OTTAWA — Canadians could soon be able to put $250 a year toward upgrading their skills, and get help to pay their bills during dedicated time off, because of measures in today's federal budget meant to help workers prepare for shifts in the labour market.
The moves are part of more than $1.7 billion in planned new spending over five years, and hundreds of millions more thereafter, although that appears to fall short of what the government has been told is needed to help workers make decisions about their careers.
The Liberals are proposing to give every Canadian worker earning between $10,000 and about $150,000 a year a $250 refundable tax credit for training that can be saved up over time, a plan that is expected to cost $710 million over the next five years.
The budget says the credit is expected to launch in late 2020 — possibly a year after this fall's federal election — and will apply to the costs of programs at eligible universities, colleges and training institutions.
An affordable place to call home. Good well-paying jobs. A secure retirement. And affordable prescription drugs. Budget 2019 is about investing in the middle class. https://t.co/PQmiAZeIyl pic.twitter.com/V391mBSdZw
— Bill Morneau (@Bill_Morneau) March 19, 2019
The government also says it plans to create a new employment-insurance benefit to cover up to 55 per cent of earnings for those who take time off from a job to attend a training program, which will cost $1.04 billion over five years.
The benefit could push up EI premiums — the Liberals are promising a break to some small businesses to offset the "upward pressure" on premiums as a result — but the actual costs won't be known until EI rates are set later this year.
Today we’re building on the same plan Canadians chose in 2015, by investing in the middle class and making sure you have the support you need, when and where you need it. Stay tuned. #YourBudget2019. pic.twitter.com/t3CLOTZfz3
— Bill Morneau (@Bill_Morneau) March 19, 2019
FIVE THINGS ABOUT THE FEDERAL BUDGET
OTTAWA — The Liberals' last budget of this mandate sets the stage for the October federal election and includes a sprinkling of money for voters across a wide spectrum. But there are also gaps in spending for some groups.
Here's what the budget does and doesn't do, for five key voting groups:
Veterans
The Liberals will enter the election campaign facing an uphill battle with veterans after Tuesday's federal budget promised some new money to those who have served in uniform but otherwise failed to address the community's largest grievances.
The budget includes funding for chronic-pain research, for survivors of veterans who married after they were 60 years old, for measures to ease the transition from military to civilian life and for Second World War commemorations.
Thread: On our first day in office, we began by investing in the middle class. And it’s what we’ve been doing every single day since. So #YourBudget2019’s title should come as no surprise. pic.twitter.com/7Nb9pIef58
— Bill Morneau (@Bill_Morneau) March 19, 2019
But it doesn't make any changes to the Trudeau government's controversial disability pension plan, which will come into effect on April 1. The plan has been blasted by many veterans as falling far short of what the Liberals promised in the last election and was recently found by the parliamentary budget officer to provide less support for the most severely injured veterans than the current system of benefits.
Seniors
To help aging Canadians with soaring drug costs in Canada, the budget promises a new agency to buy drugs in bulk and cut Canadian medication costs as a first step toward a national pharmacare plan. Ottawa is also promising to spend $500 million a year, starting in 2022, on subsidizing drugs that treat rare diseases. The government says it intends to work with provinces, territories and other partners to develop the mandate for the national drug agency, with Health Canada to receive $35 million over four years starting in 2019-2020 to create an office to support the plan.
Over 420,000 seniors in Canada have been diagnosed with dementia — and the rate of seniors living with this debilitating disease is on the rise. That's why government will spend $50 million over five years in a new national dementia strategy.
To help with retirement costs, the budget also proposes to enhance the guaranteed income supplement's earnings exemption, beginning next year, so seniors can work part-time and still see financial benefits.
Environmentalists
More Canadians are choosing to drive zero-emission vehicles and the federal government wants to help make them more affordable. An investment of $300 million over three years will see Transport Canada introduce a subsidy of up to $5,000 for electric-battery or hydrogen-fuel-cell vehicles that cost less than $45,000.
Natural Resources Canada will also get $130 over five years to deploy new recharging and refuelling stations in workplaces, public parking lots, commercial and multi-unit residential buildings and in remote locations.
Immediate expensing will be provided to a full-range of zero-emission vehicles so that businesses that want to switch over their fleets can recoup their costs faster.
Farmers
Dairy, egg and poultry farmers who lose money because of Canada's recent free-trade agreements will receive billions of dollars in compensation.
The budget sets aside $2.15 billion over the coming years for supply-managed farmers who lose income because of the country's trade deals with Europe and the Pacific Rim.
Another $1.5 billion is being earmarked to compensate farmers who lose money when they sell their stakes in the three protected domestic markets, which Canada agreed in each of the agreements to open up to more foreign competition.
Meanwhile, pork producers who have been watching a spread of African swine fever among pigs in parts of Asia and Europe may breathe easier thanks to a plan to increase monitoring for this disease at international airports. The Canada Border Services Agency will receive $31 million over the next five years, with up to $5.8 annually after, to increase the number of detector dogs at airports across the country.
