The Government of Canada presented the 2021 Federal Budget on April 19th and the response from Canadians has been mixed.
The Budget announces unprecedented spending with the goal to defeat COVID-19 and facilitate Canada’s economic recovery. The government intends to spend $77.6 billion over two fiscal years to launch Canada into post-COVID-19 recovery.
But regardless of how many billions of dollars are thrown at new programs, not all Canadians are satisfied with the government’s plans.
Investments in Indigenous communities
More than $18 B through five years is pledged to support indigenous communities’ response to COVID-19, improve quality of life, and to narrow the gaps between Indigenous and non-Indigenous peoples. This historic level of investment significantly surpasses previous budgets, but the increased spending was met with some skepticism.
Garry Bailey, President of the Northwestern Territory Métis Nation (NWTMN), noted that “most of the funding seems to go the Métis National Council, which we ’are not affiliated with.” The Congress of Aboriginal Peoples (CAP), which represents non-status and off-reserve First Nations, echoed NWTMN through a press release stating the “distinctions-based” process through which Indigenous funding is allocated favours certain Indigenous organizations over others, and that over 70% of Indigenous people live off-reserve.
CAP’s national vice-chief Kim Beaudin highlighted the problem, claiming that 80–90% of Indigenous peoples living off-reserve are excluded by the current system. In 2016, the Supreme Court ruled that the government has constitutional responsibility for Métis and non-status Indians, but with the government slow to act on the ruling, Bailey says “(NWTMN) end[s] up falling through the cracks.”
Investments in the environment
From the Net Zero Accelerator to corporate tax breaks and interest-free loans for homeowners, the budget intends to support various programs that incentivize the private sector and households to combat climate change. Sahir Khan, co-founder and executive vice-president at the University of Ottawa’s Institute of Fiscal Studies and Democracy praised the potential Budget 2021 holds for helping Alberta: “What we are seeing is support for a transforming economy under a net-zero target.”
However, not everyone is as optimistic as Khan. Tax incentives for zero-emissions technology manufacturers and companies that invest in carbon-capturing technology drew criticism from environmentalists. In its statement, the David Suzuki Foundation opposed the government’s support for carbon capture utilization and storage technology, claiming, “That money would have been better allocated to measures that reduce fossil fuel consumption.” This opinion was shared by Julia Levin, the climate and energy program manager at Environmental Defence, who said “[…] this money may go to support unproven technologies that will delay the transition away from fossil fuels.”
Investments in research and innovation
A primary focus of this year’s federal budget is investing in the private sector with the hopes of accelerating Canada’s recovery. Some requests from industry were met in the budget, notably promoting Canadian intellectual property which Benjamin Bergen, executive director of the Council of Canadian Innovators, called “[…] a smart move for positioning Canada for the digital economy.”
Other private sector requests were not reflected in the Budget. The $84.7–million pledged over five years to procure from businesses run by underrepresented individuals did not meet the hopes of Canadian innovators from the government. No changes were mentioned to Canada’s largest innovation funding program – the Scientific Research and Experimental Development tax incentive program. Financial innovations were also left off the table despite recent industry consultations.
Investments to bolster manufacturing
Budget 2021 produced a mixed reaction within the manufacturing sector. A $7.2 B top-up for the Strategic Innovation Fund, an extension for the Canada Emergency Wage Subsidy, and a boost in skills training through various programs as well as child–care support were among the measures praised by The Canadian Manufacturers and Exporters association (CME). In its statement, CME commended the government “[…] for recognizing the importance of the manufacturing sector and addressing many challenges faced by Canadian manufacturers in today’s budget”.
However, in a counterpoint, Dennis Darby, President and CEO of CME, also asserted that “there is not enough in there to move the needle and drive long-term growth.” Manufacturing represents approximately 10% of Canada’s total GDP. To compete with other countries, the Canadian government must follow its peers and bolster manufacturing with significant investments as the pandemic trends downwards.
Darby put it best when he spoke for CME in response to the budget: “Now is not the time for words, but it’s the time to deliver.” The Budget does not contain insights on how it will harmonize the 270 new programs with already existing programs. Government departments, agencies and federally funded not-for-profits must integrate strategies and collaborate with industry, academia and Canadian citizens to implement the newly announced programs and create meaningful impact.