2021 Federal Budget

April 2021

2021 Federal Budget

2021-04-20 3:59:20 PM

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Yesterday Canadian Minister of Finance and Deputy Prime Minister Chrystia Freeland presented her first budget and the Federal Government’s first since the start of the pandemic: A Recovery Plan for Jobs, Growth, and Resilience.

Overview

The 2021 Budget addresses three fundamental challenges: finishing the fight against COVID-19, creating jobs and growth, and creating a resilient and inclusive recovery. It includes significant new spending in areas such as childcare, affordable housing, broadband and climate change.

After accounting for 2021 Budget measures, the budgetary balance is expected to show a deficit of $354.2 billion in 2020-21, improving to $154.7 billion in 2021-22, and gradually declining to a deficit of $30.7 billion in 2025-26, or approximately one per cent of GDP.

The federal debt is expected to peak at 51.2 per cent of GDP in 2021-22 before declining to 49.2 per cent of GDP in 2025-26. This balance includes the cost of incremental investments since the 2020 Fall Economic Statement of $101.4 billion, or 4.2 per cent of GDP, over the next three fiscal years.

AMCTO member and municipal interests

As previously announced on March 25, 2021, the 2021 Budget confirms the Government’s proposal to provide $2.2 billion for a one-time top-up to the federal Gas Tax Fund, which would double their commitment to municipalities in 2020-21 as well as to rename the fund to the Canada Community-Building Fund.

Of particular note for the municipal sector and our members, included in the 2021 Budget are the following:

$1 billion over six years, starting in 2021-22 to the Universal Broadband Fund to support a more rapid rollout of broadband projects in collaboration with provinces and other partners;

$1 billion to support the tourism sector, including $200 million for major festivals through Canada’s Regional Development Agencies, $200 million in support for community festivals and $500 million to support tourism-based businesses through a Tourism Relief Fund;

$1.4 billion over 12 years to the Disaster Mitigation and Adaptation Fund, of which $670 million is reserved for small projects between $1 million and $20 million; and

A re-commitment of $15 billion for permanent infrastructure for transit including subway development, fleet electrification and zero-emission transit vehicles.

The 2021 Budget also makes additional commitments under the National Housing Strategy, including a new tax on vacant property owned by non-residents and $300 million in funding in 2021-22 and 2022-23 from the Rental Construction Financing Initiative allocated to support the conversion of vacant commercial property into housing.

AMCTO will continue to review the 2021 Budget and bill in the coming days for impacts to members.