins on July 4, 2021 and ends on July 31, 2021 (referred to in this section as the “eighteenth
qualifying period”);

(c.97) the period that begins on August 1, 2021 and ends on August 28, 2021 (referred to in this section as the “nine-
teenth qualifying period”);

(c.98) the period that begins on August 29, 2021 and ends on September 25, 2021 (referred to in this section as the
“twentieth qualifying period”);

(c.99) the period that begins on September 26, 2021 and ends on October 23, 2021 (referred to in this section as the
“twenty-first qualifying period”);

(c.991) the period that begins on October 24, 2021 and ends on November 20, 2021 (referred to in this section as the
“twenty-second qualifying period”); and

(d) a prescribed period that ends no later than November 30, 2021. (période d’admissibilité)

(15) The portion of paragraph (a) of the definition rent subsidy percentage in subsection 125.7(1) of the
Act before subparagraph (i) is replaced by the following:

(a) if the qualifying period is any of the eighth qualifying period to the seventeenth qualifying period,
(16) The definition rent subsidy percentage in subsection 125.7(1) of the Act is amended by striking out
“and” at the end of paragraph (a) and by replacing paragraph (b) with the following:

(a.1) if the qualifying period is any of the eighteenth qualifying period to the twentieth qualifying period, the percent-
age determined by the formula
A+B
where
A is the eligible entity’s base percentage for the qualifying period, and
B is the eligible entity’s top-up percentage for the qualifying period; and

(b) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of
the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage
de subvention pour le loyer)

(17) The description of A in the definition rent top-up percentage in subsection 125.7(1) of the Act is re-
placed by the following:
A is 25%, or a prescribed percentage, for any of the eighth qualifying period to the twentieth qualifying period and nil,
or a prescribed percentage, for any subsequent qualifying period,

(18) Paragraphs (a) to (c) of the definition speci ed percentage in subsection 125.7(1) of the Act are re-
placed by the following:

(a) for the first qualifying period, 85%; and

(b) for any of the second qualifying period to the fourth qualifying period, 70%. (pourcentage déterminé)

(19) The definition top-up percentage in subsection 125.7(1) of the Act is replaced by the following:

top-up percentage, of an eligible entity for a qualifying period, means the percentage determined by regulation for the
qualifying period or, if there is no percentage determined by regulation for the qualifying period,

(a) for any of the fifth qualifying period to the tenth qualifying period, the lesser of 25% and the percentage deter-
mined by the formula
1.25 × (A − 50%)
where
A is the entity’s top-up revenue reduction percentage for the qualifying period;

(b) for any of the eleventh qualifying period to the seventeenth qualifying period, the lesser of 35% and the percent-
age determined by the formula
1.75 × (A − 50%)
where
A is the entity’s top-up revenue reduction percentage for the qualifying period;

(c) for the eighteenth qualifying period, the lesser of 25% and the percentage determined by the formula
1.25 × (A − 50%)
where
A is the entity’s top-up revenue reduction percentage for the qualifying period;

(d) for the nineteenth qualifying period, the lesser of 15% and the percentage determined by the formula
0.75 × (A − 50%)
 where
A is the entity’s top-up revenue reduction percentage for the qualifying period;

(e) for the twentieth qualifying period, the lesser of 10% and the percentage determined by the formula
0.5 × (A − 50%)
where
A is the entity’s top-up revenue reduction percentage for the qualifying period; and

(f) for a qualifying period after the twentieth qualifying period, a percentage determined by regulation in respect of
the eligible entity or, if there is no percentage determined by regulation for the qualifying period, nil. (pourcentage
compensatoire)

(20) The portion of paragraph (a) of the definition top-up revenue reduction percentage in subsection
125.7(1) of the Act before the formula is replaced by the following:

(a) for any of the fifth qualifying period to the seventh qualifying period, the result (expressed as a percentage) of the
formula

(21) The portion of paragraph (b) of the definition top-up revenue reduction percentage in subsection
125.7(1) of the Act before subparagraph (i) is replaced by the following:

(b) for any of the eighth qualifying period to the tenth qualifying period, the greater of

(22) Paragraph (c) of the definition top-up revenue reduction percentage in subsection 125.7(1) of the Act
is replaced by the following:

(c) for the eleventh qualifying period and each subsequent qualifying period, the eligible entity’s revenue reduction
percentage for the qualifying period. (pourcentage compensatoire de baisse de revenue)

(23) Subsection 125.7(1) of the Act is amended by adding the following in alphabetical order:

executive compensation repayment amount, of an eligible entity, means

(a) nil, unless

(i) shares of the capital stock of the eligible entity are listed or traded on a stock exchange or other public market,
or

(ii) the eligible entity is controlled by a corporation described in subparagraph (i); and

(b) if the conditions in subparagraph (a)(i) or (ii) are met, the amount determined by the formula
A×B
where
A is
(a) a percentage assigned to the eligible entity under an agreement if
(i) the agreement is entered into by
(A) the eligible entity,
(B) an eligible entity, shares of the capital stock of which are listed or traded on a stock exchange or other
public market, that controls the eligible entity (referred to in this definition as the “public parent corpo-
ration”), if the public parent corporation received a deemed overpayment under subsection (2) in respect
of the seventeenth qualifying period or any subsequent qualifying period, and
 (C) each other eligible entity that received a deemed overpayment under subsection (2) in respect of the
seventeenth qualifying period or any subsequent qualifying period and was controlled in that period by
the eligible entity or the public parent corporation, if any,
(ii) the agreement is filed in prescribed form and manner with the Minister,
(iii) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity
referred to in subparagraph (i) of this description,
(iv) the total of all the percentages assigned under the agreement equals 100%, and
(v) the percentage allocated to any eligible entity under the agreement would not result in an amount allo-
cated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity
under subsection (2) for the seventeenth qualifying period and any subsequent qualifying period, and
(b) in any other case, 100%, and
B is the lesser of
(a) the total of all amounts each of which is an amount of a deemed overpayment under subsection (2) for each
of the entities described in subparagraph (a)(i) of the description of A for the seventeenth qualifying period
and each subsequent qualifying period, other than amounts in respect of employees on leave with pay, and
(b) the amount determined by the formula
C−D
where
C is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eli-
gible entity, if any, for the 2021 calendar year (prorated based upon the number of days of the eligible enti-
ty’s, or public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the
calendar year), and
D is the executive remuneration of the eligible entity, or of the public parent corporation that controls the eli-
gible entity, if any, for the 2019 calendar year (prorated based upon the number of days of the eligible enti-
ty’s, or public parent corporation’s, fiscal periods in the calendar year, if those fiscal periods are not the
calendar year). (montant du remboursement de la rémunération de la haute direction)

executive remuneration, of an eligible entity, means

(a) the total amount of compensation that is reported in the eligible entity’s Statement of Executive Compensation for
Named Executive Officers pursuant to National Instrument 51-102 Continuous Disclosure Obligations, as amended
from time to time, of the Canadian Securities Administrators in respect of Named Executive Officers of the eligible
entity;

(b) if paragraph (a) does not apply and the eligible entity is required to make a similar disclosure to shareholders
under the laws of another jurisdiction, the amount of total compensation reported in that disclosure (if the compensa-
tion of more than five individuals is required to be reported under that disclosure, using the five most highly compen-
sated of those individuals); and

(c) if paragraphs (a) and (b) do not apply, the amount that would be required to be reported by the eligible entity
using the methodology for preparing the Statement of Executive Compensation referred to in paragraph (a).
(rémunération de la haute direction)

qualifying recovery entity, for a qualifying period, means an eligible entity that meets the following conditions:

(a) it files an application with the Minister in respect of the qualifying period in prescribed form and manner no later
than 180 days after the end of the qualifying period;

(b) it is a qualifying entity for the qualifying period;

(c) if it is a corporation (other than a corporation that is exempt from tax under this Part), it
 (i) is a Canadian-controlled private corporation, or

(ii) would be a Canadian-controlled private corporation absent the application of subsection 136(1);

(d) if it is a partnership, throughout the qualifying period it is the case that

A ≤ 0.5B
where
A is the total of all amounts, each of which is the fair market value of an interest in the partnership held — directly or
indirectly, through one or more partnerships — by
(i) a person or partnership other than an eligible entity, or
(ii) a corporation, other than a corporation that
(A) is exempt from tax under this Part, or
(B) is described in subparagraph (c)(i) or (ii), and
B is the total fair market value of all interests in the partnership; and

(e) it has a revenue reduction percentage

(i) greater than 0%, if it is the seventeenth qualifying period, or

(ii) greater than 10%, if it is any of the eighteenth qualifying period to the twenty-second qualifying period. (entité
de relance admissible)

recovery wage subsidy rate, for a qualifying period, means

(a) for any of the seventeenth qualifying period to the nineteenth qualifying period, 50%;

(b) for the twentieth qualifying period, 40%;

(c) for the twenty-first qualifying period, 30%; and

(d) for the twenty-second qualifying period, 20%. (taux de subvention salariale de relance)

total base period remuneration, of an eligible entity, means the total of all amounts, each of which is for an eligible
employee in respect of a week in the fourteenth qualifying period, equal to the least of

(a) $1,129,

(b) the eligible remuneration paid to the eligible employee in respect of the week,

(c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline
remuneration in respect of the eligible employee determined for that week, and

(d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période de base)

total current period remuneration, of an eligible entity for a qualifying period, means the total of all amounts, each of
which is for an eligible employee in respect of a week in the qualifying period, equal to the least of

(a) $1,129,

(b) the eligible remuneration paid to the eligible employee in respect of the week,

(c) if the eligible employee does not deal at arm’s length with the eligible entity in the qualifying period, the baseline
remuneration in respect of the eligible employee determined for that week, and
 (d) if the eligible employee is on leave with pay in the week, nil. (rémunération totale de la période actuelle)

(24) Section 125.7 of the Act is amended by adding the following after subsection (2.1):

Canada Recovery Hiring Program

(2.2) For a qualifying recovery entity for a qualifying period, an overpayment on account of the qualifying entity’s liabili-
ty under this Part for the taxation year in which the qualifying period ends is deemed to have arisen during the qualify-
ing period in an amount determined by the formula
A × (B − C)
where
A is the recovery wage subsidy rate for the qualifying period;
B is the qualifying recovery entity’s total current period remuneration for the qualifying period; and
C is the qualifying recovery entity’s total base period remuneration.

(25) Subsection 125.7(3) of the Act is replaced by the following:

When assistance received

(3) For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is
deemed under any of subsections (2) to (2.2) to have overpaid is assistance received by it from a government immediate-
ly before the end of the qualifying period to which it relates.

(26) Paragraph 125.7(4.2)(d) of the Act is replaced by the following:

(d) if the seller meets any of the following conditions, the eligible entity is deemed to meet that condition:

(i) either of the conditions in paragraph (d) of the definition qualifying entity in subsection (1), and

(ii) both of the conditions in subparagraph (c)(ii), or the condition in subparagraph (c)(iii), of the definition quali‐
fying renter in subsection (1); and

(27) Paragraphs 125.7(5)(a) and (b) of the Act are replaced by the following:

(a) the amount of any deemed overpayment by an eligible entity under any of subsections (2) to (2.2) in respect of a
qualifying period cannot exceed the amount claimed by the eligible entity — in the application referred to in para-
graph (a) of the definition qualifying entity in subsection (1), paragraph (a) of the definition qualifying renter in
subsection (1) or paragraph (a) of the definition qualifying recovery entity in subsection (1) — in respect of that
qualifying period; and

(b) if an eligible employee is employed in a week by two or more qualifying entities that do not deal with each other at
arm’s length, the total amount of the deemed overpayment under subsection (2) or (2.2) in respect of the eligible em-
ployee for that week shall not exceed the amount that would arise if the eligible employee’s eligible remuneration for
that week were paid by one qualifying entity.

