A Plan to Grow Our Economy
and Make Life More Affordable
©Her Majesty the Queen in Right of Canada (2022)
All rights reserved
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or any part thereof shall be addressed to the Department of Finance Canada.
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Foreword v
Foreword
Taken individually, the events of the last two years have not been without
precedent. Canada has endured previous recessions and even pandemics.
We have been bueted by European wars and fought in them, too. We have
experienced crises big and small, and we have always prevailed.
But in this country’s nearly 155 years, Canadians have never been through a
time like the one we have been living through these past 25 months.
On that Thursday in March of 2020––when travel plans were hastily cancelled
and lines suddenly formed at our grocery stores––we knew that this virus would
disrupt our lives. But few imagined quite how much and for quite how long.
Yet here we are. We bent but we did not break.
Canadians have done everything that has been asked of them, and more.
And so, to all of them—to all of you—I want to say thank you!
I now have the honour of tabling my second federal Budget.
I tabled my rst in April of 2021.
In the year preceding it, the Canadian economy had teetered on the brink.
Our economy contracted by 17 per cent—the deepest recession since the
1930s. Three million Canadians lost their jobs.
It was a shattering economic blow. The Great Depression scarred this country
for a generation or more. It was entirely reasonable to fear that the COVID
recession would likewise hamstring us for years; that millions of Canadians
would still today be without jobs; and that the task of rebuilding our country
would be the work of decades.
We knew we could not let that happen. And so we provided unprecedented
emergency support to Canadian families and Canadian businesses. Our
relentless focus was on jobs—on keeping Canadians employed, and on keeping
their employers aoat.
It was an audacious plan. And it worked.
Our economy has recovered 112 per cent of the jobs that were lost during
those awful rst months, compared to just 90 per cent in the United States.
Our unemployment rate is down to just 5.5 per cent—close to the 5.4 per cent
low in 2019 that was Canada’s best in ve decades.
Our real GDP is a full 1.2 per cent above where it was before the pandemic.
Just think about that: After a devastating recession—after wave after wave and
lockdown after lockdown—our economy has not just recovered. It is booming.
Today, Canada has come roaring back.
vi
But Canadians know that ghting COVID and the COVID recession came at a
high price.
Snarled supply chains are driving prices higher at the checkout counter. Buying
a house is out of reach for far too many Canadians.
Ination—a global phenomenon—is making things more expensive in Canada, too.
The money that rescued Canadians and the Canadian economy—deployed
chiey and rightly by the federal government to the tune of eight of every
ten dollars invested—has depleted our treasury.
Our COVID response came at a signicant cost, and our ability to spend is not
innite. We will review and reduce government spending, because that is the
responsible thing to do.
And on this next point, let me be very clear: We are absolutely determined that
our debt-to-GDP ratio must continue to decline. Our pandemic decits are and
must continue to be reduced. The extraordinary debts we incurred to keep
Canadians safe and solvent must be paid down.
This is our scal anchor—a line we shall not cross, and that will ensure that our
nances remain sustainable so long as it remains unbreached.
Canada has a proud tradition of scal responsibility. It is my duty to maintain
it—and I will.
So now is the time for us to focus—with smart investments and a clarity of
purpose—on growing our economy.
That is what our government proposes to do. And this is how we propose to
do it.
Pillar one of our plan is investing in the backbone of a strong and growing
country: our people.
Let me start with housing.
Housing is a basic human need, but it is also an economic imperative.
Our economy is built by people, and people need homes in which to live.
But Canada does not have enough homes. We need more of them, fast.
This Budget represents perhaps the most ambitious plan that Canada has ever
had to solve that fundamental problem.
Over the next ten years, we will double the number of new homes we build.
This must become a great national eort, and it will demand a new spirit of
collaboration—provinces and territories; cities and towns; the private sector and
non-prots all working together with us to build the homes that Canadians need.
We will invest in building more homes and in bringing down the barriers that
Foreword vii
keep them from being built. We will invest in the rental housing that so many
count on. We will make it easier for our young people to get those rst keys of
their own.
And we will do everything we can to make the market fairer for Canadians.
We will prevent foreign buyers from parking their money in Canada by buying
up homes. We will make sure that houses are being used as homes, rather than
as commodities to be traded.
But on housing, I would like to oer one caution: There is no silver bullet which
will immediately, once and forever, make every Canadian a homeowner in the
neighbourhood where they want to live.
As Canada grows—and as a growing Canada becomes more and more
prosperous—we will need to continue to invest, year after year after year,
in building more homes for a growing country.
A growing country and a growing economy also demand a growing workforce.
A lack of workers—and of workers with the right skills—is constraining the
industrialized economies around the world.
But there is good news.
In 2020, Canada had the fastest population growth in the G7. At a time when
the world is starved for workers and talent, our country’s unique enthusiasm for
welcoming new Canadians is a powerful—and particularly Canadian—driver of
economic prosperity.
This Budget will make it easier for the skilled immigrants that our economy
needs to make Canada their home.
It will also invest in the determined and talented workers who are already here.
We will make it more aordable for our workers to move to where the jobs are.
Programs like the Canada Worker’s Benet will make it more worthwhile for
people to work.
We will invest in the skills that Canadian workers will need to ll the good-
paying jobs of today and tomorrow, and we will break down barriers and ensure
that everyone is able to roll up their sleeves and get to work if they want to.
And yes: One of those barriers is aordable childcare.
When we promised—less than a year ago—to make high quality, aordable
childcare a reality for all Canadians, our plan was certainly welcomed. But the
cheers were muted by justiable skepticism. After all, similar promises had been
made and broken for decades—ve of them in fact!
That’s why, as I stand here today, I am so proud to say we have delivered. We
have signed agreements on early learning and child care with every single
province and territory.
viii
This is women’s liberation. It will mean more women no longer need to choose
between motherhood and a career. And it will make life more aordable for
middle class Canadian families.
Fees are already being slashed across the country. By the end of this year, they
will be reduced by an average of 50 per cent.
And by 2025-26, child care will average just $10-a-day, from coast-to-
coast-to-coast.
This is feminist economic policy in action.
Housing and immigration and skills and child care. These are social policies, to
be sure. But just as importantly, they are economic policies, too.
This strategy, which our government has been pursuing for the past seven
years, is what the US Secretary of the Treasury, Janet Yellen, has recently dubbed
“Modern Supply Side Economics.”
And because these policies will create supply-led growth that helps satisfy the
demand driving ination, they are precisely what Canada needs right now.
Our second pillar for growing our economy is the green transition.
In Canada—and around the world—climate action is no longer a matter of
political debate or personal conviction; it is an existential challenge. That means
it is also an economic necessity.
In the largest economic transformation since the Industrial Revolution, the
world economy is going green.
Canada can be in the vanguard, or we can be left behind.
That is, of course, no choice at all—which is why our government is investing
urgently in this shift.
Our plan is driven by our national price on pollution—the smartest, most
eective incentive for climate action—and a new Canada Growth Fund which
will help attract the billions of dollars in private capital we need to transform
our economy at speed and at scale.
For our children, that means cleaner air and cleaner water tomorrow. And it will
mean good jobs for Canadians today.
Our third pillar for growth is a plan to tackle the Achilles heel of the Canadian
economy: productivity and innovation.
We are among the most educated countries in the world. Our scientists win
Nobel prizes, and our cities are outshining Silicon Valley in creating high-paying
technology jobs.
Foreword ix
But we are falling behind when it comes to economic productivity. Productivity
matters because it is what guarantees the dream of every parent—that our
children will be more prosperous than we are.
This is a well-known Canadian problem—and an insidious one. It is time for
Canada to tackle it.
We propose to do so, in part, with a new innovation and investment agency—
drawing on international best practices from around the world—that will give
companies across the country and across our economy the tools and incentives
they need to create and invent, and to produce more with less.
We will encourage small Canadian companies to get bigger.
We will help Canadians and Canadian companies develop new IP—and turn
their new ideas into new businesses and new jobs.
These three pillars—investing in people, investing in the green transition, and
investing in innovation and productivity—will create jobs and prosperity today,
and build a stronger economic future for our children.
They will make life more aordable, and they will ensure Canada continues to
be the best place in the world to live, work, and raise a family.
From the rst day we started working on this Budget, this growth agenda was
always going to be our focus.
And then, Vladimir Putin invaded Ukraine.
The world we woke up to on February 24 was dierent from the one that had
existed when we turned o the lights the night before.
When Putin opened re on the people of Ukraine, he also turned his guns on
the unprecedented period of prosperity that the world’s democracies have
worked so diligently to build over more than 76 years.
Our rules-based international order—born from the ashes of the Second World
War—today confronts the greatest threat since its inception.
And so our response was swift and strong. Canada and our allies imposed the
toughest sanctions ever inicted on a major economy. Russia has become an
economic pariah.
But Putin’s assault has been so vicious that we all now understand that the
world’s democracies—including our own—can be safe only if the Russian tyrant
and his criminal armies are entirely vanquished.
And that is what we are counting on the brave people of Ukraine to do.
Because they are ghting our ght—a ght for democracy—it is in our urgent
national interest to ensure they have the missiles and the money they need to
win.
x
And that is what this Budget provides.
Putin’s invasion of Ukraine has also reminded us that our own peaceful
democracy—like all the democracies of the world—depends ultimately on the
defence of hard power. The world’s dictators should never mistake our civility
for pacism. We know that freedom does not come for free, and that peace is
guaranteed only by our readiness to ght for it.
That is why this Budget makes an immediate, additional investment in our
armed forces, and proposes a swift defence policy review to equip Canada for a
world that has become more dangerous.
The images of Russian tanks rolling across Ukraine did not change the
fundamental goal of this Budget.
But Putin’s attack on Ukraine, and that country’s remarkable and valiant
resistance, has reinforced our government’s deepest conviction—a line that runs
through everything in this Budget, and in each of the Budgets that have preceded
it: That the strength of a country does not come solely from the vastness of the
reserves of its central bank, or from the size of the force in its garrisons.
Those do matter, to be sure. But they matter less than democracy itself.
They can be defeated—they are being defeated—by a people who are united
and free.
And that is every country’s true source of strength.
For a country to be strong, everyone must be included and empowered and united.
So let me explain what that stronger country looks like here at home:
It means we need housing that is aordable for everyone, and a system where
an entire generation is not priced out of owning a home.
It means we need to do our part to ght climate change so that we can leave
our children with clean air, clean water, and a livable planet.
It means we need to continue to face up to the sins of our past, and ensure that
Indigenous peoples in this country are able to live dignied and prosperous lives.
It means we need a health care system that allows people to see a doctor or a
dentist, and to receive mental health care, too.
It means we need to continue to build a society that is truly equal for everyone,
because the colour of your skin, or who you love, or where you were born should
not dictate whether you get to share in the opportunities that Canada provides.
And it means we need an economy that allows businesses to grow and create
good middle class jobs, and where everyone can earn a decent living for an
honest day’s work.
The brave people of Ukraine have shaken the world’s older democracies out of
Foreword xi
our 21
st
century malaise. They have reminded us that the strength and unity of a
country comes from the strength and unity of its people.
And they have reminded us that there should be no greater priority than to
build a country that we would be willing to ght for.
That is what we have tried to do these last seven years. And that is what we will
continue to do today.
And so, I am proud to introduce Budget 2022: A Plan to Grow Our Economy and
Make Life More Aordable.
A plan that invests in people. And a plan that will help build a Canada where
nobody gets left behind.
The Honourable Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance
xiii
Table of Contents
Foreword ...........................................................................................................v
Overview: Economic Context ..........................................................................3
1. A Strong Recovery Path .....................................................................................................4
Canada’s Performance Has Exceeded Expectations .............................................4
Canada’s Jobs Recovery Has Been Exceptionally Strong ...................................5
2. From Pandemic to Conict .............................................................................................7
Russia’s Invasion Is Dragging Down Global Growth ...........................................7
High Global Ination and the Outlook for Canada ........................................... 10
3. Budget 2022 Economic Environment ........................................................................ 14
Survey of Private Sector Economists ...................................................................... 14
Budget 2022 Economic Scenario Analysis ............................................................ 15
4. Budget 2022 Fiscal Framework ..................................................................................... 17
A Responsible Fiscal Plan ............................................................................................. 17
Preserving Canada’s Low Debt Advantage: The Fiscal Anchor ..................... 21
5. Investing to Grow the Economy ................................................................................... 25
Investing in a Green Transition That Will Support Jobs and Growth .......... 27
Investing in Our Economic Capacity and Security ............................................. 28
Investing in an Inclusive Workforce ......................................................................... 29
Chapter 1: Making Housing More Aordable ........................................... 33
1.1 Building Aordable Homes ........................................................................................ 36
Launching a New Housing Accelerator Fund ..................................................... 37
Using Infrastructure Funding to Encourage More Home Construction ... 37
Leveraging Transit Funding to Build More Homes ........................................... 38
Rapidly Building New Aordable Housing .......................................................... 38
Speeding Up Housing Construction and Repairs for Vulnerable
Canadians ......................................................................................................................... 38
Building More Aordable and Energy Ecient Rental Units ....................... 39
Direct Support for those in Housing Need ......................................................... 40
A New Generation of Co-Operative Housing Development ........................ 40
Aordable Housing in the North ............................................................................ 41
Multigenerational Home Renovation Tax Credit ............................................... 41
Greener Buildings and Homes ................................................................................. 42
Establishing a Greener Neighbourhood Pilot Program .................................. 42
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Greener Construction in Housing and Buildings .............................................. 43
Greener Aordable Housing ..................................................................................... 43
Long-Term Supports to End Homelessness ........................................................ 43
Improving Community Responses to Homelessness ...................................... 44
A New Veteran Homelessness Program ............................................................... 44
1.2 Helping Canadians Buy Their First Home ............................................................... 44
A Tax-Free First Home Savings Account ............................................................... 45
Doubling the First-Time Home Buyers’ Tax Credit ........................................... 45
An Extended and More Flexible First-Time Home Buyer Incentive ........... 46
Supporting Rent-to-Own Projects .......................................................................... 46
1.3 Protecting Buyers and Renters ................................................................................... 47
Moving Forward on a Home Buyers’ Bill of Rights .......................................... 47
Housing for Canadians, Not for Big Corporations ........................................... 47
1.4 Curbing Foreign Investment and Speculation ...................................................... 48
A Ban on Foreign Investment in Canadian Housing ........................................ 48
Making Property Flippers Pay Their Fair Share .................................................. 49
Taxing Assignment Sales ............................................................................................ 49
Protecting Canadians From Money Laundering in the
Mortgage Lending Sector .......................................................................................... 50
Chapter 2: A Strong, Growing, and Resilient Economy ............................... 57
2.1 Leading Economic Growth and Innovation ........................................................... 60
Launching a World-Leading Canada Growth Fund .......................................... 60
Creating a Canadian Innovation and Investment Agency ............................. 61
Review of Tax Support to R&D and Intellectual Property .............................. 63
Cutting Taxes for Canada’s Growing Small Businesses ................................... 64
2.2 Supporting Economic Growth and Stable Supply Chains ................................ 65
Canada’s Critical Minerals and Clean Industrial Strategies ............................ 65
Better Supply Chain Infrastructure ........................................................................... 69
Moving on Canada’s Infrastructure Investments .............................................. 70
Strengthening Canada’s Semiconductor Industry ............................................ 72
Growing Canada’s Health-Focused Small and Medium-Sized Businesses . 72
Making Canada’s Economy More Competitive ................................................. 72
Leadership on Internal Trade and Labour Mobility ........................................... 73
Supporting Canada’s Innovation Clusters ............................................................. 73
Renewing the Canadian Agricultural Partnership .............................................. 74
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2.3 Investing in Intellectual Property and Research .................................................. 74
Building a World-Class Intellectual Property Regime ....................................... 74
Securing Canada’s Research from Foreign Threats .......................................... 76
Hiring More Leading Researchers ............................................................................ 77
Expanding Canada’s Presence in Space ................................................................. 77
Leveraging the National Research Council ........................................................... 78
Funding for Black Researchers .................................................................................. 78
Funding the Canadian High Arctic Research Station ....................................... 78
2.4 Driving Investment and Growth for Our Small Businesses .............................. 79
Reducing Credit Card Transaction Fees ................................................................. 79
Strengthening Canada’s Trade Remedy and Revenue Systems ................. 79
Employee Ownership Trusts ...................................................................................... 80
Engaging the Cannabis Sector .................................................................................. 80
2.5 Supporting Recovery and Growth in Aected Sectors ..................................... 81
The Next Steps Towards High Frequency Rail ..................................................... 81
Investing in VIA Rail Stations and Maintenance Centres ................................ 81
Supporting the Prince Edward Island Potato Industry ..................................... 82
Full and Fair Compensation for Supply Managed Sectors ............................. 82
Support for Canada’s Tourism Sector ..................................................................... 83
Chapter 3: Clean Air and a Strong Economy .............................................. 89
3.1 Reducing Pollution to Fight Climate Change ........................................................ 91
Reducing Emissions on the Road ............................................................................. 91
Sustainable Agriculture to Fight Climate Change ............................................ 93
Expanding the Nature Smart Climate Solutions Fund .................................... 93
A New Tax Credit for Investments in Clean Technology ................................. 94
Returning Fuel Charge Proceeds to Small and Medium- Sized Enterprises . 94
Expanding the Low Carbon Economy Fund and Supporting Clean
Energy in Yukon ............................................................................................................. 95
Support for Business Investment in Air-Source Heat Pumps ....................... 95
Building Capacity to Support Green Procurement ........................................... 96
Industrial Energy Management ................................................................................ 96
3.2 Building a Clean, Resilient Energy Sector .............................................................. 96
Investment Tax Credit for Carbon Capture, Utilization, and Storage ........ 97
Clean Electricity .............................................................................................................. 98
Small Modular Reactors .............................................................................................. 99
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Phasing Out Flow-Through Shares for Oil, Gas, and Coal Activities ......... 99
3.3 Protecting Our Lands, Lakes, and Oceans ............................................................ 100
Renewing and Expanding the Oceans Protection Plan ................................100
Protecting Our Freshwater ....................................................................................... 101
Taking More Action to Eliminate Plastic Waste ...............................................102
Fighting and Managing Wildres .........................................................................102
Growing Canada’s Trail Network ...........................................................................103
British Columbia Old Growth Nature Fund .......................................................104
3.4 Building Canada’s Net-Zero Economy .................................................................104
Increasing the Impact of the Canada Infrastructure Bank ........................... 105
Net-Zero Capital Allocation Strategy ..................................................................106
Climate Disclosures for Federally Regulated Institutions ............................106
Supporting the International Sustainability Standards Board’s
Montreal Oce ............................................................................................................106
Chapter 4: Creating Good Middle Class Jobs ......................................... 113
4.1 Delivering on Child Care .............................................................................................114
Supporting Early Learning and Child Care ..........................................................114
4.2 Immigration for Our Economy ................................................................................117
Canada’s Ambitious Immigration Plan ................................................................. 117
Eciently Welcoming Visitors, Students, and Workers to Canada ...........118
Securing the Integrity of Canada’s Asylum System .......................................118
Supporting Legal Aid for Asylum Seekers ..........................................................119
Improving Support Services for Immigrants and Visitors to Canada .....119
Improving the Citizenship Program ......................................................................119
4.3 A Workforce for the 21
st
Century Economy ........................................................120
Modernizing Labour Market Transfer Agreements ........................................ 120
Bringing Workers to the Decision-Making Table ............................................121
Doubling the Union Training and Innovation Program ................................121
Sustainable Jobs ............................................................................................................ 122
4.4 Connecting Workers to Good Jobs .......................................................................122
Labour Mobility Deduction for Tradespeople ..................................................123
Supporting Foreign Credential Recognition in the Health Sector ...........123
An Employment Strategy for Persons With Disabilities ................................124
Improving the Temporary Foreign Worker Program .....................................124
Completing the Employment Equity Act Review ............................................125
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4.5 Towards A Better Employment Insurance System .............................................126
Extending Temporary Support for Seasonal Workers ...................................126
Chapter 5: Canada’s Leadership in the World .......................................... 131
5.1 Reinforcing Our National Defence .......................................................................... 132
Reviewing Canada’s Defence Policy .....................................................................133
Reinforcing our Defence Priorities ........................................................................ 134
Supporting Culture Change in the Canadian
Armed Forces ............................................................................................................... 135
Enhancing Canada’s Cyber Security .....................................................................136
5.2 Supporting Ukraine .....................................................................................................137
Bolstering Ukraine’s Fight for Freedom ...............................................................137
Holding Russia Accountable ....................................................................................137
Supporting Ukrainians Through the Crisis .......................................................... 139
A Safe Haven for Ukrainians ....................................................................................139
5.3 Standing Up for Democracy, Transparency, and the Rule of Law ..............140
Strengthening Canada’s Anti-Money Laundering and Anti-Terrorist
Financing (AML/ATF) Regime ..................................................................................140
Implementing a Publicly Accessible Benecial Ownership Registry ........141
Combatting Misinformation and Disinformation ...........................................142
5.4 Providing International Assistance ..........................................................................143
Leading in the Global Fight Against COVID-19 ........................................................ 144
Strengthening Global Health Security ................................................................. 144
Chapter 6: Strong Public Health Care ...................................................... 149
6.1 A Stronger Health Care System ................................................................................ 151
Dental Care for Canadians .......................................................................................152
Reducing the Backlogs of Surgeries and Procedures ....................................152
Increasing Loan Forgiveness for Doctors and Nurses in Rural and
Remote Communities ................................................................................................152
Researching the Long-Term Impacts of COVID-19 ........................................153
Improving Canada’s Dementia and Brain Health Research ........................153
Supporting the Centre for Aging and Brain Health Innovation ................153
The Canada Health Transfer .....................................................................................154
6.2 Supporting Mental Health and Well-Being .........................................................155
Supporting Mental Well-Being With the Wellness Together Canada
Portal ................................................................................................................................156
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Addressing the Opioid Crisis ..................................................................................157
Better Mental Health Support for Black Federal Public Servants .............157
6.3 Investing in Public Health ..........................................................................................157
Strengthening Canada’s Ability to Detect and Respond to Public
Health Events and Emergencies .............................................................................. 158
Maintaining the National Emergency Strategic Stockpile ............................158
Piloting a Menstrual Equity Fund for Those in Need ....................................158
Help for Canadians Who Want to Become Parents .......................................159
Taxation of Vaping Products ...................................................................................159
Chapter 7: Moving Forward on Reconciliation ........................................ 165
7.1 Addressing Past Harms and Discrimination Related to Indigenous
Children and Families .................................................................................................167
Supporting First Nations Children Through Jordan’s Principle .................168
Implementing Indigenous Child Welfare Legislation ....................................169
Addressing the Shameful Legacy of Residential Schools ............................170
7.2 Supporting Strong and Healthy Communities ................................................... 171
Improving Health Outcomes in Indigenous Communities .........................171
Distinctions-based Mental Health and Wellness ............................................172
First Nations Elementary and Secondary Education ...................................... 172
Clean Drinking Water and Better Infrastructure for First Nations
Communities .................................................................................................................172
Investing in Housing for Indigenous Communities .......................................174
7.3 Advancing Self-Determination and Prosperity ..................................................174
Implementing the United Nations Declaration on the Rights of
Indigenous Peoples Act ..............................................................................................175
Legislative Changes to Support Self-Determination .....................................175
Indigenous Climate Leadership .............................................................................176
Partnering with Indigenous Peoples in Natural Resource Projects .......... 176
Indigenous Economic Participation in Trans Mountain ................................ 177
Supporting Indigenous Businesses and Community Economic
Development ................................................................................................................. 177
Advancing Tax Jurisdiction for Indigenous Governments ...........................178
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Chapter 8: Safe and Inclusive Communities ............................................. 183
8.1 A Diverse and Inclusive Canada .............................................................................. 184
A Federal LGBTQ2 Action Plan ...............................................................................184
Fighting Systemic Racism, Discrimination, and Hate .....................................184
Supporting Black Canadian Communities .........................................................185
Federal Funding for the Jean Augustine Chair in Education,
Community and Diaspora .........................................................................................186
Supporting the Muslims in Canada Archive .....................................................186
Building the Jewish Community Centre of Greater Vancouver .................186
Ensuring Fair Compensation for News Media in the Digital News
Ecosystem ....................................................................................................................... 187
Supporting Local and Diverse Journalism .........................................................187
Creating a Safer Sport System ................................................................................188
Supporting Special Olympics Canada .................................................................188
Supporting Our Seniors ........................................................................................... 188
Doubling the Home Accessibility Tax Credit ..................................................... 190
National School Food Policy ...................................................................................190
Support for Workers Experiencing Miscarriage
or Stillbirth ......................................................................................................................191
8.2 Keeping Canadians Safe ............................................................................................191
Developing a Buy-Back Program for Assault Weapons ...............................191
Working with Provinces and Territories to Advance the National
Action Plan to End Gender-Based Violence ...................................................... 192
Preparing for Emergencies ......................................................................................192
Supporting Recovery and Completing the Rail Bypass in Lac-Mégantic .192
Increasing the Capacity of Superior Courts ......................................................193
Enhancing Legal Aid for Those Who Need It Most ........................................193
8.3 Supporting Artists and Charities in Our Communities ..................................194
Supporting Canada’s Performing Arts and Heritage Sectors ..................... 194
Supporting a More Inclusive Arts Training Sector .......................................... 195
Stronger Partnerships in the Charitable Sector ...............................................195
Boosting Charitable Spending in Our Communities .....................................196
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Chapter 9: Tax Fairness and Eective Government ................................. 203
9.1 A Fair Tax System ..........................................................................................................204
Requiring Financial Institutions to Help Pay for the Recovery ...................205
Preventing the Use of Foreign Corporations to Avoid Canadian Tax .....206
Next Steps Towards a Minimum Tax for High Earners ...................................206
Limiting Aggressive Tax Avoidance by Financial Institutions .....................207
Closing the Double-Deduction Loophole .......................................................... 208
Expanding Anti-Avoidance Tax Rules ..................................................................208
Strengthening the General Anti-Avoidance Rule ............................................ 208
International Tax Reform ............................................................................................ 209
International Accounting Standards for Insurance Contracts .................... 210
Reinforcing the Canada Revenue Agency ..........................................................211
Eliminating Excise Duty on Low-Alcohol Beer ..................................................212
Bill C-208 Follow-up ...................................................................................................212
9.2 Eective Government .................................................................................................212
Reducing Planned Spending in the Context of a Stronger Recovery .....213
Strategic Policy Review .............................................................................................. 213
Council of Economic Advisors .................................................................................214
Addressing the Digitalization of Money .............................................................214
A Fairer Banking Complaints Handling System for Canadians ..................215
Embracing Digital Government ............................................................................215
Public Sector Pension Plan Governance .............................................................215
Review of the Public Servants Disclosure Protection Act ..............................215
Annex 1: Details of Economic and Fiscal Projections .............................. 219
Annex 2: Debt Management Strategy ...................................................... 261
Annex 3: Legislative Measures................................................................... 273
Overview
Economic Context
1. A Strong Recovery Path .....................................................................................................4
Canada’s Performance Has Exceeded Expectations .............................................4
Canada’s Jobs Recovery Has Been Exceptionally Strong ...................................5
2. From Pandemic to Conict .............................................................................................7
Russia’s Invasion Is Dragging Down Global Growth ...........................................7
High Global Ination and the Outlook for Canada ........................................... 10
3. Budget 2022 Economic Environment ........................................................................ 14
Survey of Private Sector Economists ...................................................................... 14
Budget 2022 Economic Scenario Analysis ............................................................ 15
4. Budget 2022 Fiscal Framework ..................................................................................... 17
A Responsible Fiscal Plan ............................................................................................. 17
Preserving Canada’s Low Debt Advantage: The Fiscal Anchor ..................... 21
5. Investing to Grow the Economy ................................................................................... 25
Investing in a Green Transition That Will Support Jobs and Growth .......... 27
Investing in Our Economic Capacity and Security ............................................. 28
Investing in an Inclusive Workforce ......................................................................... 29
2 Overview
Economic Context 3
Overview
Economic Context
The Canadian economy has staged a strong recovery from the pandemic.
Our workers and businesses have displayed remarkable resilience as the world
endured multiple waves of COVID-19. Real GDP returned to pre-pandemic
levels earlier than expected. Canada’s jobs recovery has outperformed its G7
peers and surpassed even the most optimistic expectations. Economic scarring
from the pandemic has largely been avoided.
The impacts of the pandemic are still being felt by workers and businesses,
whether from the ongoing rebalancing of consumer demand and related
supply chain issues, or new realities such as increased remote work and the
accelerating digitalization of our economy. Federal emergency supports
managed to stabilize household nances, support millions of jobs, and keep
small businesses aoat. And now, unemployment is lower than it was when the
pandemic started.
However, the global economy remains fragile and any potential setbacks could
have a major impact on Canada. The illegal and barbaric Russian invasion of
Ukraine has led to the loss of thousands of lives and the exodus of millions of
Ukrainians. For those watching from afar, the invasion is a major new source of
uncertainty. The ramications are being felt worldwide.
The invasion of Ukraine and the resulting sanctions against Russia have weighed
on markets and condence; led to a surge in commodity prices; and resulted in
a deterioration of the global economic outlook. Higher commodity prices and
additional supply disruptions will exacerbate the inationary pressures already
seen across the world.
As an open economy and a trading nation, Canada has to confront, head-on,
longstanding challenges and new global economic dynamics. The world is
changing, and Canada cannot be left behind.
We need to invest in an economy that is innovative and growth-friendly.
We need to navigate a global green transition that is accelerating every day.
We need to ensure that all Canadian workers, Canadian businesses, and all
regions of the country benet from it. We need to build more aordable
housing to meet the growing needs of a growing workforce. We need to invest
in skills and immigration to ensure that the workforce is prepared for the
economy of today, and tomorrow.
The government is focused on positioning Canada to thrive in an uncertain
world. Budget 2022 takes needed steps to create an environment that spurs
the investments we need to grow our economy, create new, good-paying jobs
for Canadians, and grow the middle class.
