2021 Federal Budget
Today, Deputy Prime Minister and Minister of Finance Chrystia Freeland delivered the 2021 Federal Budget. Read the media release.
Below are highlights, pulled from the government’s release, that are important to our business community.
Support for Business:
- Extension of the Canada Emergency Wage Subsidy (CEWS), Canada Emergency Rent Subsidy (CERS) and lockdown support to September 25, 2021.
- Gradually decrease the rates for CEWS and CERS beginning July 4, 2021, in order to ensure an orderly phase-out of the programs as vaccinations are completed and the economy reopens.
- Provide up to $80 million in 2021-22 for the Community Futures Network of Canada and regional development agencies to extend the application deadline for the Regional Relief and Recovery Fund until June 30, 2021.
- Introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic.
- 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
- Launching the Canada Digital Adoption Program. This program will provide businesses with two streams of support. Eligible businesses will receive micro-grants to help offset the costs of going digital—and provide support to digital trainers from a network of up to 28,000 well trained young Canadians.
- Provide $1.4 billion over four years, starting in 2021-22, to:
- Work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program.
- Provide micro-grants 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.
- Improve the Canada Small Business Financing Program through amendments to the Canada Small Business Financing Act and its regulations. Proposed amendments 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.
Credit Card Transactions:
- Lowering the cost of doing business by reducing credit card transaction fees. 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.
Barriers to Internal Trade:
- 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, that we can work together to reduce them.
- Pursue internal trade objectives through new or renewed discretionary federal transfers to provinces and territories.
Jobs and Growth:
- 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.
- Canada Community Revitalization Fund: Provide $500 million over two years, starting in 2021-22, to the regional development agencies for community infrastructure.
Support for Women in Business:
- 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.
- 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.
- Proposes 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.
- Proposes that Crown corporations will be required to implement gender and diversity reporting, starting in 2022.
Support for Innovation:
- Provide $5 billion over seven years, 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.
- 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.
Click the links below to learn more about these Budget sections: