Budget 2021: Address by the Deputy Prime Minister and Minister of Finance
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I would like to begin by taking a moment to mourn the tragedy in Nova Scotia, a year ago yesterday. To the families and friends of the 22 people who were killed, and to all Nova Scotians: We grieve with you.This is also a day when people across Canada are fighting the most virulent wave of the virus we've experienced so far. Health care workers in many provinces are struggling to keep ICUs from overflowing. And millions of Canadians are facing stringent new restrictions.
We are all tired, and frustrated, and even afraid. But we will get through this. We will do it together.
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's 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 and territorial 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 tough, 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 hard-hit businesses rebound quickly.
It means providing support where COVID has struck hardest – to women, to young people, to low-wage workers, and to small and medium-sized businesses, especially in tourism and hospitality.
The final challenge is to build a more resilient Canada; better, more fair, more prosperous, and more innovative.
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 to income top-ups – so the middle class can flourish and more Canadians can join it.
Our elders have been this virus's principal victims. The pandemic has preyed on them mercilessly, ending thousands of lives and forcing all seniors into fearful isolation.
We have 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.
That's why we propose a $3 billion investment to help ensure that provinces and territories provide a high standard of care in their long-term care facilities. And we are delivering today on our promise to increase Old Age Security for Canadians 75 and older.
Our government has been urgently procuring vaccines since last spring – and providing them, at no cost, to Canadians. Today nearly 10 million Canadians have received at least one dose of vaccine. By the end of September, Canada will have received 100 million doses – enough to have every adult Canadian fully vaccinated.
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.
That is why we are rebuilding our national bio-manufacturing capacity, so that we can make these vaccines here in Canada. Canada has brilliant scientists and entrepreneurs. We will support them with an investment of $2.2 billion in bio-manufacturing and life-sciences.
When COVID 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 – like the economic devastation of a flood, blizzard, wildfire or other natural disaster.
That's why an essential part of Canada's fight against COVID has been unprecedented federal support for Canadians and Canadian businesses. We knew Canadians needed a lifeline to get through the COVID storm.
And our approach has worked. Canada's GDP grew by almost 10 per cent in the fourth quarter of last year.
We will continue to do whatever it takes. Our government is prepared to extend support measures, as long as the fight against this virus requires.
As Canada pivots to recovery, our economic plan will, too.
We promised last year 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.
Altogether, we will create nearly 500,000 new training and work experience opportunities for Canadians.
We will fulfill our Throne Speech commitment to create one million jobs by the end of this year.
Some will say our sense of urgency is misplaced. Some will say that we are spending too much.
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 worried you will be laid off in this third wave?
Are you a mother, forced to quit the dream job you fought to get, because there was no way to keep working while caring for your young children?
Did you graduate last spring, and are you still struggling to find work?
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?
If COVID has taught us anything, it's that we're all in this together. Our country cannot prosper if we leave hundreds of thousands of Canadians behind. The world has learned the lesson of 2009 – the cost of allowing economic hardship to fester. In some countries, democracy itself has been threatened by that mistake. We will not let that happen in Canada.
About 300,000 Canadians who had a job before the pandemic are still out of work. More Canadians may lose their jobs in this month's lockdowns.
To support Canadian workers as we fight the third wave, and to provide an economic bridge to a fully recovered economy, we will build on the enhancements we've made during the pandemic.
We will maintain flexible access to EI benefits for another year, until the fall of 2022.
The Canada Recovery Benefit, which we created to support Canadians not covered by EI, will remain in place through September 25 and extend an additional 12 weeks of benefits to Canadians. As our economy fully reopens over the summer, the benefit amount will go to $300 a week, after July 17.
Low-wage workers in Canada work harder than anyone else in this country, for less pay. In the past year they've faced both significant infection risks and layoffs.
And many live below the poverty line, even though they work full-time. We cannot ignore their contribution and their hardship – and we will not.
We propose to expand the Canada Workers Benefit, to invest $8.9 billion over six years in additional support for low-wage workers – extending income top-ups to about a million more Canadians and lifting nearly 100,000 people out of poverty. And this budget will introduce a $15 an hour federal minimum wage.
COVID has exposed the dangerous inadequacy of sickness benefits in Canada. We will do our part and fulfill our campaign commitment by extending the EI sickness benefit from 15 to 26 weeks.
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 keep the rest of us safe.
We cannot, and 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. We will invest $5.7 billion over five years in Canada's youth.
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, while extending the waiver of interest on federal student loans through March 2023. More than 350,000 low-income student borrowers will also have access to more generous repayment assistance.
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 more than two decades. Early learning and child care has long been a feminist issue; COVID has shown us that it is an urgent economic issue, too.
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 child care. 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, Paul Martin and Ken Dryden tried again.
This half-century of struggle is a testament to the difficulty and complexity of the task.
But this time, we're going to do it. This budget is the map and the trailhead.
There is agreement, across the political spectrum, that early learning and child care is the national economic policy we need now.