4 Overview
1. A Strong Recovery Path
Canada’s Performance Has Exceeded Expectations
The Canadian economy returned to its pre-pandemic level of activity in the
fourth quarter of 2021, marking the fastest recovery of the last three recessions
(Chart 1). Real GDP also grew 6.7 per cent at an annual rate in the last quarter
of 2021—the second-strongest pace of growth in the G7.
The scale of the government’s emergency economic support has fostered a
strong recovery, and has helped Canadians and Canadian businesses weather
the pandemic.
However, the eects of economic uncertainty are evident in measures of
consumer and business condence. The Conference Board of Canada’s Index of
Business Condence was 10 per cent below its long-term average in the fourth
quarter of 2021. Consumer condence was also below its historical average as
of March 2022, weighed down by concerns about ination.
Chart 1
Real GDP Change During COVID-19 and Previous Recessions
COVID-19
recession
2008-2009
recession
1990-1991
recession
1981-1982
recession
85
90
95
100
0 1 2 3 4 5 6 7 8
quarters after pre-recession peaks
index, pre-recession peak = 100
Pre-pandemic level
Note: Three recessions are 1981-1982, 1990-1991 and 2008-2009. Last data point is 2021Q4.
Sources: Statistics Canada; Department of Finance Canada calculations.
Economic Context 5
Canada’s Jobs Recovery Has Been Exceptionally
Strong
Canada’s labour market is emerging strongly from the fth wave of the
pandemic, with the economy adding nearly 340,000 new jobs in February—
more than making up for January’s loss (Chart 2). Canada has seen the fastest
jobs recovery in the G7 (Chart 3)—recouping 112 per cent of the jobs lost at the
outset of the pandemic, compared with 90 per cent in the U.S.
Chart 2
Employment in Canada
Chart 3
Change in Employment Across G7
Countries Relative to February 2020
80
85
90
95
100
Feb
2020
Jun
2020
Oct
2020
Feb
2021
Jun
2021
Oct
2021
Feb
2022
index, February 2020 = 100
-2 -1 0 1 2
United Kingdom
United States
Japan
Italy
Germany
France
Canada
per cent change relative to February 2020
Note: Last data point is February 2022.
Source: Statistics Canada.
Note: Last data point is February 2022 for Canada,
Germany, Italy, Japan, and the United States; December
2021 for the United Kingdom; and 2021Q4 for France
(which is compared to 2019Q4 for France).
Source: Haver Analytics.
6 Overview
The February jobs report also means that all of Canada’s scal guardrails—from
the unemployment rate, to employment rate, to actual hours worked—have
eectively recovered to their pre-pandemic levels (Chart 4). Signicant progress
along many other labour market dimensions has also been made (Chart 5).
Chart 4
Change in Fiscal Guardrails Relative
to February 2020
Chart 5
Progress in Other Key Labour
Market Metrics Through
February 2022
Employment rate (left
axis)
Total hours
worked (right
axis)
Unemployment rate
(left axis)
-30
0
30
60
90
120
150-30
-25
-20
-15
-10
-5
0
5
Feb
2020
June
2020
Oct
2020
Feb
2021
June
2021
Oct
2021
Feb
2022
per cent
per cent
90%
97%
100%
101%
101%
114%
0% 20% 40% 60% 80% 100% 120%
Long-term unemployment rate
Unemployment rate, 55+
Average hours worked
Unemployment rate, women
Unemployment rate, 15-24
Participation rate, 15-64
Crisis
Trough
2019
Average
Note: Last data point is February 2022.
Source: Statistics Canada.
Note: Illustrates the extent to which labour market
conditions have recovered. The recovery is shown
through progress bars, where the current value (i.e.,
February 2022) of each measure is compared with both
its trough during the pandemic and a pre-pandemic
benchmark value (i.e., 2019 average). Long-term
unemployed are those who have been unemployed for
27 weeks or more.
Source: Statistics Canada.
With February’s job gains, Canada’s unemployment rate dropped to
5.5 per cent, falling below its pre-pandemic level for the rst time, and near
the 50-year low of 5.4 per cent reached in May 2019 (Chart 6). While many
advanced economies have seen signicant declines in their unemployment rate,
few have also experienced an increase in labour force participation to the extent
Canada has (Chart 7).
Economic Context 7
Chart 6
Unemployment Rate
Chart 7
Change in the Labour Force
Participation Rate Across G7
Countries Relative to 2019Q4
5
6
7
8
9
10
11
12
13
14
Jan
1976
Jan
1982
Jan
1988
Jan
1994
Jan
2000
Jan
2006
Jan
2012
Jan
2018
per cent
Historical low
-1.0
-0.5
0.0
0.5
1.0
1.5
percentage points
Note: Last data point is February 2022.
Source: Statistics Canada.
Note: For Ages 15-64. Shows the change from 2019Q4
to the latest quarter, which is 2021Q4 for all countries.
Sources: Statistics Canada; OECD.
While tight labour markets are leading to improved opportunities for workers,
it also creates signicant and pressing challenges for businesses looking to hire
more workers. Employers were actively recruiting for more than 900,000 jobs
in the fourth quarter of 2021, pointing to continued strong labour demand and
the potential for wage growth to increase further.
2. From Pandemic to Conict
Russia’s Invasion Is Dragging Down Global Growth
The unprovoked and unjustied Russian invasion of Ukraine is a signicant
headwind for the global economic outlook. The economic damage risks
becoming increasingly severe and long-lasting, and the economic shockwaves
from the war will be felt by consumers around the world through higher energy
and food prices. These eects—along with disruptions to trade, tighter nancial
conditions, and fragile condence—will contribute to a meaningful weakening
of global economic growth if the conict persists.
While Russia and Ukraine account for less than 2 per cent of global GDP,
they are major suppliers of key commodities such as wheat, energy, potash,
palladium, and nickel. As a result, the invasion of Ukraine—and the signicant
sanctions imposed on Russia’s economy—have jolted commodity markets with
a surge in prices (Chart 8). With sanctions likely to remain for some time and
a longer-term strategic shift away from Russian resources in some parts of the
world, certain commodity prices are poised to remain elevated and volatile.
8 Overview
Though higher commodity prices are leading to a surge in Canada’s terms of
trade (the ratio of export prices to import prices), sharply higher prices risk
causing hardship for many households and disrupting the production of goods
and services worldwide (Chart 9). Europe in particular is highly dependent on
Russian natural gas and crude oil.
Chart 8
Change in Select Commodity Prices
Since January 3, 2022
Chart 9
Commodity Prices and Canada’s
Terms of Trade
57
48
33
32
24
23
17
9
0 10 20 30 40 50 60
European natural gas
North American natural gas
Wheat
WTI crude oil
Palladium
Industrial metals
Fertilizer
Precious metals
per cent
Commodity
price index
(left)
Terms of
trade (right)
85
90
95
100
105
110
50
100
150
200
250
300
350
2007
Q1
2010
Q1
2013
Q1
2016
Q1
2019
Q1
2022
Q1
index, 2002 = 100 index, 2002 = 100
Note: Unless otherwise noted, prices are based on North
American prices and benchmarks; all priced in U.S. dollars.
Last data point is March 31, 2022.
Source: Bloomberg.
Note: The commodity price index is a production-
weighted composite of U.S.-dollar benchmark
commodity prices. Last data point for the commodity
price index and terms of trade are 2022Q1 and
2021Q4, respectively.
Sources: Statistics Canada; Department of Finance
Canada calculations.
The heightened level of uncertainty, along with deterioration of the global
economic outlook, is also aecting investor and business condence globally.
This has translated into signicant weakness in equity markets worldwide, with
most major global stock market indices—especially those in Europe—still down
from their peaks. The longer the Russia-Ukraine conict lasts, the greater the
downside will be.
If recent moves in commodity prices and nancial markets were to persist for
a year, the Organisation for Economic Co-operation and Development (OECD)
estimates that it could reduce global growth by more than 1 percentage point
in the rst year (Chart 10), while global ination could be at least 2.5 percentage
points higher. The economic impact will vary heavily by region. In Russia, the
conict along with the direct blow from signicant economic and nancial
sanctions, could lead the economy to suer a severe recession. Given close
trade ties and nancial links to Russia and Ukraine, the euro area is likely to be
one of the most aected regions, with its real GDP expected to be reduced by
1.4 per cent over the rst full year after the start of the conict.
Economic Context 9
As a commodity producer with limited economic ties to Russia, Canada is more
insulated from the crisis than other countries. While weaker global growth and
much higher commodity prices will reduce consumers’ purchasing power and
push up costs for businesses, Canada also stands to benet from the positive
impact on Canada’s terms of trade and from being able to export commodities
now in short supply. The impact of the conict on economic activity in Canada
cannot be denitively predicted, but deep uncertainty emanating from the
conict points to risks tilted to the downside.
Chart 10
Impact on Real GDP in a First Full Year of the Russian Invasion of Ukraine
-1.4
-1.0
-0.9
-1.1
-0.8
Decline
of more
than 10%
-12
-10
-8
-6
-4
-2
0
-5
-4
-3
-2
-1
0
Euro Area OECD United
States
World World
excluding
Russia
Russia
(right scale)
per cent
Note: Simulated impact on real GDP over a one-year period beginning 24 February 2022.
Source: OECD.
10 Overview
High Global Ination and the Outlook for Canada
While ination is a global challenge, the impacts on Canadians are real.
The majority of Canadians remain concerned about the cost of living. As a
rst line of defence, many of the direct income supports that nancially
vulnerable Canadians rely on are automatically adjusted to ination. Further, the
government is taking crucial steps to help make life more aordable for more
Canadians, while investing to grow the economy and create jobs – the best
sustainable route to rising living standards in the long-run.
Making Life More Aordable
Making life more aordable is one of the government’s primary goals in
Budget 2022. In the long run, this will require addressing long-standing,
structural challenges to deliver meaningful improvements in living standards
for more Canadians.
In the near term, Canadians can be condent that they have access to support
when they need it most. Since 2015, the government has delivered real
improvements to make Canadians’ lives more aordable, including:
• Making an historic investment of $30 billion over ve years to build a
Canada-wide early learning and child care system in collaboration with
provinces, territories, and Indigenous partners. By the end of 2022, child
care fees will have been reduced by an average of 50 per cent, and by
2025-26, the average child care fee for all regulated child care spaces
across Canada will be $10 a day;
• Introducing the Canada Child Benet, which will provide up to $6,833 per
child to Canadian families this year, and has helped 435,000 children out
of poverty since 2015;
• Expanding the Canada Workers Benet to support an estimated one
million additional Canadians, which could mean $1,000 more per year for
a full-time, minimum-wage worker;
• Increasing the federal minimum wage to $15.55 per hour;
• Implementing a ten per cent increase to the maximum GIS benet for
single seniors, and reversing the announced increase to the eligibility for
OAS and GIS back to age 65 from 67;
• Providing ten days of paid sick leave for all federally regulated private
sector employees;
• Increasing Climate Action Incentive payments, which puts more money in
the pockets of eight out of every ten people in the provinces where the
federal system applies, and means a family of four will receive, for
2022-2023, $745 in Ontario, $832 in Manitoba, $1,101 in Saskatchewan
and $1,079 in Alberta; and
Economic Context 11
Making Life More Aordable
• Making post-secondary education more aordable by waiving interest
on Canada Student Loans until March 2023 and enhancing repayment
assistance to ensure that no person making $40,000 or less will need to
make payments on their federal student loans going forward.
Budget 2022 also includes a range of measures that will help to bring down
the cost of living, including:
• $5.3 billion to provide dental care for Canadians with family incomes of
less than $90,000 annually, starting with under 12 years-olds in 2022,
expanding to under 18 years-olds, seniors and persons living with a
disability in 2023, with full implementation by 2025;
• Doubling support provided through the First Time Home Buyers’ Tax
Credit from $750 to $1,500;
• Introducing a Multigenerational Home Renovation Tax Credit, which
provides up to $7,500 in support for constructing a secondary suite; and
• $475 million in 2022-23 to provide a one-time, $500 payment to those
facing housing aordability challenges.
Budget 2022 also includes a comprehensive plan to make housing more
aordable, focused on doubling the rate of new builds over the next decade,
while introducing measures to help Canadians buy their rst home, protect
buyers and renters, and curb foreign investment and speculation.
Key government benets are also adjusted for ination over time, including,
among others, Old Age Security (OAS), the Guaranteed Income Supplement
(GIS), the Canada Child Benet, and the GST Credit.
Looking ahead, Budget 2022 redoubles the government’s focus on expanding
Canada’s economic capacity with investments to create jobs and boost
growth through innovation and skills development; facilitate the transition
to a low-carbon economy by encouraging private sector investments and
targeting major sources of emissions; drive innovation and business growth;
and make our cities more competitive by expanding the supply of housing.
These investments will provide the foundation for boosting Canada’s long-
term growth and creating good-paying jobs— the best way to make life
aordable for years to come.
Even before the invasion of Ukraine, elevated ination was undermining
consumer and business condence around the world. Economists have had to
repeatedly revise their forecasts as global ination has proven to be stronger
and more persistent than anticipated. In advanced economies, ination has
now reached levels not seen in decades. This is creating uncertainty about how
quickly—and at what cost—central banks can rein in ination.
12 Overview
The current global concern over ination comes after decades during which
ination was very low. Several factors have driven ination up, including higher
food and energy prices, supply constraints associated with the pandemic, and
unprecedented demand for goods. In many advanced economies, ination
pressures have started to broaden as wage pressures build in a context marked
by tight labour markets.
While ination in Canada is more moderate than in some other countries, total
consumer price ination reached 5.7 per cent year over year in February—the
highest level since August 1991 (Chart 11). In addition to global pressures
on the prices of goods, strong demand for housing—combined with limited
supply—has also led to surging house prices (Chart 12). Canadians are facing
higher-than-expected costs of living which is putting the squeeze on household
nances across the country—and could lead to lower economic activity and
condence over time.
Chart 11
Consumer Price Ination in
Select Economies
Chart 12
Deviation of Consumer Price
Ination From Its Long-Term
Average, Canada
Canada
Euro area
G20
United
States
-1
0
1
2
3
4
5
6
7
8
Jan
2019
Jan
2020
Jan
2021
Jan
2022
per cent, year over year
-3
-2
-1
0
1
2
3
4
5
Jan
2020
Jul
2020
Jan
2021
Jul
2021
Jan
2022
Goods
Shelter services
Other services
Total
percentage points, year over year
Note: Last data point is February 2022 for all regions
but the G20, for which it is January 2022.
Sources: Haver Analytics; OECD.
Note: The long-term average is calculated over the period
1997-2019. Last data point is February 2022.
Source: Statistics Canada.
A rebalancing of global demand towards services—after pandemic-related
public health measures saw people redirect their spending heavily towards
goods—along with the easing of supply bottlenecks should help to reduce
global inationary pressures over the course of the year. However, the Russian
invasion of Ukraine is causing higher prices for food, energy, and other key
commodities. In addition, a resurgence of COVID-19 in China has led to
lockdowns that are disrupting global manufacturing supply chains once again.
As a result, uncertainty remains about the outlook for ination.
Economic Context 13
In response to these pressures, central banks—including the Bank of Canada
and the U.S. Federal Reserve—have begun to withdraw monetary stimulus.
The Bank of Canada has been clear that it will use its monetary policy tools to
return ination to the 2 per cent target and keep ination expectations well-
anchored. Ination is expected to be broadly in line with the Bank of Canada’s
2 per cent ination target in 2023.
Housing Supply Challenges and Aordability
Housing demand has been very strong during the pandemic, which was the
result of low borrowing costs combined with people’s desire for more space as
they worked from home. Though builders have responded with new residential
construction rising well above pre-pandemic levels, housing supply has been
unable to keep up with demand (Chart 13).
With inventories at record lows, house prices have rapidly increased across the
country (Chart 14), making aordability a real concern. British Columbia and
Ontario have endured longstanding supply constraints and prospective home
buyers in those markets are facing the most acute aordability challenges;
Toronto in particular has recently seen the largest increases in house prices
since 2015. Rental markets are facing similar challenges with constrained supply
putting pressure on rents.
Looking ahead, housing demand is expected to ease as interest rates rise and the
pandemic-related boost in demand fades. In combination with the increase in
new construction, this will help to slow house price growth. However, it will take
years of strong supply growth to address the very real aordability challenges
Canadians in many regions are facing. The federal government is working with
all orders of government to increase supply and address the issues of housing
aordability. As outlined in Chapter 1, Budget 2022 makes a series of signicant
investments to help jump start the construction of more aordable homes.
Chart 13
Changes in Key Measures of Housing
Activity
Chart 14
House Price Growth
12
18
4
36
30
30
42
26
18
MLS resales Sales-to-new
listings ratio
Housing starts
2020 2021 February 2022
per cent change from 2019
Toronto
and
Vancouver
Other
major
Canadian
cities
-5
0
5
10
15
20
25
30
35
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
Jan
2022
per cent, year-over-year
Note: February 2022 is a seasonally adjusted annualized
gure.
Source: Canadian Real Estate Association.
Note: Latest data point is February 2022. Other major
Canadian cities include Calgary, Edmonton, Regina,
Saskatoon, Winnipeg, Ottawa, Montreal and Moncton.
Source: Canadian Real Estate Association.
14 Overview
3. Budget 2022 Economic Environment
Survey of Private Sector Economists
The Department of Finance Canada surveyed the group of private sector
economists in early February 2022. The average of private sector forecasts
has been used as the basis for economic and scal planning since 1994,
helping to ensure objectivity and transparency, and introducing an element of
independence into the government’s economic and scal forecast.
Following a strong rebound of 4.6 per cent in 2021, real GDP was expected to
grow by a still solid 3.9 per cent in 2022 (down from 4.2 per cent in the 2021
Economic and Fiscal Update) and by 3.1 per cent in 2023 (up from 2.8 per cent in
the 2021 Economic and Fiscal Update) (Charts 15 and 16).
Chart 15
Real GDP Growth Projections
Actual
Actual
0
2
4
6
8
2021
Q4
2022
Q1
2022
Q2
2022
Q3
2022
Q4
2021 2022 2023
Economic and Fiscal Update 2021 (November 2021 survey) February 2022 survey
per cent, quarter to quarter at annual rates
Sources: Statistics Canada; Department of Finance Canada November 2021 and February 2022 surveys of private
sector economists; Department of Finance Canada calculations.
Signicantly stronger-than-expected GDP ination—driven by consumer price
ination and commodity prices—provided a material boost to the expected
level of nominal GDP (the broadest measure of the tax base), which was up
by an average of roughly $41 billion per year over the forecast horizon in
the February 2022 survey compared to the 2021 Economic and Fiscal Update
(Chart 17). Importantly, Canada’s nominal GDP continues to outperform
expectations, as it has over the course of the recovery from the pandemic.
Economic Context 15
Chart 16
Real GDP Projections
Chart 17
Nominal GDP Projections
Economic
and Fiscal
Update
2021
February
2022
survey
98
100
102
104
106
108
110
2021
Q3
2022
Q1
2022
Q3
2023
Q1
2023
Q3
2024
Q1
2024
Q3
index, pre-recession peak = 100
Economic
and Fiscal
Update
2021
February
2022
survey
100
105
110
115
120
125
130
2021
Q3
2022
Q1
2022
Q3
2023
Q1
2023
Q3
2024
Q1
2024
Q3
index, pre-recession peak = 100
Sources: Statistics Canada; Department of Finance
Canada December 2019, November 2021 and
February 2022 surveys of private sector economists;
Department of Finance Canada calculations.
Sources: Statistics Canada; Department of Finance
Canada December 2019, November 2021 and
February 2022 surveys of private sector economists;
Department of Finance Canada calculations.
Budget 2022 Economic Scenario Analysis
The macroeconomic inputs of the February 2022 survey continue to provide
a reasonable basis for scal planning (see Annex 1 for details of the economic
and scal planning framework). However, the outlook is clouded by a number
of key uncertainties, including the impact of Russia’s illegal invasion of Ukraine;
the impact on supply chains due to the COVID-19 resurgence in China;
the eects of supply and labour shortages on ination; and the impact of rising
interest rates on the Canadian economy.
16 Overview
The Department of Finance actively engages with external economists to assess
risks and uncertainties to the outlook. Throughout March, the Department closely
tracked evolving external views and forecasts. This information was used to
inform two alternative economic scenarios that illustrate the eects of unusually
high uncertainty around the illegal Russian invasion of Ukraine and its spillovers:
• Heightened Impact Scenario – considers the economic repercussions of a
drawn-out crisis in Ukraine with elevated commodity prices, prolonged
supply-chain disruptions, and more rapid monetary policy tightening.
A reduction in Russian energy exports leads to a spike in commodity prices,
while pandemic-related lockdowns in parts of the world exacerbate supply-
chain issues, leading to temporarily stronger ination. In response to higher
ination, global interest rates rise higher and more quickly than expected,
with Canada’s three-month treasury bill rate up by almost 50 basis points
on average per year compared to the February 2022 survey. Higher energy
bills and weaker condence substantially reduce consumption while supply
shortages and trade disruptions hold back activity, leading to a sharp
slowdown in global economic growth and a subsequent moderation in
global crude oil prices.
Overall, real GDP growth in Canada is 0.6 percentage point lower on average
per year (Chart 18), and the unemployment rate is 0.5 percentage point higher
on average as a result of adverse eects on condence and sharply lower
global demand.
Higher ination pushes up nominal GDP in the near term before falling below
the February survey in 2024 amid easing commodity prices and much weaker
growth. Initially, nominal GDP is $126 billion higher than the February survey
in 2022, but this improvement shrinks to $18 billion in 2023 and falls below the
February survey level by $23 billion on average over the last three years of the
forecast horizon as ination falls (Chart 19).
• Moderate Impact Scenario – considers a de-escalation of tensions in Ukraine
and a world in which supply disruptions from the war and pandemic are
smaller than expected while global demand remains resilient along with an
easing of geopolitical tensions. The global economy successfully adapts to
COVID-19 risks and pivots to more secure commodity suppliers, reducing
global inationary pressures. At the same time, Canadian commodity
producers make full use of current spare capacity and increase investment,
albeit not commensurate to the rise in energy prices. This provides a
boost to economic growth. Higher interest rates (up by 20 basis points on
average per year compared to the February 2022 survey), combined with
easing of supply-chain pressures, bring ination closer to the 2 per cent
target without derailing the economic expansion.
Altogether, the recovery is stronger than the February survey, supported by
Canada’s strong fundamentals. While commodity prices and ination are below
the downside scenario, they remain well above the February survey, especially
in the near term. With higher commodity prices and better economic prospects,
nominal GDP is $77 billion higher than the February survey on average per year
over the forecast horizon.
Economic Context 17
Chart 18
Real GDP Growth
Chart 19
Nominal GDP Level Dierence With
February 2022 Survey Outlook
3.9
3.1
2.0
1.9
1.8
2.8
0.4
2.0
2.4
2.2
4.3
4.0
2.1
1.8
1.7
0
1
2
3
4
5
2022 2023 2024 2025 2026
February 2022 Survey
Heightened impact scenario
Moderate impact scenario
per cent
126
18
-21
-25
-22
57
86
82
79
79
-40
-20
0
20
40
60
80
100
120
140
2022 2023 2024 2025 2026
Heightened impact scenario
Moderate impact scenario
$ billions
Sources: Department of Finance Canada February 2022
survey of private sector economists; Department of
Finance Canada calculations.
Sources: Department of Finance Canada February 2022
survey of private sector economists; Department of
Finance Canada calculations.
Details on these scenarios are outlined in Annex 1. Estimated scal impacts
associated with these scenarios are illustrated below.
4. Budget 2022 Fiscal Framework
A Responsible Fiscal Plan
Over the course of the pandemic, the federal government deployed one of the
most eective response plans in the world to protect Canadian workers and
businesses. Approximately eight out of every ten dollars invested to support
Canadians and ght COVID-19 has come from the federal government.
This response saved lives and kept Canada’s economy aoat—while
also limiting the debt and decits of Canada’s provinces and territories.
Provincial and territorial governments continued to signicantly outperform
scal projections for 2021-22. Fiscal results to date show that the aggregate
provincial-territorial decit was less than one-third of what was expected at the
time of 2021 budgets, a much larger improvement than at the federal level. As a
result, the aggregate provincial-territorial balance is expected to have declined
to just 1 per cent of GDP in 2021-22 (Chart 20).
18 Overview
Chart 20
Budgetary Balances, Canada and Provincial-Territorial Aggregate
-14.9
-4.6
-2.1
-1.0
-16
-14
-12
-10
-8
-6
-4
-2
0
2020-21 2021-22
Canada
Provincial-territorial aggregate
per cent of GDP
Sources: Federal, provincial and territorial public accounts, budgets and scal updates; Department of Finance
Canada calculations.
The signicant investments the federal government made have worked. And the
Canadian economy’s recovery has been swift and strong. But these were, and
must remain, emergency measures. Budget 2022 rmly pivots the government’s
focus from broad-based emergency COVID-19 expenditures—and towards
targeted investments that will build Canada’s economic capacity, prosperity,
resilience, and security in two ways:
• First, it reinvests signicantly in areas that will expand our economic
capacity and productivity to drive long-term growth. These include housing,
early learning and child care, skills, immigration, ghting climate change,
supply chains, business innovation and research and development (R&D).
• Second, it takes responsible steps to review government spending, with the
intention of nding opportunities for both savings and reallocation to other
post-pandemic priorities that will support long-term growth and prosperity
without creating inationary pressures, as described in Chapter 9.
Economic Context 19
Table 1
Economic and Fiscal Developments and Policy Actions and Measures
billions of dollars
Projection
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Budgetary balance – EFU 2021
-144.5 -58.4 -43.9 -29.1 -22.7 -13.1
Economic and scal developments
since EFU 2021
36.1 14.3 11.7 7.5 8.5 7.4
Budgetary balance before policy
actions and measures
-108.5 -44.1 -32.3 -21.6 -14.2 -5.8
Policy actions since EFU 2021
-3.1 -1.3 -0.6 0.6 0.4 0.3
Budget 2022 measures (by
chapter)
1. Making Housing More Aordable
-0.7 -2.0 -2.2 -2.1 -2.2 -1.0
2. A Strong, Growing, and
Resilient Economy
0.0 -0.3 -1.4 -1.2 -1.3 -1.3
reproling infrastructure investments
0.1 0.2 0.8 1.2 2.0 2.1
3. Clean Air and a Strong Economy
0.0 -1.3 -2.2 -3.0 -2.9 -3.0
4. Creating Good Middle Class Jobs
0.0 -0.8 -1.3 -1.4 -1.2 -1.2
5. Canada’s Leadership in the World
0.0 -1.7 -1.5 -1.9 -2.0 -2.3
6. Strong Public Health Care
-1.3 -0.7 -0.8 -1.3 -1.4 -1.6
7. Moving Forward on Reconciliation
-0.2 -2.5 -2.0 -1.9 -1.9 -2.0
8. Safe and Inclusive Communities
0.0 -0.2 -0.4 -0.4 -0.3 -0.3
9.1 Tax Fairness
0.0 2.0 3.3 3.6 3.7 3.9
9.2 Eective Government
0.0 0.0 0.7 1.7 2.7 3.7
Total – Budget 2022 measures
-2.2 -7.4 -7.1 -6.7 -4.8 -3.0
Budgetary balance
-113.8 -52.8 -39.9 -27.8 -18.6 -8.4
Budgetary balance (% of GDP)
-4.6 -2.0 -1.4 -0.9 -0.6 -0.3
Federal debt (% of GDP)
46.5 45.1 44.5 43.8 42.8 41.5
Heightened Impact Scenario -113.8 -39.5 -43.7 -41.1 -32.2 -21.1
Budgetary Balance (%GDP)
-4.6 -1.4 -1.5 -1.4 -1.1 -0.7
Federal debt (%GDP)
46.5 42.6 43.9 44.2 43.7 42.8
Moderate Impact Scenario -113.8 -48.2 -31.3 -21.6 -13.2 -2.7
Budgetary Balance (%GDP)
-4.6 -1.8 -1.1 -0.7 -0.4 -0.1
Federal debt (%GDP)
46.5 44.0 42.7 41.9 40.9 39.5
20 Overview
After accounting for Budget 2022 measures and incremental policy actions
since the 2021 Economic and Fiscal Update, the budgetary balance is expected
to remain below that projected in the 2021 Economic and Fiscal Update, with
a $113.8 billion expected decit in 2021-22, improving to a projected decit
of $8.4 billion in 2026-27, or about 0.3 per cent of GDP. The federal debt is
expected to decline from 46.5 per cent of GDP in 2021-22 to 41.5 per cent
of GDP in 2026-27. Looking out over the next ve years, the federal decit
(Chart 21) and debt as a share of the economy (Chart 22) are both expected to
decline each year.
Chart 21
Budgetary Balance
Chart 22
Federal Debt
-15
-12
-9
-6
-3
0
Economic and Fiscal Update 2021
Budget 2022
per cent of GDP
2021
Economic
and Fiscal
Update
Budget
2022
Moderate
impact
scenario
Heightened
impact
scenario
38
40
42
44
46
48
50
per cent of GDP
Source: Department of Finance Canada. Source: Department of Finance Canada.
The scal outlook presented in Budget 2022 respects a number of important
scal sustainability metrics, including:
• The decit is projected to fall to 0.9 per cent of GDP by 2024-25 before
reaching 0.3 per cent of GDP by the end of the budget planning horizon
(Chart 21), a level in 2026-27 that is lower than the 2013-14 decit of
0.4 per cent of GDP which the government recorded six years from the
onset of the 2008-09 nancial crisis.
• The federal debt-to-GDP ratio is projected to be on a steeper downward
track than originally anticipated several months ago—even under the
heightened impact economic scenario presented in Section 3, the debt-to-
GDP ratio remains below that of the 2021 Economic and Fiscal Update by
2026-27 (Chart 22).
• Public debt charges are forecast to remain at historically low levels, even
after accounting for the expected rise in interest rates by private sector
forecasters (see the box entitled “Projected Public Debt Charges”).
Economic Context 21
Compared to our international peers, the federal scal outlook and the
better-than-expected provincial-territorial scal results position Canada to
continue to have the lowest net debt-to-GDP ratio in the G7 (Chart 23),
and the second-lowest decit as a per cent of GDP among these same
countries (Chart 24).
Chart 23
General Government Net Debt
Forecasts, G7 Countries
Chart 24
General Government Decit
Forecasts, G7 Countries
0 50 100 150 200
Japan
Italy
France
United States
United Kingdom
Germany
Canada
2021
2022
2023
per cent of GDP
0 2 4 6 8 10 12 14
United States
France
United Kingdom
Italy
Japan
Canada
Germany
2021
2022
2023
per cent of GDP
Notes: The internationally comparable denition of “general government” includes the central, state, and local levels
of government, as well as social security funds. For Canada, this includes the federal, provincial/territorial, local and
Indigenous government sectors, as well as the Canada Pension Plan and the Quebec Pension Plan.
Source: International Monetary Fund, October 2021 Fiscal Monitor.
Preserving Canada’s Low Debt Advantage:
The Fiscal Anchor
The government’s scal anchor is unchanged: the federal government remains
committed to unwinding COVID-19-related decits and reducing the federal
debt-to-GDP ratio over the medium term.
Budget 2022 once again meets this test. The government is winding down
emergency COVID-19 expenditures and implementing a scal plan that ensures
federal debt remains on a downward track as a share of the economy. This plan
also eectively brings the decit-to-GDP ratio back to its pre-pandemic track by
the end of the budget forecast horizon (Chart 25).
22 Overview
Chart 25
Budgetary Balance
-1.7
-14.9
-4.6
-2.0
-1.4
-0.9
-0.6
-0.3
-1.2 -1.2
-0.9
-0.7
-0.6
-0.4
-16
-12
-8
-4
0
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Actuals
Budget 2022 Outlook
2019 Economic and Fiscal Update Outlook as published
(Pre-Pandemic Fiscal Track)
per cent of GDP
Note: The forecast horizon in the 2019 Economic and Fiscal Update ends in 2024-25.
Source: Department of Finance Canada.
The government’s continued commitment to its scal anchor will help ensure
Canada’s low debt advantage and enviable credit ratings are preserved and that
future generations are not burdened with COVID-19-related debt.
Budget 2022 is taking critical steps to advance the government’s long-
term objectives of (1) building a stronger and more resilient economy—one
that generates shared prosperity, while (2) maintaining long-term scal
sustainability. These objectives are mutually reinforcing, and the government
will pursue them both as it works to build a more equitable future, for everyone.
Canada has a long history of prudent and sound scal management, along
with several other strengths, such as economic resilience and diversity, eective
policymaking and institutional frameworks, well-regulated nancial markets,
and monetary and scal policy exibility. Together, these reinforce Canada’s
stable economic and scal position.
These strengths continue to shape Canada’s excellent credit ratings from
Moody’s (Aaa), S&P (AAA), DBRS (AAA), and Fitch (AA+). All four rating agencies
have rearmed Canada’s strong credit ratings.
Considering the government’s scal anchor and using Budget 2022 forecasts
as a starting point, the government’s plan is scally sustainable for current and
future generations. Indeed, over the three next decades, the federal debt-to-
GDP ratio is projected to continuously decline and be on a steeper downward
track than projected in Budget 2021 (Chart 26). Details and sensitivity analysis
around these long-term scal projections are presented in Annex 1.
Economic Context 23
Chart 26
Long-Term Projection of the Federal Debt
Budget 2021
Budget 2022
0
10
20
30
40
50
60
2015-16 2020-21 2025-26 2030-31 2035-36 2040-41 2045-46 2050-51 2055-56
per cent of GDP
Notes: Rather than being viewed as a forecast, this long-term projection should be viewed as a modelling scenario
based on a set of reasonable economic and demographic assumptions, assuming no future changes in policies. See
Annex 1 for more detail.
Sources: Statistics Canada; Department of Finance Canada.
24 Overview
Projected Public Debt Charges
By 2026, private sector forecasters expect the three-month treasury bill rate
to increase by 200 basis points and the ten-year government bond rate to
increase by 160 basis points, consistent with a global increase in yields across
all markets. As such, this is already built into the baseline forecast. Despite
this forecast trend and the sharp increase in the federal debt since COVID-19,
federal public debt charges are projected to remain historically low, at $42.9
billion or about 1.4 per cent of GDP. This is well below the pre-nancial crisis
level of 2.1 per cent in 2007-08 (Chart 27).
Federal public nances would remain resilient even under higher-than-
projected interest rates. For example, in a scenario where interest rates were
100 basis points higher than forecast in all years in this budget, public debt
charges would rise by an additional $9.3 billion (0.3 percentage points of
GDP) by 2026, bringing them to 1.7 per cent of GDP, which is still lower than
at the end of the 2000s.
Chart 27
Historical Public Debt Charges as a Proportion of GDP, and Projected
Sensitivity to a 100 Basis-Point Increase in Interest Rates
0
1
2
3
4
5
6
7
1971-72 1976-77 1981-82 1986-87 1991-92 1996-97 2001-02 2006-07 2011-12 2016-17 2021-22 2026-27
per cent of GDP
Public debt charges (historical)
Public debt charges forecast with 100 basis-point increase in interest rates
Public debt charges forecast
Source: Department of Finance Canada.
With higher interest rates, the government would also realize some osetting
benets, including:
• Higher revenues from the government’s interest-bearing assets;
• Corresponding downward adjustments that reduce public sector pensions
and employee benet obligations; and
• Higher government tax revenues if interest rate increases were due to
stronger economic growth.
Economic Context 25
5. Investing to Grow the Economy
Budget 2022 Makes Essential Investments Now
Canada has many of the essential building blocks it needs to be one of the
most competitive economies in the world today, and for the years and decades
to come. We have: a strong base of commodities and critical minerals that are in
high global demand; abundant sources of clean energy; one of the highest rates
of inward foreign direct investment in the G7; a growing population; high levels
of fundamental research occurring in world-class universities and colleges; and
a talented workforce that is among the most highly educated in the world.
Canada boasts one of the fastest-growing employment bases for high-tech
jobs, and with the right investments, has the potential to become a world leader
in technology and innovation.
In the face of uncertainty, business investment can be paralyzed by a “wait-
and-see” approach. But to succeed in an uncertain world, Canada must invest
in its future now, or risk falling behind. Over the medium term, investments
that expand Canada’s supply capacity will allow the economy to grow while
mitigating future inationary pressures.
Budget 2022’s investments in housing, immigration, and skills will be key to
growing and maintaining a strong, diverse, and talented workforce. Investments
in growth—including clean growth—and innovation will be central to
building Canada’s industries and economy of tomorrow. And together, these
investments will help build a resilient and sustainable economy that strengthens
the middle class, and leaves no one behind.
Chart 28
Average Potential Annual Growth in Real GDP per capita, Selected OECD
Countries, 2020-2060
0.0
0.5
1.0
1.5
per cent
Note: The 2020-2060 annual growth rate reects the weighted average of growth for the 2020-30 and 2030-60 periods.
Sources: OECD (2021), "The Long Game: Fiscal Outlooks to 2060 Underline Need for Structural Reform"; Department of
Finance Canada calculations.
26 Overview
The stakes are high. Most Canadian businesses have not invested at the
same rate as their U.S. counterparts. Unless this changes, the OECD projects
that Canada will have the lowest per-capita GDP growth among its member
countries (Chart 28). By working to bring Canada’s projected growth rate up
to the OECD average, we could add more than $4,000 (in 2019 dollars) to the
annual income of the median family with children by 2030.
Investing in Long-Term Economic Growth
The government is committed to investing in the health of the Canadian
economy and making life more aordable for Canadians. This means
investments in areas like the transition to a low-carbon economy and business
innovation that will increase productivity and help to contain ination going
forward.
Boosting the supply side of the economy is one of the key ways to mitigate
ination. Expanding the supply capacity of the economy requires investments
that grow the labour force, improve workers’ skills and increase the stock of
productive capital (buildings, machinery, equipment, software, intellectual
property, etc.). Canada must prioritize such investments in order to surmount
the fundamental economic challenges it faces over the longer-term.
It takes time before investment actually boosts economic supply. While
investment may add to demand in the short-term, improved prospects for
future supply will help to keep ination expectations in check. This directly
addresses the biggest threat to price stability today: the risk that elevated
ination becomes entrenched in expectations. When businesses expect that
increases in their costs will be moderate, they do not feel the same need to
raise prices to sustain prot margins.
The government has already made important supply-side investments.
The investment in Early Learning and Child Care, which is expected to
yield a material increase in labour-force participation, is one important
example. Budget 2022 redoubles the focus on expanding supply capacity
with investments to grow and maintain our talented and diverse workforce
through immigration and skills development; facilitate the transition to a
low-carbon economy; drive innovation and business growth; and make our
cities more competitive by expanding the supply of housing.
Economic Context 27
Investing in a Green Transition That Will Support
Jobs and Growth
Canada has among the highest per-capita greenhouse gas (GHG) emissions
in the world (Chart 29). In part, this reects the role that the resource sector
plays in Canada’s economy, with the share of investment attributable to oil, gas,
and mining being ten times the average of other G7 countries. Canada’s vast
geography and seasonality also contribute to energy-intensive housing and
transportation needs.
Carbon pricing is an important part of driving Canada towards a cleaner
economy. But to reduce Canada’s emissions, and ensure our economy is
competitive in an increasingly green world, signicant investments are also
needed, from both government and private capital. This includes investment
in the development and usage of clean technologies that are needed to
grow Canada’s supply capacity while reducing emissions. Leading into the
pandemic, growth in Canada’s clean technology sector had been outpacing
growth in the rest of the economy. Building on these strengths would allow
Canada to prosper through the transition to net-zero and create good jobs.
But uncertainty about how the global transition will unfold is hampering this
investment. To address this, the government is taking action to help mobilize
readily available private capital to invest in Canada’s capacity to ensure that
Canada’s workers and businesses prosper in the green transition. The goals are
both to achieve net-zero and to build the new low-carbon industries we will
need as engines for future growth.
Chart 29
Greenhouse Gas Emissions per Capita
0
5
10
15
20
25
30
Australia Canada United
States
New
Zealand
Germany Denmark Japan Finland United
Kingdom
Italy France Spain Norway Sweden
1998 2008 2018
tonne of CO2-equivalent
Source: Climate Watch, United Nations Framework Convention on Climate Change Annex I dataset.
28 Overview
Investing in Our Economic Capacity and Security
While Canada and Canadians have beneted from higher rates of labour force
participation and employment compared to our international peers, we have
not done as well in keeping up with the changes in technology and innovation
that improve productivity.
Labour productivity growth in Canada has slowed from about 2.7 per cent in
the 1960s and 1970s to less than 1 per cent today. Technology has been a key
driver of productivity and supply-driven economic growth. However, Canada
has lagged behind other advanced economies in investing in and adopting
new and innovative technologies (Charts 30 and 31). The rates of investment
in Information and Communications Technology (ICT) equipment and R&D
in Canada are only about half the U.S. levels.
Importantly, Canada is highly exposed to global economic developments,
with trade as a share of GDP second only to Germany among G7 countries.
This means investment in Canada is often aimed at producing for the global
market. In recent years, trade and geopolitical tensions have strained the rules-
based global trading system. Ensuring stable trade relations will continue to
be important for investment in Canada. At the same time, an uncertain world
creates opportunities for a stable democracy like Canada to supply energy and
other critical goods to the world.
In response to recent developments and emerging opportunities in the global
economy, the government will act to improve business investment in innovation
and technology and help Canadian businesses to grow and strengthen Canada’s
critical supply chains, and its ability to produce strategic commodities.
Economic Context 29
Chart 30
Business Expenditures on Research
and Development as Share of GDP,
G7 Countries, Average 2015-19
Chart 31
ICT Hardware, Software, and
Database Investment as Share of
GDP, G7 Countries, Average 2015-19
0 1 2 3
Italy
Canada
United
Kingdom
France
Germany
United
States
Japan
Canada ranks 21
st
among 37 OECD
countries
per cent
0 1 2 3 4
Germany
Canada
Italy
United Kingdom
Japan
France
United States
Software & Database ICT
Canada ranks 17
th
among 29 OECD
countries
per cent
Sources: OECD Main Science and Technology Indicators;
Department of Finance Canada calculations.
Notes: ICT is Information and Communications Technology.
Average share between 2015 and 2019. Calculations based
on constant dollar values of investment and GDP.
Sources: OECD Annual National Accounts; Department of
Finance Canada calculations.
Investing in an Inclusive Workforce
While the government’s COVID-19 economic response plan has been successful
in getting Canadians back to work, over the long term, population aging may
weigh on labour force growth and the economy’s capacity to supply goods
and services. It will, therefore, become critical to improve labour market
participation of under-represented segments of the population (Chart 32).
The government’s signicant investment in early learning and child care
is a major step in this direction and it is expected to result in a marked
improvement in labour market participation by women with children.
The evidence from Quebec—which began building a universal early learning
and child care network in 1997—is clear. In 1997, the women’s labour force
participation rate in Quebec was 4 percentage points lower than the rest of
Canada. Today it is 4 points higher than the rest of Canada.
Immigration will be another key driver of workforce growth in Canada.
Already, more than one in four workers are foreign-born. As the Canadian
population ages, immigration is expected to account for an increasingly large
share of the labour force (Chart 33).
30 Overview
Chart 32 Chart 33
Gap in Labour Force Participation
Relative to Men, Selected Groups,
2021
Foreign-Born Share of Labour
Force, 2000-2035
-20
-15
-10
-5
0
Persons
with
disabilities
High
school
or less
Indigenous
Canadians
Recent
immigrants Women
percentage points
0
5
10
15
20
25
30
35
2000 2005 2010 2015 2020 2025 2030 2035
Projection
per cent
Note: Participation rates for 2021, except for Canadians
with disabilities (2017). Recent immigrants are those
who came to Canada in the last ve years. Indigenous
Canadians only includes those living o reserve and in
the provinces. 25-54 years of age for all.
Sources: Statistics Canada; Department of Finance
Canada calculations.
Note: The projection is based on the medium-growth
scenario.
Source: Martel, L. (2019), “The Labour Force in Canada
and Its Regions: Projections to 2036,” Statistics Canada;
Department of Finance Canada calculations
Chapter 1
Making Housing More Aordable
1.1 Building Aordable Homes ........................................................................................ 36
Launching a New Housing Accelerator Fund ..................................................... 37
Using Infrastructure Funding to Encourage More Home Construction ... 37
Leveraging Transit Funding to Build More Homes ........................................... 38
Rapidly Building New Aordable Housing .......................................................... 38
Speeding Up Housing Construction and Repairs for Vulnerable
Canadians ......................................................................................................................... 38
Building More Aordable and Energy Ecient Rental Units ....................... 39
Direct Support for those in Housing Need ......................................................... 40
A New Generation of Co-Operative Housing Development ........................ 40
Aordable Housing in the North ............................................................................ 41
Multigenerational Home Renovation Tax Credit ............................................... 41
Greener Buildings and Homes ................................................................................. 42
Establishing a Greener Neighbourhood Pilot Program .................................. 42
Greener Construction in Housing and Buildings .............................................. 43
Greener Aordable Housing ..................................................................................... 43
Long-Term Supports to End Homelessness ........................................................ 43
Improving Community Responses to Homelessness ...................................... 44
A New Veteran Homelessness Program ............................................................... 44
1.2 Helping Canadians Buy Their First Home ............................................................... 44
A Tax-Free First Home Savings Account ............................................................... 45
Doubling the First-Time Home Buyers’ Tax Credit ........................................... 45
An Extended and More Flexible First-Time Home Buyer Incentive ........... 46
Supporting Rent-to-Own Projects .......................................................................... 46
1.3 Protecting Buyers and Renters ................................................................................... 47
Moving Forward on a Home Buyers’ Bill of Rights .......................................... 47
Housing for Canadians, Not for Big Corporations ........................................... 47
1.4 Curbing Foreign Investment and Speculation ...................................................... 48
A Ban on Foreign Investment in Canadian Housing ........................................ 48
Making Property Flippers Pay Their Fair Share .................................................. 49
Taxing Assignment Sales ............................................................................................ 49
Protecting Canadians From Money Laundering in the
Mortgage Lending Sector .......................................................................................... 50
Making Housing More Aordable 33
Chapter 1
Making Housing More Aordable
Everyone should have a safe and aordable place to call home.
But that goal—one that was taken as a given for previous generations—is
increasingly out of reach for far too many Canadians. Young people cannot
imagine being able to aord the house they grew up in. Foreign investors and
speculators are buying up homes that should be for Canadians to own. Rents
in our major cities continue to climb, pushing people further and further away
from where they work.
All of this has an impact on our economy, too. In cities and communities across
the country, a lack of aordable housing makes it more dicult to attract the
workers that businesses need. Increasing our housing supply will make Canada
more competitive in the global race for talent and investment. It will help make
sure that our economy can continue to grow in the years to come.
Chart 1.1
Number of Homes per 1,000 Persons, Selected OECD Countries
OECD Average
0
100
200
300
400
500
600
700
France Germany Japan United
Kingdom
Canada United
States
Australia New
Zealand
Ratio
Note: This chart is for illustrative purposes only, and does not reect the approach used to calculate supply gaps.
Organisation for Economic Co-operation and Development (OECD) average is 462 homes per 1,000 persons.
Source: OECD Questionnaire on Aordable and Social Housing (2021).
There are a number of factors that are making housing more expensive, but
the biggest issue is supply. Put simply, Canada is facing a housing shortage—
we have a lower number of homes per person than many OECD countries.
Increasing our housing supply will be key to making housing more aordable
for everyone.
To ll the gap that already exists—and to keep up with our growing population
over the next decade—Finance Canada and the Canada Mortgage and Housing
Corporation estimate that Canada will need to build at least 3.5 million new
homes by 2031. To reach that number, signicant steps have to be taken today.
34 Chapter 1
In a given year, Canada constructs about 200,000 new housing units—
standalone houses, individual condos, and other types of homes alike.
While annual construction has increased in recent years, it is not enough to
address aordability challenges and keep up with the housing demands of a
growing population. To meet these housing needs, Canada will need to double
our current rate of new construction over the next decade.
Neither the federal government nor developers can solve this issue alone—
provincial, territorial, and municipal governments also have a signicant role
to play.
Budget 2022 proposes measures that—in partnership with steps that must be
taken by other orders of government—will put Canada on the path to double
our construction of new housing and meet Canada’s housing needs over the
next decade.
Chart 1.2
Federal Housing Investments
0
2
4
6
8
10
12
14
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22
2022-
23
2023-
24
2024-
25
2025-
26
2026-
27
2027-
28
Pre-Budget 2022 Budget 2022 - Funding Increases Budget 2022 - Funding Reallocations
billions of dollars
Note: Amounts for 2016-17 until 2020-21 are actuals, as available. Amounts for 2021-22 onwards are estimates. Amounts
are on a cash basis. Budget 2022 reects the net impact of new funding, and reallocations of existing funding. Amounts
include aordable housing and homelessness programming, including the National Housing Strategy, as well as energy
eciency programs delivered through Natural Resources Canada. Due to data limitations, energy eciency programs may
include support for non-residential buildings as well. Amounts do not include: tax measures; cost-matching provided by
provinces and territories; or distinctions-based housing investments delivered by Indigenous Services Canada, Crown-
Indigenous Relations and Northern Aairs Canada, or on reserve renovation and retrot support provided through the
Canada Mortgage and Housing Corporation.
Making Housing More Aordable 35
Budget 2022 measures that will build more homes and make housing more
aordable across the country include:
• Putting Canada on the path to double our housing construction over the
next decade;
• Helping Canadians buy their rst home;
• Protecting buyers and renters;
• Curbing unfair practices that drive up the price of housing; and
• Continuing to ght homelessness and support housing aordability,
particularly for the most vulnerable.
In addition to these measures, Budget 2022 proposes additional funding to
address housing needs of Indigenous peoples, as detailed in Chapter 7.
Key Ongoing Actions
The federal government is already on track by 2027-28 to deliver more
than $72 billion in nancial support through the National Housing Strategy,
in addition to other measures that will make housing more aordable.
Actions underway since 2015 include:
More than $42 billion in federal support for the construction and repair of
rental housing, aordable housing, and shelters;
More than $15 billion in joint funding with provinces and territories,
including for the Canada Housing Benet to provide direct rent assistance;
More than $11 billion in support for community and social housing;
More than $2.7 billion in distinctions-based support for housing in
Indigenous communities;
More than $3 billion for Reaching Home: Canada’s Homelessness Strategy,
and a commitment to eliminate chronic homelessness by 2030; and
Tabling legislation that would implement Canada's rst national vacant
housing tax on non-Canadian, non-resident owners.
36 Chapter 1
Figure 1.1
National Housing Strategy Initiatives and Investments Committed
As of December 2021, unless otherwise specified
*As of September 2021
National Housing Strategy
Initiatives and Investments
Committed to date
$24.2 billion
New units
Over 91,000
Repaired units
Over
209,000
Housing aordability supports
Over 172,000 households
Shelter
New:
1,600
shelter spaces
Repair:
700
shelter spaces
Women and children
*
Targeting:
37,500
units
1.1 Building Aordable Homes
Every order of government has a role to play in building more homes and
making housing more aordable for Canadians. Provinces and territories
oversee the frameworks guiding land use, planning, and their targets for
increasing the number of new homes. Municipalities implement policies in a
manner best suited to their communities.
To help double our rate of construction over the next ten years, make our housing
and building stock more environmentally friendly, and address homelessness,
the federal government is proposing a range of measures that will:
• Incentivize cities to build more homes and create denser, more sustainable
neighbourhoods to increase housing supply;
• Support those in need of aordable housing by building new aordable
units faster;
• Create a new generation of co-op housing through the largest investment
in new co-op housing in more than 30 years;
• Accelerate retrots and build more net-zero homes in communities across
Canada so that people can save on energy bills; and
• Support those experiencing or at risk of homelessness by continuing
to provide doubled annual funding for Reaching Home; building new
aordable units for the most vulnerable; continuing work to end
chronic homelessness; and introducing a new program to combat
veteran homelessness.
Making Housing More Aordable 37
Launching a New Housing Accelerator Fund
To make housing more aordable, more housing needs to be built.
Building more housing will require investments, but it will also require changes
to the systems that are preventing more housing from being built.
The federal government’s goal is to incentivize the cities and towns that are
stepping up to get more housing built, while also ensuring that municipalities
are able to get the support they need to modernize and build new homes.
Budget 2022 proposes to provide $4 billion over ve years, starting in
2022-23, to the Canada Mortgage and Housing Corporation to launch a
new Housing Accelerator Fund. The fund will be designed to be exible
to the needs and realities of cities and communities, and could include
support such as an annual per-door incentive for municipalities, or up-
front funding for investments in municipal housing planning and delivery
processes that will speed up housing development. Its focus will be on
increasing supply, but government supports will be targeted to ensure
a balanced supply that includes a needed increase to the supply of
aordable housing.
This new fund will target the creation of 100,000 net new housing units over the
next ve years.
The Housing Accelerator Fund will have a exible single application system,
and will still allow municipalities to access other related programs. The federal
government will ensure that the program also takes into account smaller and
rural communities that are growing quickly, like those in Atlantic Canada and
northern Ontario.
Using Infrastructure Funding to Encourage More
Home Construction
Every year, the federal government provides signicant amounts of funding to
provinces, territories, and municipalities to help them deliver important public
infrastructure projects. At the same time, there is not enough housing being
built to keep up with the needs of Canadians.
A coordinated approach, involving all orders of government, is required to
ensure public spending is working to build more of the homes Canadians need.
To this end, Budget 2022 signals the government’s intention to create
exibility within federal infrastructure programs to tie access to
infrastructure funding to actions by provinces, territories, and municipalities
to increase housing supply where it makes sense to do so. This exibility
would be included within the Canada Community-Building Fund, when
its current administrative agreements with provinces and territories are
renewed; and other future infrastructure programs.
38 Chapter 1
Together with the new Housing Accelerator Fund, this represents nearly
$43 billion in new and existing federal funding over the next ten years that
will be leveraged to encourage the construction of more homes for Canadians
across the country.
Leveraging Transit Funding to Build More Homes
The pandemic has had an extraordinary impact on public transit ridership and
the revenues that municipalities count on. On March 25, 2022, the government
tabled a bill to authorize up to $750 million in 2021-22 to support municipalities
as they address their public transit shortfalls.
To increase the impact of this investment, the proposed funding will be
conditional on provincial and territorial governments committing to match the
federal contribution and to accelerate their work with their municipalities to
build more homes for Canadians.
Rapidly Building New Aordable Housing
Additional aordable housing units are urgently needed, particularly for those
experiencing or at risk of homelessness. To ensure that more aordable housing
can be built quickly, the government is proposing to extend the Rapid Housing
Initiative for a third round.
Budget 2022 proposes to provide $1.5 billion over two years, starting in
2022-23, to the Canada Mortgage and Housing Corporation to extend the
Rapid Housing Initiative. This new funding is expected to create at least
6,000 new aordable housing units, with at least 25 per cent of funding
going towards women-focused housing projects.
Speeding Up Housing Construction and Repairs for
Vulnerable Canadians
Over the last ve years, the National Housing Co-Investment Fund has
supported the construction and repair of 108,000 housing units for the most
vulnerable Canadians. Projects like shelters, homes for seniors and persons with
disabilities, and supportive housing account for 75 per cent of units committed
to so far, with demand for those units exceeding supply. To protect housing
aordability tomorrow, the government is accelerating its investments today.
Budget 2022 proposes to advance $2.9 billion in funding, on a cash basis,
under the National Housing Co-Investment Fund, so that all remaining
funds will be spent by 2025-26. This will accelerate the creation of up to
4,300 new units and the repair of up to 17,800 units for the Canadians who
need them most.
Taking lessons from the Rapid Housing Initiative, the National Housing
Co-Investment Fund will be made both more exible and easier to access,
including with more generous contributions and faster approvals.
Making Housing More Aordable 39
Chart 1.3
New Rapid Housing Initiative Spending and National Housing Co-
Investment Funding Prole
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
millions of dollars
Previous Funding Profile (Co-Investment Fund)
New Funding Profile (Co-Investment Fund)
New Funding (Rapid Housing Initiative)
Note: The chart above is on a cash basis whereas the tables at the end of the chapter are presented on an accrual basis.
The accrual gures assume that loans are repaid. Figures also include the $500 million that will be reallocated from the
National Housing Co-Investment Fund to support a new Co-operative Housing Development Program.
Building More Aordable and Energy Ecient Rental
Units
The Rental Construction Financing Initiative (RCFI) incentivizes the construction
of new rental housing by oering low-interest loans and mortgage insurance to
those building more rental housing in areas where it is needed most.
Budget 2022 announces the government’s intent to reform the
Rental Construction Financing Initiative by strengthening its aordability
and energy eciency requirements. Developers who signicantly exceed
these requirements and build highly aordable and energy ecient units
will be eligible to have a portion of their repayable loans converted to non-
repayable loans.
Budget 2022 also announces that the RCFI will target a goal of having at
least 40 per cent of the units it supports provide rent equal to or lower than
80 per cent of the average market rent in their local community. These new
requirements and incentives under a more ambitious Rental Construction
Financing Initiative will ensure that rental units built through this program
are more aordable, that people can reduce pollution and save on energy
bills, and that Canada continues to make progress towards meeting our
climate projections.
40 Chapter 1
Direct Support for those in Housing Need
The Canada Housing Benet was co-developed with provinces and territories
and launched in 2020 with joint funding of $4 billion over eight years.
It provides direct nancial support to Canadians who are experiencing housing
need. However, as part of its broader eorts to make life more aordable for
Canadians, the government recognizes that many are in need of additional
assistance. To support those struggling with housing costs:
Budget 2022 proposes to provide $475 million in 2022-23 to provide a
one-time $500 payment to those facing housing aordability challenges.
The specics and delivery method will be announced at a later date.
A New Generation of Co-Operative Housing
Development
For generations, co-ops have oered quality, aordable housing to Canadians,
while empowering their members through inclusion, personal development,
and security of tenure through their community-oriented model of housing.
While co-ops are home to approximately a quarter of a million Canadians,
not enough have been built in recent years.
Budget 2022 proposes to reallocate $500 million of funding on a cash basis
from the National Housing Co-Investment Fund to launch a new Co-operative
Housing Development Program aimed at expanding co-op housing in
Canada. This new program will be co-designed with the Co-operative Housing
Federation of Canada and the co-operative housing sector.
Budget 2022 also proposes an additional $1 billion in loans to be
reallocated from the Rental Construction Financing Initiative to support co-
op housing projects.
With the largest investment in building new co-op housing for more than
30 years, an estimated 6,000 units will be constructed.
Making Housing More Aordable 41
Aordable Housing in the North
Canada’s Northern communities face unique housing needs due to higher
construction costs, shorter construction seasons, infrastructure gaps, and the eects
of climate change that are increasing as the North has been warming at roughly
three times the global warming rate. The federal government is continuing to work
with partners across Yukon, the Northwest Territories, and Nunavut to address the
issues of housing availability and quality that disproportionately aect Northerners.
Budget 2022 proposes to provide $150 million over two years, starting
in 2022-23, to support aordable housing and related infrastructure
in the North. Of this amount, $60 million would be provided to
the Government of Nunavut; $60 million to the Government of the
Northwest Territories; and $30 million to the Government of Yukon.
Multigenerational Home Renovation Tax Credit
Many Canadians have traditions of living together in multigenerational homes,
with grandparents, parents, and children under one roof. For some families
across the country, having dierent generations living together—an elderly
grandparent with their daughter’s family or a son with a disability with their
parents—can be an important way for them to care for each other.