(28) Subparagraph 125.7(6)(b)(ii) of the Act is replaced by the following:

(ii) in respect of the fifth qualifying period and subsequent qualifying periods, increase the amount of a deemed
overpayment under subsection (2), or

(29) Section 125.7 of the Act is amended by adding the following after subsection (6):

Anti-avoidance — recovery wage subsidy

(6.1) Notwithstanding any other provision in this section, the total current period remuneration of an eligible entity for
a qualifying period is deemed to be equal to the total base period remuneration of the eligible entity, if
 (a) the eligible entity, or a person or partnership not dealing at arm’s length with the eligible entity, enters into a
transaction or participates in an event (or a series of transactions or events) or takes an action (or fails to take an
action) that has the effect of increasing the difference between the total current period remuneration and the total
base period remuneration of the eligible entity for the qualifying period; and

(b) it is reasonable to conclude that one of the main purposes of the transaction, event, series or action in paragraph
(a) is to increase the amount of a deemed overpayment under subsection (2.2).

(30) Paragraphs 125.7(7)(a) and (b) of the Act are replaced by the following:

(a) for the purposes of subsections (2) to (2.2) and subsections 152(3.4) and 160.1(1), to be a taxpayer, and

(b) for the purposes of subsections (2) to (2.2), to have a liability under this Part for a taxation year in which a qualify-
ing period ends.

(31) Subparagraphs 125.7(8)(a)(i) and (ii) of the Act are replaced by the following:

(i) the percentages in subparagraphs (a)(i), (b)(i), (c)(i), (d)(i), (e)(i), (f)(i), (g)(i), (h)(i), (i)(i) and (j)(i), and

(ii) the factors in subparagraphs (a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f)(ii), (g)(ii), (h)(ii), (i)(ii) and (j)(ii); and

(32) Paragraph 125.7(8)(b) of the Act is replaced by the following:

(b) the definition rent subsidy percentage in subsection (1), the factors and percentages in paragraphs (a) and (a.1)
of that definition;

(b.1) the definition recovery wage subsidy rate, the percentages in that definition; and

(33) Section 125.7 of the Act is amended by adding the following after subsection (9):

Special case
(9.1) For the purposes of paragraph (9)(b), if the particular qualifying period is the eleventh qualifying period, then the
immediately preceding qualifying period is deemed to be the ninth qualifying period.

Greater of wage and recovery subsidies

(9.2) For a qualifying period,

(a) if the amount of any deemed overpayment under subsection (2) is equal to or greater than the amount of any
deemed overpayment under subsection (2.2), the amount of any deemed overpayment under subsection (2.2) is
deemed to be nil; and

(b) if the amount of any deemed overpayment under subsection (2.2) is greater than the amount of any deemed over-
payment under subsection (2), the amount of any deemed overpayment under subsection (2) is deemed to be nil.

(34) Section 125.7 of the Act is amended by adding the following after section (13)

Executive compensation
(14) The amount of a refund made by the Minister to an eligible entity in respect of a deemed overpayment under sub-
section (2) on a particular date under subsection 164(1.6), in respect of any of the seventeenth qualifying period to the
twenty-second qualifying period, is deemed to be an amount that has been refunded to the eligible entity on that particu-
lar date (for the taxation year in which the refund was made) in excess of the amount to which the eligible entity was
entitled as a refund under this Act to the extent of the lesser of the amount of the refund and the amount determined by
the formula
A−B
where
A is the executive compensation repayment amount of the eligible entity; and
B is the total of all amounts deemed to be an excess refund to the eligible entity under this subsection in respect of
refunds made after the particular date.

Foreign currency — executive remuneration

(15) For the purposes of paragraphs 261(2)(b) and (5)(c), amounts referred to in the definition executive remunera‐
tion in subsection (1) are deemed to arise on the last day of the eligible entity’s fiscal period to which the amount relates
and not at any other time.

(35) Subsections (12) and (26) are deemed to have come into force on September 27, 2020.

18 Subsection 152(3.4) of the Act is replaced by the following:

COVID-19 — notice of determination

(3.4) The Minister may at any time determine the amount deemed by any of subsections 125.7(2) to (2.2) to be an over-
payment on account of a taxpayer’s liability under this Part that arose during a qualifying period (as defined in subsec-
tion 125.7(1)), or determine that there is no such amount, and send a notice of the determination to the taxpayer.

19 (1) Subparagraph 163(2)(i)(i) of the Act is replaced by the following:

(i) the amount that would be deemed by any of subsections 125.7(2) to (2.2) to have been an overpayment by the
person or partnership if that amount were calculated by reference to the information provided in the application
filed pursuant to paragraph (a) of the definition qualifying entity in subsection 125.7(1), paragraph (a) of the defi-
nition qualifying renter in subsection 125.7(1) or paragraph (a) of the definition qualifying recovery entity in
subsection 125.7(1), as the case may be

(2) Section 163 of the Act is amended by adding the following after subsection (2.901):

Penalty — COVID-19
(2.902) Every eligible entity that is deemed by subsection 125.7(6.1) to have an amount of total current period remuner-
ation for a qualifying period is liable to a penalty equal to 25% of the amount that would be deemed by subsection
125.7(2.2) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated
by reference to the information provided in the application filed pursuant to paragraph (a) of the definition qualifying
recovery entity in subsection 125.7(1).

20 Subsection 164(1.6) of the Act is replaced by the following:

COVID-19 refunds
(1.6) Notwithstanding subsection (2.01), at any time after the beginning of a taxation year of a taxpayer in which an
overpayment is deemed to have arisen under any of subsections 125.7(2) to (2.2), the Minister may refund to the taxpay-
er all or any part of the overpayment.

21 Section 8901.2 of the Income Tax Regulations is replaced by the following:

8901.2 The amount determined by regulation in respect of a qualifying entity for the purposes of clause (b)(iv)(B) of
the description of A in subsection 125.7(2) of the Act for a week in a qualifying period is

(a) for the seventh qualifying period and eighth qualifying period, the greater of

(i) the amount determined for the week under subparagraph (a)(i) of the description of A in subsection 125.7(2) of
the Act, and

(ii) the amount determined for the week under subparagraph (a)(ii) of the description of A in subsection 125.7(2)
of the Act;
 (b) for the ninth qualifying period and the tenth qualifying period, the greater of

(i) $500, and

(ii) the lesser of

(A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible em-
ployee determined for that week, and

(B) $573;

(c) for any of the eleventh qualifying period to the nineteenth qualifying period, the greater of

(i) $500, and

(ii) the lesser of

(A) 55% of baseline remuneration (as defined in subsection 125.7(1) of the Act) in respect of the eligible em-
ployee determined for that week, and

(B) $595; and

(d) for the twentieth qualifying period and any subsequent qualifying period, nil.

Immediate Expensing
22 The Act is modified to give effect to the proposals relating to Immediate Expensing as described in
the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Rate Reduction for Zero-Emission Technology Manufacturers

23 The Act is modified to give effect to the proposals relating to a Rate Reduction for Zero-Emission
Technology Manufacturers as described in the budget documents tabled by the Minister of Finance in
the House of Commons on Budget Day.

Capital Cost Allowance for Clean Energy Equipment

24 The Act is modified to give effect to the proposals relating to Capital Cost Allowance for Clean Ener-
gy Equipment as described in the budget documents tabled by the Minister of Finance in the House of
Commons on Budget Day.

Film or Video Production Tax Credits

25 The Act is modified to give effect to the proposals relating to Film or Video Production Tax Credits
as described in the budget documents tabled by the Minister of Finance in the House of Commons on
Budget Day.

Mandatory Disclosure Rules

26 The Act is modified to give effect to the proposals relating to Mandatory Disclosure Rules as de-
scribed in the budget documents tabled by the Minister of Finance in the House of Commons on Budget
Day.
Avoidance of Tax Debts
27 The Act is modified to give effect to the proposals relating to Avoidance of Tax Debts as described in
the budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Audit Authorities
28 (1) Subsection 231.1(1) of the Act is amended by striking out “and” at the end of paragraph (a), by
adding “and” at the end of paragraph (b) and by replacing the portion of that subsection after para-
graph (b) with the following:

(c) require the owner or manager of a property or business of a taxpayer — and any particular person on the premises
or place where the business is carried on, the property is kept, anything is done in connection with the business or any
books or records of the taxpayer are or should be kept — to give the authorized person all reasonable assistance and to
answer all proper questions and, for those purposes, the authorized person may require

(i) the owner or manager to attend at the premises or place with the authorized person, and

(ii) the owner, manager or the particular person to answer those questions orally or in writing, in any form speci-
fied by the authorized person.

(2) Subsection 231.1(2) of the Act is replaced by the following:

Entry to premises
(2) For the purposes of subsection (1), an authorized person may enter into the premises or place where any business is
carried on, any property is kept, anything is done in connection with any business or any books or records are or should
be kept, except if the premises or place is a dwelling-house, the authorized person may enter the dwelling-house without
the consent of the occupant only under the authority of a warrant under subsection (3).

Base Erosion and Profit Shifting

Interest Deductibility Limits

29 The Act is modified to give effect to the proposals relating to Interest Deductibility Limits as de-
scribed in the budget documents tabled by the Minister of Finance in the House of Commons on Budget
Day.

Hybrid Mismatch Arrangements

30 The Act is modified to give effect to the proposals relating to Hybrid Mismatch Arrangements as de-
scribed in the budget documents tabled by the Minister of Finance in the House of Commons on Budget
Day.
Notice of Ways and Means Motion to amend the Excise Tax Act
That it is expedient to amend the Excise Tax Act as follows:
Application of the GST/HST to E-commerce
1 (1) The definition reporting period in subsection 123(1) of the Excise Tax Act is replaced by the follow-
ing:

reporting period of a person means the reporting period of the person as determined under sections 211.18 and 245 to
251; (période de déclaration)

(2) Paragraph (c) of the definition activité commerciale in subsection 123(1) of the French version of the
Act is replaced by the following:

c) la réalisation d’une fourniture, sauf une fourniture exonérée, d’un immeuble de la personne, y compris les actes
qu’elle accomplit dans le cadre ou à l’occasion de la fourniture. (commercial activity)

(3) Subsections (1) and (2) come into force, or are deemed to have come into force, on July 1, 2021.

2 (1) Paragraph 141.01(1)(c) of the French version of the Act is replaced by the following:

c) la réalisation de fournitures d’immeubles de la personne, y compris les actes qu’elle accomplit dans le cadre ou à
l’occasion des fournitures.

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021.

3 (1) Subsection 143(1) of the Act is amended by striking out “or” at the end of paragraph (b) and by
adding the following after that paragraph:

(b.1) the supply is a qualifying tangible personal property supply (as defined in subsection 211.1(1)) and the per-
son is required under section 211.22 to be registered under Subdivision D of Division V at the time the supply is made;
or

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021.

(3) For the purposes of applying subsection 143(1) of the Act, as amended by subsection (1), in respect of
a supply in respect of which subparagraph 7(2)(c)(ii) applies, the supply is deemed to have been made
on July 1, 2021.

4 (1) Subsection 148(3) of the Act is replaced by the following:

Non-application
(3) This section does not apply to

(a) a person registered under Subdivision E of Division II; or

(b) a non-resident person that makes a supply in Canada of admissions in respect of a place of amusement, a semi-
nar, an activity or an event and whose only business carried on in Canada is the making of such supplies.

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021.

5 (1) Subsection 178.8(9) of the Act is replaced by the following:

Application
(9) Subsections (2) to (7) do not apply in respect of goods imported in circumstances in which subsection 169(2) applies
or in which section 180 or subparagraph 211.23(1)(c)(i) deems a person to have paid tax in respect of a supply of proper-
ty equal to the tax under Division III in respect of the importation of goods.

(2) Subsection (1) applies to goods imported on or after July 1, 2021 and to goods imported before that
day that were not accounted for under section 32 of the Customs Act before that day.