Millenials
Real-estate prices in some of Canada's largest cities have increased beyond many young would-be buyers' reach — something the Liberals have long promised to address.
Tuesday's budget announces measures for qualifying buyers to be able to have the government pick up part of the cost of their mortgages to lower their monthly payments, with the amount of help depending on their income and whether they're buying a newly built or existing home.
Changes are also being planned to allow Canadians to raise the amount they can pull from their retirement savings plans to fund the purchase of their first homes, from $25,000 to $35,000, and to allow people whose marriages or common-law partnerships break down to dip into those savings a second time.
To help Canadians still struggling to save for their education and repay their student loans, The budget proposes changes to the interest rate on Canada Student Loans and Canada Apprentice Loans.
In addition, legislative changes will be made so that student loans no longer accumulate interest during the six-month non-repayment "grace" period after a student borrower leaves school.
LIBERALS OFFER 'MODEST' HELP FOR FIRST-TIME HOMEBUYERS
OTTAWA — On the eve of a federal election this fall, the Liberal government is looking to help more Canadians buy their first homes by picking up a portion of their mortgage costs and increasing the amount they can borrow from their retirement savings for a down payment.
Helping people enter the housing market has been a growing preoccupation for the Liberals ever since they were elected in 2015, with soaring real-estate prices in some of Canada's largest cities putting home ownership beyond the reach of many.
An estimated 1.6 million Canadian households are considered in "core housing need," meaning people who are living in places that are either too expensive or don't suit their needs.
The means-tested incentive the Liberals unveiled Tuesday would only be available to households with incomes under $120,000 — roughly $50,000 more than the median household income as calculated by Statistics Canada — and on mortgages no more than four times the household's total income.
Eligible buyers would see the government pick up part of the costs of their mortgages to lower their monthly payments, with the amount of help determined by their incomes and whether they're buying an existing or newly built home.
The government also plans to raise the maximum amount a first-time buyer can withdraw from an RRSP: $35,000, up from $25,000. And while the program has long been restricted to new would-be homeowners, those who are recovering from the breakup of a marriage or common-law relationship would also be allowed to take part.
The measure, expected to cost $1.25 billion over three years beginning this fiscal year, would target Canadians "that face legitimate challenges entering housing markets" after qualifying for a mortgage, the budget document says. An additional $100 million would flow to the Canada Mortgage and Housing Corporation to help organizations that already provide the so-called "shared equity mortgages."
The government would recoup its costs when the house is sold, although the budget document isn't clear what would happen if the home is sold for a loss.
The program, some details of which are yet to be finalized, is part of a tranche of spending that includes establishing a national expert panel on housing supply and affordability, better data collection, and $300 million for a contest to encourage cities to come up with new ways of expanding housing stock.
The new measures could increase the annual number of new homebuyers nationally to 140,000 from 100,000 by lowering monthly payments without creating higher household debt loads, said Finance Minister Bill Morneau, who was confident the measures won't cause a spike in housing prices.
"We're recognizing that it is challenging for people in the housing market; it's a real issue, but what we've done is we've carefully looked at what's the best way to deal with that issue," Morneau told a news conference.
"It's not going to make an impact on the overall market from a pricing standpoint, meaning people are actually going to be better off, more optimism in terms of housing, and it's the reason we're very excited about this measure."
Economists and experts had been concerned that Morneau's focus on helping millennials, in particular, get footholds in the market could juice home prices after years of trying to cool demand in places like Toronto and Vancouver. Federal efforts, such as a new financial "stress test" to make sure a buyer can afford a mortgage, have slowed prices from where they might have been.
Scotiabank economist Marc Desormeaux said the Liberals opted for a relatively modest measure, considering the options they have.
"This is providing additional support for individuals who have already qualified for homes, helps them relieve some of their monthly payments once they've qualified for a mortgage and entered into the contract," Desormeaux said.
"The concerns about stoking demand from some of these measures aren't concerns that we would raise at this time."
What the measures should do is increase supply — one of the measure's stated goals. The government plans to cover five per cent of the cost of the purchase of an existing home and 10 per cent of a new build, hoping to "encourage the home construction needed to address some of the housing supply shortages" across the country, the budget document says.
Mathieu Laberge, an expert with Deloitte, said the measures appear to target people who would be willing to rent or buy smaller condominium units, for example, outside a major urban centre.
"It may shift the decision-making of some buyers in larger cities," said Laberge, a former policy adviser to Social Development Minister Jean-Yves Duclos. "You're changing the relevant price between rental and home ownership in those areas, like the immediate suburbs of, for example, Vancouver and Toronto, which is a way to provide more options to households that would otherwise be priced out of the market."
Tuesday's budget also includes $10 billion more for a program to fund the construction of new rental units — the third time the Liberals have expanded the program, which aims to create 14,000 units over 10 years and now carries a $50-billion price tag.
LIBERALS PROMISE BILLIONS FOR DAIRY, CHICKEN FARMERS AFFECTED BY TRADE DEALS
OTTAWA — The Trudeau government is promising billions of dollars to compensate dairy, egg and poultry farmers hurt by Canada's recent free-trade agreements — industries concentrated in vote-rich Quebec and Ontario.