To support these families, Budget 2022 proposes to introduce a
Multigenerational Home Renovation Tax Credit, which would provide up to
$7,500 in support for constructing a secondary suite for a senior or an adult
with a disability.
Starting in 2023, this refundable credit would allow families to claim 15 per cent
of up to $50,000 in eligible renovation and construction costs incurred in order
to construct a secondary suite.
42 Chapter 1
Greener Buildings and Homes
Buildings and homes are the third-largest source of greenhouse gas emissions
in Canada, accounting for approximately 12 per cent of Canada’s emissions.
Since 2016, the federal government has dedicated more than $10 billion
towards decarbonizing homes and buildings, and incenting energy ecient
retrots. To achieve Canada’s goal of net-zero emissions by 2050, the scale
and pace of retrotting buildings in Canada must increase. To this end, the
federal government will develop a national net-zero by 2050 buildings strategy,
working with provinces, territories, and other partners to accelerate both
retrots of existing buildings, and the construction of buildings to the highest
zero carbon standards.
Budget 2022 proposes to provide $150 million over ve years, starting
2022-23, to Natural Resources Canada to develop the Canada Green
Buildings Strategy. The strategy will include initiatives to further drive
building code reform; to accelerate the adoption and implementation
of performance-based national building codes; to promote the use
of lower carbon construction materials; and to increase the climate
resilience of existing buildings.
Budget 2022 proposes to provide $200 million over ve years, starting
in 2022-23, to Natural Resources Canada to create the Deep Retrot
Accelerator Initiative, which will provide support for retrot audits and
project management for large projects to accelerate the pace of deep
retrots in Canada, including a focus on low-income aordable housing.
Establishing a Greener Neighbourhood Pilot Program
More than two thirds of buildings that will be standing in Canada in 2050 have
already been built today, and many of them need to be retrotted to make
them more sustainable.
The Energiesprong model, adopted by Netherlands, the United Kingdom,
France, Germany, and the United States, accelerates the pace and scale of
retrots by aggregating homes and buildings in an entire neighbourhood and
retrotting them all at the same time. This support for community-level home
retrots aligns with the Net-Zero Advisory Body’s recommendation to seek out
opportunities to decarbonize multiple buildings at once.
Budget 2022 proposes to provide $33.2 million over ve years, starting
2022-23, to Natural Resources Canada, including $6 million from the
Green Infrastructure – Energy Ecient Buildings Program to implement a
Greener Neighbourhoods Pilot Program in up to six community housing
neighbourhoods to pilot “Energiesprong” model in Canada.
Making Housing More Aordable 43
Greener Construction in Housing and Buildings
Guidance, standards, and research are all needed to support innovations like
the development of lower-carbon building materials and more energy ecient
processes for retrotting homes.
Budget 2022 proposes to provide $183.2 million over seven years, starting
in 2022-23, with $8.5 million in remaining amortization, and $7.1 million
ongoing to the National Research Council to conduct research and
development on innovative construction materials and to revitalize
national housing and building standards to encourage low-carbon
construction solutions.
Greener Aordable Housing
Budget 2021 announced $4.4 billion on a cash basis to create the Canada Greener
Homes Loan program, of which a portion will be used to make existing aordable
housing more energy ecient, which will also help to lower energy bills.
Budget 2022 proposes to provide an additional $458.5 million over the
program duration, starting in 2022-23, to the Canada Mortgage and
Housing Corporation to provide low-interest loans and grants to low-
income housing providers as part of the low-income stream of the Canada
Greener Homes Loan program.
Long-Term Supports to End Homelessness
Every Canadian should have a safe place to call home, but for too many,
including Indigenous peoples, persons with disabilities, and veterans, that still
isn’t a reality. Thousands of Canadians do not have a warm place to sleep at the
end of the day, and during the pandemic, have had to choose between the cold
of the streets and the crowding of shelters.
Through Reaching Home: Canada’s Homelessness Strategy, the federal
government has committed more than $3 billion to address homelessness,
including doubling annual funding for four years in response to the pandemic.
The government remains committed to ending chronic homelessness, and is
proposing signicant additional investments that will help make continued
progress towards that goal.
Budget 2022 proposes to provide $562.2 million over two years, beginning
in 2024-25, for Infrastructure Canada to continue providing doubled annual
funding for Reaching Home. This funding will provide longer term certainty
for the organizations doing vitally important work across the country and
ensure that our communities have the support they need to continue to
prevent and address homelessness.
44 Chapter 1
Improving Community Responses to Homelessness
Reaching Home provides vital support to community eorts to support those
experiencing homelessness. However, no community or organization can
prevent or end homelessness on its own. Making sure that everyone has a
safe place to call home is a goal that dierent organizations and orders of
governments share, and there is a need to ensure communities have access to
all of the knowledge and tools they need to eect change.
Budget 2022 proposes to provide $18.1 million over three years, starting in
2022-23, to Infrastructure Canada to conduct research about what further
measures could contribute to eliminating chronic homelessness.
A New Veteran Homelessness Program
The government is also taking action to address the fact that thousands of
veterans experience homelessness every year. They have served Canada with
our ag on their shoulder, and they deserve a safe place to call home.
Budget 2021 announced $45 million for a pilot program aimed at reducing
veteran homelessness. To ensure that long-term support is in place, the
government now intends to move directly to the launch of a targeted program.
Budget 2022 proposes to provide $62.2 million over three years, beginning
in 2024-25, for Infrastructure Canada, with support from Veterans Aairs
Canada, to launch a new Veteran Homelessness Program that will provide
services and rent supplements to veterans experiencing homelessness in
partnership with community organizations.
1.2 Helping Canadians Buy Their First Home
From big cities to small towns, the cost of owning a home continues to rise.
Young people are nding it more and more dicult to imagine buying a one-
bedroom condo—to say nothing of a three-bedroom house. Many of those
who’ve been saving for years are being pushed further and further away from
where they work in order to nd something they can aord.
To help address this, Budget 2022 is proposing a series of new measures to
support rst-time home buyers and help make the path to ownership a reality
for renters.
Making Housing More Aordable 45
A Tax-Free First Home Savings Account
As home prices climb, so too does the cost of a down payment. This represents
a major barrier for many looking to own a home—especially young people.
To help Canadians save for their rst home:
Budget 2022 proposes to introduce the Tax-Free First Home Savings
Account that would give prospective rst-time home buyers the ability to
save up to $40,000. Like an RRSP, contributions would be tax-deductible,
and withdrawals to purchase a rst home—including investment income—
would be non-taxable, like a TFSA. Tax-free in, tax-free out.
The government intends to work with nancial institutions to ensure that a Tax-
Free First Home Savings Account could be opened and contributed to in 2023.
It is estimated that the Tax-Free First Home Savings Account would provide
$725 million in support over ve years.
Matthew and Taryn are aspiring homeowners living together. Starting in
2023, they each save $8,000 per year (the annual maximum) in their Tax-Free
First Home Savings Account and are able to deduct this from their income.
They both make between $50,000 and $100,000, and the Tax-Free First Home
Savings Account allows them each to receive an annual federal tax refund
of $1,640.
Matthew and Taryn have a combined $90,000 (including tax-free investment
income) in their Tax-Free First Home Savings Account at the end of 2027,
when they nally nd their ideal rst home.
By using the Tax-Free First Home Savings Account, Matthew and Taryn are
nally able to aord a down payment to buy their rst home. They can
withdraw their down payment tax-free, saving thousands of dollars that can
be put towards their new home. In addition, they will claim the doubled First-
Time Home Buyers’ Tax Credit, providing an additional $1,500 in tax relief.
Doubling the First-Time Home Buyers’ Tax Credit
The government recognizes that the signicant closing costs associated with
purchasing a home can be a hurdle for rst-time home buyers, and the First-Time
Home Buyers’ Tax Credit is intended to provide support to Canadians buying their
rst home whether it be in a rural, suburban, or urban community.
Budget 2022 proposes to double the First-Time Home Buyers’ Tax Credit
amount to $10,000. The enhanced credit would provide up to $1,500 in
direct support to home buyers.
This measure would apply to homes purchased on or after January 1, 2022.
46 Chapter 1
An Extended and More Flexible First-Time Home
Buyer Incentive
To make it more aordable for people to buy their rst home, the federal
government introduced the First-Time Home Buyer Incentive, which allows
eligible rst-time home buyers to lower their borrowing costs by sharing the
cost of buying a home with the government.
To help more Canadians purchase their rst home, Budget 2022 announces
an extension of the First-Time Home Buyer Incentive to March 31, 2025,
and that the government is exploring options to make the program more
exible and responsive to the needs of rst-time home buyers, including
single-led households.
Supporting Rent-to-Own Projects
Many Canadians rent because they value the exibility that comes with it.
Others rent before they plan to buy their own home, but for those working
towards ownership, rising home prices are pushing down payments further out
of reach. Rent-to-own arrangements can help alleviate that barrier by providing
more time and support to renters on the path to homeownership, and by
allowing them to live and grow in their homes.
To help develop and scale up rent-to-own projects across Canada, Budget
2022 proposes to provide $200 million in dedicated support under the
existing Aordable Housing Innovation Fund. This will include $100 million
to support non-prots, co-ops, developers, and rent-to-own companies
building new rent-to-own units.
This investment will provide opportunities for Canadians to get on the path
to homeownership earlier, while also encouraging new housing supply that
supports aordability for renters and prospective homeowners.
Examples of eligible projects, which must include safeguards and robust
consumer protections, could include the repair and renewal of housing for rent-
to-own purposes, innovative nancing models, and programming that assists
rent-to-own participants in preparing for homeownership.
Making Housing More Aordable 47
1.3 Protecting Buyers and Renters
Buying a home is often the most signicant nancial decision that someone will
make in their life. However, some real estate practices are putting even more
pressure on home buyers and leaving them questioning whether or not they
paid too much for their home.
Moving Forward on a Home Buyers’ Bill of Rights
Unfair practices like blind bidding or asking buyers to waive their right to a
home inspection can make the process of buying a home even more stressful
for too many Canadians. To help level the playing eld for young and middle
class Canadians, the government will take steps to make the process of buying
a home more open, transparent, and fair.
Budget 2022 announces that the Minister of Housing and Diversity and
Inclusion will engage with provinces and territories over the next year to
develop and implement a Home Buyers’ Bill of Rights and bring forward a
national plan to end blind bidding. Among other things, the Home Buyers
Bill of Rights could also include ensuring a legal right to a home inspection
and ensuring transparency on the history of sales prices on title searches.
To support these eorts, Budget 2022 proposes to provide $5 million
over two years, starting in 2022-23, to the Canada Mortgage and Housing
Corporation.
Housing for Canadians, Not for Big Corporations
Housing should be for Canadians to use as homes.
However, in recent years, the signicant increase in housing prices has led
to large investors acquiring a larger portfolio of residential housing. There is a
concern that this concentration of ownership in residential housing can drive up
rents and house prices, and undercut the important role that small, independent
landlords play. Many believe that this trend has also led to a rise in “renovictions”,
when a landlord pressures and persuades their tenants to leave, or is formally
permitted to evict them to make extensive renovations in order to raise rents.
To address these concerns:
Budget 2022 announces a federal review of housing as an asset class, in
order to better understand the role of large corporate players in the market
and the impact on Canadian renters and homeowners. This will include the
examination of a number of options and tools, including potential changes
to the tax treatment of large corporate players that invest in residential real
estate. Further details on the review will be released later this year, with
potential early actions to be announced before the end of the year.
48 Chapter 1
1.4 Curbing Foreign Investment and Speculation
Increasing our housing supply will help make housing more aordable, but it
isn’t the only solution.
There is concern that foreign investment, property ipping and speculation, and
illegal activity are driving up the cost of housing in Canada. The government
has an important role to play in tackling these issues.
Budget 2022 proposes new measures that will ban foreign investment in
residential real estate, crack down on illegal activity in our housing market, and
make sure that property ippers and speculators are paying their fair share
of tax.
A Ban on Foreign Investment in Canadian Housing
For years, foreign money has been coming into Canada to buy residential
real estate. This has fueled concerns about the impact on costs in cities like
Vancouver and Toronto and worries about Canadians being priced out of the
housing market in cities and towns across the country.
To make sure that housing is owned by Canadians instead of foreign
investors, Budget 2022 announces the government’s intention to propose
restrictions that would prohibit foreign commercial enterprises and people
who are not Canadian citizens or permanent residents from acquiring non-
recreational, residential property in Canada for a period of two years.
Refugees and people who have been authorized to come to Canada under
emergency travel while eeing international crises would be exempted.
International students on the path to permanent residency would also be
exempt in certain circumstances, as would individuals on work permits who are
residing in Canada.
The government will continue to monitor the impact that foreign money is
having on housing costs across Canada and may come forward with additional
measures to strengthen the enforcement of the proposed ban if necessary.
Non-resident, non-Canadians who own homes that are being underused or left
vacant would be subject to the Underused Housing Tax once it is in eect.
Making Housing More Aordable 49
Making Property Flippers Pay Their Fair Share
Property ipping—buying a house and selling it for much more than what was
paid for it just a short time prior—can unfairly lead to higher housing prices,
and some people who engage in property ipping may be improperly reporting
their prots to pay less tax.
Budget 2022 proposes to introduce new rules to ensure prots from
ipping properties are taxed fully and fairly. Specically, any person
who sells a property they have held for less than 12 months would be
considered to be ipping properties and would be subject to full taxation
on their prots as business income. Exemptions would apply for Canadians
who sell their home due to certain life circumstances, such as a death,
disability, the birth of a child, a new job, or a divorce. Exemptions will be
set in forthcoming rules and Canadians will be consulted on the draft
legislative proposals.
This new measure will ensure that investors who ip homes pay their fair share,
while protecting the current, vitally important, principal residence exemption for
Canadians who use their houses as homes.
The measure would apply to residential properties sold on or after January 1, 2023.
Taxing Assignment Sales
Homes should be for people to live in, not commodities to be traded and
proted upon by housing speculators. Speculative trading in the Canadian
housing market contributes to higher prices for Canadians. Speculative trading
can include the resale of housing before it has even been constructed or lived
in. This is called an “assignment sale.”
Currently, when a person makes a new home assignment sale, Goods and
Services Tax/Harmonized Sales Tax (GST/HST) may or may not apply, depending
on the reason for purchasing the home. For example, GST/HST does not apply if
the buyer initially intended to live in the home.
This creates an opportunity for speculators to be dishonest about their original
intentions, and uncertainty for everyone involved in an assignment sale as to
whether GST/HST applies. The current rules also result in the uneven application
of GST/HST to the full and nal prices of new homes.
To address these issues, Budget 2022 proposes to make all assignment
sales of newly constructed or substantially renovated residential housing
taxable for GST/HST purposes, eective May 7, 2022.
50 Chapter 1
Protecting Canadians From Money Laundering in the
Mortgage Lending Sector
In recent years, there has been a growth in mortgages issued by lending
businesses not regulated under the national anti-money laundering and anti-
terrorist nancing rules that apply to other nancial institutions, such as banks.
This puts many middle class Canadians, and their most important investment, at
nancial risk.
To help prevent nancial crimes in the real estate sector, the federal
government is announcing its intention to extend anti-money laundering
and anti-terrorist nancing requirements to all businesses conducting
mortgage lending in Canada within the next year.
This will limit the exploitation of the real estate market by criminals, which can
aect housing aordability across the country.
Making Housing More Aordable 51
Chapter 1
Making Housing More Aordable
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
1.1. Building
Aordable Homes 750 1,813 2,030 1,789 1,864 637 8,883
Launching a New
Housing Accelerator
Fund
0 150 925 925 1,000 1,000 4,000
Leveraging Transit
Funding to Build More
Homes
1
750 0 0 0 0 0 750
Rapidly Building New
Aordable Housing
0 1,000 500 0 0 0 1,500
Speeding Up Housing
Construction and
Repairs for Vulnerable
Canadians
2
0 801 1,059 978 893 0 3,730
Less: Funds Sourced
From Existing
Departmental
Resources
0 -801 -675 -595 -510 -576 -3,157
Building More
Aordable and Energy
Ecient Rental Units
0 216 244 251 223 194 1,128
Less: Funds
Previously
Provisioned in the
Fiscal Framework
0 -216 -244 -251 -223 -194 -1,128
Direct Support for those
in Housing Need
0 475 0 0 0 0 475
A New Generation of
Co-Operative Housing
Development
0 6 34 78 74 0 191
Less: Funds Sourced
From Existing
Departmental
Resources
0 -6 -34 -78 -74 0 -191
Aordable Housing in
the North
0 75 75 0 0 0 150
Multigenerational Home
Renovation Tax Credit
0 5 25 25 25 25 105
Greener Buildings and
Homes
3
0 70 70 70 70 70 350
52 Chapter 1
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Establishing a Greener
Neighbourhood Pilot
Program
3
0 2 8 11 8 4 33
Less: Funds Sourced
From Existing
Departmental
Resources
0 0 0 -4 -2 0 -6
Greener Construction in
Housing and Buildings
3
0 17 24 28 31 28 127
Greener Aordable
Housing
3
0 49 39 75 72 85 319
Less: Funds
Previously
Provisioned in the
Fiscal Framework
0 -27 -26 -31 -28 -24 -136
Long-Term Supports to
End Homelessness
0 0 0 281 281 0 562
Improving Community
Responses to
Homelessness
0 8 8 2 0 0 18
A New Veteran
Homelessness Program
0 0 0 13 24 24 62
Less: Year-Over-
Year Reallocation
of Funding
0 -11 0 11 0 0 0
1.2. Helping Canadians
Buy Their First Home -17 124 180 345 350 355 1,338
A Tax-Free First Home
Savings Account
0 0 55 215 225 230 725
Doubling the First-Time
Home Buyers’ Tax Credit
30 125 130 130 130 130 675
An Extended and More
Flexible First-Time Home
Buyer Incentive
9 38 43 51 52 50 242
Less: Funds Sourced
From Existing
Departmental
Resources
-55 -38 -48 -51 -57 -56 -305
Supporting Rent-to-Own
Projects
0 22 24 24 25 26 121
Less: Funds Sourced
From Existing
Departmental
Resources
0 -22 -24 -24 -25 -26 -121
1.3. Protecting Buyers
and Renters 0 3 3 0 0 0 5
Making Housing More Aordable 53
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Moving Forward on a
Home Buyers' Bill of
Rights 0 3 3 0 0 0 5
1.4. Curbing Foreign
Investment and
Speculation
0 -14 -25 -25 -25 -25 -114
Making Property
Flippers Pay Their Fair
Share 0 -4 -15 -15 -15 -15 -64
Taxing Assignment Sales 0 -10 -10 -10 -10 -10 -50
Additional Investments
– Making Housing
More Aordable
0 26 0 0 0 0 26
Assisting Homeowners
Aected by Pyrrhotite 0 26 0 0 0 0 26
Additional funding proposed for the Canada Mortgage and Housing Corporation to support
homeowners in Quebec whose homes require remediation from damages to foundations
caused by the mineral pyrrhotite.
Chapter 1 - Net Fiscal
Impact
733 1,951 2,188 2,109 2,189 966 10,137
Note: Numbers may not add due to rounding.
1
Announced on February 17, 2022.
2
An additional $573 million in outer year existing departmental resources will be advanced to support this
measure.
3
Announced in the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong
Economy, released on March 29, 2022.
Chapter 2
A Strong, Growing, and Resilient Economy
2.1 Leading Economic Growth and Innovation ........................................................... 60
Launching a World-Leading Canada Growth Fund .......................................... 60
Creating a Canadian Innovation and Investment Agency ............................. 61
Review of Tax Support to R&D and Intellectual Property .............................. 63
Cutting Taxes for Canada’s Growing Small Businesses ................................... 64
2.2 Supporting Economic Growth and Stable Supply Chains ................................ 65
Canada’s Critical Minerals and Clean Industrial Strategies ............................ 65
Better Supply Chain Infrastructure ........................................................................... 69
Moving on Canada’s Infrastructure Investments .............................................. 70
Strengthening Canada’s Semiconductor Industry ............................................ 72
Growing Canada’s Health-Focused Small and Medium-Sized Businesses . 72
Making Canada’s Economy More Competitive ................................................. 72
Leadership on Internal Trade and Labour Mobility ........................................... 73
Supporting Canada’s Innovation Clusters ............................................................. 73
Renewing the Canadian Agricultural Partnership .............................................. 74
2.3 Investing in Intellectual Property and Research .................................................. 74
Building a World-Class Intellectual Property Regime ....................................... 74
Securing Canada’s Research from Foreign Threats .......................................... 76
Hiring More Leading Researchers ............................................................................ 77
Expanding Canada’s Presence in Space ................................................................. 77
Leveraging the National Research Council ........................................................... 78
Funding for Black Researchers .................................................................................. 78
Funding the Canadian High Arctic Research Station ....................................... 78
2.4 Driving Investment and Growth for Our Small Businesses .............................. 79
Reducing Credit Card Transaction Fees ................................................................. 79
Strengthening Canada’s Trade Remedy and Revenue Systems ................. 79
Employee Ownership Trusts ...................................................................................... 80
Engaging the Cannabis Sector .................................................................................. 80
2.5 Supporting Recovery and Growth in Aected Sectors ..................................... 81
The Next Steps Towards High Frequency Rail ..................................................... 81
Investing in VIA Rail Stations and Maintenance Centres ................................ 81
Supporting the Prince Edward Island Potato Industry ..................................... 82
Full and Fair Compensation for Supply Managed Sectors ............................. 82
Support for Canada’s Tourism Sector ..................................................................... 83
A Strong, Growing, and Resilient Economy 57
Chapter 2
A Strong, Growing, and Resilient Economy
The global economy is changing. Technology, globalization, and an historic
eort to ght climate change are creating new industries and new jobs.
We can be leaders in the economy of today and tomorrow and Canadians can
benet from the good jobs and economic growth that will come with it. But to
be leaders in tomorrow’s economy, we need to make smart decisions today.
We need to attract more investment in the industries that are creating good
middle class jobs for Canadians. We need to make our economy more resilient
by strengthening our supply chains, ensuring our businesses can get their
goods to market, and making sure Canadians are able to buy the products they
need from around the world.
We need to make our economy more innovative and more productive and we
need to make it easier for businesses, big and small, to invest, grow, and create
jobs in Canada.
Canada is already home to some of the fastest growing markets for high-tech
jobs in North America. Toronto—not Silicon Valley—led high-tech job growth
from 2019 into 2020, and Vancouver outpaced New York City.
Chart 2.1
High Tech Job Growth
26%
21%
15%
0%
5%
10%
15%
20%
25%
30%
per cent growth 2019-2020
Source: CBRE Tech-30 2021
The corporate income tax rate reductions proposed in Budget 2021 for
businesses that manufacture zero-emission technologies will give Canada
the lowest combined federal-provincial-territorial average tax rate in the G7.
This makes us an attractive destination for business investment in the clean
technology sector—a sector that is getting larger and more valuable every day.
58 Chapter 2
Chart 2.2
Statutory Corporate Income Tax Rates for Zero-Emission Technology
Manufacturing and Processing, G7 Countries
17.9%
19.0%
25.8%
25.8%
27.8%
29.7%
29.9%
0%
5%
10%
15%
20%
25%
30%
35%
Canada United
Kingdom
United States France Italy Japan Germany
Notes: Statutory rates are the weighted average or representative combined federal and provincial/state/regional rate,
including surtaxes where applicable.
Tax rates are for 2022 and include measures announced as of January 1, 2022 (except for the United States where they are
for 2021).
As the global economy changes, Canada has everything we need to thrive.
Our workforce is one of the most educated in the world. We have world-
class research institutions and abundant sources of clean energy. We are
the only country in the world with free trade access to the entire G7 and
European Union.
But other countries are moving fast in the international competition for
investment and innovation. We need to do more to ensure Canadian
businesses—of all sizes—are able to succeed.
Budget 2022 outlines the additional steps that need to be taken—the steps
that will create new, good-paying jobs for Canadians; help more people join the
middle class; and set Canada up to be an economic leader for decades to come.
A Strong, Growing, and Resilient Economy 59
Key Ongoing Actions
In Budget 2021, the federal government announced a range of important
programs and initiatives that will help foster economic growth, including:
$8 billion to transform and decarbonize industry and invest in clean
technologies and batteries;
$4 billion for the Canada Digital Adoption Program, which launched in
March 2022 to help businesses move online, boost their e-commerce
presence, and digitalize their businesses;
$1.2 billion to support life sciences and bio-manufacturing in Canada,
including investments in clinical trials, bio-medical research, and
research infrastructure;
$1 billion to the Strategic Innovation Fund to support life sciences and
bio-manufacturing rms in Canada and develop more resilient supply
chains. This builds on investments made throughout the pandemic
with manufacturers of vaccines and therapeutics like Sano, Medicago,
and Moderna;
$1.9 billion for the National Trade Corridors Fund to make Canada’s
transportation infrastructure more ecient and more eective, like
twinning parts of the Trans-Canada Highway in Nova Scotia and road and
rail improvements at the Port of Vancouver;
$1.5 billion for regional development agencies to support the country’s
economic recovery through programs like the Jobs and Growth Fund and
the Canada Community Revitalization Fund;
$1 billion for the Universal Broadband Fund (UBF), bringing the total
available through the UBF to $2.75 billion, to improve high-speed Internet
access and support economic development in rural and remote areas
of Canada;
Enhancing the Canada Small Business Financing Program, increasing annual
nancing to small businesses by an estimated $560 million;
$1.2 billion to launch the National Quantum Strategy, Pan-Canadian
Genomics Strategy, and the next phase of Canada’s Pan-Canadian Articial
Intelligence Strategy to capitalize on emerging technologies of the future;
$1 billion to revitalize the tourism sector;
Helping small and medium-sized businesses to invest in new technologies
and capital projects by allowing for the immediate expensing of up to
$1.5 million of eligible investments beginning in 2021;
Continuing to work with partners to support the revitalization of East
Montreal, including projects that promote innovation, development, and a
green and inclusive transition of the area; and
Cutting tax rates in half for businesses that manufacture zero-emission
technologies.
60 Chapter 2
2.1 Leading Economic Growth and Innovation
Budget 2022 comes at a critical time for Canada. We need to take signicant
and transformative steps to put our economy on the path to reach net-zero
by 2050. We need to make it easier for Canadian businesses to innovate and
become global leaders in the industries that will grow our economy and create
new jobs.
While Budget 2022 proposes dozens of measures that will help to do these
things, there are two steps, in particular, that will have a signicant impact
in making Canada’s economy stronger and more innovative: the launch of
a world-leading Canada Growth Fund; and the creation of a new Canadian
Innovation and Investment Agency.
Launching a World-Leading Canada Growth Fund
The value of economic growth is that it delivers higher and better standards
of living for Canadians. Facing the challenges of climate change, technological
change, and a changing global economy, Canada’s economic success is not
guaranteed. It requires focused and concerted action.
Governments cannot do this alone. To prosper in the face of challenges of such
great scale, we must nd new ways of pooling our capabilities across the public
sector, the private sector, and across industries from coast-to-coast-to-coast.
On the ght against climate change alone—to build a net-zero economy by
2050—Canada will need between $125 billion and $140 billion of investment
every year over that period. Today, annual investment in the climate transition is
between $15 billion and $25 billion. No one government can close that gap.
Today, other countries are moving to positon themselves in the international
competition for capital and investment. Canada’s peers have begun to launch
growth funds to attract the trillions of dollars in private capital that are waiting
to be invested in the good jobs and new industries of today and tomorrow.
Canada must keep pace.
Budget 2022 proposes to establish the Canada Growth Fund to attract
substantial private sector investment to help meet important national
economic policy goals:
1. To reduce emissions and contribute to achieving Canada’s climate goals;
2. To diversify our economy and bolster our exports by investing in the
growth of low-carbon industries and new technologies across new and
traditional sectors of Canada’s industrial base; and
3. To support the restructuring of critical supply chains in areas important
to Canada’s future prosperity—including our natural resources sector.
A Strong, Growing, and Resilient Economy 61
The Canada Growth Fund will be a new public investment vehicle that will
operate at arms-length from the federal government. It will invest using a broad
suite of nancial instruments including all forms of debt, equity, guarantees,
and specialized contracts. The fund will be initially capitalized at $15 billion over
the next ve years. It will invest on a concessionary basis, with the goal that for
every dollar invested by the fund, it will aim to attract at least three dollars of
private capital.
In standing up the Canada Growth Fund, the government intends to seek expert
advice from within Canada and abroad. Following these consultations, details
about the launch of the fund will be included in the 2022 fall economic and
scal update. Funding for the Canada Growth Fund will be sourced from the
existing scal framework.
Creating a Canadian Innovation and Investment Agency
Canadians are a talented, creative, and inventive people. Our country has never
been short on good ideas.
But to grow our economy, invention is not enough. Canadians and Canadian
companies need to take their new ideas and new technologies and turn them
into new products, services, and growing businesses.
However, Canada currently ranks last in the G7 in R&D spending by businesses.
This trend has to change.
Chart 2.3
Business R&D Relative to Peers
0.6
1.2
0.8
1.6
1.9
2.3
1.2
1.4
1.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1981 1985 1989 1993 1997 2001 2005 2009 2013 2017
Canada United States G7
per cent of GDP
Source: Organisation for Economic Co-operation and Development, Main Science and Technology Indicators.
62 Chapter 2
Solving Canada’s main innovation challenges—a low rate of private business
investment in research, development, and the uptake of new technologies—is
key to growing our economy and creating good jobs.
A market-oriented innovation and investment agency—one with private sector
leadership and expertise—has helped countries like Finland and Israel transform
themselves into global innovation leaders.
The Israel Innovation Authority has spurred the growth of R&D-intensive
sectors, like the information and communications technology and autonomous
vehicle sectors. The Finnish TEKES helped transform low-technology sectors like
forestry and mining into high technology, prosperous, and globally competitive
industries.