This is social infrastructure that will drive jobs and growth. This is feminist economic policy. This is smart economic policy. That is why this budget commits up to $30 billion over five years, reaching $9.2 billion every year, permanently, to build a high-quality, affordable and accessible early learning and child care system across Canada.
This is not an effort that will deliver instant gratification. We are building something that, of necessity, must be constructed 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 : Five years from now, parents across the country should have access to high quality early learning and child care, for an average of $10 a day.
I make this promise to Canadians today, speaking as your Finance Minister and as a working mother: We will get it done.
In making this historic commitment, I want to thank the visionary leaders of Quebec, particularly Quebec's feminists, who have shown the rest of Canada the way forward.
This plan will, of course, also provide additional resources to Quebec, which might well use them to further support an early learning and child care system that is already the envy of the rest of Canada, and indeed, much of the world.
Small businesses are the vital heart of our economy, and they have been hardest-hit by the lockdowns.
Healing the wounds of COVID requires a rescue plan for them.
So, 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.
But our government will do much more than execute a rescue.
With this budget, we will make unprecedented investments in Canada's small businesses, helping them invest in new technologies and innovation.
We will invest up to $4 billion to help up to 160,000 small and medium-sized businesses buy and adopt the new technologies they need to grow.
The Canada Digital Adoption Program will also provide 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 program will help Canadian small businesses go digital and become more competitive and efficient.
Increased funding for the Venture Capital Catalyst Initiative will help provide financing to innovative Canadian businesses, so they can grow.
We will also encourage businesses to invest in themselves. We will allow immediate expensing of up to $1.5 million of eligible investments by Canadian-controlled private corporations in each of the next three years. These larger deductions will support 325,000 businesses in making critical investments and will represent $2.2 billion in total savings to them over the next five years.
Building for the future means investing in innovation and entrepreneurs.
So, 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.
In 2021, job growth means green growth.
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. 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.
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, resilient and sustainable economy.
Canada will become more productive and competitive by supplying the green exports the world wants and needs.
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 greenhouse gas emissions, while growing their businesses.
We will propel the green transition through new tax measures, including for zero emissions technology, carbon capture and storage, and green hydrogen.
We are at a pivotal moment in the green 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.
Our growing population is one of our great economic strengths.
And a growing country needs to build. We need to build housing. We need to build public transit. We need to build broadband. We need to build infrastructure. And we will.
We will invest $2.5 billion and reallocate $1.3 billion in existing funding to help build, repair and support 35,000 existing housing units.
And we will support the conversion to housing of the empty office space that has appeared in our downtowns, by reallocating $300 million from the Rental Construction Financing Initiative.
Houses should not be passive investment vehicles for offshore money. They should be homes for Canadian families.
So, on January 1st, 2022, our government will introduce Canada's first national tax on vacant property owned by non-resident, non-Canadians.
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 help to connect rural, remote and Indigenous communities.
Therefore we are committing an additional $1 billion over six years for the Universal Broadband Fund, to accelerate access to high-speed internet in rural and remote communities.
We intend to draw even more talented, highly skilled people to Canada, including international students.
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 Canada's strength.
Our government has made progress in righting the historic wrongs in Canada's relationship with Indigenous Peoples. But we still have a lot of work ahead.
It's important to note that Indigenous Peoples have led the way in battling COVID. Their success is a credit to Indigenous leadership and self-governance.
We will invest more than $18 billion to further narrow gaps between Indigenous and non-Indigenous peoples, support healthy, safe, and prosperous Indigenous communities, and advance reconciliation with First Nations, Inuit, and the Métis Nation.
We will invest more than $6 billion for infrastructure in Indigenous communities, and $2.2 billion to help end the national tragedy of Missing and Murdered Indigenous Women and Girls.
This has been a year 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 each of us bearing our fair share of the collective burden.
That is why, now more than ever, fairness in our tax system 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 ensure that multinational corporations pay their fair share of tax in Canada.
Our government is 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. Meanwhile, this budget reaffirms our government's commitment to impose such a tax unilaterally, until an acceptable multilateral approach comes into effect.
It's also fair to ask those who have prospered in this bleak year to do a little more to help those who still need help. 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.
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. 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 child care, 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, it would be short-sighted of us not to make them.
Second, because our decision last year to support Canadians is already paying off. Decisive 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.
Third, because our government has a plan, and we keep our promises.
We said in the Fall Economic Statement that we would invest 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 $381.6 billion dollars. We've spent less than we provisioned for. Our deficit for 2020-2021 is $354.2 billion, below our forecast.
Finally, and crucially, we can afford this ambitious budget because the investments we propose today are 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.
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 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 investments will permanently boost Canada's economic capacity.
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 promised to invest in workers and their prosperity, in long-term growth for all of us. And we did.
Today, we meet a new challenge, the greatest our country has faced in a generation, with a renewed promise.
Opportunity is coming.
Growth is coming.
Jobs are coming.
After a long, grim year, Canadians are ready to recover and to rebuild.
We will finish the fight against COVID.
We will all get back to work.
We will come roaring back.
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