The $3.65 billion the government is setting aside includes $2.15 billion to help farmers who lose income because of trade deals with Europe and countries on the Pacific Rim, both of which make it easier for foreign egg, dairy and poultry producers to enter the Canadian market.
That is in addition to a $250-million, five-year fund established in 2016 to compensate dairy farmers for the European Union deal.
The budget earmarks $1.5 billion for farmers who lose money when they sell their production rights in the supply-management system, which limits egg, poultry and dairy production in Canada. To gain the right to sell supply-managed products, farmers have to buy "quota," often from existing producers who want to leave the industry.
The system also limits foreign products by slapping steep tariffs on imports beyond a certain level, which raises their price at the grocery store and makes them less attractive to consumers. Allowing more foreign-produced food into the Canadian market will increase competition for products from Canadian farmers.
"To ensure that Canada's dairy, poultry and egg farmers can continue to provide Canadians with high-quality products in a world of freer trade, we will make available an income protection program for supply-managed farmers, along with a measure to protect the value of quota investments these farmers have already made," Finance Minister Bill Morneau said in his prepared budget speech.
The budget does not provide details on how or when the money will be distributed to farmers and producers, who have long railed against any move that would expand foreign involvement in those sectors.
But the government appears to be hoping the promise of compensation will provide a salve to supply-managed farmers, many of whom are clumped in key ridings in Quebec and Ontario and angry that the deals have weakened their grip on the market.
That could prove important for the Liberals, who will likely need a strong showing in the two provinces in this year's federal election to have a hope of retaining power.
The budget also indicates more money could be forthcoming as the government works with industry "to address the impacts on processing, as well as potential future impacts of the Canada-United States-Mexico Agreement."
The North American deal, which will succeed NAFTA, has yet to be ratified and come into effect. That deal is the third free-trade agreement in which Canada agreed to open its supply-managed sectors, which emerged last year as a favourite target of U.S. President Donald Trump, particularly the dairy sector.
Supply management has long been hotly debated in Canada.
Proponents say the system keeps the market from getting saturated, which keeps prices stable and ensures steady incomes for farmers while protecting food safety, ensuring higher-quality products and eliminating the need for direct subsidies.
Critics say it drives up the cost of dairy, eggs and chicken for consumers, which has a disproportionate impact on low-income families. The system has been a frequent target in — and barrier to — past free-trade negotiations.
Successive federal governments for decades nonetheless resisted opening Canada to more tariff-free imports from other countries, in part because of the political implications.
But when Stephen Harper was prime minister, the Conservatives opened the door to change when they agreed to ease restrictions on European cheese imports through the Canada-European Union trade deal, which was signed and came into force under the Trudeau Liberals.
Ottawa then agreed, in the 11-country Trans-Pacific Partnership trade deal, to give participants more access to Canada's dairy, egg and poultry markets.
HIGHLIGHTS FROM THE 2019 FEDERAL BUDGET
OTTAWA — Highlights from the federal Liberal budget tabled Tuesday by Finance Minister Bill Morneau:
— $1.7 billion over five years, and $586 million a year after that, for a Canada Training Benefit to help workers upgrade skills and acquire new ones while keeping their jobs. The benefit includes a $250-a-year tax credit to pay for training programs and access to employment insurance to cover living expenses for up to four weeks away from work.
— $1.18 billion over five years to toughen border security, including hiring more judges to handle judicial reviews of asylum applications.
— Measures to make housing more affordable, especially for first-time buyers, by letting them borrow $35,000 from RRSPs (up from $25,000) and having the Canada Mortgage and Housing Corp. contribute a small share of equity for down payments.
— A federal deficit of $19.8 billion, including a $3-billion "risk adjustment," an increase of $200 million from last year's forecast. The Liberals' forecast again includes a gradual reduction in the deficit, but not quite as quickly as anticipated last year. By 2023-2024, the projected federal deficit is $11.4 billion.
— $3.9 billion for farmers in supply-managed industries affected by new trade agreements with the United States and Asian countries.
— $2.2 billion for municipalities' and First Nations' infrastructure projects, through a one-time boost to the amount distributed through the federal gas-tax transfer.
— $1.2 billion over three years to enhance social services for Indigenous families and children, the main element in a package of spending aimed at Indigenous Peoples.
— Lowering the interest rate on Canada Student Loans to the prime rate, from the current prime-plus-2.5-percentage-points.
— Creating a new Canadian Drug Agency to centralize the evaluations of the effectiveness and efficiency of new drugs and buy in bulk nationwide, instead of province-by-province.
— $500 million a year, starting in 2022, to subsidize the costs of drugs for rare diseases, whose high costs are distributed among very few patients.
— $300 million over three years for rebates of up to $5,000 on electric or hydrogen-fuel-cell vehicles (with a maximum purchase price of $45,000).
— $950 million for municipal governments to refit their own buildings for energy efficiency and to provide their own subsidy programs for private homeowners to do the same.
— $50 million over five years to devise a new national dementia strategy.