In Canada, a new innovation and investment agency will proactively work with
new and established Canadian industries and businesses to help them make the
investments they need to innovate, grow, create jobs, and be competitive in the
changing global economy.
Budget 2022 announces the government’s intention to create an
operationally independent federal innovation and investment agency,
and proposes $1 billion over ve years, starting in 2022-23, to support its
initial operations. Final details on the agency’s operating budget are to be
determined following further consultation later this year.
At a time when other countries are making signicant investments in this area,
the government intends to invest in innovation, research, and development at
the scale required to make Canada a global leader.
Support delivered through the innovation and investment agency will also
enable innovation and growth within the Canadian defence sector and boost
investments in Canadian defence manufacturing.
The government will consult further with both Canadian and global experts
in nalizing the design and mandate of the new agency, with details to be
announced in the 2022 fall economic and scal update.
A Strong, Growing, and Resilient Economy 63
An Innovation and Investment Agency to Help Canadian
Businesses Succeed
Shannon runs a small life science rm in London, Ontario, and has learned
that a Canadian university researcher has discovered—through preliminary
experiments—a new class of potentially life-saving cancer therapeutics.
Shannon’s rm specializes in methods for quickly turning potential
therapeutics into safe, market-ready pharmaceuticals through advanced drug
development methods.
Her rm wants to partner with the researcher to initiate a new R&D program to
develop these drugs, but does not have the capital it needs. Shannon sees a large
global opportunity, but nancial support is needed up front to help her company
seize the opportunity.
Shannon’s rm could approach the Agency to seek guidance and support, and
the Agency would quickly determine the feasibility of the project, the market
potential of the technology, and could provide the rm with needed funding
to capitalize on an exciting opportunity. If project milestones are achieved,
Shannon’s rm could apply for additional funding as it works to sell its new
product around the world and create jobs here in Canada.
Review of Tax Support to R&D and Intellectual
Property
The Scientic Research and Experimental Development (SR&ED) program
provides tax incentives to encourage Canadian businesses of all sizes and
in all sectors to conduct R&D. The SR&ED program has been a cornerstone
of Canada’s innovation strategy. The government intends to undertake a
review of the program, rst to ensure that it is eective in encouraging R&D
that benets Canada, and second to explore opportunities to modernize and
simplify it. Specically, the review will examine whether changes to eligibility
criteria would be warranted to ensure adequacy of support and improve overall
program eciency.
As part of this review, the government will also consider whether the tax
system can play a role in encouraging the development and retention of
intellectual property stemming from R&D conducted in Canada. In particular,
the government will consider, and seek views on, the suitability of adopting a
patent box regime in order to meet these objectives.
64 Chapter 2
Cutting Taxes for Canada’s Growing Small Businesses
The government provides a range of incentives to encourage investments in
growing businesses.
Small businesses currently benet from a reduced federal tax rate of 9 per
cent on their rst $500,000 of taxable income, compared to a general federal
corporate tax rate of 15 per cent. A business no longer has access to this
lower rate once its level of capital employed in Canada reaches $15 million.
However, phasing out access to the lower tax rate too quickly—and then
requiring a small business to pay more in tax—can discourage some businesses
from continuing to grow and create jobs.
Budget 2022 proposes to phase out access to the small business tax rate
more gradually, with access to be fully phased out when taxable capital
reaches $50 million, rather than at $15 million.
This would allow more medium-sized businesses to benet from the reduced
rate, increase the amount of income that can be eligible for the reduced rate, and
deliver an estimated $660 million in tax savings over the 2022-2023 to 2026-2027
period that can be reinvested towards growing and creating jobs.
This measure would apply to taxation years that begin on or after Budget Day.
The government is also undertaking a review to assess whether the tax system
is providing adequate support to investments in growing businesses. The review
will include an examination of the rollover for small business investments. This
measure allows investors in small businesses to defer tax on capital gains.
Cutting Taxes for Canada’s Growing Small Businesses
MakerCo is a manufacturing business that currently has $10 million in taxable
capital and earns $500,000 in income annually (corresponding to a 5 per cent
rate of return on capital). Because the company’s taxable capital does not
exceed $10 million, all of its income is eligible for the small business tax rate of
9 per cent.
The company has identied a promising opportunity to expand its operations
and is considering a $2 million capital investment, which would bring its
taxable capital to $12 million and increase its income to $600,000.
Under the current rules, the company’s income eligible for the small business
tax rate would decrease to $300,000 and the remaining $300,000 would be
taxed at the general corporate tax rate of 15 per cent.
With the more gradual phase-out proposed in this Budget, the company’s
income eligible for the small business tax rate would be $475,000 and the
remaining $125,000 would be taxed at the general corporate tax rate. As a
result, the company would save $10,500 in taxes compared to the current
rules, making it more attractive for MakerCo to grow its business.
A Strong, Growing, and Resilient Economy 65
2.2 Supporting Economic Growth and Stable
Supply Chains
With our abundant resources, Canada has a unique opportunity to lead the way
in sectors where supply chain challenges have impacted the global economy.
Smart investments in areas like agriculture, critical minerals, and semiconductors
will help make Canada a leader in the clean and digital technologies that the
world counts on, and create thousands of good jobs for Canadians—many of
them in rural areas.
Complementary investments to allow goods to move more eciently—
both within Canada and with our trading partners around the world—will also
make our economy more resilient in the face of an ever-changing world.
Canada’s Critical Minerals and Clean Industrial
Strategies
Figure 2.1
Critical Minerals Opportunities
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Smelter or refinery
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Mine
Tungsten
Aluminium
Molybdenum
Potash
Nickel,
Chromium
Rare earth elements
Lithium
Tin, tungsten,
indium, gallium
Nickel, cobalt,
platinum group
metals
Uranium
Graphite
Aluminum
Vanadium
Lithium
Nickel,
cobalt
Nickel, cobalt
Graphite
Molybdenum
Nickel, Copper,
cobalt
Fluorspar
Niobium
Nickel, cobalt,
platinum group
metals
Niobium
Antimony
Zinc, copper
Copper
Rare earth elements
Cobalt, platinum group metals
Nickel, copper, cobalt,
platinum group metals
Titanium
Molybdenum,
copper
Cobalt, bismuth,
copper
Magnesium
Helium
Zinc, bismuth,
indium,
germanium
YK
BC
AB
SK
NWT
NU
MB
ON
QC
NL
NL
PEI
NS
NB
Critical minerals are central to major global industries like clean technology,
health care, aerospace, and computing. They are used in phones, computers,
and in our cars. They are already essential to the global economy and will
continue to be in even greater demand in the years to come.
Canada has an abundance of a number of valuable critical minerals, but we
need to make signicant investments to make the most of these resources.
66 Chapter 2
In Budget 2022, the federal government intends to make signicant
investments that would focus on priority critical mineral deposits, while working
closely with aected Indigenous groups and through established regulatory
processes. These investments will contribute to the development of a domestic
zero-emissions vehicle value chain, including batteries, permanent magnets,
and other electric vehicle components. They will also secure Canada’s place in
important supply chains with our allies and implement a just and sustainable
Critical Minerals Strategy.
In total, Budget 2022 proposes to provide up to $3.8 billion in support over
eight years, on a cash basis, starting in 2022-23, to implement Canada’s
rst Critical Minerals Strategy. This will create thousands of good jobs, grow
our economy, and make Canada a vital part of the growing global critical
minerals industry.
Supporting Critical Minerals Projects in Canada
Critical mineral mining projects are expensive and come with a unique set
of challenges that can often include remote locations, changing prices, and
lengthy regulatory processes. Making these projects a less risky undertaking for
companies will help grow both Canada’s critical mineral industry and secure the
good resource jobs of the future. Specic measures proposed in Budget 2022
to support critical mineral projects include:
Up to $1.5 billion over seven years, starting in 2023-24, for infrastructure
investments that would support the development of the critical minerals
supply chains, with a focus on priority deposits;
$79.2 million over ve years on a cash basis, starting in 2022-23, for Natural
Resources Canada to provide public access to integrated data sets to
inform critical mineral exploration and development; and
The introduction of a new 30 per cent Critical Mineral Exploration Tax
Credit for specied mineral exploration expenses incurred in Canada and
renounced to ow-through share investors.
The tax credit would apply to certain exploration expenditures targeted at
nickel, lithium, cobalt, graphite, copper, rare earths elements, vanadium,
tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals,
or uranium, and renounced as part of a ow-through share agreement entered
into after Budget Day and on or before March 31, 2027.
These measures will build upon Canada’s strong capital markets position for
mining companies.
The Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) are the
world's primary listing venues for mining and mineral exploration companies,
with more than 1,170 issuers in 2021. Between 2017 and 2021, almost
$45 billion of the world's total equity capital for these mineral exploration and
mining companies was raised by companies listed on the TSX or TSXV.
A Strong, Growing, and Resilient Economy 67
Chart 2.4
Global Mining Equity Capital Raised
(5-Year Total = 101 Billion CAD)
Source: TSX/TSXV Market Intelligence Group, S&P Capital IQ and S&P Global Market Intelligence.
As at December 31, 2021.
Attracting Global Critical Minerals Supply Chains
Budget 2022 proposes signicant funding to make Canada a more attractive
destination for critical minerals investment and to secure valuable agreements
that would increase production of goods like electric vehicles and batteries.
Budget 2022 proposes to provide up to $1 billion over six years on a
cash basis, starting in 2024-25, to Innovation, Science and Economic
Development Canada for the Strategic Innovation Fund. Combined with
$500 million drawn from existing program funding, this will provide
$1.5 billion in targeted support towards critical minerals projects,
with prioritization given to manufacturing, processing, and recycling
applications. Support for innovative projects through the Strategic
Innovation Fund will complement other proposed investments in the
sector, including a proposed $1.5 billion investment in infrastructure.
The government will also explore potential opportunities to support the growth
of the solar panel industry through this envelope.
$44.9B
$33.9B
$11.4B
$5.6B
$4.9B
TSX/TSXV ASX NYSE/NYSE Amer. HKEx LSE/AIM
68 Chapter 2
Promoting Sustainable Mining Extraction and Processing
With signicant advantages like strong environmental protections, a
well-educated workforce, experience in greening mining operations, and
commitments to reconciliation and Indigenous participation, Canada has
everything that leading companies look for when deciding where to invest in
mining projects. These advantages will be vitally important as Canada seeks to
develop the critical minerals supply chains.
Budget 2022 proposes new funding to build on those assets and continue to
make Canada an attractive country for critical mining investment.
Budget 2022 proposes to provide up to $144.4 million over ve years,
starting in 2022-23, to Natural Resources Canada and the National
Research Council to support research, development, and the deployment
of technologies and materials to support critical mineral value chains.
• Additionally, as indicated in Chapter 7, Budget 2022 proposes to
provide $103.4 million over ve years, starting in 2022-23, to Natural
Resources Canada for the development of a National Benets-Sharing
Framework for natural resources and the expansion of the Indigenous
Partnership Oce and the Indigenous Natural Resource Partnerships
program. At least $25 million of this amount will be dedicated to early
engagement and Indigenous communities' capacity building to support
their participation in the critical minerals strategy. These investments
will increase Indigenous capacity to benet from all types of natural
resources projects, including critical minerals, and are a key component
of the Partnering with Indigenous Peoples in Natural Resource Projects
proposal in Chapter 7.
Making the Critical Minerals Regulatory Processes Simpler
Companies seeking to invest look for a balanced and predictable regulatory
environment and a collaborative approach between dierent orders of
government. To help job-creating critical minerals projects move forward
in Canada, Budget 2022 makes important investments in improving our
regulatory processes.
Budget 2022 proposes to provide $10.6 million over three years, starting in
2024-25, to Natural Resources Canada to renew the Centre of Excellence on
Critical Minerals, which works with provincial, territorial, and other partners,
and that will provide direct assistance to help developers of critical minerals
navigate regulatory processes and existing support measures.
A Strong, Growing, and Resilient Economy 69
Budget 2022 also proposes to provide up to $40 million over eight years,
starting in 2022-23, to Crown-Indigenous Relations and Northern Aairs
Canada to support northern regulatory processes.
To ensure an ecient and eective impact assessment regime, the federal
government will consider the funding requirements for the Impact Assessment
Agency of Canada and other relevant departments in the context of the fall
2022 economic and scal update. This will help support the assessment of
major projects, such as critical mineral mines.
Working With Friends and Allies to Strengthen Global
Supply Chains
Canada has the critical minerals the world needs and is uniquely positioned to
be a trusted partner in the global critical minerals supply chain.
Budget 2022 proposes to provide $70 million over eight years, starting
in 2022-23, to Natural Resources Canada to advance Canada’s global
leadership on critical minerals, in particular to meet its responsibilities
under the Extractive Sector Transparency Measures Act.
Better Supply Chain Infrastructure
The recent ooding in British Columbia—which cut o the ow of goods
to and from the west coast—reinforced the importance of our highways,
railways, and ports as the backbone of our transportation system. In January,
the government hosted the National Supply Chain Summit to discuss the
challenges facing Canada's supply chains and identify potential solutions.
The recommendations of the Task Force will help inform the development of a
National Supply Chain Strategy.
Continued investments in transportation infrastructure will help ensure
Canada’s supply chains can meet the needs of our economy and withstand
disruptions caused by climate change and global events. Well-functioning
supply chains support good jobs and keep goods moving.
To help build more resilient and ecient supply chains, Budget 2022
proposes to provide $603.2 million over ve years, starting in 2022-23,
to Transport Canada, including:
• $450 million over ve years, starting in 2022-23, to support supply chain
projects through the National Trade Corridors Fund, which will help
ease the movement of goods across Canada’s transportation networks.
This is in addition to the $4.2 billion that has been allocated to the fund
since 2017. The Minister of Transport will rename the fund to reect the
government’s focus on supply chains;
• $136.3 million over ve years, starting in 2022-23, to develop industry-
driven solutions to use data to make our supply chains more ecient,
building on the success of initiatives like the West Coast Supply Chain
Visibility Program. Of this amount, $19 million will be sourced from
existing resources; and
70 Chapter 2
• $16.9 million over ve years, starting in 2022-23, to continue making
Canada’s supply chains more competitive by cutting needless red tape,
including working to ensure that regulations across various modes of
cargo transportation (e.g., ship, rail) work eectively together.
These investments will help lower prices for Canadians; make our supply chains
stronger; improve the ability of Canadian businesses to export their goods
abroad; and deliver essential goods to our communities.
These investments will also complement work the government is doing
through the newly established National Supply Chain Task Force, which will
work with industry, associations and experts to examine key pressures and
make recommendations regarding short- and long-term actions to strengthen
the eciency, uidity, and resiliency of transportation infrastructure and the
reliability of Canada’s supply chains.
Moving on Canada’s Infrastructure Investments
The Investing in Canada Infrastructure Program is providing $33.5 billion
over 11 years for public infrastructure across Canada. Under this program,
provinces and territories prioritize and submit projects to Infrastructure Canada
for review. To date, the program has approved more than $20 billion for over
4,500 projects in communities across the country, including the Montreal Blue
Line, Calgary Green Line, and Vancouver Millennium Line extensions, and the
public transit expansion in Ontario.
However, many of the funded projects are reporting construction delays due to
the pandemic. Despite signicant progress, there is also a need for provinces
to more quickly commit their remaining funding to projects that will deliver the
infrastructure that our communities need.
Budget 2022 signals the government’s intention to accelerate the deadline
for provinces to fully commit their remaining funding under the Investing in
Canada Infrastructure Program to priority projects to March 31, 2023.
As a measure of scal prudence, any uncommitted funds after this date
will be reallocated to other priorities. The federal government will work
closely with provinces to support them in expediting project submissions.
The existing deadline of March 31, 2025 will remain unchanged for
the territories.
Budget 2022 also proposes to extend the Investing in Canada Infrastructure
Program’s construction deadline from October 2027 to October 2033.
To support this extension, Budget 2022 proposes to adjust the program’s
funding prole so that funding is available when needed. This extension
recognizes delays caused by the pandemic, and will ensure that provinces
and territories can fund priority projects.
These measures will help ensure that federal funding for infrastructure can
A Strong, Growing, and Resilient Economy 71
continue to support transformative infrastructure projects in communities
across Canada.
Table 2.1
Funding Remaining, by Province, in the Investing in Canada Infrastructure
Program*
Province
Remaining Project Funding
$ (millions)
Percentage of total
project funding envelope
Alberta
$60.3 2%
British Columbia
$1,312.6 34%
Manitoba
$13.6 1%
New Brunswick
$392.4 58%
Newfoundland and
Labrador
$326.3 59%
Nova Scotia
$372.0 45%
Ontario
$1,056.8 10%
Prince Edward Island
$89.8 25%
Quebec
$3,299.0 44%
Saskatchewan
$375.2 42%
Source: Infrastructure Canada
*Data as of February 2, 2022 - Numbers do not include projects that provinces have signaled to the federal government.
72 Chapter 2
Strengthening Canada’s Semiconductor Industry
Semiconductors—often called microchips—are used every day in smartphones,
computers, and cars.
In February, the federal government announced $150 million to support
investments in the development and supply of semiconductors. This investment
built on the $90 million allocated in Budget 2021 to retool and modernize
the National Research Council’s Canadian Photonics Fabrication Centre,
which supplies photonics research, testing, prototyping, and pilot-scale
manufacturing services to academics and businesses in Canada.
In addition to these previous investments, Budget 2022 proposes to
provide $45 million over four years, starting in 2022-23 on a cash basis,
to Innovation, Science and Economic Development Canada to engage
with stakeholders, conduct market analysis, and support projects that will
strengthen Canada’s semiconductor industry.
Growing Canada’s Health-Focused Small and
Medium-Sized Businesses
The Coordinated Accessible National Health Network (CAN Health Network)
brings together hospital networks and health authorities in nine provinces
to procure innovative health care solutions, including investing in made-in-
Canada technologies. This model shows potential to help deliver better care to
Canadians, help our health technology businesses grow and create good middle
class jobs across the country.
Budget 2022 proposes to provide $30 million over four years, starting
in 2022-23, to build upon the success of the CAN Health Network,
and expand it nationally to Quebec, the territories, and Indigenous
communities.
Making Canada’s Economy More Competitive
A competitive economy is a fair, growing, and innovative economy. In this
regard, the government will consult broadly on the role and functioning of
the Competition Act and its enforcement regime. However, there are also
shortcomings in the Act that can easily be addressed and move Canada in line
with international best practices.
Budget 2022 announces the government’s intention to introduce legislative
amendments to the Competition Act as a preliminary phase in modernizing
the competition regime. This will include xing loopholes; tackling practices
harmful to workers and consumers; modernizing access to justice and
penalties; and adapting the law to today's digital reality.
A Strong, Growing, and Resilient Economy 73
Leadership on Internal Trade and Labour Mobility
Reducing barriers to interprovincial trade and labour mobility has been
consistently identied by economists as among the top ways for Canada to
increase our long-term economic prosperity. The International Monetary Fund
recently found that Canada could increase our GDP per capita by four per cent
through a complete liberalization of interprovincial trade in goods.
Since 2015, Canada has achieved meaningful progress, including signing
the Canada Free Trade Agreement, the removal of federal restrictions on
the interprovincial trade of liquor, and actions to harmonize regulations
between jurisdictions.
The federal government is committed to providing continued leadership
on reducing barriers to internal trade and labour mobility. Over the coming
year the government will evaluate and, where appropriate, remove federal
exemptions to the Canada Free Trade Agreement and take action to conclude
outstanding internal trade negotiations.
Supporting Canada’s Innovation Clusters
Since they were launched in 2017, Canada’s innovation clusters have helped
build successful and growing innovation ecosystems across the Canadian
economy. These have included plant-based protein alternatives; ocean-based
industries; advanced manufacturing; digital technologies; and
articial intelligence.
As of December 2021, Canada’s innovation clusters have already approved
more than 415 projects with 1,840 partners, worth over $1.9 billion.
These projects have been supported through co-investment by government
and industry across 11 provinces and territories. Together they have also
generated more than 850 new intellectual property rights.
There is an opportunity now to build on the success of this model to strengthen
networks between the private sector, academia, and governments in ways that
will promote innovation, help rms grow in Canada, and grow our economy.
Budget 2022 proposes to provide $750 million over six years, starting in
2022-23, to support the further growth and development of Canada’s
Global Innovation Clusters. Building on their success to date, these clusters
will expand their national presence and will collaborate to deepen their
impact, including through joint missions aligned with key government
priorities, such as ghting climate change and addressing supply chain
disruptions. To maximize the impact of this funding and to ensure it
corresponds with industry and government needs, it will be allocated
between the ve clusters on a competitive basis.
74 Chapter 2
Renewing the Canadian Agricultural Partnership
For generations, the agriculture and agri-food sector has been a cornerstone of
the Canadian economy. Canada’s farmers are counted upon to feed Canadians
and the world—a task that is even more important today due to increasing food
insecurity stemming from Russia’s illegal invasion of Ukraine.
The Canadian Agricultural Partnership is a comprehensive suite of support
oered by the federal, provincial, and territorial governments. Each year,
these programs provide $600 million to support agricultural innovation,
sustainability, competitiveness, and market development. The framework also
includes a comprehensive suite of business risk management programs to
help Canadian farmers cope with volatile markets and disaster situations, with
average spending of approximately $2 billion per year.
Federal, provincial, and territorial governments will work together over
the coming year to renew the programs under the next agricultural policy
framework that begins in 2023.
2.3 Investing in Intellectual Property and Research
Investing in and protecting intellectual property and research are vitally
important pieces of building an innovative economy.
Answering the call from those looking to innovate, Budget 2022 helps
to protect and expand intellectual property and research; attract leading
researchers; advance critical research priorities; and strengthen the security of
our research institutions.
Building a World-Class Intellectual Property Regime
Patent-owning businesses grow faster and pay higher wages. However, on the
number of patents held, Canada lags behind other countries we are competing
with to attract investment and grow our economy.
Since 2015, the federal government has taken important steps to improve
Canada’s intellectual property performance, including through the launch of
the National Intellectual Property Strategy in 2018, and Elevate IP and IP Assist
announced in Budget 2021.
A Strong, Growing, and Resilient Economy 75
Chart 2.5
Number of Patents per Capita, 2018
0 50 100 150
Italy
Canada
U.K.
France
U.S.
Germany
Japan
Patents per million people
Source: Organisation for Economic Co-operation and Development, Main Science and Technology Indicators.
To build a world-class intellectual property regime, Budget 2022 proposes
to build on previous investments and provide $96.6 million over ve years,
starting in 2022-23, and $22.9 million ongoing, as follows:
• $47.8 million over ve years, starting in 2023-24, and $20.1 million
ongoing to Innovation, Science and Economic Development Canada to
launch a new national lab-to-market platform to help graduate students
and researchers take their work to market;
• $35 million over ve years, starting in 2022-23, to Global Aairs Canada
for the CanExport program to help Canadian businesses secure their
intellectual property in foreign markets;
• $10.6 million over ve years, starting in 2022-23, and $2 million ongoing
to Innovation, Science and Economic Development Canada to launch a
survey to assess the government’s previous investments in science and
research, and how knowledge created at post-secondary institutions
generates commercial outcomes;
• $2.4 million over ve years, starting in 2022-23, and $0.6 million
ongoing to Innovation, Science and Economic Development Canada to
expand use of ExploreIP, Canada’s intellectual property marketplace,
so that more public sector intellectual property is put to use helping
Canadian businesses; and
• $0.8 million over ve years, starting in 2022-23, and $0.2 million
ongoing to Innovation, Science and Economic Development Canada to
expand the Intellectual Property Legal Clinics Program, which will make
it easier to access basic intellectual property services.
76 Chapter 2
The Strategic Intellectual Property Program Review announced in Budget 2021
is underway. Where appropriate the federal government intends to strengthen
intellectual property conditions to promote the growth of intellectual property
and maintain it in Canada.
The government will also undertake a review of further ways to build innovative
companies that support Canada’s competitiveness, keep intellectual property in
Canada, and attract talent and investment from around the world. In particular,
the government will consider and seek views on the suitability of adopting a
patent box regime and other measures to promote the growth of intellectual
property and maintain it in Canada.
Securing Canada’s Research from Foreign Threats
Canadian research and intellectual property can be an attractive target
for foreign intelligence agencies looking to advance their own economic,
military, or strategic interests. The National Security Guidelines for Research
Partnerships, developed in collaboration with the Government of Canada–
Universities Working Group in July 2021, help to protect federally funded
research.
To implement these guidelines fully, Budget 2022 proposes to provide
$159.6 million, starting in 2022-23, and $33.4 million ongoing, as follows:
• $125 million over ve years, starting in 2022-23, and $25 million
ongoing, for the Research Support Fund to build capacity within post-
secondary institutions to identify, assess, and mitigate potential risks to
research security; and
• $34.6 million over ve years, starting in 2022-23, and $8.4 million
ongoing, to enhance Canada’s ability to protect our research, and
to establish a Research Security Centre that will provide advice and
guidance directly to research institutions.
A Strong, Growing, and Resilient Economy 77
Hiring More Leading Researchers
The federal government created the Canada Research Chairs Program (CRCP) in
2000 to grow the number of world-class researchers in Canada. Today, there are
more than 2,200 Canada Research Chairs helping our universities lead cutting-
edge research. An extensive evaluation of the CRCP is currently underway and
is expected to be completed in fall 2022. Future investments and modernization
to the CRCP will be examined following the review.
To complement the CRCP, the Canada Excellence Research Chairs program
attracts and retains top-tier global research faculty in science and technology.
Budget 2022 proposes to provide $38.3 million over four years, starting
in 2023-24, and $12.7 million ongoing for the federal granting councils to
add new, internationally recruited Canada Excellence Research Chairs in
the elds of science, technology, engineering, and mathematics. This will
support a further 12 to 25 new Canada Excellence Research Chairs—
reinforcing Canada’s competitive advantage as a destination of choice for
world-class researchers.
Expanding Canada’s Presence in Space
Budget 2019 announced an investment of $1.9 billion over 24 years to build
and operate Canadarm3 for the NASA-led Lunar Gateway.
Canadarm3 is a smart robotic system that will use cutting-edge software and
articial intelligence to perform tasks on the Lunar Gateway station as it orbits
the Moon.
A broad range of Canadian companies will also play a role in the Canadarm3
supply chain, which will create and maintain an estimated 630 high-quality jobs
for Canadians over a 12-year period that began in 2019-20.
In December 2020, Canada signed a treaty with the United States that
guaranteed Canada’s use of Lunar Gateway for scientic and innovation
purposes and secured ights for Canadian astronauts to go to the Moon.
This will include the participation of Canadian astronauts on Artemis II—the rst
crewed mission to the Moon’s vicinity since 1972—which will make Canada just
the second country to send a human to deep space.
Budget 2022 announces the government’s intention to introduce
legislative amendments and new legislation necessary to enable Canada’s
participation in Lunar Gateway, including the ratication of the Canada-US
Lunar Gateway Treaty and the construction of Canadarm3.
78 Chapter 2
Leveraging the National Research Council
The National Research Council (NRC) provides a network of research and
technical facilities across Canada, supporting business, government, and
university collaborations.
Budget 2022 announces that the government will explore new ways to better
integrate leading university researchers and business partners and further
modernize the NRC to better invent, innovate, and prosper.
Additional information will be forthcoming alongside further details on the
establishment of the new innovation and investment agency.
Funding for Black Researchers
A diverse, inclusive, and equitable research community leads to better
research and science. The scholarship and fellowship programs of the federal
granting councils—the Natural Sciences and Engineering Research Council,
Social Sciences and Humanities Research Council, and Canadian Institutes
of Health Research—provide student researchers with the support
they need to pursue research and science and to secure good jobs.
However, Black researchers are underrepresented in the awarding of these
grants, scholarships, and fellowships. To help increase opportunities for Black
Canadian researchers:
Budget 2022 proposes to provide $40.9 million over ve years, starting
in 2022-23, and $9.7 million ongoing to the federal granting councils to
support targeted scholarships and fellowships for promising Black student
researchers.
Funding the Canadian High Arctic Research Station
As a hub for science and technology in Canada’s North, the Canadian High
Arctic Research Station is designed to be a world-class scientic facility in the
remote Arctic that strengthens Canadian leadership on Arctic issues.
Budget 2022 proposes to provide $14.5 million over ve years, starting
in 2022-23, with $8.4 million in remaining amortization and $2.5 million
ongoing, to support the completion and operations of the Canadian High
Arctic Research Station.
A Strong, Growing, and Resilient Economy 79
2.4 Driving Investment and Growth for Our Small
Businesses
Canada’s small and medium-sized businesses are at the heart of our economy
and our communities. They dene our main streets and neighbourhoods, in
cities and towns, both urban and rural. Helping them innovate and grow is
good for Canada—now and for decades to come.
Budget 2022 will address the barriers that are preventing small businesses from
growing. This includes reducing payment card fees for merchants.
Budget 2022 will also help Canadian businesses make the most of global trade
opportunities, while better protecting Canadian businesses against unfair
competition.
Reducing Credit Card Transaction Fees
Payment card transaction fees can increase the cost of doing business for our
small businesses. As announced in Budget 2021, the federal government is
committed to lowering the cost of credit card fees in a way that benets small
businesses and protects existing reward points for consumers. To this end, the
government will continue current consultations with stakeholders on solutions
to lower the cost of fees for merchants.
Strengthening Canada’s Trade Remedy and Revenue
Systems
A strong and accessible trade remedy system protects Canadian workers
and businesses, while eective revenue systems ensure that trade ows are
eectively enforced.
Budget 2022 announces the government’s intention to introduce
amendments to the Special Import Measures Act and the Canadian
International Trade Tribunal Act to strengthen Canada’s trade remedy
system by better ensuring unfairly traded goods are subject to duties, and
increasing the participation of workers.
Budget 2022 proposes to provide $4.7 million over ve years, starting in
2022-23, and $1.1 million ongoing, to the Canada Border Services Agency
to create a Trade Remedy Counselling Unit that will assist companies,
with a focus on small and medium-sized enterprises.