6 (1) Section 179 of the Act is amended by adding the following after subsection (3):

Exception — distribution platform operator

(3.1) For the purposes of this Part, if

(a) paragraphs (1)(a) to (c) apply to a taxable supply in respect of particular tangible personal property that is made
by a registrant and is referred to in any of subparagraphs (1)(a)(i) to (iii),

(b) the transfer referred to in paragraph (1)(b) of physical possession of the particular property is to a person (in this
subsection referred to as the “consignee”) that is acquiring physical possession of the particular property as the recipi-
ent of a taxable supply made by way of sale of the particular property that

(i) is deemed under subsection 211.23(1) to have been made by a distribution platform operator (as defined in
subsection 211.1(1)), and

(ii) would, in the absence of subsection 211.23(1), be made by a non-resident person that is not registered under
Subdivision D of Division V,

(c) the distribution platform operator is registered under Subdivision D of Division V, and

(d) the non-resident person gives to the registrant, and the registrant retains, a certificate that

(i) acknowledges that the consignee acquired physical possession of the particular property as the recipient of a
taxable supply and that the distribution platform operator is required to collect tax in respect of that taxable sup-
ply, and

(ii) states the distribution platform operator’s name and registration number assigned under section 241,
the following rules apply:

(e) paragraphs (1)(d) to (g) do not apply to the taxable supply referred to in paragraph (a), and

(f) the taxable supply referred to in paragraph (a) is deemed to have been made outside Canada.

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021.

7 (1) The Act is amended by adding the following after section 211:

SUBDIVISION E

Electronic Commerce

Interpretation

De nitions
211.1 (1) The following definitions apply in this Subdivision.
accommodation platform means a digital platform through which a person facilitates the making of supplies of short-
term accommodation situated in Canada by another person that is not registered under Subdivision D of Division V.
(plateforme de logements)

accommodation platform operator, in respect of a supply of short-term accommodation made through an accommo-
dation platform, means a person (other than the supplier or an excluded operator in respect of the supply) that

(a) controls or sets the essential elements of the transaction between the supplier and the recipient;

(b) if paragraph (a) does not apply to any person, is involved, directly or through arrangements with third parties, in
collecting, receiving or charging the consideration for the supply and transmitting all or part of the consideration to
the supplier; or

(c) is a prescribed person. (exploitant de plateforme de logements)

Canadian accommodation related supply means a taxable supply of a service

(a) that is made to a person in connection with a supply of short-term accommodation situated in Canada made to
the person; and

(b) the consideration for which represents a booking fee, administration fee or other similar charge. (fourniture liée
à un logement au Canada)

digital platform includes a website, an electronic portal, gateway, store or distribution platform or any other similar
electronic interface but does not include

(a) an electronic interface that solely processes payments; or

(b) a prescribed platform or interface. (plateforme numérique)

distribution platform operator, in respect of a supply of property or a service made through a specified distribution
platform, means a person (other than the supplier or an excluded operator in respect of the supply) that

(a) controls or sets the essential elements of the transaction between the supplier and the recipient;

(b) if paragraph (a) does not apply to any person, is involved, directly or through arrangements with third parties, in
collecting, receiving or charging the consideration for the supply and transmitting all or part of the consideration to
the supplier; or

(c) is a prescribed person. (exploitant de plateforme de distribution)

electronic ling means using electronic media in a manner specified by the Minister. (transmission électronique)

excluded operator means a person that, in respect of a supply of property or a service,

(a) meets all of the following conditions:

(i) the person does not set, directly or indirectly, any of the terms and conditions under which the supply is made,

(ii) the person is not involved, directly or indirectly, in authorizing the charge to the recipient of the supply in re-
spect of the payment of the consideration for the supply, and

(iii) the person is not involved, directly or indirectly, in the ordering or delivery of the property or in the ordering
or rendering of the service;

(b) solely provides for the listing or advertising of the property or service or for the redirecting or transferring to a
digital platform on which the property or service is offered;
 (c) is solely a payment processor; or

(d) is a prescribed person. (exploitant exclu)

false statement includes a statement that is misleading because of an omission from the statement. (faux énoncé)

qualifying tangible personal property supply means a supply made by way of sale of tangible personal property that
is, under the agreement for the supply, to be delivered or made available to the recipient in Canada, other than

(a) an exempt or zero-rated supply;

(b) a supply of tangible personal property sent by mail or courier to the recipient at an address in Canada from an
address outside Canada by the supplier or by another person acting on behalf of the supplier, if the supplier maintains
evidence satisfactory to the Minister that the property was so sent;

(c) a supply that is deemed under subsection 180.1(2) to have been made outside Canada; and

(d) a prescribed supply. (fourniture admissible d’un bien meuble corporel)

speci ed Canadian recipient means a recipient of a supply in respect of which the following conditions are met:

(a) the recipient has not provided to the supplier, or to a distribution platform operator in respect of the supply, evi-
dence satisfactory to the Minister that the recipient is registered under Subdivision D of Division V; and

(b) the usual place of residence of the recipient is situated in Canada. (acquéreur canadien déterminé)

speci ed distribution platform means a digital platform through which a person facilitates the making of specified
supplies by another person that is a specified non-resident supplier or facilitates the making of qualifying tangible per-
sonal property supplies by another person that is not registered under Subdivision D of Division V. (plateforme de
distribution déterminée)

speci ed non-resident supplier means a non-resident person that does not make supplies in the course of a business
carried on in Canada and that is not registered under Subdivision D of Division V. (fournisseur non-résident
déterminé)

speci ed supply means a taxable supply of intangible personal property or a service other than

(a) a supply of intangible personal property that

(i) may not be used in Canada,

(ii) relates to real property situated outside Canada, or

(iii) relates to tangible personal property ordinarily situated outside Canada;

(b) a supply of a service that

(i) may only be consumed or used outside Canada,

(ii) is in relation to real property situated outside Canada, or

(iii) is rendered in connection with criminal, civil or administrative litigation (other than a service rendered before
the commencement of such litigation) that is under the jurisdiction of a court or other tribunal established under
the laws of a country other than Canada or that is in the nature of an appeal from a decision of a court or other
tribunal established under the laws of a country other than Canada;

(c) a supply of a service that is deemed under subsection 180.1(2) to have been made outside Canada;
 (d) a supply of a service

(i) that is made to a person in connection with a supply of short-term accommodation made to the person, and

(ii) the consideration for which represents a booking fee, administration fee or other similar charge; and

(e) a prescribed supply. (fourniture déterminée)

Registration
(2) For greater certainty, in this Part (other than this Subdivision) and in Schedules V to X, a reference to registration
does not include registration under this Subdivision.

Accommodations, Intangible Personal Property and Services

Residence indicators
211.11 (1) For the purposes of this Subdivision, the following are indicators in respect of the usual place of residence
of a recipient of a supply:

(a) the home address of the recipient;

(b) the business address of the recipient;

(c) the billing address of the recipient;

(d) the Internet Protocol address of the device used by the recipient or similar data obtained through a geolocation
method;

(e) payment-related information in respect of the recipient or other information used by the payment system;

(f) the information from a subscriber identity module, or other similar module, used by the recipient;

(g) the place at which a landline communication service is supplied to the recipient; and

(h) any other relevant information that the Minister may specify.

Indicator — Canada and provinces

(2) For the purposes of this section,

(a) a Canadian indicator in respect of the recipient of a supply is an indicator obtained in connection with the supply
that reasonably supports the conclusion that the usual place of residence of the recipient is situated in Canada;

(b) a foreign indicator in respect of the recipient of a supply is an indicator obtained in connection with the supply
that reasonably supports the conclusion that the usual place of residence of the recipient is situated outside Canada;

(c) a participating province indicator in respect of the recipient of a supply is an indicator obtained in connection
with the supply that reasonably supports the conclusion that the usual place of residence of the recipient is situated in
a participating province; and

(d) a non-participating province indicator in respect of the recipient of a supply is an indicator obtained in connec-
tion with the supply that reasonably supports the conclusion that the usual place of residence of the recipient is situ-
ated in a non-participating province.

Usual place of residence — Canada

(3) For the purposes of this Subdivision, the usual place of residence of the recipient of a supply is situated in Canada if
a person that is the supplier or a distribution platform operator in respect of the supply,
 (a) in the ordinary course of the person’s operations, has obtained two or more Canadian indicators in respect of the
recipient and has not obtained more than one foreign indicator in respect of the recipient;

(b) in the ordinary course of the person’s operations, has obtained two or more Canadian indicators in respect of the
recipient and two or more foreign indicators in respect of the recipient, but the Canadian indicators are, in the cir-
cumstances, reasonably considered to be more reliable in determining a place of residence; or

(c) if paragraphs (a) and (b) do not apply, has determined that the usual place of residence of the recipient is situated
in Canada based on any method that the Minister may allow.

Usual place of residence — participating province address

(4) For the purposes of this Subdivision, if the usual place of residence of the recipient of a supply is situated in Canada
and if a person that is the supplier or a distribution platform operator in respect of the supply has obtained in the ordi-
nary course of the person’s operations one or more addresses that are a home or business address of the recipient in a
participating province and has not obtained in the ordinary course of the person’s operations the same number or a
greater number of addresses that are a home or business address of the recipient in a non-participating province, the
usual place of residence of the recipient is situated in the following participating province:

(a) if those addresses of the recipient that are in a participating province are all in the same participating province,
that participating province; and

(b) if those addresses of the recipient that are in a participating province are in two or more participating provinces
and if the tax rates for those participating provinces are the same, the participating province among those participat-
ing provinces that has the largest population.

Usual place of residence — participating province indicators

(5) For the purposes of this Subdivision, if the usual place of residence of the recipient of a supply is situated in Canada
but is not determined under subsection (4) to be in a participating province and if a person that is the supplier or a dis-
tribution platform operator in respect of the supply has obtained in the ordinary course of the person’s operations one or
more participating province indicators in respect of the recipient and has not obtained in the ordinary course of the per-
son’s operations the same number or a greater number of non-participating province indicators in respect of the recipi-
ent that could reasonably be considered to be as reliable in determining a place of residence as those participating
province indicators, the usual place of residence of the recipient is situated in the following participating province:

(a) if those participating province indicators are in respect of the same participating province, that participating
province;

(b) if those participating province indicators are in respect of two or more participating provinces and the participat-
ing province indicators in respect of one of those participating provinces are, in the circumstances, reasonably consid-
ered to be more reliable in determining a place of residence, that participating province;

(c) if the usual place of residence of the recipient is not determined under paragraph (a) or (b) and if the person has
determined that the usual place of residence of the recipient is situated in one of the participating provinces based on
any method that the Minister may allow, that participating province; or

(d) if the usual place of residence of the recipient is not determined under any of paragraphs (a) to (c) and if those
participating province indicators are in respect of two or more participating provinces, the participating province
among those participating provinces for which the tax rate is the lowest or, if the tax rates for those participating
provinces are the same, the participating province among those participating provinces that has the largest popula-
tion.

Usual place of residence — participating province

(6) For the purposes of this Subdivision, if, in respect of a supply, the usual place of residence of the recipient is situated
in Canada but is not determined under subsection (4) or (5) to be in a participating province and if a person that is the
supplier or a distribution platform operator in respect of the supply has determined that the usual place of residence of
the recipient is situated in a participating province based on any method that the Minister may allow, then the usual
place of residence of the recipient is situated in that participating province.

