2021 Federal Budget

The ‘2021 Federal Budget: A Recovery for Jobs, Growth, and Resilience’ has been released and it gives businesses historic support to help weather the current health crisis and lay the foundation for a strong and inclusive economic recovery.

Below are highlights from the government’s release that are important to our business community. 

Fiscal Snapshot

  • $101.4 billion in new spending to support the economy.
  • The national deficit is set to hit $354 billion.
  • Expected to drop to $30.7 billion by 2025-26.

As employers and workers continue confronting the headwinds of the pandemic, Budget 2021 commits to extending various business supports:

Job Support

  • Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy to be extended to September 5th, 2021. (The rates for CEWS and CERS will gradually decrease beginning July 4, 2021, in order to ensure an orderly phase-out of the programs as vaccinations are completed and the economy reopens).
  • Introduction of the Canada Hiring Program – $595 million to help businesses both rehire workers and hire new employees. This program will provide eligible employers with up to $1121 per week for employees hired between June 6th to November 20th, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy.
  • Establishing the new Apprenticeship Service, $470 million over three years, to help 55,000 first-year apprentices in construction and manufacturing Red Seal trades.
    • Employers would be eligible to receive up to $5,000 for all first-year apprenticeship opportunities to pay for upfront costs such as salaries and training.
    • This incentive will be doubled to $10,000 for employers who hire those underrepresented, including women, racialized Canadians, and persons with disabilities.
    • Employment Insurance sickness benefits have been extended from 15 weeks to 26 weeks.

Financing for small business and entrepreneurs

When small businesses thrive, communities thrive. Entrepreneurs, particularly women and racialized communities, face several barriers to growth. There is additional access to capital for small business and entrepreneurs through initiatives such as the enhancement of the Canada Small Business Financing Program and resources to support diverse Canadian entrepreneurs.

Capital Investment Support

  • Improving the Canada Small Business Financing Program by increasing annual financing by $560 million to support approximately 2,900 additional small businesses. This includes:
    • Expanding loan class eligibility to include lending against intellectual property and start-up assets and expenses.
    • Increasing the maximum loan amount from $350,000 to $500,000 and extending the loan coverage period from 10 to 15 years for equipment and leasehold improvements
    • Expanding borrower eligibility to include non-profit and charitable social enterprises.
    • Introducing a new line of credit product to help with liquidity and cover short-term working capital needs.
  • The immediate expensing of up to $1.5 million of eligible investments by Canadian-controlled private corporations made on or after Budget Day and before 2024. Eligible investments will cover over 60 percent of capital investments typically made by Canadian-controlled private corporations.
  • Aerospace Regional Recovery Initiative, starting in 2021-22, will invest $250 million to support small and medium-sized firms in improving productivity, strengthening commercialization, and greening their operations and products.
  • Provide up to $80 million in 2021-22 for the Community Futures Network of Canada and regional development agencies to extend the application deadline for the Regional Relief and Recovery Fund until June 30, 2021.

Small Business Growth

  • Canada Technology Adoption Fund will create up to 28,000 jobs for young Canadians and help as many as 160,000 small and medium-sized businesses adopt new digital technologies.
  • $500 million over two years, starting in 2021-22, to the regional development agencies for community infrastructure.

Support for Women in Business

This objective is to promote greater gender, racial, ethnic, and Indigenous diversity among senior ranks of the financial sector, and ensure more Canadians have access to these opportunities.  Child care can act as an economic equalizer to parents and mothers, particularly, women from minority communities. Affordable and accessible child care can help level the economic playing field for families.

  • $30 Billion over 5 years to establish a Canada-wide early learning and child care system.
  • $146.9 million over four years to strengthen the Women Entrepreneurship Strategy. Women entrepreneurs would have greater access to financing, mentorship, and training. Funding would also further support the Women Entrepreneurship Ecosystem Fund and the Women Entrepreneurship Knowledge Hub.
  • The government will work with financial institutions to develop a voluntary code to help support the inclusion of women and other underrepresented entrepreneurs as clients in the financial sector.

Click here for more information: Learn more about support for Women.

Investing in the Green Economy

  • $4.4 billion on a cash basis to help 200,000 households complete deep home retrofits through interest-free loans worth up to $40,000. The program would be available by summer 2021 and is expected to help build Canadian supply chains for energy-efficient products.
  • An additional $5 billion over seven years to the Net Zero Accelerator. This funding will provide up to $8 billion of support for jobs and projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.

Young Canadians

  • $708 million over five years to create at least 85,000 work-integrated learning placements.
  • A wage subsidy of 75% up to $7,500 per as part of the Student Work Placement Program.
  • $109.3 towards the Youth Employment Health Strategy which will result in 30,600 new jobs.
  • $371.8 million in new funding for Canada Summer Jobs in 2022-23 to support approximately 75,000 new job placements in the summer of 2022.

$721 million over the next two years to help connect them with employers and provide them with over 100,000 new job opportunities.

Digital Adoption Program

This is an innovative program that will help create jobs for young people and help small business adopt new digital technologies which will be important to get our economy moving. Eligible businesses will receive micro-grants (by providing $1.4 billion over 4 years, starting in 2021-22) to help offset the costs of going digital—and create training and work opportunities for as many as 28,000 young people to help small- and medium-sized businesses across Canada adopt new technology.

Jobs and Growth

  • Provide $700 million over three years, starting in 2021-22, for the regional development agencies to support business financing. This would position local economies for long-term growth by transitioning to a green economy, fostering an inclusive recovery, enhancing competitiveness, and creating jobs in every corner of the country.

Canada Community Revitalization Fund: Provide $500 million over two years, starting in 2021-22, to the regional development agencies for community infrastructure.

Click here for more information: Support for Job Creation

Support for Innovation

  •  Provide $5 billion over seven years, starting in 2021-22, to the Net Zero Accelerator. Building on the support for the Net Zero Accelerator announced in the strengthened climate plan, this funding would allow the government to provide up to $8 billion of support for projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.
  • Provide $500 million over five years, starting in 2021-22, and $100 million per year ongoing, to expand the Industrial Research Assistance Program to support up to 2,500 additional innovative small and medium-sized firms.

Click here for more information :Learn more about supports for Innovation.

Click here for more information: Learn more about support for Small Business.

Click here for more information: Support for Low-wage Workers

Click here for more information: Support for Tourism, Arts & Culture

Read the media release.