The government also proposes to introduce amendments to the Customs
Act to implement electronic payments and clarify importer responsibility
for duties and taxes.
80 Chapter 2
Employee Ownership Trusts
Employee ownership trusts encourage employee ownership of a business,
and facilitate the transition of privately owned businesses to employees.
Budget 2021 announced that the government would engage with stakeholders
to examine what barriers exist to the creation of these trusts in Canada.
These consultations revealed that the main barrier to the creation of employee
ownership trusts in Canada was the lack of a dedicated trust vehicle under
current tax legislation tailored to the requirements of these structures.
Budget 2022 proposes to create the Employee Ownership Trust—a new,
dedicated type of trust under the
Income Tax Act
to support
employee ownership.
The government will continue to engage with stakeholders to nalize the
development of rules for the Employee Ownership Trust and to assess
remaining barriers to the creation of these trusts.
Engaging the Cannabis Sector
As a relatively new sector of the Canada economy, it is important that the
federal government and all stakeholders have a clear understanding of the
challenges and opportunities that are facing Canada’s legal cannabis sector.
Budget 2022 proposes launching a new cannabis strategy table that
will support an ongoing dialogue with businesses and stakeholders in
the cannabis sector. This will be led by the Department of Innovation,
Science and Economic Development, and will provide an opportunity for
the government to hear from industry leaders and identify ways to work
together to grow the legal cannabis sector in Canada.
This engagement is in addition to the proposed changes to the cannabis excise
duty framework detailed in the Tax Supplementary Information.
A Strong, Growing, and Resilient Economy 81
2.5 Supporting Recovery and Growth in Aected
Sectors
Changes in global trade, or other disruptions, can have signicant
consequences for Canadian businesses and the Canadian families that depend
on them. This is particularly the case for sectors that depend on predictable
market and border conditions, like agriculture and tourism.
The federal government has a role to play in minimizing the impacts of these
challenges on businesses and industries when they arise, and to help them
recover and grow afterwards.
Budget 2022 takes timely action to support the resiliency of important sectors,
and to invest in their long-term success.
The Next Steps Towards High Frequency Rail
High frequency rail has the potential to oer climate-friendly transportation and
faster, more regular, and more reliable passenger rail service between Toronto
and Quebec City—Canada’s busiest travel corridor. The federal government
is making use of the expertise of private sector companies for the potential
project’s planning and design.
Budget 2022 proposes to provide $396.8 million over two years, starting
in 2022-23, to Transport Canada and Infrastructure Canada for planning
and design steps in support of high frequency rail between Toronto and
Quebec City.
Investing in VIA Rail Stations and Maintenance
Centres
In 2019, 4.8 million passengers rode VIA Rail trains in the Windsor to Quebec City
corridor. Demand for passenger rail was signicantly aected by the pandemic,
but ridership on VIA trains is now rebounding and is expected to continue to rise
as we come through the pandemic. However, many of VIA Rail’s maintenance
centres and stations are decades-old and require signicant investments to
ensure they can provide the quality rail service that Canadians deserve.
Budget 2022 proposes to provide $42.8 million over four years, starting in
2023-24, with $169.4 million in remaining amortization, to VIA Rail Canada
to construct, maintain, and upgrade stations and maintenance centres in
the Windsor to Quebec City corridor.
82 Chapter 2
Supporting the Prince Edward Island Potato Industry
The detection of potato wart on Prince Edward Island (PEI) has disrupted sales
of potatoes to the United States and threatened the livelihoods of Islanders
who count on being able to export their world-class potatoes. The federal
government is making progress in getting PEI potatoes back to market in the
United States. With that work ongoing, the government will continue to support
the PEI potato industry, and the Canadian Food Inspection Agency will continue
its eorts to prevent the spread of potato wart on PEI.
Budget 2022 proposes to provide a total of $16 million over two years, on a
cash basis, starting in 2022-23 to the Atlantic Canada Opportunities Agency
through the Jobs and Growth Fund to support long-term investments and
assist in stabilizing the Prince Edward Island potato sector and supply chain.
Budget 2022 also proposes to provide $12 million over two years, starting
in 2022-23, for the Canadian Food Inspection Agency to accelerate the
investigation into the latest detection of potato wart to help prevent its
spread and to allow for full trade to resume with the United States as soon
as possible.
Full and Fair Compensation for Supply Managed
Sectors
As a result of signicant trade deals that the federal government has negotiated
since 2015, Canada now has trade agreements with two-thirds of the world’s
economies and is the only country with free trade access to the entire G7 and
the European Union. Free trade creates good jobs for Canadians and will help
our economy and businesses continue to grow for decades to come.
As part of these agreements, including the new NAFTA, Canada provided our
trading partners with incremental market access for dairy, poultry, and eggs.
Since 2016, the federal government has provided $2.7 billion in compensation
for farmers as a result of the Canada-European Union Comprehensive Economic
and Trade Agreement and the Comprehensive and Progressive Agreement
for Trans-Pacic Partnership. Processors of dairy, poultry, and eggs have also
received $392.5 million in compensation.
Working with sector representatives, the government will announce full and fair
compensation for the supply managed sector related to the new NAFTA in the
2022 fall economic and scal update.
A Strong, Growing, and Resilient Economy 83
Support for Canada’s Tourism Sector
After ve consecutive years of growth, the pre-COVID visitor economy
generated $105 billion in expenditures in Canada in 2019. The sector remains a
key economic driver and job creator, especially for young and rural Canadians.
With the onset of the pandemic, workers and businesses in the tourism industry
felt the full impact of public health measures and border closures.
To date, the tourism and hospitality sector received an estimated $23 billion in
support through the federal government’s emergency programs.
The Tourism and Hospitality Recovery Program, which is available until
May 2022, was introduced to provide support through wage and rent subsidies
to organizations in the tourism and hospitality sectors. The Local Lockdown
Program was also introduced to ensure organizations have the necessary
support to weather the impacts of lockdowns and capacity restrictions.
Canada’s high vaccination rate and the lifting of travel restrictions are providing
important relief as the sector begins to turn the corner. To continue supporting
Canada’s tourism sector, the Minister of Tourism will work with the tourism
industry, provincial and territorial counterparts, and Indigenous tourism
operators to develop a new post-pandemic Federal Tourism Growth Strategy,
which will plot a course for growth, investment, and stability.
As part of these eorts, and to ensure Indigenous businesses are part of the
recovery, Budget 2022 proposes two important measures.
Budget 2022 proposes to provide $20 million over two years, starting
in 2022-23, in support of a new Indigenous Tourism Fund to help the
Indigenous tourism industry recover from the pandemic and position itself
for long-term, sustainable growth.
Budget 2022 also proposes to provide $4.8 million over two years, starting
in 2022-23, to the Indigenous Tourism Association of Canada to support its
operations, which continue to help the Indigenous tourism industry rebuild
and recover from the pandemic.
These measures build on other ongoing supports for the sector, including
$1 billion in support provided through Budget 2021 programs such as the
Tourism Relief Fund and the Major Festivals and Events Support Initiative.
An estimated $750 million of these funds are expected to be used to support
the sector in 2022-23. Destination Canada is also expected to spend more than
$48 million for marketing campaigns in the United States, in order to draw in
more visitors and increase economic activity.
84 Chapter 2
Supporting Vibrant Rural Communities
Canada’s rural communities are a driver of economic growth, and home
to a wide range of industries including agriculture, mining, and tourism.
To support this growth, the federal government has announced a range of
important programs and initiatives that are supporting Canadians living and
working in rural communities, including:
• $2.75 billion for the Universal Broadband Fund to improve high-speed Internet
access in rural and remote areas;
• $2 billion for the Regional Relief and Recovery Fund, which has supported local
businesses through Regional Development Agencies during the pandemic;
• $2.7 billion in compensation to farmers since 2016 for the Canada-European
Union Comprehensive Economic and Trade Agreement, and the Comprehensive
and Progressive Agreement for Trans-Pacic Partnership;
• $1 billion to revitalize the tourism industry;
• $392.5 million in compensation for dairy, poultry, and egg processors;
• $101 million to support Canada’s wine sector as it adapts to ongoing and
emerging challenges; and
• Providing $100 million from the price on pollution directly to farmers in provinces
where the federal system applies.
Budget 2022 also announces further action to support Canadians living in
rural communities, including:
• $26.2 million to increase the forgivable amount of student loans for doctors and
nurses who practice in rural and remote communities;
• $3.8 billion over eight years to launch Canada’s rst Critical Minerals Strategy,
which will create jobs in rural communities across Canada;
• $346.1 million to train 1,000 re ghters and provide them with new equipment,
and $169.9 million to create a new wildre satellite monitoring system;
• $4 billion over ve years for a new Housing Accelerator Fund to help
municipalities—including smaller and rural communities—build 100,000 new
homes;
• $29.3 million to create a Trusted Employer model and cut red tape for access
to the Temporary Foreign Worker Program, and $48.2 million to create a
new streamlined foreign worker program for agricultural and sh processing
employers;
• $55 million to maintain and enhance the Trans Canada Trail;
• $470 million to help farmers reduce emissions by expanding the On-Farm Climate
Action Fund; and
• Tripling the size of the Agricultural Clean Technology Program with a top-up of
$329 million.
A Strong, Growing, and Resilient Economy 85
Chapter 2
A Strong, Growing, and Resilient Economy
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
2.1. Leading Economic Growth
and Innovation
0 11 364 410 435 440 1,660
Launching a World-Leading
Canada Growth Fund
0 10 300 400 400 400 1,510
Less: Funds Sourced From the
Fiscal Framework
0 -10 -300 -400 -400 -400 -1,510
Creating a Canadian Innovation
and Investment Agency
0 1 199 250 275 275 1000
Cutting Taxes for Canada’s
Growing Small Businesses
0 10 165 160 160 165 660
2.2. Supporting Economic
Growth and Stable Supply
Chains
0 187 644 734 737 726 3,029
Canadian Critical Minerals Strategy
– Infrastructure Investments
0 0 214 214 214 214 857
Critical Mineral Exploration Tax
Credit
0 65 45 110 90 90 400
Canadian Critical Minerals Strategy
– Integrated Data
0 8 15 18 18 18 77
Canadian Critical Minerals Strategy
– Strategic Innovation Fund
0 0 0 17 44 101 162
Canadian Critical Minerals
Strategy – Technology Research,
Development, and Deployment
0 20 20 35 35 35 144
Canadian Critical Minerals Strategy
– Centre of Excellence on Critical
Minerals
0 0 0 4 4 4 11
Canadian Critical Minerals Strategy
– Support for Northern Regulatory
Processes
0 5 5 5 5 5 25
Canadian Critical Minerals Strategy
– Global Leadership on Critical
Minerals
0 8 13 13 13 13 62
Better Supply Chain Infrastructure
0 63 161 138 134 109 603
Less: Funds Sourced From
Existing Departmental
Resources
0 -2 -4 -4 -4 -4 -19
Strengthening Canada's
Semiconductor Industry
0 3 3 18 18 0 40
Growing Canada’s Health-
Focused Small and Medium-Sized
Businesses
0 10 10 5 5 0 30
86 Chapter 2
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Supporting Canada's Innovation
Clusters
0 8 162 162 163 142 637
2.3. Investing in Intellectual
Property and Research
0 45 56 77 83 89 350
Building a World-Class Intellectual
Property Regime
0 9 13 20 25 30 97
Securing Canada’s Research from
Foreign Threats
0 29 31 32 33 34 160
Hiring More Leading Researchers
0 0 0 13 13 13 38
Funding for Black Researchers
0 4 8 9 10 10 41
Funding the Canadian High Arctic
Research Station
0 3 3 2 3 3 14
2.4. Driving Investment and
Growth for Our Small Businesses
0 0 0 0 0 0 1
Strengthening Canada’s Trade
Remedy and Revenue Systems -
Trade Remedy Counselling Unit
0 1 1 1 1 1 5
Strengthening Canada’s Trade
Remedy and Revenue Systems -
Clarifying Liability for Amounts
Owing on Imports
0 0 -1 -1 -1 -1 -4
2.5. Supporting Recovery and
Growth in Aected Sectors
0 95 348 10 14 14 482
The Next Steps Towards High
Frequency Rail
0 74 323 0 0 0 397
Investing in VIA Rail Stations and
Maintenance Centres
0 0 4 10 14 14 43
Supporting the Prince Edward
Island Potato Industry
0 10 10 0 0 0 20
Less: Funds Sourced From
Existing Departmental
Resources
0 -1 -1 0 0 0 -2
Support for Canada's Tourism
Sector
0 13 12 0 0 0 25
Chapter 2 - Fiscal Impact
0 339 1,412 1,232 1,270 1,270 5,522
Moving on Canada's
Infrastructure Investments
– Investing in Canada
Infrastructure Program Reprole
-127 -201 -761 -1,226 -1,956 -2,072 -6,342
Note: Numbers may not add due to rounding.
Chapter 3
Clean Air and a Strong Economy
3.1 Reducing Pollution to Fight Climate Change ........................................................ 91
Reducing Emissions on the Road ............................................................................. 91
Sustainable Agriculture to Fight Climate Change ............................................ 93
Expanding the Nature Smart Climate Solutions Fund .................................... 93
A New Tax Credit for Investments in Clean Technology ................................. 94
Returning Fuel Charge Proceeds to Small and Medium- Sized Enterprises . 94
Expanding the Low Carbon Economy Fund and Supporting Clean
Energy in Yukon ............................................................................................................. 95
Support for Business Investment in Air-Source Heat Pumps ....................... 95
Building Capacity to Support Green Procurement ........................................... 96
Industrial Energy Management ................................................................................ 96
3.2 Building a Clean, Resilient Energy Sector .............................................................. 96
Investment Tax Credit for Carbon Capture, Utilization, and Storage ........ 97
Clean Electricity .............................................................................................................. 98
Small Modular Reactors .............................................................................................. 99
Phasing Out Flow-Through Shares for Oil, Gas, and Coal Activities ......... 99
3.3 Protecting Our Lands, Lakes, and Oceans ............................................................ 100
Renewing and Expanding the Oceans Protection Plan ................................100
Protecting Our Freshwater ....................................................................................... 101
Taking More Action to Eliminate Plastic Waste ...............................................102
Fighting and Managing Wildres .........................................................................102
Growing Canada’s Trail Network ...........................................................................103
British Columbia Old Growth Nature Fund .......................................................104
3.4 Building Canada’s Net-Zero Economy .................................................................104
Increasing the Impact of the Canada Infrastructure Bank ........................... 105
Net-Zero Capital Allocation Strategy ..................................................................106
Climate Disclosures for Federally Regulated Institutions ............................106
Supporting the International Sustainability Standards Board’s
Montreal Oce ............................................................................................................106
Clean Air and a Strong Economy 89
Chapter 3
Clean Air and a Strong Economy
Climate change is real and the path forward is clear. To protect our planet—and
to build a stronger economy—we must do even more on climate action.
The climate crisis is more urgent than ever. Canada is already experiencing an
increase in heat waves, wildres, and heavy storms. These impacts—and the
economic and health repercussions that come with them—will continue to
accelerate if we do not act now.
Since 2015, the federal government has invested more than $100 billion to
help lead the way in ghting climate change and protecting the environment.
We have introduced a world-leading price on pollution, and on March 29, 2022,
the federal government unveiled its Emissions Reduction Plan, which set out an
ambitious and achievable plan to reduce greenhouse gas emissions by 40 per
cent by 2030 compared to 2005 levels, and puts Canada on a path to reach net-
zero emissions by 2050.
Even still, we need to do more. And that is what we will do.
Smart climate investments today are good for Canadian workers, good for the
Canadian economy, and good for the planet. With the largest mobilization of
global capital since the Industrial Revolution already underway, Canada has the
chance to become a leader in the clean energy of the future.
Our allies have been clear: their short-term focus is on eliminating their reliance
on Russian oil and gas, while they shift to renewables and clean hydrogen as
quickly as they can. Canada is working with our partners in Europe and around
the world to assist them in doing so.
Budget 2022 will help Canada continue to lead in global eorts to ght climate
change, to protect our nature, and to build a clean economy that will create the
good-paying middle class jobs of today and tomorrow.
90 Chapter 3
Key Ongoing Actions
Through major investments since 2015, the federal government has announced
a range of important programs and initiatives that will support Canada’s eorts
to ght climate change and protect the environment, such as:
3 Establishing a world-leading price on pollution that puts money back in the
pockets of Canadians;
3 Issuing Canada’s inaugural, $5 billion green bond to help nance investments
in green infrastructure and other projects that will ght climate change;
3 Investing $8 billion for the Net Zero Accelerator to support projects that
reduce greenhouse gas emissions;
3 $4.4 billion to help homeowners save on their energy bills through energy
ecient home retrots under the Canada Greener Homes Loan Program;
3 $2.3 billion to protect nature and wildlife;
3 $976.8 million to help protect 25 per cent of Canada’s marine and coastal
areas by 2025;
3 Planting two billion trees by 2031, 30 million of which have already been
planted;
3 $647.1 million to preserve wild Pacic salmon populations;
3 $3.4 billion for the Disaster Mitigation and Adaptation Fund to make
communities more resilient to the natural disasters caused by climate
change;
3 $476.7 million to renew the Chemicals Management Plan;
3 $319 million to spur the development of carbon capture, utilization, and
storage technologies;
3 $385 million under the Agricultural Climate Solutions program;
3 $165 million under the Agricultural Clean Technology program;
3 Working with provinces and territories toward a goal of zero plastic waste
by 2030, including the elimination of certain single-use plastics; and
3 Cutting tax rates in half for businesses that manufacture zero-emission
technologies.
Clean Air and a Strong Economy 91
3.1 Reducing Pollution to Fight Climate Change
Canada is taking signicant steps towards reducing our emissions by
40-45 per cent below 2005 levels by 2030, and towards reaching net-zero
by 2050.
Budget 2022 introduces new measures that will make it easier and more
aordable for Canadians and Canadian businesses to adopt clean technologies.
The measures below build upon important investments announced in Chapter 1
to green our housing stock and support net-zero new builds in communities
across Canada. Measures announced in Chapter 2 will also help position
Canada as a leader in the critical minerals that will power the clean technologies
required for our net-zero emissions future.
Reducing Emissions on the Road
On-road transportation accounts for 20 per cent of Canada’s greenhouse gas
emissions.
To accelerate the manufacturing and adoption of cleaner cars, the federal
government will put in place a sales mandate to ensure at least 20 per cent
of new light-duty vehicle sales will be zero-emission vehicles (ZEVs) by 2026,
at least 60 per cent by 2030 and 100 per cent by 2035.
To reduce emissions from medium- and heavy-duty vehicles (MHDVs),
the federal government will aim to achieve 35 per cent of total MHDV sales
being ZEVs by 2030.
In addition, the federal government will develop a medium- and heavy-duty
ZEV regulation to require 100 per cent MHDV sales to be ZEVs by 2040 for
a subset of vehicle types based on feasibility, with interim 2030 regulated
sales requirements that would vary for dierent vehicle categories based on
feasibility, and explore interim targets for the mid-2020s.
Making the Switch to Zero-Emission Vehicles More
Aordable
To help make ZEVs more aordable for Canadians, the federal government has
oered purchase incentives of up to $5,000 for eligible vehicles since 2019.
This program has helped Canadians purchase or lease over 136,000 new ZEVs,
but more support is needed to help Canadians get behind the wheel of zero-
emission vehicles.
Budget 2022 proposes to provide $1.7 billion over ve years, starting in
2022-23, with $0.8 million in remaining amortization, to Transport Canada
to extend the Incentives for Zero-Emission Vehicles (iZEV) program until
March 2025. Eligibility under the program will also be broadened to
support the purchase of more vehicle models, including more vans, trucks,
and SUVs, which will help make ZEVs more aordable. Further details will
be announced by Transport Canada in the coming weeks.
92 Chapter 3
Building a National Network of Electric Vehicle Charging
Stations
Since 2015, the federal government has helped build almost 1,500 charging
stations across the country. As more and more Canadians adopt zero-emission
vehicles, we need to build the charging infrastructure that drivers can rely on,
no matter where they’re going.
Budget 2022 announces that the Canada Infrastructure Bank will invest
$500 million in large-scale urban and commercial ZEV charging and
refuelling infrastructure. Funding will be sourced from the Canada
Infrastructure Bank’s existing resources under its green infrastructure
investment priority area.
Budget 2022 proposes to provide $400 million over ve years, starting
in 2022-23, to Natural Resources Canada to fund the deployment of ZEV
charging infrastructure in sub-urban and remote communities through the
Zero-Emission Vehicle Infrastructure Program (ZEVIP).
Budget 2022 proposes to provide $2.2 million over ve years, starting in
2022-23, to Natural Resources Canada to renew the Greening Government
Operations Fleet Program, which will continue to conduct readiness
assessments of federal buildings required to facilitate the transition of the
federal vehicle eet to ZEVs.
Helping Businesses Switch to Medium- and Heavy-Duty
Zero-Emission Vehicles
Businesses across Canada want to upgrade their eets to be part of the solution
to climate change. However, those upgrades can be expensive, and businesses
need to be condent that ZEVs can reliably transport their goods to market.
Budget 2022 proposes to provide $547.5 million over four years, starting in
2022-23, to Transport Canada to launch a new purchase incentive program
for medium- and heavy-duty ZEVs.
Budget 2022 proposes to provide $33.8 million over ve years, starting in
2022-23, with $42.1 million in remaining amortization, to Transport Canada
to work with provinces and territories to develop and harmonize regulations
and to conduct safety testing for long-haul zero-emission trucks.
To help decarbonize vehicles already on the road, Budget 2022 proposes to
provide $199.6 million over ve years, starting in 2022-23, and $0.4 million
ongoing, to Natural Resources Canada to expand the Green Freight
Assessment Program, which will be renamed the Green Freight Program.
This will support assessments and retrots of more vehicles and a greater
diversity of eet and vehicle types.
With these investments, the government is taking a signicant step towards
reducing pollution on our roads, and is on track to meet its commitment to add
50,000 new ZEV chargers and hydrogen stations across Canada.
Clean Air and a Strong Economy 93
Sustainable Agriculture to Fight Climate Change
Agriculture plays an essential role in Canada’s economy, and our farmers help
feed the world. At a time of geopolitical uncertainty and rising costs, ensuring
that Canada’s agricultural production continues to grow will be
vitally important.
However, agriculture also represents approximately 10 per cent of our
greenhouse gas emissions. Farmers across the country are experiencing the
impacts of climate change like oods and droughts, and have already been
leading the adoption of climate-friendly practices, like precision agriculture
technology and low-till techniques. These technologies can help reduce
emissions and save farmers both time and money.
Budget 2022 proposes to provide a further $329.4 million over six years,
starting in 2022-23, with $0.6 million in remaining amortization, to triple
the size of the Agricultural Clean Technology Program.
Budget 2022 proposes to provide $469.5 million over six years, with
$0.5 million in remaining amortization, starting in
2022-23, to Agriculture and Agri-Food Canada to expand the
Agricultural Climate Solutions program’s On-Farm Climate Action Fund.
Budget 2022 proposes $150 million for a resilient agricultural landscape
program to support carbon sequestration, adaptation, and address other
environmental co-benets, to be discussed with provinces and territories.
Budget 2022 proposes to provide $100 million over six years, starting in
2022-23, to the federal granting councils to support post-secondary
research in developing technologies and crop varieties that will allow for
net-zero emission agriculture.
Expanding the Nature Smart Climate Solutions Fund
Investing in protecting nature is among the most aordable climate action
that governments can take. The existing Nature Smart Climate Solutions
Fund provides $631 million from 2021-22 to 2031-32 to support projects that
conserve, restore and enhance wetlands, peatlands, and grasslands to capture
and store carbon.
To enhance the potential for the natural environment to store carbon and
reduce emissions, Budget 2022 proposes to provide $780 million over
ve years, starting in 2022-23, to Environment and Climate Change Canada
to expand the Nature Smart Climate Solutions Fund.
94 Chapter 3
A New Tax Credit for Investments in Clean Technology
The expansion of clean technology will need to accelerate if Canada’s
economy is going to reach net-zero. Helping Canadian companies adopt clean
technologies will create jobs, keep Canadian businesses competitive, and
reduce Canada’s emissions at the same time.
Budget 2022 announces that the Department of Finance Canada will
engage with experts to establish an investment tax credit of up to
30 per cent, focused on net-zero technologies, battery storage solutions,
and clean hydrogen. The design details of the investment tax credit will be
provided in the 2022 fall economic and scal update.
Returning Fuel Charge Proceeds to Small and
Medium- Sized Enterprises
Since 2019, it has no longer been free to pollute anywhere in Canada, and
provincial and territorial governments have been able to design and implement
their own pollution pricing systems that meet a standard, federal benchmark.
Most have done so. But in provinces that have decided not to implement
a system that meets the benchmark—specically Alberta, Saskatchewan,
Manitoba, and Ontario—a federal backstop applies.
In these provinces, all direct proceeds of pollution pricing are returned to
households, small businesses, Indigenous groups, and farmers.
In the 2021 Economic and Fiscal Update, the government announced its
intention to return a portion of the proceeds from the price on pollution to
small and medium-sized businesses through new federal programming in
backstop jurisdictions. Beginning in 2022-23, these businesses will receive an
estimated $1.5 billion in fuel charge proceeds collected between 2020-21 and
2022-23. This new program will also be used to return outstanding 2019-20
fuel charge proceeds, amounting to approximately $120 million, that have not
already been returned through the Climate Action Incentive Fund.
Budget 2022 proposes to provide up to $30 million over two years, starting
in 2022-23, to Environment and Climate Change Canada to administer
direct payments to support emission-intensive, trade-exposed small and
medium-sized enterprises in those jurisdictions.
Clean Air and a Strong Economy 95
Expanding the Low Carbon Economy Fund and
Supporting Clean Energy in Yukon
Greater collaboration on climate action between all orders of government
is important for helping to build a clean economy and create good jobs.
Through the Low Carbon Economy Fund, the federal government has worked
with provinces and territories on funding projects that are reducing emissions
from coast-to-coast-to-coast.
The Low Carbon Economy Fund currently provides up to $2 billion to provinces
and territories to reduce emissions, build resilient communities, and generate
good jobs for Canadians. It has supported the installation of emission-reducing
technologies like wind power, solar power, and electric heating in buildings.
Since 2017, the Low Carbon Economy Fund has supported approximately
132 projects across Canada.
Budget 2022 proposes to provide $2.2 billion over seven years, starting
in 2022-23, to Environment and Climate Change Canada to expand and
extend the Low Carbon Economy Fund.
Budget 2022 announces $32.2 million over two years, starting in 2022-23,
from the expanded Low Carbon Economy Fund to support the Atlin Hydro
Expansion project in British Columbia, which will provide clean electricity
to the Yukon and help reduce greenhouse gas emissions. The federal
government has previously committed $83.9 million to this project.
Support for Business Investment in Air-Source Heat
Pumps
Buildings account for 12 per cent of Canada’s greenhouse gas emissions, arising
mostly from space and water heating. Air-source heat pumps are an energy
ecient, zero-emission heating alternative that can help support Canada’s
climate goals if widely adopted.
Budget 2022 proposes to expand the accelerated tax deductions for business
investments in clean energy equipment to include air-source heat pumps.
To support job creation and growth in clean technology manufacturing
in Canada, the government proposes to extend the 50 per cent reduction
of the general corporate and small business income tax rates for zero-
emission technology manufacturers to include manufacturers of air-source
heat pumps.
These measures are expected to reduce federal revenues by $53 million over
ve years starting in 2022-23.
96 Chapter 3
Building Capacity to Support Green Procurement
With more than $20 billion in purchasing requirements every year, the federal
government can use its signicant buying power to accelerate the transition
to a net-zero economy by purchasing goods and services with a reduced
environmental impact, and by adopting new, clean technologies.
In Budget 2022, the federal government is announcing that Public Services
and Procurement Canada (PSPC) will develop new tools, guidelines, and
targets to support the adoption of green procurement across the federal
government. Additional details will be announced by PSPC in the
months ahead.
Industrial Energy Management
Helping industrial sectors adopt clean technology will play an important role in
the transition to a low carbon economy and in achieving Canada’s goal of net
zero emissions by 2050.
Budget 2022 proposes to provide $194 million over ve years, starting in
2022-23, to Natural Resources Canada to expand the Industrial Energy
Management System program. This will to support ISO 50001 certication,
energy managers, cohort-based training, audits, and energy eciency-
focused retrots for key small-to-moderate projects that ll a gap in the
federal suite of industrial programming.
3.2 Building a Clean, Resilient Energy Sector
Since 2015, Canada has begun an ambitious green transformation of our
energy sector—an important sector of our economy that directly represents
7.6 per cent of our GDP and 257,000 jobs for Canadians.
Canada has already introduced a carbon-pricing system and a commitment
to phase out unabated coal-red electricity by 2030. In addition to these
measures, the federal government recently committed to achieving a net-zero
electricity system by 2035 and to introducing a cap on emissions from the oil
and gas sector.
Budget 2022 proposes new measures to increase investments in clean power,
to support clean electricity projects, to encourage the decarbonization of our
energy sector, and to mobilize new capital to establish hydrogen hubs.
Clean Air and a Strong Economy 97
Investment Tax Credit for Carbon Capture,
Utilization, and Storage
Carbon capture, utilization, and storage (CCUS) is a suite of technologies
that capture carbon dioxide (CO
2
) emissions—whether from fuel combustion,
industrial processes, or directly from the air—to either store the CO
2
typically
deep underground, or to use it in other industrial processes such as permanent
mineralization in concrete.
CCUS technologies are an important tool for reducing emissions in high-
emitting sectors where other pathways to reduce emissions may be limited or
unavailable. Examples of industries where CCUS has helped to reduce emissions
include oil and gas, chemical production, and electricity generation.