Threshold amount
211.12 (1) For the purposes of this section, the threshold amount of a particular person for a period is the total of all
amounts each of which is an amount that is, or that could reasonably be expected to be, the value of the consideration for
a supply that is, or that could reasonably be expected to be,

(a) a specified supply made during that period by the particular person to a specified Canadian recipient (other than a
zero-rated supply or a supply that is deemed to have been made by the particular person under paragraph
211.13(1)(a) or subparagraph 211.13(2)(a)(i));

(b) a Canadian accommodation related supply made during that period by the particular person to another person
that is not registered under Subdivision D of Division V;

(c) if the particular person is a distribution platform operator in respect of a specified supply (other than a zero-rated
supply) made during that period through a specified distribution platform by a specified non-resident supplier to a
specified Canadian recipient, a specified supply (other than a zero-rated supply) that is made during that period
through the specified distribution platform by a specified non-resident supplier to a specified Canadian recipient and
in respect of which any person is a distribution platform operator; or

(d) if the particular person is an accommodation platform operator in respect of an accommodation supply — being a
taxable supply of short-term accommodation situated in Canada made by any person that is not registered under Sub-
division D of Division V to a recipient that is not registered under that Subdivision — that is made during that period
through an accommodation platform, an accommodation supply that is made during that period through the accom-
modation platform and in respect of which any person is an accommodation platform operator.

Registration required
(2) Every person (other than a registrant or a person that carries on a business in Canada) that is a specified non-resi-
dent supplier at any time, a distribution platform operator in respect of a supply made at any time or an accommodation
platform operator in respect of a supply made at any time is required at that time to be registered under this Subdivision
if the threshold amount of the person for any period of 12 months (other than a period that begins before July 2021) that
includes that time exceeds $30,000.

Application
(3) A person required under subsection (2) to be registered under this Subdivision shall apply to the Minister for regis-
tration. The application is to be made in prescribed form containing prescribed information and is to be filed with the
Minister by way of electronic filing on or before the first day on which the person is required to be registered under this
Subdivision.

Registration
(4) The Minister may register any person that applies for registration under subsection (3) and, upon doing so, the Min-
ister shall assign a registration number to the person and notify the person of the registration number and the effective
date of the registration.

Notice of intent
(5) If the Minister has reason to believe that a person that is not registered under this Subdivision is required to be reg-
istered under subsection (2) and has failed to apply for registration under subsection (3) as and when required, the Min-
ister may send a notice in writing (in this section referred to as a “notice of intent”) to the person that the Minister pro-
poses to register the person under subsection (7).

Representations to Minister
(6) Upon receipt of a notice of intent, a person shall apply for registration under subsection (3) or establish to the satis-
faction of the Minister that the person is not required to be registered under subsection (2).
Registration by Minister
(7) If, after 60 days after the particular day on which a notice of intent was sent by the Minister to a person, the person
has not applied for registration under subsection (3) and the Minister is not satisfied that the person is not required to
be registered under subsection (2), the Minister may register the person under this Subdivision and, upon doing so, shall
assign a registration number to the person and notify the person in writing of the registration number and the effective
date of the registration, which effective date is not to be earlier than 60 days after the particular day.

Cessation of registration
(8) If a person is registered under this Subdivision and if the person becomes registered under Subdivision D of Division
V on a particular day, the person ceases to be registered under this Subdivision effective on the particular day.

Cancellation on notice
(9) The Minister may, after giving a person that is registered under this Subdivision reasonable written notice, cancel
the registration of the person if the Minister is satisfied that the registration is not required under this Subdivision.

Cancellation on request
(10) On request from a person, the Minister shall cancel the registration of the person under this Subdivision if the Min-
ister is satisfied that the registration is not required under this Subdivision.

Cancellation — noti cation

(11) If the Minister cancels the registration of a person under subsection (9) or (10), the Minister shall notify the person
of the cancellation and its effective date.

Public disclosure
(12) Despite section 295, the Minister may make available to the public, in any manner that the Minister considers ap-
propriate, the names of persons registered under this Subdivision (including any trade name or other name used by
those persons), the registration numbers assigned to those persons under this section, the effective date of the registra-
tion and, if a person ceases to be registered under this Subdivision, the date on which the person ceases to be registered.

Speci ed supply — operator

211.13 (1) If a specified supply is made through a specified distribution platform by a specified non-resident supplier
to a specified Canadian recipient and if another person registered under this Subdivision is a distribution platform oper-
ator in respect of the specified supply, then, for the purposes of this Part (other than section 211.1, paragraph
211.12(1)(c) and section 240)

(a) the specified supply is deemed to have been made by the other person and not by the specified non-resident sup-
plier; and

(b) the other person is deemed not to have made a supply to the specified non-resident supplier of services relating to
the specified supply.

Speci ed supply — registered operator

(2) If a specified supply is made through a specified distribution platform by a specified non-resident supplier, if anoth-
er person that is registered under Subdivision D of Division V, or that carries on a business in Canada, is a distribution
platform operator in respect of the specified supply and if, in the absence of section 143, the specified supply would have
been a supply made in Canada, the following rules apply:

(a) if the other person is registered under Subdivision D of Division V, for the purposes of this Part (other than sec-
tion 211.1, paragraph 211.12(1)(c) and section 240)

(i) the specified supply is deemed to have been made by the other person and not by the specified non-resident
supplier, and
 (ii) the other person is deemed not to have made a supply to the specified non-resident supplier of services relating
to the specified supply; and

(b) in any other case, for the purposes of sections 148 and 249, the specified supply is deemed to have been made by
the other person and not by the specified non-resident supplier.

Accommodation — operator
(3) If a particular supply that is a taxable supply of short-term accommodation situated in Canada is made through an
accommodation platform by a particular person that is not registered under Subdivision D of Division V, if another per-
son that is registered under this Subdivision is an accommodation platform operator in respect of the particular supply
and if the recipient has not provided to the other person evidence satisfactory to the Minister that the recipient is regis-
tered under Subdivision D of Division V, then, for the purposes of this Part (other than sections 148 and 211.1, paragraph
211.12(1)(d) and sections 240 and 249)

(a) the particular supply is deemed to have been made by the other person and not by the particular person; and

(b) the other person is deemed not to have made a supply to the particular person of services relating to the particular
supply.

Accommodation — registered operator

(4) If a particular supply that is a taxable supply of short-term accommodation situated in Canada is made through an
accommodation platform by a particular person that is not registered under Subdivision D of Division V and if another
person that is registered under that Subdivision, or that carries on a business in Canada, is an accommodation platform
operator in respect of the particular supply, then, for the purposes of this Part (other than for the purposes of applying
sections 148 and 249 in respect of the particular person and other than for the purposes of section 211.1, paragraph
211.12(1)(d) and section 240)

(a) the particular supply is deemed to have been made by the other person and not by the particular person; and

(b) the other person is deemed not to have made a supply to the particular person of services relating to the particular
supply.

Joint and several, or solidary, liability

(5) If a particular person that is deemed under paragraph (1)(a), subparagraph (2)(a)(i) or paragraph (3)(a) or (4)(a) not
to have made a supply made a false statement to another person that is deemed under paragraph (1)(a), subparagraph
(2)(a)(i) or paragraph (3)(a) or (4)(a), as the case may be, to have made the supply and if the false statement is relevant
to the determination of whether the other person is required to collect tax in respect of the supply or the determination
of the amount of tax that the other person is required to collect in respect of the supply, the following rules apply:

(a) the particular person and the other person are jointly and severally, or solidarily, liable for all obligations under
this Part (in this subsection referred to as the “obligations in respect of the supply”) that arise upon or as a conse-
quence of

(i) the tax in respect of the supply becoming collectible by the other person, and

(ii) a failure to account for or pay as and when required under this Part an amount of net tax of the other person,
or an amount required under section 230.1 to be paid by the other person, that is reasonably attributable to the
supply;

(b) the Minister may assess the particular person for any amount for which the particular person is liable under this
subsection and sections 296 to 311 apply with any modifications that the circumstances require; and

(c) if the other person did not know and could not reasonably be expected to have known that the particular person
made a false statement and if the other person relied in good faith on the false statement and, because of such re-
liance, did not charge, collect or remit all the tax in respect of the supply that the other person was required to charge,
collect or remit, despite section 296, the Minister is not to assess the other person for any obligations in respect of the
 supply in excess of the obligations in respect of the supply that arise upon or as a consequence of the other person
having charged, collected or remitted an amount of tax in respect of the supply.

Supply — Canada
211.14 (1) For the purposes of this Part and despite paragraphs 136.1(1)(d) and (2)(d), subsection 142(2) and section
143, if a person registered under this Subdivision makes a specified supply to a specified Canadian recipient, or makes a
Canadian accommodation related supply to a recipient that has not provided to the person evidence satisfactory to the
Minister that the recipient is registered under Subdivision D of Division V, the supply is deemed to be made in Canada
and, in the case of a Canadian accommodation related supply that is included in Schedule VI, the supply is deemed not
to be included in that Schedule.

Supply — Canada
(2) For the purposes of this Part and despite paragraph 136.1(2)(d), subsection 142(2) and section 143, if a person regis-
tered under Subdivision D of Division V or carrying on a business in Canada makes a Canadian accommodation related
supply, the supply is deemed to be made in Canada and, if the supply is included in Schedule VI, the supply is deemed
not to be included in that Schedule.

Speci ed supply — participating province

(3) For the purposes of this Part and despite section 144.1, if a specified supply (other than a supply of intangible per-
sonal property, or a service, that relates to real property) is deemed to be made in Canada under subsection (1), the fol-
lowing rules apply:

(a) if the usual place of residence of the specified Canadian recipient is situated in a participating province, the supply
is deemed to be made in the participating province; and

(b) in any other case, the supply is deemed to be made in a non-participating province.

Canadian accommodation related supply — participating province

(4) For the purposes of this Part and despite section 144.1, if a Canadian accommodation related supply is deemed to be
made in Canada under subsection (1) or (2), the supply is deemed to be made in the province in which the accommoda-
tion is situated.

Billing agent
211.15 For the purposes of this Part, if a particular person that is registered under this Subdivision makes an election
in respect of a supply under subsection 177(1.1) with a registrant described in subsection 177(1.11), the registrant is
deemed not to have made a supply to the particular person of services of acting as an agent described in subsection
177(1.11) in respect of the supply.

Disclosure of tax
211.16 A person registered under this Subdivision that is required under section 221 to collect tax in respect of a supply
shall indicate to the recipient, in a manner satisfactory to the Minister,

(a) the consideration paid or payable by the recipient for the supply and the tax payable in respect of the supply; or

(b) that the amount paid or payable by the recipient for the supply includes the tax payable in respect of the supply.

Restrictions
211.17 (1) No amount of an input tax credit, rebate, refund or remission under this or any other Act of Parliament
shall be credited, paid, granted or allowed to the extent that it can reasonably be regarded that the amount is deter-
mined, directly or indirectly, in relation to an amount that is collected as or on account of tax, or in relation to an
amount of tax that is required to be collected, by a person that is registered or required to be registered under this Subdi-
vision.
Exception
(2) Subsection (1) does not apply

(a) to a rebate, refund or remission in relation to an amount that a person may

(i) deduct under subsection 231(1), 232(3) or 234(3) in determining the net tax of the person for a reporting period
of the person,

(ii) claim as a rebate under section 259 or 259.1, or

(iii) claim as a rebate under section 261 in respect of an amount that is collected as or on account of tax from the
person at a time when the person is not registered under Subdivision D of Division V;

(b) for the purposes of subsections 232(1) and (2); and

(c) for prescribed purposes.

Return
211.18 (1) Despite subsection 238(2), every person registered under this Subdivision shall file a return with the Minis-
ter by way of electronic filing for each reporting period of the person within one month after the end of the reporting
period.

Reporting period
(2) Despite sections 245 and 251 and subject to subsections (3) and (4), the reporting period of a person registered under
this Subdivision is a calendar quarter.

Becoming registered
(3) If a person becomes registered under this Subdivision on a particular day, the following periods are deemed to be
separate reporting periods of the person:

(a) the period beginning on the first day of the reporting period of the person, otherwise determined under section
245, that includes the particular day and ending on the day immediately preceding the particular day; and

(b) the period beginning on the particular day and ending on the last day of the calendar quarter that includes the
particular day.

