The 2021 Federal Budget: Key Takeaways

On Monday the Government of Canada presented its first Budget in almost two years. Not only that, it was the first Budget in Canadian history presented by a female Minister of Finance. Yay Canada! Unsurprisingly, the Government’s focus in this Budget was on post-Covid recovery, but this Government takes a pretty broad view of what that means. The first and most important thing about the Budget is that it comes with a lot of goodies for a lot of people and groups:

• $101.4 billion in new spending over three years to fuel the recovery and kick-start the transition to a green economy;
• $17.6 billion for green recovery via land/ocean conservation and exceeding Canada’s climate targets;
• $30 billion over five years and $8.3 billion per year after that to create and sustain a national child care program. Goal is a $10/day child care service by 2025-2026;
• $18 billion to build safer, healthier Indigenous communities;
• Extension of pandemic business and income support measures, such as wage and rent subsidies, through the fall;
• Extension of maximum period of employment insurance sickness benefits, from 15 weeks to 26 weeks;
• Projection of 1 million new jobs created by the end of the year;
• A new $15 federal minimum wage;
• $4.4 billion to help homeowners with green retrofits through interest-free loans of up to $40,000;
• $2.5 billion to build and repair 35,000 housing units for vulnerable Canadians;
• $1 billion for the tourism sector for festivals and cultural events;
• New tax of 10 to 20 per cent for luxury cars and aircraft worth more than $100,000 and luxury boats over $250,000; and
• $236.2 million over five years, and $33.5 million per year afterward, for the departments of National Defence and Veterans Affairs to eliminate sexual misconduct and gender-based violence in the military and to support survivors.

It’s quite a list! And that’s not an accident. Like all budgets, this one was created with a number of goals in mind – some economic, some political. First and foremost, the political goal of this Budget was to not trigger an election. That likely wasn’t the goal when folks started drafting it, but with the spike in Covid cases in Ontario, BC and Alberta, it likely became the goal over the last two weeks. That requires one of two things: either something one of the Parties in the House of Commons could not possibly vote against; or so many things the public will support that voting against the package becomes too difficult for one of the Parties. Hard to argue the laundry list above doesn’t meet that test. When this combines with the announcement by the Bank of Canada two days after the budget that the Bank expects GDP growth in Canada to clock in at a whopping 6.5% in 2021 (up almost 3% from past predictions), and the rapidly increasing pace of vaccine rollouts, an election before Canada Day seems less and less likely and heading to the polls this fall likely feels more daunting all the time for Opposition MPs.