In Budget 2021, the federal government proposed an investment tax credit
for CCUS with the intention of both securing Canada’s place as a leader in
CCUS and supporting the Canadian innovators and engineers advancing the
technology. By lowering the carbon footprints of Canada’s traditional energy
producers, the credit aims to ensure that they are a stable source of cleaner
energy both domestically and internationally.
The CCUS investment tax credit is a key part of the government’s broader plan
to work with industry towards the goal of decarbonization, including through
initiatives like the Canada Growth Fund in Chapter 2 and the Net-Zero Accelerator.
The government has consulted the public, stakeholders, and provinces on the
design of the investment tax credit for CCUS, and used the input received to
inform its nal design.
Budget 2022 proposes a refundable investment tax credit for businesses
that incur eligible CCUS expenses, starting in 2022. The investment
tax credit would be available to CCUS projects to the extent that they
permanently store captured CO
2
through an eligible use. Eligible CO
2
uses
include dedicated geological storage and storage of CO
2
in concrete, but
does not include enhanced oil recovery.
From 2022 through 2030, the investment tax credit rates would be set at:
• 60 per cent for investment in equipment to capture CO
2
in direct air
capture projects;
• 50 per cent for investment in equipment to capture CO
2
in all other
CCUS projects; and
• 37.5 per cent for investment in equipment for transportation, storage
and use.
To encourage the industry to move quickly to lower emissions, these rates
will be reduced by 50 per cent for the period from 2031 through 2040.
98 Chapter 3
The proposed refundable tax credit is expected to cost $2.6 billion over
ve years starting in 2022-23, with an annual cost of about $1.5 billion in
2026-27. Going forward, it is expected that the measure will continue to cost
approximately $1.5 billion annually until 2030.
The government will engage with relevant provinces in the expectation that
they will further strengthen nancial incentives to accelerate the adoption of
CCUS technologies by industry.
The government will also undertake a review of investment tax credit rates
before 2030 to ensure that the proposed reduction in the level of tax support
from 2031 to 2040 aligns with the government’s environmental objectives.
Other CO
2
uses could be made eligible in the future, if permanence of storage
can be demonstrated and no incremental CO
2
emissions result from the use of
the product that is produced.
Clean Electricity
Canada has one of the cleanest electricity power grids in the world, but the
clean energy it generates does not reach all parts of the country. To achieve
the government’s commitment to a net-zero electricity system by 2035,
approximately $15 billion has been made available since 2016 to support
investments in clean power generation and transmission, with Budget 2022
announcing further investments to support the expansion of clean electricity
in Canada.
Budget 2022 proposes to provide $250 million over four years, starting in
2022-23, to Natural Resources Canada to support pre-development
activities of clean electricity projects of national signicance, such as
inter-provincial electricity transmission projects and small modular reactors.
The federal government is already advancing similar work on the
Atlantic Loop and Prairie Link projects. Projects like the Atlantic Loop will
be critical as we move towards a net-zero emissions electricity system,
while also supporting economic development through investments in new
infrastructure and the enhanced security and reliability of our clean energy
supply.
Budget 2022 proposes $600 million over seven years starting in 2022-2023
to Natural Resources Canada for the Smart Renewables and Electrication
Pathways Program to support additional renewable electricity and grid
modernization projects.
Budget 2022 proposes to provide $2.4 million in 2022-23 to Natural Resources
Canada to establish a Pan-Canadian Grid Council, which would provide
external advice in support of national and regional electricity planning.
Budget 2022 provides $25 million starting 2022-23, to Natural Resources
Canada to establish Regional Strategic Initiatives to work with provinces,
territories, and relevant stakeholders to develop net-zero energy plans.
Clean Air and a Strong Economy 99
Small Modular Reactors
Small modular reactors oer a promising pathway to support Canada’s low-
carbon energy transition and they are less complex, easier to operate, and more
cost eective than current nuclear technology. For example, a 300-megawatt
small modular reactor could supply enough clean power for an estimated
300,000 homes. With approximately 76,000 hard-working Canadians employed
across its supply chain, Canada's nuclear industry is well positioned to leverage
its more than 60 years of science and technology innovation to become a leader
in the development and deployment of small modular reactor technology.
Support to develop this technology can position Canada as a clean energy
leader; support the decarbonization of provincial electricity grids in places like
New Brunswick and Saskatchewan; facilitate the transition away from diesel
power in remote communities; and help decarbonize heavy emitting industries.
Budget 2022 proposes to provide $120.6 million over ve years, starting in
2022-23, and $0.5 million ongoing, as follows:
• $69.9 million for Natural Resources Canada to undertake research to
minimize waste generated from these reactors; support the creation
of a fuel supply chain; strengthen international nuclear cooperation
agreements; and enhance domestic safety and security policies and
practices; and,
• $50.7 million, and $0.5 million ongoing, for the Canadian Nuclear
Safety Commission to build the capacity to regulate small modular
reactors and work with international partners on global regulatory
harmonization.
Phasing Out Flow-Through Shares for Oil, Gas, and
Coal Activities
The federal government committed to phase out or rationalize inecient fossil
fuel subsidies—and has recently accelerated the previous timeline for doing so
from 2025 to 2023.
Budget 2022 proposes to eliminate the ow-through share regime for fossil
fuel sector activities. This will be done by no longer allowing expenditures
related to oil, gas, and coal exploration and development to be renounced
to ow-through share investors for ow-through share agreements entered
into after March 31, 2023.
This measure is expected to increase federal revenues by $9 million over
ve years, starting in 2022-23.
100 Chapter 3
3.3 Protecting Our Lands, Lakes, and Oceans
Canada’s nature is central to our national identity. However, Canada is warming
twice as fast as the global average, and three times faster in the North.
The impact of this warming on our natural environment will be signicant.
Northern, coastal, Indigenous, and remote communities are signicantly more
vulnerable to climate change, and the recent oods, droughts, and res in
British Columbia, Alberta, Saskatchewan, and Manitoba are examples of a
growing number of costly and devastating climate-related challenges.
Since 2015, Canada has gone from having less than 1 per cent of our oceans
protected to almost 14 per cent. The federal government has committed to
protecting 25 per cent of our land, oceans, and freshwater by 2025, while
working towards protecting 30 per cent by 2030.
In Budget 2022, the federal government is proposing to undertake signicant
eorts to further protect our natural environment and to help mitigate the
nancial and ecological costs associated with biodiversity loss and
climate change.
Adaptation actions in Budget 2022 will build on the signicant environment and
climate-related investments of more than $100 billion since 2015 and support a
National Adaptation Strategy that will be published later this year.
Renewing and Expanding the Oceans Protection Plan
In 2016, the government announced the Oceans Protection Plan to protect
Canada’s coasts and waterways and enable their safe and responsible
commercial use. Under the Plan, the government has improved monitoring of
marine trac across Canada and restored the health of over 60 aquatic habitats
nationally. Today, marine trac continues to increase in support of Canada’s
growing economy, and the federal government is taking additional steps to
strengthen marine safety, protect marine ecosystems, and create stronger
partnerships with Indigenous and coastal communities.
Budget 2022 proposes to provide an additional $2.0 billion over nine years,
starting in 2022-23, with $78.7 million in remaining amortization,
and $136.4 million per year ongoing, to renew and expand the
Oceans Protection Plan. This builds on ongoing funding announced in
2016, and will result in an overall increase in federal funding for oceans
protection over the next ve years.
Budget 2022 also announces the government’s intention to propose
amendments to the Canada Shipping Act and other acts, including to
enable the proactive management of marine emergencies and to cover
more types of pollution.
These measures will help ensure that Indigenous communities, industry,
investors, and all Canadians can have condence in marine safety and will allow
for marine activity to continue safely and sustainably.
Clean Air and a Strong Economy 101
Protecting Our Freshwater
Canada holds 20 per cent of the world’s freshwater supply. Protecting our
freshwater is critically important to Canadians, to our environment, and to our
economy. In 2019, the government committed to establish a federal Canada
Water Agency to work with provinces, territories, Indigenous communities, and
other stakeholders in order to nd the best ways to keep Canada’s water safe,
clean, and well-managed.
Budget 2022 proposes to provide $43.5 million over ve years, starting in
2022-23, and $8.7 million ongoing to Environment and Climate Change
Canada to create a new Canada Water Agency, which will be stood-up
in 2022. The headquarters of the new Agency will be located outside of the
National Capital Region.
Budget 2022 proposes to provide $19.6 million in 2022-23 to
Environment and Climate Change Canada to sustain the Freshwater
Action Plan. The future of this initiative will be communicated at a later
date. This funding will support clean-up eorts in the Great Lakes,
the St. Lawrence River, Lake Winnipeg, Lake of the Woods, the Fraser River,
the Saint John River, the Mackenzie River, and Lake Simcoe.
Budget 2022 proposes to provide $25.0 million over ve years, starting
in 2022-23, to Environment and Climate Change Canada to support the
Experimental Lakes Area.
Budget 2022 proposes to provide $44.9 million over ve years, starting
in 2022-23, and $9.0 million ongoing to Fisheries and Oceans Canada
to support the Great Lakes Fishery Commission. This funding will help
coordinate Canada-U.S. invasive sea lamprey control activities, manage
sheries, and conduct scientic research in the Great Lakes.
102 Chapter 3
Taking More Action to Eliminate Plastic Waste
No one wants to see trash on the beach where their children play, or on the trail
where they hike. The federal government has already taken signicant steps—
working with all orders of government, industry, and other stakeholders to take
action on plastic waste and pollution and to work towards a goal of zero plastic
waste by 2030. A signicant step towards this goal is the government’s intent to
enact regulations prohibiting certain single-use plastics in 2022.
Under Canada’s G7 presidency in 2018, Canada championed the development
of the Ocean Plastics Charter and later worked with provincial and territorial
governments to develop a Canada-wide Strategy on Zero Plastic Waste.
Budget 2022 proposes to provide $183.1 million over ve years, starting
in 2022-23, to Environment and Climate Change Canada, Fisheries and
Oceans Canada, Health Canada, Transport Canada, Crown-Indigenous
Relations and Northern Aairs Canada, Statistics Canada, and the National
Research Council. This investment will reduce plastic waste and increase
plastic circularity by developing and implementing regulatory measures,
and conducting scientic research to inform policy-making. This funding
will also help better understand eects of micro-plastics on human health,
monitor plastic contaminants in the North, inform ship plastic waste
management, and monitor plastic pollution in water systems.
Budget 2022 also proposes to provide $10 million in 2022-23 to
Fisheries and Oceans Canada to renew the Ghost Gear Fund for one year
to continue to assist projects that retrieve ghost gear, dispose of shing-
related plastic waste, test new shing technology, and support international
eorts to remove ghost gear from our oceans.
Fighting and Managing Wildres
Last summer, Canadians again saw the devastating and tragic impact of
wildres in British Columbia. Communities like Lytton saw homes and
businesses lost to re. People across the country spent days under a haze of
smoke. Canada is experiencing more frequent and more extreme wildres and
this trend will continue as the climate changes. The risk of wildre is especially
serious for remote and Indigenous communities and res come with signicant
economic and environmental costs.
Clean Air and a Strong Economy 103
Budget 2022 proposes additional action to counter the growing threat of
wildres in Canada, including by providing support to provinces, territories,
and Indigenous communities for wildre mitigation, response, and
monitoring through the following:
• $269 million over ve years, starting in 2022-23, to Natural Resources
Canada as exceptional, time-limited support to help provinces and
territories procure reghting equipment such as vehicles and aircrafts;
• $39.2 million over ve years, starting in 2022-23, to Indigenous
Services Canada to support the purchase of reghting equipment by
First Nations communities;
• $37.9 million over ve years, starting in 2022-23, with $0.6 million
ongoing, to Natural Resources Canada to train 1,000 additional
reghters and incorporate Indigenous traditional knowledge in re
management; and
• $169.9 million over 11 years, starting in 2022-23, with $6.9 million
in remaining amortization, to the Canadian Space Agency,
Natural Resources Canada, and Environment and Climate
Change Canada to deliver and operate a new wildre monitoring
satellite system.
Growing Canada’s Trail Network
The Trans Canada Trail is a national initiative that began in 1992 with the goal
of developing a network of recreational trails that would stretch across Canada.
At 27,000 kilometres, the Trans Canada Trail is now the longest trail network in
the world, connecting Canadians to nature from coast-to-coast-to-coast.
To maintain and enhance Canada’s trail network, Budget 2022 proposes to
provide $55 million over ve years, starting in 2022-23, to the Parks Canada
Agency for the Trans Canada Trail.
To improve access and promote tourism and recreational activities around
Rouge National Urban Park, Budget 2022 proposes to provide $2 million
over two years, starting in 2022-23, to the Parks Canada Agency to
contribute to building new trails outside and connecting to trails inside the
Urban Park.
104 Chapter 3
British Columbia Old Growth Nature Fund
British Columbia’s iconic old growth forests have deep-rooted cultural
signicance to Indigenous communities and are important to all
British Columbians. They are also critical habitats for dozens of species at risk
and migratory birds and are important natural stores of carbon.
To conserve and protect these forests, Budget 2022 proposes to provide
$55.1 million over three years, starting in 2022-23, to Environment and
Climate Change Canada and Natural Resources Canada to establish
an Old Growth Nature Fund in collaboration with the Province of
British Columbia, non-governmental organizations, and Indigenous and
local communities. This funding will be conditional on the Government of
British Columbia making a matching investment.
3.4 Building Canada’s Net-Zero Economy
Governments around the world will not be able to nance the transition to a
net-zero economy and ght climate change alone. Thankfully, the transition
to net-zero represents a signicant opportunity for businesses and investors
looking to invest in the economy of the future and trillions of dollars in private
capital have already been assembled for investments in green infrastructure and
technology around the world.
Budget 2022 takes a number of important steps to mobilize the substantial
private capital that will build a cleaner economy, ght climate change, and
create new, good-paying middle class jobs for Canadians.
A major component of building Canada’s net-zero economy is the Canada
Growth Fund—a signicant new $15 billion government investment fund that
will accelerate the investment of private capital into decarbonization and clean
technology projects; help to promote the diversication of Canada’s economy;
play a key role in helping to meet Canada’s climate targets; and strengthen
both Canada’s economic resilience and capacity. More information on the
Canada Growth Fund can be found in Chapter 2.
Clean Air and a Strong Economy 105
Chart 3.1
Annual Investment to Attain Net-Zero Emissions in Canada by 2050
(Total Private and Government Investment)
0
20
40
60
80
100
120
140
160
Current Annual Investment Required Annual Investment
$ billions
$15 - $25 Billion
$125 - $140 Billion
Sources: Global Financial Markets Association and Boston Consulting Group, Climate Finance Markets and the Real Economy
(2020); United Nations Framework Convention on Climate Change (2018).
Increasing the Impact of the Canada Infrastructure
Bank
The Canada Infrastructure Bank (CIB) was created in 2017 to attract private
capital to major infrastructure projects and help build more of the infrastructure
that we need across the country.
In 2020, the CIB announced its three-year, $10 billion Growth Plan, which included
a goal of helping Canada achieve its emissions reduction targets. Since then,
the CIB has identied opportunities to work with private sector and institutional
investors to do even more to help Canada reach a net-zero emissions future.
To increase the CIB’s impact, Budget 2022 announces a broadened role
for the CIB to invest in private sector-led infrastructure projects that will
accelerate Canada’s transition to a low-carbon economy. This will allow the
CIB to invest in small modular reactors; clean fuel production; hydrogen
production, transportation and distribution; and carbon capture, utilization
and storage. These new areas fall under the CIB’s existing clean power and
green infrastructure investment areas. The CIB will continue to invest in its
public transit, broadband, and trade and transportation investment areas.
As noted in section 3.1, the CIB will also invest $500 million in large-scale, zero-
emission vehicle (ZEV) charging and refueling infrastructure to help accelerate
the adoption of ZEVs and reduce Canada’s transportation emissions.
By investing in public and private-sector led infrastructure projects, the CIB
will complement the Canada Growth Fund to reduce emissions, ght climate
change, and build Canada’s net-zero economy.
106 Chapter 3
Net-Zero Capital Allocation Strategy
Last year, the government created the Sustainable Finance Action Council,
convening 25 of Canada’s largest nancial institutions and pension funds,
which together represent more than $10 trillion in assets. While public
investment can provide some of the capital required to support the net-zero
transition, the massive spending power of the private sector—both in Canada
and around the world—will play a vital role in the transition to a low-carbon
global economy.
Budget 2022 announces that the Sustainable Finance Action Council will
develop and report on strategies for aligning private sector capital with the
transition to net-zero, with support from the Canadian Climate Institute
and in consultation with the Net-Zero Advisory Body.
Climate Disclosures for Federally Regulated
Institutions
The federal government is committed to moving towards mandatory reporting
of climate-related nancial risks across a broad spectrum of the Canadian
economy, based on the international Task Force on Climate-related Financial
Disclosures (TCFD) framework.
The Oce of the Superintendent of Financial Institutions (OSFI) will consult
federally regulated nancial institutions on climate disclosure guidelines in 2022
and will require nancial institutions to publish climate disclosures—aligned
with the TCFD framework—using a phased approach, starting in 2024.
OSFI will also expect nancial institutions to collect and assess information on
climate risks and emissions from their clients.
As federally regulated banks and insurers play a prominent role in shaping
Canada’s economy, OSFI guidance will have a signicant impact on how
Canadian businesses manage and report on climate-related risks and exposures.
Separately, the government will move forward with requirements for disclosure
of environmental, social, and governance (ESG) considerations, including
climate-related risks, for federally regulated pension plans.
Supporting the International Sustainability Standards
Board’s Montreal Oce
The federal government welcomed the International Financial Reporting
Standards (IFRS) Foundation’s selection of Montreal to host one of the two
central oces of the new International Sustainability Standards Board (ISSB).
The ISSB will develop global sustainability standards to enhance the quality
and comparability of international corporate reporting on environmental, social
and governance (ESG) factors. The government is committed to supporting
the start-up of the Montreal oce and positioning Canada as a leader in
sustainability reporting.
Clean Air and a Strong Economy 107
Budget 2022 proposes to provide $8 million over three years, starting in
2022-23, to Canada Economic Development for Quebec Regions to
support the start-up of the ISSB's Montreal oce. This investment builds
on signicant industry and public sector funding from across Canada that
helped to bring the ISSB to Canada.
Table 3.1
Climate Change Funding Proposed through Budget 2022 Previously
Announced in the 2030 Emissions Reduction Plan
Section
Number
Measure Title Funding Amount
ERP Page
Reference
1.1
Canada Green Buildings Strategy $150 million p. 36
Deep Retrot Accelerator Initiative $200 million p. 37
Greener Neighbourhoods Pilot Program $33.2 million p. 37
Innovative construction materials R&D/Building standards $183.2 million p. 37
Low-interest loans (Canada Greener Homes Loan program) $458.5 million p. 37
3.1
Incentives for Zero-Emission Vehicles (iZEV) program $1.7 billion p. 61
Zero-Emission Vehicle Infrastructure Program $400 million p. 61
Greening Government Operations Fleet Program $2.2 million p. 61
Incentives for medium- and heavy-duty ZEVs $547.5 million p. 61
Long-haul zero-emission trucks regulations/Safety testing $33.8 million p. 61
Green Freight Assessment Program $199.6 million p. 61
Agricultural Clean Technology Program $329.4 million p. 66
On-Farm Climate Action Fund $469.5 million p. 65
Resilient Agricultural Landscape Program $150 million p. 65
Federal granting councils $100 million p. 66
Nature Smart Climate Solutions Fund $780 million p. 73
Low Carbon Economy Fund $2.2 billion p. 31
Industrial Energy Management System program $194 million p. 46
3.2
Clean electricity projects pre-development activities $250 million p. 42
Smart Renewables and Electrication Pathways Program $600 million p. 42
Pan-Canadian Grid Council $2.4 million p. 42
Regional Strategic Initiatives $25 million p. 42
7.3 Indigenous Climate Leadership Agenda $29.6 million p. 101
Total $9.1 billion
Note: The entries in the “Funding Amount” column have dierent durations and do not include remaining amortization
amounts. Please refer to budget text for complete funding information. Funding amounts may not add up to total due
to rounding.
108 Chapter 3
Chapter 3
Clean Air and a Strong Economy
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
3.1. Reducing
Pollution to Fight
Climate Change
0 827 1,530 2,022 1,485 946 6,810
Reducing Emissions
on the Road - Making
the Switch to Zero-
Emission Vehicles More
Aordable
1
0 422 549 723 4 2 1,699
Reducing Emissions on
the Road – Investing
in ZEV Charging
Infrastructure in Sub-
Urban and Remote
Communities
1
0 80 80 80 80 80 400
Reducing Emissions
on the Road –
Greening Government
Operations Fleet
Program
1
0 0 0 0 0 0 2
Reducing Emissions on
the Road – Incentives
for Medium- and
Heavy-Duty ZEVs
1
0 11 97 149 290 0 548
Reducing Emissions
on the Road – Long-
Haul ZEV Trucking
Regulations and Safety
Testing
1
0 4 8 8 7 6 34
Reducing Emissions
on the Road – Green
Freight Assessment
Program
1
0 23 45 53 49 29 200
Sustainable Agriculture
to Fight Climate
Change
1
0 66 168 235 229 189 887
Expanding the
Nature Smart Climate
Solutions Fund
1
0 156 156 156 156 156 780
Returning Fuel Charge
Proceeds to Small
and Medium Sized
Enterprises
0 15 15 0 0 0 30
Expanding the Low
Carbon Economy Fund
1
0 18 360 560 607 440 1,985
Support for Business
Investment in Air-
Source Heat Pumps
0 9 15 10 10 9 53
Industrial Energy
Management
1
0 24 36 47 51 35 194
Clean Air and a Strong Economy 109
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
3.2. Building a Clean,
Resilient Energy
Sector
0 133 226 493 956 1,581 3,389
Investment Tax Credit
for Carbon Capture,
Utilization, and Storage
0 35 70 285 755 1,455 2,600
Clean Electricity
1
0 88 133 181 175 100 677
Small Modular Reactors
0 10 24 29 29 29 121
Phasing Out Flow-
Through Shares for Oil,
Gas, and Coal Activities
0 0 -1 -2 -3 -3 -9
3.3. Protecting Our
Land, Lakes, and
Oceans
0 324 475 511 477 462 2,248
Renewing and
Expanding the Oceans
Protection Plan
0 237 314 344 354 342 1,590
Less: Funds
Sourced
From Existing
Departmental
Resources
0 -34 -30 -30 -30 -30 -153
Protecting Our
Freshwater
0 42 23 23 23 23 133
Less: Funds
Previously
Provisioned in the
Fiscal Framework
0 -4 0 0 0 0 -4
Taking More Action to
Eliminate Plastic Waste
0 39 37 36 42 43 197
Less: Funds
Sourced
From Existing
Departmental
Resources
0 -1 -1 -1 0 0 -4
Fighting and Managing
Wildres
0 30 101 102 77 72 383
Less: Funds
Sourced
From Existing
Departmental
Resources
0 -1 -1 -1 -1 -1 -6
Growing Canada’s Trail
Network
0 10 11 11 12 13 57
British Columbia Old
Growth Nature Fund
0 6 22 27 0 0 55
110 Chapter 3
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
3.4. Building Canada's
Net-Zero Economy
-3 0 0 3 0 0 0
Supporting the
International
Sustainability
Standards Board’s
Montreal Oce
0 3 3 3 0 0 8
Less: Funds
Previously
Provisioned in the
Fiscal Framework
-3 -3 -3 0 0 0 -8
Chapter 3 - Net Fiscal
Impact
-3 1,284 2,231 3,030 2,918 2,988 12,448
Note: Numbers may not add due to rounding.
1
Announced in the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy,
released on March 29, 2022.
Chapter 4
Creating Good Middle Class Jobs
4.1 Delivering on Child Care .............................................................................................114
Supporting Early Learning and Child Care ..........................................................114
4.2 Immigration for Our Economy ................................................................................117
Canada’s Ambitious Immigration Plan ................................................................. 117
Eciently Welcoming Visitors, Students, and Workers to Canada ...........118
Securing the Integrity of Canada’s Asylum System .......................................118
Supporting Legal Aid for Asylum Seekers ..........................................................119
Improving Support Services for Immigrants and Visitors to Canada .....119
Improving the Citizenship Program ......................................................................119
4.3 A Workforce for the 21
st
Century Economy ........................................................120
Modernizing Labour Market Transfer Agreements ........................................ 120
Bringing Workers to the Decision-Making Table ............................................121
Doubling the Union Training and Innovation Program ................................121
Sustainable Jobs ............................................................................................................ 122
4.4 Connecting Workers to Good Jobs .......................................................................122
Labour Mobility Deduction for Tradespeople ..................................................123
Supporting Foreign Credential Recognition in the Health Sector ...........123
An Employment Strategy for Persons With Disabilities ................................124
Improving the Temporary Foreign Worker Program .....................................124
Completing the Employment Equity Act Review ............................................125
4.5 Towards A Better Employment Insurance System .............................................126
Extending Temporary Support for Seasonal Workers ...................................126
Creating Good Middle Class Jobs 113
Chapter 4
Creating Good Middle Class Jobs
In the face of a pandemic that has changed all of our lives, workers in Canada
have shown remarkable resilience. Whether adapting to work from home,
restructuring entire businesses to manufacture personal protective equipment,
or heading to their frontline job in the middle of a lockdown, the determination
and ingenuity of Canada’s workforce has kept our economy moving during an
unprecedented and challenging two years.
At the start of the pandemic, the federal government introduced signicant
economic support to allow our workers and businesses to make ends meet.
Those investments worked. Canada’s economy has recovered 112 per cent
of the jobs lost at the outset of the pandemic. Our unemployment rate in
February 2022 was at 5.5 per cent, which is lower than prior to the pandemic.
Job creation is remarkably strong, and even our hardest-hit sectors are starting
to get back up and running.
But with our unemployment rate hitting near-record lows, some businesses
are still struggling to nd workers. This is a problem in Canada and around
the world. A strong and prosperous economy requires a diverse, talented, and
constantly growing workforce. And yet too many Canadians—women with
young children, new graduates, newcomers, Black and racialized Canadians,
Indigenous peoples, and persons with disabilities among them—are facing
barriers to nding meaningful and well-paid work.
In Budget 2022, the government is putting in place important measures that will
help address those issues and meet the needs of our workers, our businesses,
and the Canadian economy so that it can keep growing stronger for years
to come.
Key Ongoing Actions
The federal government has made historic investments to help workers
succeed and ensure that Canadian businesses have access to a diverse, skilled
workforce. These include:
$30 billion over ve years to build a Canada-wide early learning and
child care system;
Expanding the Canada Workers Benet to support an estimated one million
additional Canadians, which could mean $1,000 more per year for a full-
time, minimum-wage worker;
More than $3 billion over three years to support nearly 500,000 new
job and training opportunities, including by helping mid-career workers
transition to in-demand jobs, and helping young Canadians gain valuable
work experience;
114 Chapter 4
Making post-secondary education more accessible by doubling the Canada
Student Grants amount until July 2023—meaning up to $6,000 per year in
non-repayable aid for full-time students in need—and by waiving interest
on Canada Student Loans through to March 2023;
Introducing a $15 per hour federal minimum wage and legislating 10 days
of paid sick leave to improve the working conditions for the nearly one
million workers in the federally-regulated private sector; and
Increasing the length of Employment Insurance sickness benets from
15 to 26 weeks, as of summer 2022.
4.1 Delivering on Child Care
Supporting Early Learning and Child Care
In Budget 2021, the federal government made an historic and transformative
investment of $30 billion over ve years. Combined with previous investments
announced since 2015, $9.2 billion ongoing will be invested in child care,
including Indigenous Early Learning and Child Care, starting in 2025-26.
Child care is not just a social policy—it is an economic policy, too. Aordable,
high-quality child care will grow our economy, allow more women to enter the
workforce, and help give every Canadian child the best start in life.
In less than a year, the federal government reached agreements with all
13 provinces and territories. This means, by the end of 2022, that Canadian
families will have seen their child care fees reduced by an average of
50 per cent. By 2025-26, it will mean an average child care fee of $10-a-day for
all regulated child care spaces across Canada. Most provinces and territories are
also moving ahead with faster than anticipated initiatives to support access to
aordable high-quality child care spaces (Figure 4.1).
Alberta, Saskatchewan, and the Northwest Territories have already cut child care
fees in half. In Ontario, fees will be reduced by an initial 25 per cent retroactive
to April 1, 2022. Yukon has already put in place a $10-a-day target for child care
spaces as of April
1, 2021, ve years ahead of schedule. Prince Edward Island is
targeting $10-a-day spaces by the end of 2024.
Creating Good Middle Class Jobs 115
Figure 4.1
Fee Reductions for Child Care Spaces Across Canada
already achieved $10/day on average
reductions earlier than December 2022
on track for reductions
by December 2022
YK
$7,300
BC
$9,390
AB
$8,610
SK
$5,220
NWT
$7,300
NU
$7,300
MB
$2,610
ON
Over $9,000
QC
NL
$7,560
NB
$5,220
NS
$6,780
PEI
$4,170
Estimated average gross annual savings per child with
$10-a-day child care compared to 2019 child care fees
$
Note: Employment and Social Development Canada estimates. Savings estimates are relative to 2019 levels, are
based on out-of-pocket parent fees, and do not include amounts that would be recovered through provincial/
territorial tax credits or the federal child care expense deduction at tax time, or changes to provincial/territorial or
federal benets as a result of lower child care expenses. Actual savings for families will vary based on factors such as
actual fees paid prior to reductions. The estimate for Ontario is based on the Province of Ontario’s current modelling
for an average $10/day out-of-pocket parent fee.
As the federal government worked with provinces and territories on the
completion and implementation of agreements, many raised that infrastructure
funding was a challenge for non-prot and public providers where real estate
costs were too high or building materials too expensive.
In response to requests from provinces and territories, and to support the
implementation of the Canada-wide early learning and child care system,
Budget 2022 proposes to provide $625 million over four years, beginning
in 2023-24, to Employment and Social Development Canada for an Early
Learning and Child Care Infrastructure Fund.