Cessation of registration
(4) If a person ceases to be registered under this Subdivision on a particular day, the following periods are deemed to be
separate reporting periods of the person:

(a) the period beginning on the first day of the calendar quarter that includes the particular day and ending on the
day immediately preceding the particular day; and

(b) the period beginning on the particular day and ending on the last day of the reporting period of the person, other-
wise determined under section 245, that includes the particular day.

De nition of qualifying foreign currency

211.19 (1) In this section, qualifying foreign currency means the U.S. dollar, the euro or another foreign currency
that the Minister may specify.

Manner of payment
(2) Every person that is registered or required to be registered under this Subdivision and that is required under subsec-
tion 278(2) to pay or remit an amount to the Receiver General shall pay or remit that amount in the manner determined
by the Minister.
Non application — subsection 278(3)
(3) Subsection 278(3) does not apply in respect of an amount that a person that is registered or required to be registered
under this Subdivision is required under this Part to pay or remit to the Receiver General.

Foreign currency — no designation

(4) Despite section 159 and subject to subsection (7), if tax is collected, or required to be collected, in respect of a supply
made by a person that is registered or required to be registered under this Subdivision and if the value of the considera-
tion for the supply is expressed in a foreign currency, the consideration is to be converted into Canadian currency using
the exchange rate applicable on the last day of the reporting period in which the tax is collected or required to be collect-
ed, as the case may be, or using any other conversion method that the Minister may allow.

Foreign currency — application

(5) A person registered under this Subdivision may apply to the Minister, in prescribed form containing prescribed in-
formation and filed in prescribed manner with the Minister, to be designated as a person eligible to determine the net
tax for a reporting period of the person in a qualifying foreign currency. The Minister may require that the application be
filed by way of electronic filing.

Foreign currency — authorization

(6) If the Minister receives an application of a person under subsection (5), the Minister may, subject to such conditions
as the Minister may at any time impose, designate the person as a person eligible to determine the net tax for a reporting
period of the person in the qualifying foreign currency indicated by the Minister.

Foreign currency — designated persons

(7) Despite section 159, if a person is designated under subsection (6) in respect of a reporting period of the person, the
following rules apply in respect of the reporting period:

(a) the net tax for the reporting period is to be determined in the return for that reporting period in the qualifying
foreign currency indicated by the Minister;

(b) any amount to be remitted or paid by the person to the Receiver General in respect of the reporting period is to be
remitted or paid in the qualifying foreign currency indicated by the Minister; and

(c) any amount that is required to be converted into the qualifying foreign currency indicated by the Minister for the
purposes of determining the net tax for the reporting period, or for the purposes of determining any other amount to
be remitted or paid to the Receiver General in respect of the reporting period, is to be converted into that qualifying
foreign currency using the exchange rate applicable on the last day of the reporting period or using any other conver-
sion method that the Minister may allow.

Prohibition
211.2 No person shall, in respect of a supply of property or a service made to a particular person who is a consumer of
the property or service, provide to another person that is registered or required to be registered under this Subdivision
evidence that the particular person is registered under Subdivision D of Division V.

Information return — accommodation platform operator

211.21 A person (other than a prescribed person) that, at any time during a calendar year, is registered or required to
be registered under this Subdivision or is a registrant and that is an accommodation platform operator in respect of a
supply of short-term accommodation situated in Canada made in the calendar year shall file with the Minister an infor-
mation return for the calendar year, in prescribed form containing prescribed information, before July of the following
calendar year. The Minister may require that the information return be filed by way of electronic filing.
Tangible Personal Property

De nition of speci ed recipient

211.22 (1) In this section, speci ed recipient, in respect of a supply of property, means a person (other than a non-
resident person that is not a consumer of the property) that is the recipient of the supply and that is not registered under
Subdivision D of Division V.

Registration required
(2) Every person that is a non-resident person that does not at any time make supplies in the course of a business car-
ried on in Canada or a distribution platform operator in respect of a supply made at any time is required at that time to
be registered under Subdivision D of Division V if, for any period of 12 months (other than a period that begins before
July 2021) that includes that time, the amount determined by the following formula is greater than $30,000:
A+B
where
A is the total of all amounts, each of which is an amount that is, or that could reasonably be expected to be, the value of
the consideration for a taxable supply that is, or that could reasonably be expected to be, a qualifying tangible per-
sonal property supply made during that period by the person to a specified recipient (other than a supply deemed to
have been made by the person under subparagraph 211.23(1)(a)(i)); and
B is
(a) if the person is a distribution platform operator in respect of a qualifying tangible personal property supply
made during that period through a specified distribution platform, the total of all amounts, each of which is an
amount that is, or that could reasonably be expected to be, the value of the consideration for a supply that is, or
that could reasonably be expected to be, a qualifying tangible personal property supply made during that period
through the specified distribution platform to a specified recipient and in respect of which any person is a distri-
bution platform operator, and
(b) in any other case, zero.

Qualifying supply — operator

211.23 (1) If a particular supply that is a qualifying tangible personal property supply is made through a specified dis-
tribution platform by a particular person that is not registered under Subdivision D of Division V and if another person
that is registered under Subdivision D of Division V, or is carrying on a business in Canada, is a distribution platform
operator in respect of the particular supply, the following rules apply:

(a) for the purposes of this Part (other than for the purposes of applying sections 148 and 249 in respect of the partic-
ular person and other than for the purposes of section 211.1, paragraph (a) of the description of B in subsection
211.22(2) and section 240)

(i) the particular supply is deemed to have been made by the other person and not by the particular person, and

(ii) the particular supply is deemed to be a taxable supply;

(b) for the purposes of this Part (other than sections 179 and 180), the other person is deemed not to have made a
supply to the particular person of services relating to the particular supply; and

(c) if the other person is registered under Subdivision D of Division V, if the particular person has paid tax under
Division III in respect of the importation of the tangible personal property, if no person is entitled to claim an input
tax credit or a rebate under this Part in respect of the tax in respect of the importation, if no person is deemed under
section 180 to have paid tax in respect of a supply of the tangible personal property that is equal to the tax in respect
of the importation and if the particular person provides to the other person evidence satisfactory to the Minister that
the tax in respect of the importation has been paid,

(i) for the purposes of determining an input tax credit of the other person, the other person is deemed
 (A) to have paid, at the time the particular person paid the tax in respect of the importation, tax in respect of a
supply made to the other person of the tangible personal property equal to the tax in respect of the importation,
and

(B) to have acquired the tangible personal property for use exclusively in commercial activities of the other per-
son, and

(ii) no portion of the tax in respect of the importation paid by the particular person shall be rebated, refunded or
remitted to the particular person, or shall otherwise be recovered by the particular person, under this or any other
Act of Parliament.

Joint and several, or solidary, liability

(2) If a particular person that is deemed under subparagraph (1)(a)(i) not to have made a supply made a false statement
to another person that is deemed under that subparagraph to have made the supply and if the false statement is relevant
to the determination of whether the other person is required to collect tax in respect of the supply or the determination
of the amount of tax that the other person is required to collect in respect of the supply, the following rules apply:

(a) the particular person and the other person are jointly and severally, or solidarily, liable for all obligations under
this Part (in this subsection referred to as the “obligations in respect of the supply”) that arise upon or as a conse-
quence of

(i) the tax in respect of the supply becoming collectible by the other person, and

(ii) a failure to account for or pay as and when required under this Part an amount of net tax of the other person,
or an amount required under section 230.1 to be paid by the other person, that is reasonably attributable to the
supply;

(b) the Minister may assess the particular person for any amount for which the particular person is liable under this
subsection and sections 296 to 311 apply with any modifications that the circumstances require; and

(c) if the other person did not know and could not reasonably be expected to have known that the particular person
made a false statement and if the other person relied in good faith on the false statement and, because of such re-
liance, did not charge, collect or remit all the tax in respect of the supply that the other person was required to charge,
collect or remit, despite section 296, the Minister is not to assess the other person for any obligations in respect of the
supply in excess of the obligations in respect of the supply that arise upon or as a consequence of the other person
having charged, collected or remitted an amount of tax in respect of the supply.

Joint and several, or solidary, liability

(3) If a particular person provides to another person evidence that tax in respect of an importation has been paid, if the
particular person made a false statement to the other person, if the false statement is relevant to the determination of
whether paragraph (1)(c) is applicable in respect of the importation and if the other person claimed an input tax credit
(in this subsection referred to as the “non-allowable input tax credit”) to which the other person was not entitled but to
which the other person would have been entitled if paragraph (1)(c) were applicable in respect of the importation, the
following rules apply:

(a) the particular person and the other person are jointly and severally, or solidarily, liable for all obligations under
this Part that arise upon or as a consequence of the other person having claimed the non-allowable input tax credit;

(b) the Minister may assess the particular person for any amount for which the particular person is liable under this
subsection and sections 296 to 311 apply with any modifications that the circumstances require; and

(c) if the other person did not know and could not reasonably be expected to have known that the particular person
made a false statement and if the other person relied in good faith on the false statement and, because of such re-
liance, claimed the non-allowable input tax credit, despite section 296, the Minister is not to assess the other person
for any obligations under this Part that arose upon or as a consequence of the other person having claimed the non-
allowable input tax credit.
Noti cation and records — warehouse
211.24 A particular person (other than a prescribed person) that in the course of a business makes one or more partic-
ular supplies of a service of storing in Canada tangible personal property (other than a service that is incidental to the
supply by the particular person of a freight transportation service, as defined in section 1 of Part VII of Schedule VI)
offered for sale by another person that is a non-resident person shall

(a) notify the Minister of this fact, in prescribed form containing prescribed information and filed with the Minister
in prescribed manner, on or before

(i) the day that is

(A) if the particular person makes those particular supplies in the course of a business carried on as of July 1,
2021, January 1, 2022, and

(B) in any other case, six months after the day on which the particular person last began making those particu-
lar supplies in the course of a business, or

(ii) any later day that the Minister may allow; and

(b) in respect of those particular supplies, maintain records containing information specified by the Minister.

Information return — operator

211.25 A person (other than a prescribed person) that is a registrant at any time during a calendar year and that is a
distribution platform operator in respect of a qualifying tangible personal property supply made in the calendar year
shall file with the Minister an information return for the calendar year, in prescribed form containing prescribed infor-
mation, before July of the following calendar year. The Minister may require that the information return be filed by way
of electronic filing.

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021, except that

(a) subsections 211.13(1) to (4) and section 211.14 of the Act, as enacted by subsection (1), apply

(i) in respect of supplies made after June 2021, and

(ii) in respect of supplies made before July 2021 if all or part of the consideration for the supply be-
comes due, or is paid without having become due, after June 2021;

(b) sections 211.21 and 211.25 of the Act, as enacted by subsection (1), apply to 2021 and subsequent cal-
endar years except that, in applying those sections to the 2021 calendar year,

(i) the references to “a calendar year” in those sections are to be read as references to “the period
that begins on July 1, 2021 and ends on December 31, 2021”, and

(ii) the references to “the calendar year” in those sections are to be read as references to “that peri-
od”; and

(c) subsection 211.23(1) of the Act, as enacted by subsection (1), applies

(i) in respect of supplies made after June 2021, and

(ii) in respect of supplies made before July 2021 if all of the consideration for the supply becomes
due, or is paid without having become due, after June 2021.

(3) For the purposes of applying sections 211.12 to 211.14 of the Act, as enacted by subsection (1), in re-
spect of a supply in respect of which subparagraph (2)(a)(ii) applies, the supply is deemed to have been
made on July 1, 2021.
(4) If subparagraph (2)(a)(ii) and subsection 211.13(3) or (4) of the Act, as enacted by subsection (1), ap-
ply in respect of a supply of short-term accommodation and if part of the consideration for the supply
becomes due, or is paid without having become due, before July 2021, for the purposes of Division II of
Part IX of the Act, that part of the consideration shall not be included in calculating the tax payable in
respect of the supply.

