Another Federal Budget has arrived, and contained within the 2022 iteration include historic investments in housing affordability, clean growth, Indigenous reconciliation, critical minerals, intellectual property and cyber security.
Whereas the last year’s Federal Budget was the most extensive in Canadian history in terms of spending, the 2022 Budget instead is more measured in its disbursements.
The Budget contains a total of 209 measures and $15.4 billion (B) in net fiscal impact over the next two years.
The government recognized that mobilizing private finance is key to clean growth through the implementation of a new $1.5 B Canada Growth Fund. The arms-length investment vehicle, with an initial capitalization of $15 B, aims to promote clean growth through targeted investments that reduce greenhouse gases, grow the GDP, and all in the context of an increasingly hostile world.
The Budget also contains over $10 B over the next six years allocated towards affordable housing, focused almost entirely on increasing the housing supply. An additional $4 B is intended for Indigenous housing. These measures are intended to tackle the deteriorating housing affordability problem in Canada.
Notably, the government abandoned its proposal for an innovation agency modeled after the Defense Advanced Research Projects Agency (DARPA) in the U.S. Global Advantage has stated that implementing that model here in Canada would have required an end-to-end examination of Canada’s innovation ecosystem. However, the announcement of the defence-focused $1 B Canada Innovation and Investment Agency – with little details given – suggests the government is interested in further developing R&D in the defence sectors.
Below are some of the key investments and tax measures contained within the 2022 Federal Budget, with proposed spending represented until 2026.
Key R&D/Innovation measures:
- Approximately $3.6 B to support and develop a Canadian critical minerals strategy and world-leading industry
- $1.5 B, and an initial capitalization of $15 B, for the Canada Growth Fund
- $1 B to establish Canada Innovation and Investment Agency to support innovation within the defence and defence manufacturing sector
Key defence measures:
- $6.1 B over 5 years to DND to meet defence priorities, including continental defences, commitments to allies, and for investments in equipment and technology to immediately increase the capabilities of CAF
- $500 M in military aid and other financial assistance to Ukraine
The Budget also contains measures that impact the federal, provincial/territorial and municipal governments, as well as the higher education and private sector.
