March 2016
2016 Federal Budget Update

2016-03-22 9:40:07 PM


Today Finance Minister Bill Morneau released the 2016 Federal Budget, Growing the Middle Class.  AMCTO will conduct a more thorough analysis of the budget over the coming days and weeks, but here are a few of the highlights: Fiscal Outlook: 

  • Deficit: $29.4 billion for 2016-2017, $29 billion for 2017-2018, slowly dropping to $17.7 billion in 2019-2020
  • Debt: Expected to grow to $113 billion by 2020-2021
  • Debt-to-GDP: The debt-to-GDP ratio will stay more or less flat at approximately 32%
  • Growth: The projected deficit is based on 0.4% on annual growth, much lower than predicted by a number of economists
  • Overall, the budget provided $120 billion over 10 years in infrastructure investment, including public transit, green infrastructure, and affordable housing. Specifically:
    • $11.9 billion for public transit, affordable housing, wastewater systems
    • $3.4 billion in a Public Transit Infrastructure Fund, to upgrade and improve public transit
    • $3.4 billion to upgrade parks, harbours, border crossings, federal airports, and site clean-up (for contaminated areas)
    • $5 billion of phase 1 funding will go towards green infrastructure, with an emphasis on clean water and wastewater management
    • $3.4 billion over five years for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure
    • $4.2 billion is dedicated towards a $4.2 billion Clean Water and Wastewater Fund for water and wastewater infrastructure for provinces, territories, First Nations, and municipalities
Budget 2 Budget 1
  • However, $60 billion of the new infrastructure is backended over the 10 year disbursement period . The funding is split into two phases: the first of which begins this fiscal year and allocates $11.9 billion over the first five years. Phase two will deliver on the "remaining eight years" of the plan and disburse the remaining $60 billion. The details of the second phase won't be revealed until next year.
  • The budget did not include a specific promise for a Canada Infrastructure Bank, however, this could be part of phase 2.
  • Transit funding will be allocated to the provinces and territories based on their share of national transit ridership using 2014 data from the Canadian Urban Transit Association, which will net Ontario 44.01% of funding
  • The government will also accelerate available funding under the New Building Canada Fund
Budget 3 Housing: 
  • Investing $2.3 billion over two years, starting in 2016-17 to give Canadians greater access to social housing, specifically:
    • $2.2 billion to invest in social infrastructure
    • $739 million for First Nations, Inuit and norther housing
    • Doubling current federal funding under the Investment in Affordable Housing initiative
    • $504.4 million over two years starting in 2016-2017 for rent supplements and other measures to foster safe, independent living
    • $200.7 million over two years, staring in 2016-2017 for construction, repair and adaption of affordable housing for seniors
    • $573.9 million over two years, staring in 2016-2017 for energy and water efficiency retrofits and renovations to existing social housing
Budget 4 Homelessness: 
  • $112 million on a homelessness strategy, including the construction of 3,000 shelters for victims of violence
  • $800 million over the next four years to support innovation clusters
  • Reducing the middle class income tax bracket from 22% to 20.5%
  • $8.4 billion for education, housing and clean drinking water for indigenous communities-specifically $2 billion for clean drinking water and $555 million to repair and build new nursing stations on reserves
  • Elimination of the 2% cap on funding First Nations’ programs – resulting in $3.1 billion in new spending on First Nations’ issues from 2016/17 – 2017/18.    Investments will be targeted at education, child services, on-reserve infrastructure, and the National Inquiry into Missing and Murdered Aboriginal Women and Girls.
  • $1.9 bill over five years for arts and culture organizations, including the Canada Council, Telefilm Canada and the National Arts Centre
  • $1 billion over four years to fund clean technology in the forestry, fisheries, mining, energy, and agriculture sectors;
  • $130 million over five years to support clean technology R&D and commercialization generally; and
  • $2 billion over three years for a new Post-Secondary Institutions Strategic Investment Fund – aimed at modernizing campus research and commercialization facilities.
  • $143 million over three years for rail safety and compliance initiatives.

Overall the budget received a favourable reception from municipalities and municipal stakeholders. Budget 6 Budget 7 Budget 8 Budget 5


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