(5) If subparagraph (2)(a)(ii) and section 211.14 of the Act, as enacted by subsection (1), apply in respect
of a supply that is a specified supply or a Canadian accommodation related supply, if paragraph
143(1)(c) of the Act does not apply in respect of the supply and if part of the consideration for the supply
becomes due, or is paid without having become due, before July 2021, the following rules apply:

(a) for the purposes of Division II of Part IX of the Act, that part of the consideration is not to be in-
cluded in calculating the tax payable in respect of the supply; and

(b) for the purposes of Division IV of Part IX of the Act,

(i) despite section 211.14 of the Act, as enacted by subsection (1), the supply is deemed to be made
outside Canada, and

(ii) the part of the consideration for the supply that becomes due, or is paid without having become
due, after June 2021 is not to be included in calculating the tax payable in respect of the supply.

(6) For the purposes of applying sections 211.22 and 211.23 of the Act, as enacted by subsection (1), in re-
spect of a supply in respect of which subparagraph (2)(c)(ii) applies, the supply is deemed to have been
made on July 1, 2021.

8 (1) Subsection 240(2) of the Act is replaced by the following:

Non-resident supplier — tangible personal property

(1.5) Despite subsection (1), every person that is required under section 211.22 to be registered under this Subdivision is
required to be registered for the purposes of this Part.

Non-resident performers, etc.

(2) Every person (other than a person registered under Subdivision E of Division II) that enters Canada for the purpose
of making taxable supplies of admissions in respect of a place of amusement, a seminar, an activity or an event is re-
quired to be registered for the purposes of this Part and shall, before making any such supply, apply to the Minister for
registration.

(2) The portion of subsection 240(2.1) of the Act before paragraph (a) is replaced by the following:

Application
(2.1) A person required under any of subsections (1) to (1.2) and (1.5) to be registered must apply to the Minister for
registration before the day that is 30 days after

(3) Subsection 240(2.1) of the Act is amended by striking out “and” at the end of paragraph (a.1) and by
adding the following after that paragraph:

(a.2) in the case of a person required under subsection (1.5) to be registered, the first day on which the person is
required under section 211.22 to be registered under this Subdivision; and

(4) The portion of subsection 240(3) of the Act before paragraph (a) is replaced by the following:

Registration permitted
(3) An application for registration for the purposes of this Part may be made to the Minister by any person that is not
required under subsection (1), (1.1), (1.2), (1.5), (2) or (4) to be registered, that is not required to be included in, or added
to, the registration of a group under subsection (1.3) or (1.4) and that
(5) Subsections (1) to (4) come into force, or are deemed to have come into force, on July 1, 2021.

9 The Act is amended by adding the following after section 285.01:

Penalty
285.02 In addition to any other penalty under this Part, the recipient of a supply of property or a service that evades or
attempts to evade the payment or collection of tax payable by the recipient under Division II in respect of the supply by
providing false information to a particular person that is registered or required to be registered under Subdivision E of
Division II or, if the recipient is a consumer of the property or service, by providing to the particular person evidence
that the recipient is registered under Subdivision D of Division V is liable to pay a penalty equal to the greater of $250
and 50% of the amount of tax that has been evaded or attempted to be evaded.

10 (1) Subsection 286(1) of the Act is replaced by the following:

Keeping books and records

286 (1) Every person that carries on a business or is engaged in a commercial activity in Canada, every person that is
required under this Part to file a return and every person that makes an application for a rebate or refund shall keep all
records that are necessary to enable the determination of the person’s liabilities and obligations under this Part or the
amount of any rebate or refund to which the person is entitled.

Minister may specify information

(1.1) The Minister may specify the form a record is to take and any information that the record shall contain.

Language and location of record

(1.2) Unless otherwise authorized by the Minister, a record shall be kept in Canada in English or in French.

(2) Subsection (1) comes into force, or is deemed to have come into force, on July 1, 2021.

11 (1) The definition business number in subsection 295(1) of the Act is amended by striking out “or” at
the end of paragraph (a) and by adding the following after that paragraph:

(a.1) a person registered under Subdivision E of Division II; or

(2) Paragraph 295(6.1)(a) of the Act is replaced by the following:

(a) the identified person is registered under Subdivision E of Division II or Subdivision D of Division V; and

(3) Subsections (1) and (2) come into force, or are deemed to have come into force, on July 1, 2021.

12 Paragraph 298(1)(e) of the Act is replaced by the following:

(e) in the case of any penalty payable by the person, other than a penalty under section 280.1, 285, 285.01, 285.02 or
285.1, more than four years after the person became liable to pay the penalty;

GST New Housing Rebate Conditions

13 (1) Subsection 262(3) of the Act is replaced by the following:

Group of individuals
(3) If a supply of a residential complex or a share of the capital stock of a cooperative housing corporation is made to
two or more individuals or if two or more individuals construct or substantially renovate, or engage another person to
construct or substantially renovate, a residential complex, the following rules apply in respect of those individuals:

(a) subject to paragraphs (b) and (c), the references in sections 254 to 256 to a particular individual shall be read as
references to all of those individuals as a group;
 (b) the references in paragraphs 254(2)(b), 254.1(2)(b), 255(2)(c), 256(2)(a) and (2.2)(b) to the primary place of resi-
dence of the particular individual or a relation of the particular individual are to be read as references to the primary
place of residence of any of those individuals or a relation of any of those individuals;

(c) the references in clause 254(2)(g)(i)(A), subparagraphs 254.1(2)(g)(i), 255(2)(f)(i) and 256(2)(d)(i) and paragraph
256(2.2)(c) to the particular individual or a relation of the particular individual are to be read as references to any of
those individuals or a relation of any of those individuals; and

(d) only one of those individuals may apply for the rebate under section 254, 254.1, 255 or 256, as the case may be, in
respect of the complex or share.

(2) Subsection (1) applies in respect of

(a) any rebate under subsection 254(2), 254.1(2) or 255(2) of the Act in respect of which the agreement
referred to in paragraph 254(2)(b), 254.1(2)(a) or 255(2)(c) of the Act, as the case may be, is entered in-
to after Budget Day; and

(b) any rebate under subsection 256(2) of the Act

(i) in respect of a residential complex (other than a mobile home or floating home) if the construc-
tion or substantial renovation of the residential complex is substantially completed after Budget
Day, or

(ii) in respect of a mobile home or floating home acquired or imported after Budget Day.

Rebate of Excise Tax for Goods Purchased by Provinces

14 (1) Section 68.19 of the Excise Tax Act is replaced by the following:

Payment — use by province

68.19 (1) If tax under Part III has been paid in respect of any goods that Her Majesty in right of a province has pur-
chased or imported, an amount equal to the amount of that tax shall, subject to this Part, be paid to Her Majesty in right
of the province if Her Majesty in right of the province has purchased or imported those goods for any purpose other than

(a) resale;

(b) use by any board, commission, railway, public utility, university, manufactory, company or agency owned, con-
trolled or operated by the government of the province or under the authority of the legislature or the lieutenant gover-
nor in council of the province; or

(c) use by Her Majesty in right of the province, or by any agents or servants of Her Majesty in right of the province, in
connection with the manufacture or production of goods or use for other commercial or mercantile purposes.

Application
(1.1) No amount shall be paid under subsection (1) in respect of goods purchased or imported by Her Majesty in right of
a province unless an application for the payment is made within two years after Her Majesty in right of the province
purchased or imported those goods.

Election
(1.2) Her Majesty in right of a province and the particular person that is, as the case may require, the importer, trans-
feree, manufacturer, producer, wholesaler, jobber or other dealer in respect of goods that Her Majesty in right of the
province purchases or imports may jointly elect, in prescribed form containing prescribed information, to have the fol-
lowing rules apply in respect of the purchase or importation:

(a) the particular person, and not Her Majesty in right of the province, is entitled to apply for a payment under sub-
section (1) in respect of the purchase or importation; and
 (b) the amount payable by the Minister under subsection (1) in respect of the purchase or importation shall be paid
to the particular person, and not to Her Majesty in right of the province.

Limitation
(1.3) No more than one election under subsection (1.2) may be made by Her Majesty in right of a province in respect of
a particular purchase or importation of goods.

Exception
(2) Subsection (1.2) does not apply in respect of goods purchased or imported by Her Majesty in right of a province at a
time when a reciprocal taxation agreement referred to in section 32 of the Federal-Provincial Fiscal Arrangements Act
is in force in respect of the province.

Non-application of subsection 68.2(1)

(3) For greater certainty, if an application for a payment in respect of goods can be made by any person under subsec-
tion (1), subsection 68.2(1) does not apply in respect of the goods.

(2) Subsection (1) applies in respect of any goods purchased or imported after 2021.

Electronic Filing and Certification of Tax and Information Returns

15 The Act is modified to give effect to the proposals relating to Electronic Filing and Certification of
Tax and Information Returns described in the budget documents tabled by the Minister of Finance in
the House of Commons on Budget Day.

Avoidance of Tax Debts

16 The Act is modified to give effect to the proposals relating to Avoidance of Tax Debts described in the
budget documents tabled by the Minister of Finance in the House of Commons on Budget Day.

Audit Authorities
17 Subsection 98(3) of the Act is replaced by the following:

Inspection
(3) Every person required by subsection (1) to keep records and books of account shall, at all reasonable times, make the
records and books of account and every account and voucher necessary to verify the information therein available to
officers of the Agency and other persons thereunto authorized by the Minister, give them all reasonable assistance to
inspect the records, books, accounts and vouchers and answer all proper questions orally or in writing, in any manner
specified by the officers or the other persons.

18 (1) Subsections 288(1) and (2) of the Act are replaced by the following:

Inspections
288 (1) Subject to subsection (2), an authorized person may, at all reasonable times, for any purpose related to the ad-
ministration or enforcement of this Part,

(a) inspect, audit or examine the documents, property or processes of a person that may be relevant in determining
the obligations of that or any other person under this Part or the amount of any rebate or refund to which that or any
other person is entitled;

(b) enter any premises or place where any business or commercial activity is carried on, where any property is kept,
where anything is done in connection with any business or commercial activity or where any documents are or should
be kept; and
 (c) require the owner or manager of the property, business or commercial activity — and any particular person on
any premises, or in any place, where the business or commercial activity is carried on, where the property is kept,
where anything is done in connection with the business or commercial activity or where any documents are or should
be kept — to give to the authorized person all reasonable assistance and to answer all proper questions relating to the
administration or enforcement of this Part and, for that purpose, the authorized person may require

(i) the owner or manager to attend at the premises or place with the authorized person, and

(ii) the owner, the manager or the particular person to answer those questions orally or in writing, in any manner
specified by the authorized person.

Prior authorization
(2) If any premises or place referred to in subsection (1) is a dwelling-house, an authorized person may not enter that
dwelling-house without the consent of the occupant, except under the authority of a warrant issued under subsection (3).

(2) Paragraph 288(3)(a) of the Act is replaced by the following:

(a) there are reasonable grounds to believe that a dwelling-house is a premises or place referred to in subsection (1),
Notice of Ways and Means Motion to amend the Excise Act, 2001
and Other Legislation
That it is expedient to amend the Excise Act, 2001 and other legislation as
follows:
Excise Duty on Tobacco
1 (1) The definition adjustment day in section 58.1 of the Excise Act, 2001 is amended by striking out “or”
at the end of paragraph (a.1) and by adding the following after that paragraph:

(a.2) the day after Budget Day; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

2 (1) Section 58.2 of the Act is amended by adding the following after subsection (1.1):

Imposition of tax — 2021 increase

(1.2) Subject to section 58.3, every person shall pay to Her Majesty a tax on all taxed cigarettes of the person held at the
beginning of the day after Budget Day at the rate of $0.02 per cigarette.

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

3 (1) Subsection 58.5(1) of the Act is amended by striking out “or” at the end of paragraph (a.1) and by
adding the following after that paragraph:

(a.2) in the case of the tax imposed under subsection 58.2(1.2), June 30, 2021; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

4 (1) Subsection 58.6(1) of the Act is amended by striking out “or” at the end of paragraph (a.1) and by
adding the following after that paragraph:

(a.2) in the case of the tax imposed under subsection 58.2(1.2), June 30, 2021; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

5 (1) Paragraph 1(a) of Schedule 1 to the Act is replaced by the following:

(a) $0.72725; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

6 (1) Paragraph 2(a) of Schedule 1 to the Act is replaced by the following:

(a) $0.14545; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

7 (1) Paragraph 3(a) of Schedule 1 to the Act is replaced by the following:

(a) $9.09062; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.
8 (1) Paragraph 4(a) of Schedule 1 to the Act is replaced by the following:
(a) $31.65673; or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

9 (1) Subparagraph (a)(i) of Schedule 2 to the Act is replaced by the following:

(i) $0.11379, or

(2) Subsection (1) is deemed to have come into force on the day after Budget Day.

Electronic Filing and Certification of Tax and Information Returns

10 The Excise Act, 2001 is modified to give effect to the proposals relating to Electronic Filing and Certi-
fication of Tax and Information Returns described in the budget documents tabled by the Minister of
Finance in the House of Commons on Budget Day.

11 The Air Travellers Security Charge Act is modified to give effect to the proposals relating to Elec-
tronic Filing and Certification of Tax and Information Returns described in the budget documents
tabled by the Minister of Finance in the House of Commons on Budget Day.

12 The Greenhouse Gas Pollution Pricing Act is modified to give effect to the proposals relating to
Electronic Filing and Certification of Tax and Information Returns described in the budget documents
tabled by the Minister of Finance in the House of Commons on Budget Day.

Avoidance of Tax Debts

13 The Excise Act, 2001 is modified to give effect to the proposals relating to Avoidance of Tax Debts de-
scribed in the budget documents tabled by the Minister of Finance in the House of Commons on Budget
Day.

14 The Greenhouse Gas Pollution Pricing Act is modified to give effect to the proposals relating to
Avoidance of Tax Debts described in the budget documents tabled by the Minister of Finance in the
House of Commons on Budget Day.

Audit Authorities
15 (1) The portion of subsection 260(2) of the Excise Act, 2001 before paragraph (a) is replaced by the
following:

Powers of of cer
(2) The officer may, at all reasonable times, for any purpose related to the administration or enforcement of this Act

(2) Paragraphs 260(2)(b) and (c) of the Act are replaced by the following:

(b) stop a conveyance or direct that it be moved to a place where an inspection or examination may be performed;

(c) require any individual to be present during an inspection, audit or examination, require any individual to answer
all proper questions orally or in writing, in any manner specified by the officer and require any individual to give to
the officer all reasonable assistance;

16 (1) The portion of subsection 70(2) of the Air Travellers Security Charge Act before paragraph (a) is
replaced by the following:
Powers of authorized person
(2) The authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of
this Act

(2) Paragraph 70(2)(b) of the Act is replaced by the following:

(b) require any individual to be present during an inspection, audit or examination, require any individual to give to
the authorized person all reasonable assistance and require any individual to answer all proper questions orally or in
writing, in any manner specified by the authorized person.

17 (1) The portion of subsection 141(2) of the Greenhouse Gas Pollution Pricing Act before paragraph
(a) is replaced by the following:

Powers of authorized person

(2) The authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of
this Part

(2) Paragraph 141(2)(b) of the Act is replaced by the following:

(b) require any individual to be present during an inspection, audit or examination, require any individual to answer
all proper questions orally or in writing, in any manner specified by the authorized person and require any individual
to give to the authorized person all reasonable assistance.

Excise Duty on Vaping Products

18 The Excise Act, 2001 is modified to give effect to the proposals relating to Excise Duty on Vaping
Products described in the budget documents tabled by the Minister of Finance in the House of Com-
mons on Budget Day.
Notice of Ways and Means Motion to introduce an Act to implement
a Tax on Select Luxury Goods
That it is expedient to introduce an Act to give effect to the proposals relating to
the Tax on Select Luxury Goods described in the budget documents tabled by
the Minister of Finance in the House of Commons on Budget Day.

1
Draft Amendments to
Various Regulations
Draft Amendments to Various GST/HST Regulations
Input Tax Credit Information Requirements
Input Tax Credit Information (GST/HST) Regulations
1 The definition intermediary in section 2 of the Input Tax Credit Information (GST/HST) Regulations
is replaced by the following:

intermediary of a person, means, in respect of a supply made by the person, a registrant

(a) that, acting as agent of the person or under an agreement with the person, causes or facilitates the making of the
supply, or

(b) that is deemed under subsection 177(1.11) of the Act to have acted as agent of the person in making the supply;
(intermédiaire)

2 (1) The portion of paragraph 3(a) of the Regulations before subparagraph (i) is replaced by the fol-
lowing:

(a) where the total amount paid or payable shown on the supporting documentation in respect of the supply or, if the
supporting documentation is in respect of more than one supply, the supplies, is less than $100,

(2) The portion of paragraph 3(b) of the Regulations before subparagraph (i) is replaced by the follow-
ing:

(b) where the total amount paid or payable shown on the supporting documentation in respect of the supply or, if the
supporting documentation is in respect of more than one supply, the supplies, is $100 or more and less than $500,

(3) The portion of paragraph 3(c) of the Regulations before subparagraph (i) is replaced by the follow-
ing:

(c) where the total amount paid or payable shown on the supporting documentation in respect of the supply or, if the
supporting documentation is in respect of more than one supply, the supplies, is $500 or more,

3 Sections 1 and 2 are deemed to have come into force on the day after Budget Day.

GST New Housing Rebate Conditions

New Harmonized Value-added Tax System Regulations, No. 2
4 Section 40 of the New Harmonized Value-added Tax System Regulations, No. 2 is replaced by the fol-
lowing:

Group of individuals
40 If a supply of a residential complex or a share of the capital stock of a cooperative housing corporation is made to
two or more individuals or if two or more individuals construct or substantially renovate, or engage another person to
construct or substantially renovate, a residential complex, the following rules apply in respect of those individuals:

(a) subject to paragraphs (b) and (c), the references in sections 41, 43, 45 and 46 and the references in section 256.21
of the Act to an individual are to be read as references to all of those individuals as a group;

1
 (b) the references in subsection 41(2) and paragraphs 45(2)(a), 46(2)(a) and 46(5)(c) to the primary place of residence
of an individual or a relation of the individual are to be read as references to the primary place of residence of any of
those individuals or a relation of any of those individuals;

(c) the reference in paragraph 46(5)(d) to the particular individual or a relation of the particular individual is to be
read as a reference to any of those individuals or a relation of any of those individuals; and

(d) only one of those individuals may apply for a rebate under subsection 256.21(1) of the Act in respect of the com-
plex or share, the amount of which is determined under section 41, 43, 45 or 46.

5 Section 4 applies in respect of

(a) any rebate under subsection 256.21(1) of the Excise Tax Act, the amount of which is determined
under subsection 41(2), 43(1) or 45(2) of the Regulations, in respect of which the agreement referred
to in paragraph 254(2)(b), 254.1(2)(a) or 255(2)(c) of that Act, as the case may be, is entered into after
Budget Day; and

(b) any rebate under subsection 256.21(1) of the Excise Tax Act, the amount of which is determined
under subsection 46(2) of the Regulations

(i) in respect of a residential complex (other than a mobile home or floating home) if the construc-
tion or substantial renovation of the residential complex is substantially completed after Budget
Day, or

(ii) in respect of a mobile home or floating home acquired, imported or brought into a participat-
ing province after Budget Day.

2
Annex 7
Consultations on Other Tax Measures:
Supplementary Information
Overview
This annex provides detailed information on the Digital Services Tax proposed in
the Budget and invites input from stakeholders. It also provides information
about the proposed Tax on Unproductive Use of Canadian Housing by Foreign
Non-resident Owners, including plans for consultation.

The costing for the measures in this annex is presented in Table 1 – Cost of
Proposed Tax Measures in Annex 6.

Digital Services Tax

Context
Digital technology has resulted in the development of new business models and
ways of creating value. In the digital economy, data is a key commodity and the
collection, processing and monetization of data is a key commercial activity. New
business models have developed involving online platforms that attract users
through certain service offerings, collect data and content contributions from the
users, and then monetize that data and content in order to earn a profit.
Examples of such business models include:

 social media platforms and search engines that earn revenue from
advertising that they target based on data they have gathered about their
users’ interests; and
 intermediation platforms that create online markets for sellers and buyers of
goods or services (e.g., taxi rides, short-term accommodations), exchange
information across the platform about those on the other side of the market
and facilitate transactions between them.
In these business models, the users are not mere customers of the platform or
passive recipients of its services. The active participation of users, in interacting
with the platform and providing data and content contributions, is a key
contributor to the product offering of the platform. This user participation is a
key input in the platform business’s production process in a way similar to labour
and physical capital in a more traditional business. For example:

 a search engine cannot earn advertising revenue without users to view

ads and provide information allowing those ads to be targeted; and

Consultations on Other Tax Measures: Supplementary Information 731

 an accommodation platform cannot facilitate transactions without
information about available apartments to share with potential renters
and information about renters seeking premises to share with
apartment providers.
Current tax systems, however, were generally designed for a bricks-and-mortar
economy and effectively assume that value is created only in places where
physical resources, like employees, facilities and equipment, are located. Given
their reliance on digital technology, businesses of this type do not require a local
physical presence in order to engage with users and collect their data and
content. These businesses nevertheless can reasonably be considered to be
conducting this part of their value-creating activity, even if it is controlled
remotely, in the location of the users. This activity, however, is not always subject
to local tax under current rules.

Since user-intensive commercial activity of this kind is dominated by businesses

that are multinational in scope, this issue would be best addressed multilaterally.
To this end, the international community has been discussing possible
approaches for a number of years. In the project on Base Erosion and Profit
Shifting (BEPS) undertaken by the members of the Organisation for Economic Co-
operation and Development (OECD) and the G20 from 2013 to 2015, digital
economy challenges were designated as Action 1 of the 15 action items. No
agreement, however, was reached under Action 1 on a common approach with
respect to corporate-level tax. Intensive discussions on the challenges of
digitalization re-started in 2017 through the OECD-led Inclusive Framework on
BEPS (which now has 139 member jurisdictions). Due to the inability to reach
consensus, however, in October 2020 the target date for agreement was deferred
to mid-2021.

Canada has a strong preference for a multilateral approach and so continues to

work actively toward this goal with our international partners. However, there
have been delays in reaching agreement and there is uncertainty about when an
eventual agreed approach will come into effect. The government therefore
proposes to implement an interim measure.

Proposed Measure
As announced in the November 2020 Fall Economic Statement, Budget 2021
proposes to implement a Digital Services Tax (DST). The proposed tax is intended
to ensure that revenue earned by large businesses – foreign or domestic – from
engagement with online users in Canada, including through the collection,
processing and monetizing of data and content contributions from those users, is
subject to Canadian tax. The DST is intended to be interim in nature – it would
apply as of January 1, 2022 until an acceptable multilateral approach comes into
effect with respect to the implicated businesses.

732 Annex 7
The proposed tax would have the following key features.

 Rate and Base: The DST would apply at a rate of 3 per cent on revenue from
certain digital services reliant on the engagement, data and content
contributions of Canadian users. For greater certainty, revenue would not
include any applicable value-added tax or sales tax amounts collected on the
revenue transaction.
 In-Scope Revenue: The DST would apply to revenue from online business
models in which the participation of users, including by the provision of data
and content contributions, is a key value driver. Specifically, it would apply to
revenue from:
 Online marketplaces: Services provided through an online marketplace
that helps match sellers of goods and services with potential buyers,
whether or not the platform facilitates completion of the sale. Included
would be optional (e.g., “premium”) services that enhance the basic
intermediation function or affect its commercial terms. This category
would not generally include:
 revenue in respect of the storage or shipping of tangible goods sold
through the marketplace, to the extent the revenue reflects a
reasonable rate of compensation for those services;
 the sale of goods and services (including the sale, licensing or
streaming of digital content such as audio, video, games, software, e-
books, newspapers and magazines) by a seller on its own account;
and
 trading in financial instruments and commodities.
 Social media: Services provided through an online interface to facilitate
interaction between users or between users and user-generated content.
This category would not generally include an interface of which the sole
purpose is to provide communications services (such as telephone
service through Voice over Internet Protocol).
 Online advertising: Services aimed at the placing of online advertisements
that are targeted based on data gathered from users of an online
interface. This would include online interfaces such as online
marketplaces, social media platforms, internet search engines, digital
content streaming services, and online communications services.
Advertisements would include preferential search listings. The scope
would encompass both revenue earned by an interface operator from the
display of advertising on the interface as well as revenue earned from
systems for facilitating online advertising placement by third parties
(including demand-side platforms, supply-side platforms, ad exchanges
and advertising performance monitoring services).

Consultations on Other Tax Measures: Supplementary Information 733

  User data: The sale or licensing of data gathered from users of an online
interface, including anonymized and aggregated data.
 Taxpayers:
 Thresholds: The DST would apply to businesses organized under various
forms including corporations, trusts and partnerships. The DST would
apply in a particular calendar year to an entity that meets, or is a member
of a business group that meets, both of the following thresholds:
 global revenue from all sources of €750 million or more (the threshold
for country-by-country reporting under an OECD standard) in the
previous calendar year; and
 in-scope revenue associated with Canadian users of more than
$20 million in the particular calendar year.
For such entities or groups, the DST would apply only to in-scope revenue
associated with Canadian users in excess of the $20 million threshold.

 Group-level calculation: Group-level calculation of thresholds is important

because a firm’s administrative capacity is linked to its overall size and the
revenue-generating activities linked to Canadian users may be dispersed
across multiple entities in a business group. It is anticipated that groups
will generally be defined in the same manner as for country-by-country
reporting.
 Large firms: Large firms are the focus of the proposed tax for several reasons.
 Successful leveraging of user participation, data and content as a key
value creation method in an online platform involves significant
economies of scale and important network effects. Users are attracted
by the presence of other users with whom they can interact, so market
share tends to gravitate toward platforms that attract large user
groups. Larger platforms thus tend to have a greater ability to generate
value from user engagement.
 Larger, more mature firms are more likely to be profitable and able to
bear the burden of a tax on revenue, which is not sensitive to
profitability. Exclusion from the tax of smaller firms, from all countries,
will help ensure that smaller, less mature and growing firms, which are
less likely to be profitable, are not prejudiced in their ability to compete
against larger, more established firms.
 Large firms are better able to manage the burden of compliance
associated with a new tax and can absorb the relevant costs over a
larger amount of revenue. The relative costs of administration for
government are also proportionately smaller relative to the tax revenue
for larger firms. In particular, the costs of administering a tax applicable
to large numbers of smaller firms, many of which have little or no local
physical presence, would be inordinate.

734 Annex 7
 Revenue Sourcing: When revenue of an entity is contractually related
to both activities within the scope of the DST and other activities, the
in-scope revenue would need to be determined on a reasonable basis.
In determining an entity’s in-scope revenue associated with users in
Canada (as opposed to users in another jurisdiction), two general
methods would be used. Where it is possible to trace revenues to
relevant users in Canada on the basis of transactional information, such
tracing would be required. Where such tracing is not possible, a
specified formulaic allocation would be required. Revenue sourcing
principles would vary according to the nature of the revenue.
 Online marketplaces: Fee revenue of online marketplaces would
generally be sourced to the locations of the users who interact
through the interface.
 Transactional: Fee revenue associated with a particular
transaction between users (e.g., a fee set as a percentage of the
transaction price or as a fixed amount per transaction, or a fee
otherwise set for a particular transaction) would generally be
considered to be sourced 50:50 to the locations of the buyer
and seller. This allocation recognizes that regardless of the legal
arrangement for payment of the fee, the intermediation service
of the marketplace is reliant on the engagement and data
contributions of both parties. However, where the transaction is
an arrangement for the performance of a tangible service in a
particular location (e.g., accommodations, food delivery, taxi
ride), the revenue would be sourced to the location where the
service is performed.
 Non-transactional: Fee revenue that is not associated with a
particular transaction (e.g., interface subscription fees) and
revenue from advertising goods or services listed for sale on
the marketplace would be sourced to the locations of the
interface users on a formulaic basis. The revenue associated
with users in Canada would be considered to be equal to the
total of the relevant revenue multiplied by the ratio of the
number of marketplace transaction participants in Canada to
the total number of transaction participants. For this purpose,
the buyer and seller in a transaction would each be considered
a “transaction participant” and a participant would be counted
each time it participates in a transaction. This allocation reflects
the fact that non-transactional interface fees are generally paid
for the ultimate purpose of concluding transactions with other
interface users, even if those users cannot be identified at the
time the fee is paid.

Consultations on Other Tax Measures: Supplementary Information 735

  Social media: Fee revenue of social media interfaces (e.g., interface
subscription fees) would be sourced to the locations of the interface
users on a formulaic basis. The revenue associated with users in
Canada would be considered to be equal to the total of the relevant
revenue multiplied by the ratio of the number of active users of the
interface that are users in Canada to the total number of active
users in all locations. This allocation reflects the fact that interface
fees are generally paid for the purpose of facilitating interactions
with other interface users, including those who do not pay fees.
 Online advertising: Online advertising revenue would generally be
sourced based on the location of the user who views, listens to,
clicks on, or otherwise consumes the advertisement. This user
would often be the same user whose data has been used to target
the advertisement. As an exception, revenue of an online
marketplace from advertising goods or services listed for sale on
the marketplace would be sourced using the formula applicable to
non-transactional marketplace fee revenue (outlined above).
Outside of this exception, advertising revenue would be sourced
using tracing or a formulaic basis, according to the circumstances.
 Tracing: Advertising revenue would be required to be traced to
viewers in Canada where possible. For example, this would
include revenue from a series of advertisements that is shown
all or substantially all (generally 90 per cent or more) to viewers
in Canada and revenue from individual advertisements that are
shown to viewers in Canada (e.g., where advertising fees are
contractually charged on the basis of a user viewing or clicking
on the advertisement or taking some other action).
 Formula: Where under a contract advertising revenue
associated with users in Canada and other jurisdictions is not
separately identifiable, revenue associated with users in Canada
would be considered to be equal to the total contract revenue
multiplied by the ratio of the number of advertisement views by
viewers in Canada to the total number of advertisement views
by viewers in all locations.
 User data: Revenue from the sale of user data would be sourced
where possible to the location of the user to whom the data relates.
If particular revenue relates to data in respect of both users in
Canada and users in other locations, the revenue associated with
users in Canada would be considered to be equal to the total of the
relevant revenue multiplied by the ratio of the number of users
from which the data was collected that are users in Canada to the
total number of users.

736 Annex 7
 User Location:
 Ordinary location: The determination of whether a user of an
interface is located in Canada or some other country for purposes
of revenue sourcing would generally be based on the ordinary (i.e.,
usual) location of an individual user and the ordinary place of
business of a business user. The determination of the ordinary
location, or ordinary place of business, of a user would be based on
information generally available to the digital service provider. This
would include such indicators as recurring data on device
geolocation or internet protocol (IP) address, billing address,
delivery address (where relevant), and telephone area code.
 Real-time location: By exception, in the cases of advertising targeted
based on the real-time location of a user and the sale of data based
on the real-time location of a user, the real-time location of a user
would be based on device geolocation if available, or other
information if not.
 Consistency: Firms would be expected to use a consistent approach
in determining user location, though different approaches might be
used for different services depending on differences in data
availability.
 Treatment for Income Tax Purposes: As with other non-income taxes,
the deductibility of the DST liability of an entity in computing taxable
income for Canadian income tax purposes would be determined based
on general principles – e.g., whether it is incurred for the purpose of
earning the entity’s income subject to Canadian income tax. DST liability
would not be eligible for a credit against Canadian income tax payable.
 Administration: It is proposed that firms subject to DST be required to
file an annual return following the end of the reporting period, which is
proposed to be the calendar year. It is contemplated that:
 one annual payment would be required after the end of the
reporting period;
 a group would be able to designate an entity to file the DST return
and pay the DST liability on behalf of the group; and
 to facilitate enforcement, each entity in a group would be jointly
and severally liable for DST payable by any other group member.

Coming Into Force

The DST would apply as of January 1, 2022.

Consultations on Other Tax Measures: Supplementary Information 737

Consultation
The government plans to engage with the provinces and territories to discuss the
implications of the DST.

The government welcomes feedback from stakeholders on the proposed

approach to implementing the DST. Interested parties are invited to send written
representations by June 18, 2021 to the Department of Finance Canada, Tax
Policy Branch at: [email protected].

It is anticipated that draft legislation for a new statute implementing the DST
would be released for public comment during summer 2021, taking into account
the feedback received. The legislation would subsequently be included in a bill to
be introduced in Parliament.

738 Annex 7
Tax on Unproductive Use of Canadian Housing by
Foreign Non-resident Owners
Budget 2021 proposes to introduce a new national 1-per-cent tax on the value of
non-resident, non-Canadian owned residential real estate considered to be
vacant or underused. This tax would be levied annually beginning in 2022.

Beginning in 2023, all owners of residential property in Canada, other than

Canadian citizens or permanent residents of Canada, would be required to file an
annual declaration for the prior calendar year with the Canada Revenue Agency
in respect of each Canadian residential property they own. The requirement to
file this declaration would apply irrespective of whether the owner is subject to
tax in respect of the property for the year.

In a declaration in respect of a property, the owner would be required to report

information such as the property address, the property value and the owner’s
interest in the property. The owner may also be eligible to claim in their
declaration an exemption from the tax in respect of a property for the year. An
exemption may be available, for instance, where a property is leased to one or
more qualified tenants in relation to the owner for a minimum period in a
calendar year. Where an exemption in respect of a property for the year is not
available, the owner would be required to calculate the amount of tax owing and
report and remit it to the Canada Revenue Agency by the filing due date.

The failure to file a declaration with respect to a property for a calendar year as
and when required could result in the loss of any available exemptions in respect
of the property for the calendar year. Penalties and interest would also be
applicable and the assessment period would be unlimited.

In the coming months, the government will release a backgrounder to provide

stakeholders with an opportunity to comment on further parameters of the
proposed tax. These parameters would include, for example, the definition of
residential property, the value on which the tax would apply, how the tax would
apply where a property is owned by multiple individuals and/or non-individuals,
potential exemptions and compliance and enforcement mechanisms.
Additionally, the consultation will consider whether, how and when the proposed
tax would apply in smaller, resort and tourism communities.

Consultations on Other Tax Measures: Supplementary Information 739

 Notices of Ways
and Means Motions
Notice of Ways and Means Motion to Introduce an Act to Implement
a Digital Services Tax
That it is expedient to introduce an Act to implement a Digital Services Tax to
give effect to the proposals relating to the Digital Services Tax as described in the
budget documents tabled by the Minister of Finance in the House of Commons
on Budget Day.
Notice of Ways and Means Motion to introduce an Act to implement
a Tax on Unproductive Use of Canadian Housing by Foreign Non-
resident Owners
That it is expedient to introduce an Act to give effect to the proposals relating to
the Tax on Unproductive Use of Canadian Housing by Foreign Non-resident
Owners described in the budget documents tabled by the Minister of Finance in
the House of Commons on Budget Day.