This funding will enable provinces and territories to make additional child care
investments, including the building of new facilities.
As noted in Budget 2021, Quebec has been a pioneer in early learning and child
care in Canada, and this new funding will be part of an asymmetrical agreement
with the province of Quebec that will allow for Quebec to further enhance its child
care system.
116 Chapter 4
Early Learning and Child Care Investments to Make Life More Aordable
Canada-Wide Early Learning and Child Care Agreements
Province/
Territory and
Date Agreement
Announced
Amount
of Federal
Investment
(5 Year
Allocation,
$ millions)
1
Estimated Average
Savings per Child
with 50% Average
Fee Reduction
(gross, annual)
2
Estimated Average
Savings per
Child at $10/day
(gross, annual)
2
Child
Care
Spaces
to be
Created
Estimated
Early
Childhood
Educator Jobs
to be Created
3
BC
July 8, 2021
$3,212
$6,000
(by end of 2022)
$9,390
(by end of FY 2025-26)
40,000
4
8,000 to 10,000
NS
July 13, 2021
$605
$4,690
(by end of 2022)
$6,780
(by end of FY 2025-26)
9,500 1,900 to 2,375
YK
July 23, 2021
$42
Yukon committed
to a $10/day
average fee prior to
Budget 2021
$7,300
(achieved)
110 22 to 28
PEI
July 27, 2021
$118
$3,390
(by end of 2022)
$4,170
(by end of 2024)
452 90 to 113
NL
July 28, 2021
$306
$5,090
(by end of 2022)
$7,560
(as early as January
2023)
5,895 1,179 to 1,474
QC
5
August 5, 2021
$5,964 Not applicable Not applicable 37,000 7,400 to 9,250
MB
August 9, 2021
$1,201
$2,610
(by end of 2022)
$2,610
(by end of FY 2022-23)
23,000 4,600 to 5,750
SK
August 13, 2021
$1,099
$3,910 (retroactive
to July 2021)
$5,220
(by end of FY 2025-26)
28,000 5,600 to 7,000
AB
November 15, 2021
$3,797
$5,610
(January 2022)
$8,610
(by end of FY 2025-26)
42,500 8,500 to 10,625
NB
December 13, 2021
$492
$3,910
(by end of 2022)
$5,220
(by end of FY 2025-26)
3,400 680 to 850
NWT
December 15, 2021
$51
$4,950
(by end of 2022)
$7,300
(by end of FY 2025-26)
300 60 to 75
NU
January 24, 2022
$66
$4,950
(by end of 2022)
$7,300
(by end of March 2024)
238 48 to 60
ON
March 28, 2022
$10,235
$6,000
(by end of 2022)
over $9,000
6
(by end of FY 2025-26)
86,000
7
14,000 to 15,000
6
1
National Canada-wide early learning and childhood allocations are calculated based on projected 0-12 child
population and include base funding of $2 million per province/territory per year.
2
Employment and Social Development Canada estimates and are illustrative only. Savings estimates are relative to
2019 levels unless updated data is provided by provinces and territories. Estimates are based on out-of-pocket
parent fees and do not include amounts that would be recovered through provincial/territorial tax credits or the
federal child care expense deduction at tax time, or changes to provincial/territorial or federal benets as a result
of lower child care expenses. Actual savings for families will vary based on factors such as actual fees paid prior to
reductions.
3
Employment and Social Development Canada estimates. Range of estimated early childhood educator jobs
created is based on the national average range of early childhood educators expected to be required per new
child care space. Provincial and territorial estimates may dier due to regulatory variation.
4
B.C. committed to creating 30,000 new spaces within ve years, and 40,000 new spaces within seven years.
5
The Government of Canada has entered into an asymmetrical agreement with the province of Quebec that
will allow for further improvements to its early learning and child care system, where parents with a subsidized,
reduced contribution space already pay a single fee of less than $10/day.
6
Based on the province of Ontario’s current modelling for an average $10/day out-of-pocket parent fee.
7
The province of Ontario committed to create 86,000 spaces from 2019 levels by end of 2026 which is
approximately 71,000 new spaces from current levels.
Creating Good Middle Class Jobs 117
4.2 Immigration for Our Economy
Immigration is vital to our economy, our communities, and to our national identity
as a country that is diverse and welcoming of everyone. Indeed, multiculturalism is
one of Canada’s great success stories and an example to the world.
Throughout the pandemic, many newcomers have been on the front lines,
working in key sectors like health care, transportation, the service sector, and
manufacturing. Without them, Canada’s economy would not have overcome the
challenges of the last two years.
In the decades to come, our economy will continue to rely on the talents of
people from all over the world, just as we have in decades past. Our future
economic growth will be bolstered by immigration. And Canada will remain a
leader in welcoming newcomers eeing violence and persecution.
In Budget 2022, the federal government is proposing investments to enhance
our capacity to meet the immigration demands of our growing economy; to
create opportunities for all newcomers; and to maintain Canada’s world-class
immigration system.
Canada’s Ambitious Immigration Plan
Canada welcomed more than 405,000 new permanent residents in 2021—
more than any year in Canadian history.
To meet the demands of our growing economy, the federal government’s
2022-24 Immigration Levels Plan—tabled in February 2022—sets an even higher
annual target of 451,000 permanent residents by 2024—the majority of whom
will be skilled workers, which will help to address persistent labour shortages.
This higher target—along with the government’s 2021 Economic and Fiscal
Update investments to resolve delays and backlogs in processing and new
investments proposed in this Budget—will help make our immigration system
more responsive to Canada’s economic needs and humanitarian commitments.
The Immigration Levels Plan helps reunite family members with their loved
ones, and allows us to continue to be home to the talents of those already
in Canada by granting permanent status to temporary residents—including
essential workers and international students.
The Immigration Levels Plan also includes rm global humanitarian commitments,
including a plan to resettle at least 40,000 Afghan refugees in the coming years.
On March 30, 2022, Canada marked an important milestone by welcoming the
10,000th Afghan refugee since August 2021. In addition, the government has
introduced new immigration streams for Ukrainians, set out in Chapter 5.
118 Chapter 4
To support the processing and settlement of new permanent residents
to Canada as part of Canada’s Immigration Levels Plan—including the
government’s increased commitment to Afghan refugees—the government
has committed $2.1 billion over ve years and $317.6 million ongoing in
new funding.
As announced in Budget 2021, the government also intends to amend the
Immigration and Refugee Protection Act to improve Canada’s ability to select
applicants that match its changing and diverse economic and labour force
needs. These people will be from among the growing pool of candidates
seeking to become permanent residents through the Express Entry System.
Eciently Welcoming Visitors, Students, and Workers
to Canada
Every year, Canada welcomes millions of tourists, international students, and
temporary foreign workers. Together, they inject billions of dollars into our
economy; bring new ideas and energy to our schools and businesses; create
lasting commercial and social ties; and ll openings in our workforce.
As the world recovers from the pandemic and travel restrictions are lifted,
Canada can expect to see a growing number of temporary residence
applications, visitor visas, and study permits.
Budget 2022 proposes to provide $385.7 million over ve years, and
$86.5 million ongoing, for Immigration, Refugees and Citizenship Canada,
the Canada Border Services Agency, and the Canadian Security Intelligence
Service to facilitate the timely and ecient entry of a growing number of
visitors, workers, and students.
Securing the Integrity of Canada’s Asylum System
Canada is a welcoming destination for those seeking refuge and each year takes
in tens of thousands of people eeing violence and persecution.
Around the world, the number of displaced people and families tragically
continues to rise. In the months and years to come, many will seek to come
to Canada.
Canada’s asylum system—the border ocers, immigration ocials, and
members of the Immigration and Refugee Board who process, investigate, and
adjudicate asylum claims—has recently beneted from enhanced temporary
funding. As the COVID-19 situation in Canada continues to improve and
border restrictions ease, the federal government is committed to ensuring that
Canada’s asylum system has the long-term resources it needs.
Budget 2022 proposes to provide Immigration, Refugees and Citizenship
Canada, the Canada Border Services Agency, the Immigration and Refugee
Board, and the Canadian Security Intelligence Service with $1.3 billion over
the next ve years, and $331.2 million ongoing, to support the long-term
stability and integrity of Canada’s asylum system.
Creating Good Middle Class Jobs 119
The government is also proposing to introduce amendments to the
Immigration and Refugee Protection Act to allow Immigration, Refugees
and Citizenship Canada to require the electronic submission of asylum
claims. Claims can currently be submitted either digitally or on paper,
making it dicult to keep track of all information relevant to a le and
ultimately leading to processing delays. This reform will help modernize
and streamline the asylum process and reduce wait times for claimants.
Supporting Legal Aid for Asylum Seekers
Each year, thousands fearing persecution seek refuge in Canada. After their arrival,
asylum seekers have the right to a fair hearing to determine their legal status.
For those who cannot aord legal support, immigration and refugee legal
aid can provide eligible asylum claimants with legal information, advice, and
representation. These services, delivered in partnership with provinces, make the
asylum system more ecient and help asylum seekers receive fair outcomes.
Budget 2022 proposes to provide $43.5 million in 2022-23 to maintain
federal support for immigration and refugee legal aid services.
Improving Support Services for Immigrants and
Visitors to Canada
As global demand to visit, study, and work in Canada increases—in addition to
a growing number of permanent residents moving to Canada—so too must the
government’s ability to provide accessible, timely, and responsive services.
Budget 2022 proposes to provide $187.3 million over ve years, and
$37.2 million ongoing, for Immigration, Refugees and Citizenship Canada
to improve its capacity to respond to a growing volume of enquiries and to
invest in the technology and tools required to better support people using
their services.
Improving the Citizenship Program
Becoming a citizen allows new Canadians to fully participate in Canadian
society, including through the ability to vote, to run for public oce, and to
travel under a Canadian passport.
To modernize the process of obtaining Canadian citizenship, the federal
government recently launched new online services, which include the ability
to submit applications electronically. However, current legislation limits the
government’s ability to modernize the citizenship application process through
digitization, meaning processing takes longer and online tools are limited.
To further improve the experience of applicants and to enable the
Citizenship Program to accommodate higher levels of applications,
the government intends to introduce legislative amendments to the
Citizenship Act to enable automated and machine-assisted processing and
the safe and secure collection and use of biometric information.
120 Chapter 4
The 2021 Economic and Fiscal Update also provided funding in 2022-23 for
citizenship processing, as part of an $85 million investment to reduce processing
times and pandemic-related application backlogs.
4.3 A Workforce for the 21
st
Century Economy
Structural shifts in the global economy—including an increase in automation and
a global transition to lower-emission industries and technologies—will require
some workers in sectors across Canada to develop new skills and adjust the way
they work.
“3.1 million Canadian jobs will change in some way over the next
decade due to the climate transition”
– RBC Economics (2022)
The transition to a new career can be a dicult and stressful time—workers
have bills to pay, families to take care of, and established roots in their
communities. As our economy changes, Canada’s jobs and skills plan must be
tailored to the needs of those workers and help them to meet the needs of
growing businesses and sectors.
In recent years, the federal government has made signicant investments to
connect workers to jobs—including mid-career workers, young people, and
underrepresented workers—with nearly 500,000 opportunities for skills
development and in-demand jobs in Budget 2021.
Budget 2022 proposes to build on past investments, to work with provincial
and territorial partners on improving how skills training is provided, to launch
intensive engagement with labour groups on how Canada can better support
skilled workers as they navigate a changing economy, and support union-led
apprenticeship training for those who are underrepresented in the trades.
Modernizing Labour Market Transfer Agreements
Every year, the federal government provides more than $3 billion in funding to
provinces and territories to provide training and employment support through
the Labour Market Transfer Agreements. These investments help more than
one million Canadians every year prepare for their next job through programs
ranging from skills training and wage subsidies, to career counselling and job
search assistance.
The federal government is taking steps to renew this partnership with provinces
and territories in order to be more responsive to the needs of workers,
businesses, and the economy.
Creating Good Middle Class Jobs 121
Budget 2022 proposes to amend Part II of the Employment Insurance Act to
ensure more workers are eligible for help before they become unemployed,
and that employers can receive direct support to re-train their workers.
Over the coming year, the government also intends to intensify work with
provinces and territories to modernize these agreements, reecting the changing
needs and challenges of both the current and future Canadian labour market.
This will include working together to support mid-career workers in transitioning
to new sectors and help local economies adapt and prosper.
Bringing Workers to the Decision-Making Table
Canada’s long-term economic success depends on matching workers with
the right skills to employers in growing sectors. For some workers, having the
right skills could mean a small change, like learning a new method. For others,
it might mean deeper training towards a career in a new eld, such as the
skilled trades or clean technologies.
The future of work should be led by workers—and unions need to be at the
forefront of our planning for the jobs of tomorrow.
Budget 2022 proposes to provide $2.5 million in 2022-23 for Employment
and Social Development Canada to launch a new union-led advisory table
that brings together unions and trade associations. In the coming year, the
table will advise the government on priority investments to help workers
navigate the changing labour market, with a particular focus on skilled,
mid-career workers in at-risk sectors and jobs. Further details will be
announced in the coming weeks.
The results will be used to inform future actions and investments to help
workers make the transition to the jobs and sectors that need them.
Doubling the Union Training and Innovation Program
The skilled trades are vital to the future of the Canadian economy and oer
workers rewarding careers in elds ranging from carpentry to electricians
and boilermakers. The federal government wants to provide more women,
newcomers, persons with disabilities, Indigenous peoples, and racialized
Canadians with the chance to have good-quality jobs in high-paying skilled
trades, and unions play a critical role in training skilled trades workers.
Since 2017, the Union Training and Innovation Program has supported union-
based apprenticeship training in the Red Seal trades, including through
investments in training, equipment, and materials, as well as in support for
innovative approaches to address barriers facing apprentices.
Budget 2022 proposes to provide $84.2 million over four years to double
funding for the Union Training and Innovation Program. Each year, the
new funding would help 3,500 apprentices from underrepresented groups
begin and succeed in careers in the skilled trades through mentorship,
career services, and job-matching.
122 Chapter 4
Sustainable Jobs
Workers will always be at the heart of the government’s plan to build a strong
economy and a bright future for Canadians. As the world moves to a net-zero
emissions future, we must ensure that everyone has a real and fair chance to
succeed and that no region gets left behind. Already, the federal government has
made progress towards building a just transition for workers through sustainable
jobs and have undertaken public consultations on legislation that will support
workers and communities in the shift to a low-carbon future. This work continues.
In March, in the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean
Air and a Strong Economy, the government committed to skills training,
including through a new Futures Fund for Alberta, Saskatchewan, and
Newfoundland and Labrador. Along with the government’s commitment to a
new Clean Jobs Training Centre, this will help workers have the tools to succeed.
The federal government will also continue to work with its partners, including
labour unions, to design programs that take into account current barriers and
underrepresentation, so that there is a level playing eld for everyone.
Canada’s long-term success depends on workers. From engineers, scientists,
farmers, construction workers, tradespeople, resource workers, energy workers,
researchers, and more, everyone will have a role to play in the economy
of tomorrow.
4.4 Connecting Workers to Good Jobs
With record lows in unemployment as Canada emerges from the pandemic,
employers across the country—especially in rural Canada—are nding it
dicult to hire the workers they need.
Budget 2022 proposes to grow our workforce by addressing barriers faced by
mothers, Black and racialized Canadians, newcomers, persons with disabilities,
young Canadians, and other people who are underrepresented in Canada’s
workforce. This will include improving labour mobility and foreign credential
recognition, and creating opportunities for persons with disabilities.
The government also intends to engage with experts on the role that a
Career Extension Tax Credit could play in boosting the labour force participation
of seniors who want to continue to work later in life.
Creating Good Middle Class Jobs 123
Labour Mobility Deduction for Tradespeople
Canada is growing, and that means more homes, roads, and important
infrastructure projects need to be built. Skilled trades workers are essential
to Canada’s success and we need them to be able to get to the job site—
no matter where it is.
Workers in the construction trades often travel to take on temporary jobs—
frequently in rural and remote communities—but their associated expenses do
not always qualify for existing tax relief.
Improving labour mobility for workers in the construction trades can help to
address labour shortages and ensure that important projects, like housing, can
be completed across the country.
Budget 2022 proposes to introduce a Labour Mobility Deduction, which
would provide tax recognition on up to $4,000 per year in eligible travel and
temporary relocation expenses to eligible tradespersons and apprentices.
This measure would apply to the 2022 and subsequent taxation years.
Supporting Foreign Credential Recognition in the
Health Sector
The pandemic has only worsened the labour shortages in our health care sector.
Internationally-trained health care professionals can help ll these gaps and
ensure that Canadians receive the quality health care they deserve.
The Foreign Credential Recognition Program helps skilled newcomers
secure meaningful, well-paying jobs by funding provinces, territories, and
organizations to improve foreign credential recognition processes and by
providing direct support to skilled newcomers. This support includes mentoring,
job placements, and nancial assistance for exams and classes.
Budget 2022 proposes to provide $115 million over ve years,
with $30 million ongoing, to expand the Foreign Credential Recognition
Program and help up to 11,000 internationally trained health care
professionals per year get their credentials recognized and nd work in
their eld. It will also support projects—including standardized national
exams, easier access to information, faster timelines, and less red tape—
that will reduce barriers to foreign credential recognition for health care
professionals.
124 Chapter 4
An Employment Strategy for Persons With
Disabilities
Persons with disabilities should be fully included in Canada’s economic recovery.
However, despite being ready and willing to work, their employment rates are
much lower than those of Canadians without disabilities—59 per cent versus
80 per cent, according to the 2017 Canadian Survey on Disability. The federal
government is steadfast in its commitment to an inclusive recovery—and we
cannot leave persons with disabilities behind.
Budget 2022 proposes to provide $272.6 million over ve years
to Employment and Social Development Canada to support the
implementation of an employment strategy for persons with disabilities
through the Opportunities Fund. This will help to address labour market
shortages through increased participation by persons with disabilities and
make workplaces more inclusive and accessible. Of this funding, $20 million
will be allocated to the Ready, Willing and Able program to help persons
with Autism Spectrum Disorder or intellectual disabilities nd employment.
This measure will also form an important part of the government’s Disability
Inclusion Action Plan, which will aim to improve the quality of life for persons
with disabilities, and build on more than $1.1 billion in funding that the federal
government has committed to advance the inclusion of persons with disabilities
since 2015.
Improving the Temporary Foreign Worker Program
The Temporary Foreign Worker (TFW) program allows foreign nationals to
work in Canada on a temporary basis in order to ll jobs that Canadians are
unavailable or unwilling to take. The workers that come to Canada through
the TFW program contribute to the labour in a range of sectors, including
agriculture and sh and other food processing.
As employers across the country face diculties in nding workers, the TFW
program is experiencing a growing demand. However, additional steps need
to be taken to ensure the health, safety, and quality of life of those who
come to work in Canada—the importance of which has been reinforced by
the unacceptable experience of some temporary foreign workers during
the pandemic.
Creating Good Middle Class Jobs 125
Budget 2022 proposes a number of measures to increase protections for workers,
to reduce administrative burdens for trusted repeat employers, and to ensure
employers can quickly bring in workers to ll short-term labour market gaps.
These include:
$29.3 million over three years to introduce a Trusted Employer Model that
reduces red tape for repeat employers who meet the highest standards
for working and living conditions, protections, and wages in high-demand
elds. Further details on this program will be announced in the coming
year.
$48.2 million over three years, with $2.8 million in remaining amortization,
to implement a new foreign labour program for agriculture and sh
processing, tailored to the unique needs of these employers and workers.
The program will be regularly reviewed by the Minister of Employment,
Workforce Development and Disability Inclusion for its impact on local
labour markets to maximize the employment of Canadians and permanent
residents and to ensure the program is not negatively impacting wages for
Canadians and permanent residents.
$64.6 million over three years to increase capacity to process employer
applications within established service standards.
$14.6 million in 2022-23, with $3 million in remaining amortization,
to make improvements to the quality of employer inspections and hold
employers accountable for the treatment of workers.
Completing the Employment Equity Act Review
Through the Employment Equity Act, the government promotes and improves
equality and diversity in federally regulated workplaces. Since the introduction
of the Employment Equity Act, continued progress has been made to address
inequalities but some workers are still facing barriers to employment and
promotion and many federal workplaces fail to reect the full diversity of
Canada’s population. That is why, on July 14, 2021, the government launched an
arm’s length Task Force to review the Act and advise on how to modernize the
federal employment equity framework.
Budget 2022 proposes to provide $1.9 million in 2022-23 in order to
complete the Employment Equity Act Review in coming months. A nal
report will be publicized in fall 2022.
126 Chapter 4
4.5 Towards A Better Employment Insurance System
Over the last two years, millions of Canadians’ livelihoods have been interrupted
by lockdowns, illness, or the need to care for loved ones. At the start of the
pandemic, the government responded by introducing emergency income
support that ensured workers and their families could continue to make ends
meet, even as the pandemic prevented them from working.
As Canada’s economy continues to recover from the pandemic and emergency
programs wind down, the Minister of Employment, Workforce Development
and Disability Inclusion is consulting with Canadians on what needs to be done
to build an Employment Insurance (EI) system that better meets the current and
future needs of workers and employers. This includes simpler and fairer rules
for workers, new ways to support experienced workers transitioning to a new
career, and coverage for self-employed and gig workers.
The government will release its long-term plan for the future of EI after the
consultations conclude.
Extending Temporary Support for Seasonal Workers
In certain regions of the country, seasonal industries—including shing and
tourism in Atlantic Canada and British Columbia—are the lifeblood of local
economies. The Employment Insurance (EI) system is critical to ensuring that
the workers these industries count on have the support they need between
work seasons.
In 2018, to address gaps in EI support between seasons, the government
introduced a pilot project in 13 regions of the country to provide up to
ve additional weeks—for a maximum of 45 weeks—for eligible seasonal
workers. The temporary support was extended in Budget 2021 to ensure
continued support during the pandemic.
Budget 2022 proposes to extend these rules until October 2023 as the
government considers a long-term solution that best targets the needs of
seasonal workers. The cost of this measure is estimated at $110.4 million
over three years, starting in 2022-23.
As part of this extension, the government proposes to maintain a recently
introduced legislative x to ensure that the timing of COVID-19 benets
does not aect future EI eligibility under the rules of the program.
Creating Good Middle Class Jobs 127
Chapter 4
Creating Good Middle Class Jobs
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
4.1. Delivering on
Child Care 0 0 75 150 200 200 625
Supporting Early
Learning and Child Care 0 0 75 150 200 200 625
4.2. Immigration for
Our Economy 0 564 913 921 782 813 3,993
Canada’s Ambitious
Immigration Plan
1
0 398 484 473 345 357 2,058
Eciently Welcoming
Visitors, Students, and
Workers to Canada 0 75 86 86 86 86 421
Less: Funds
Previously
Provisioned in the
Fiscal Framework 0 -35 0 0 0 0 -35
Securing the Integrity of
Canada’s Asylum System 0 57 312 305 312 332 1,318
Supporting Legal Aid for
Asylum Seekers 0 44 0 0 0 0 44
Improving Support
Services for Immigrants
and Visitors to Canada 0 25 31 56 37 37 187
4.3. A Workforce
for the 21
st
Century
Economy 0 12 25 25 25 0 87
Bringing Workers to the
Decision-Making Table 0 3 0 0 0 0 3
Doubling the Union
Training and Innovation
Program 0 9 25 25 25 0 84
4.4. Connecting
Workers to Good Jobs
25 194 245 256 212 217 1,149
Labour Mobility
Deduction for
Tradespeople
25 110 110 115 115 120 595
Administrative Costs
0 1 1 1 1 1 6
Supporting Foreign
Credential Recognition
in the Health Sector
0 5 20 30 30 30 115
An Employment
Strategy for Persons
with Disabilities
0 39 65 65 65 65 299
Less: Year-Over-
Year Reallocation of
Funding
0 -26 0 0 0 0 -26
128 Chapter 4
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Improving the
Temporary Foreign
Worker Program
0 63 49 45 1 1 159
Completing the
Employment Equity Act
Review
0 2 0 0 0 0 2
4.5. Towards a Better
Employment Insurance
System
0 3 56 51 0 0 110
Extending Temporary
Support for Seasonal
Workers 0 3 56 51 0 0 110
Additional
Investments – Creating
Good Middle Class
Jobs
0 8 0 0 0 0 8
COVID-19 Benet
Integrity 0 8 0 0 0 0 8
Budget 2022 proposes to amend the Canada Emergency Response Benet Act and the Canada
Emergency Student Benet Act to provide the Canada Revenue Agency with authority to
establish and collect debts, on a weekly basis, for situations where a worker has accessed more
than one benet at once. Proposed funding would support related administration.
Chapter 4 - Net
Fiscal Impact
25 781 1,314 1,403 1,219 1,230 5,972
Note: Numbers may not add due to rounding.
1
The 2022‒2024 Immigration Levels Plan was announced on February 14
th
, 2022.
Chapter 5
Canada’s Leadership in the World
5.1 Reinforcing Our National Defence .......................................................................... 132
Reviewing Canada’s Defence Policy .....................................................................133
Reinforcing our Defence Priorities ........................................................................ 134
Supporting Culture Change in the Canadian Armed Forces ..................... 135
Enhancing Canada’s Cyber Security .....................................................................136
5.2 Supporting Ukraine .....................................................................................................137
Bolstering Ukraine’s Fight for Freedom ...............................................................137
Holding Russia Accountable ....................................................................................137
Supporting Ukrainians Through the Crisis .......................................................... 139
A Safe Haven for Ukrainians ....................................................................................139
5.3 Standing Up for Democracy, Transparency, and the Rule of Law ..............140
Strengthening Canada’s Anti-Money Laundering and Anti-Terrorist
Financing (AML/ATF) Regime ..................................................................................140
Implementing a Publicly Accessible Benecial Ownership Registry ........141
Combatting Misinformation and Disinformation ...........................................142
5.4 Providing International Assistance ..........................................................................143
Leading in the Global Fight Against COVID-19 ........................................................ 144
Strengthening Global Health Security ................................................................. 144
Canada’s Leadership in the World 131
Chapter 5
Canada’s Leadership in the World
Since the end of the Second World War, Canada has been a steadfast defender
of the rules-based international order. We have defended it because a world
based on rules is in Canada’s national interest.
But today, that order is facing an existential threat. Russia’s barbaric invasion
of Ukraine is not only an attack on the people of Ukraine and on Ukraine’s
territorial integrity, but also on democracy and the unprecedented period of
prosperity that the world’s democracies have worked continuously to build over
the last 75 years.
At the same time, issues ranging from COVID-19 to climate change and
increasingly confrontational authoritarian regimes demand the attention of
Canada and our allies. The spread of misinformation and disinformation is
directly challenging the stability of even the most long-standing democracies.
Budget 2022 recognizes those challenges and proposes new action to respond
to them. It invests in Canada’s defence capabilities, and in the alliances that will
ensure a strong and coordinated global response to the ongoing challenges
that the world today faces.
It commits to reinforcing global democracy, to combatting illicit nancing,
and to pushing back against the forces of disinformation and misinformation
that threaten public institutions around the world. Concurrently, Canada will
continue to provide critical international assistance to those who need it most.
The events of the last months have reminded us that the international
community is strongest when it acts together in defence of the values we share.
In partnership with like-minded democracies around the world, Canada will
continue to stand up to the global threats that recognize no borders.
132 Chapter 5
Key Ongoing Actions
In the past year, including through Budget 2021, the federal government has
announced a range of important programs and initiatives that are advancing
Canada’s leadership in the world, including:
More than $2.7 billion since the start of the COVID-19 pandemic to support
low- and middle-income countries, including by providing access to
vaccines, therapeutics, and testing;
$5.3 billion over ve years to double Canada’s international climate
nancing to help developing countries tackle climate change;
$180 million at the Generation Equality Forum to support the economic
participation and higher education of women around the world;
$847 million over ve years to maintain Canada’s military at a higher
state of readiness under the North Atlantic Treaty Organization (NATO)
Readiness Initiative, and to increase Canada’s contributions to NATO’s
common budget and military activities;
$252 million over ve years, with $160 million in remaining amortization,
to lay the groundwork for North American Aerospace Defence Command
(NORAD) modernization and sustain existing continental and Arctic
defence capabilities;
$1.5 billion over three years to the International Development Association
to help meet the nancing needs of the world’s poorest countries as they
recover from the pandemic; and
$3.7 billion, or 20 percent of Canada’s newly allocated IMF Special Drawing
Rights, in support for poverty reduction, sustainability, growth, and
resiliency in low-income and vulnerable countries to help those who need
it most.
5.1 Reinforcing Our National Defence
National defence is a fundamental responsibility of the federal government. In
addition to protecting Canada from international threats and defending our
sovereignty, the Canadian Armed Forces play an important role in making the
world a safer place.
Investments made through Canada’s 2017 defence policy, Strong, Secure,
Engaged, decisively reversed a trend of lagging defence spending that stretched
back three decades. Canada’s defence spending is on track to double between
2016-17 and 2026-27. As implementation of this plan continues, Canada must
respond to evolving circumstances to ensure that the women and men of the
Canadian Armed Forces are prepared to full the missions we ask of them.
Canada’s Leadership in the World 133
To immediately reinforce Canada’s national defence, announcements in
Budget 2022 will provide a total of more than $8 billion in new funding over
ve years—on top of planned increases associated with Strong, Secure, Engaged.
This funding will strengthen Canada’s contributions to our core alliances; bolster
the capabilities of the Canadian Armed Forces; continue to support culture
change and a safe and healthy working environment in the Canadian Armed
Forces; and reinforce Canada’s cyber security.
Chart 5.1
Funding for the Department of National Defence
0
5
10
15
20
25
30
35
40
45
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Pre-Strong, Secure, Engaged
Strong, Secure, Engaged
Pre-Budget 2022
Budget 2022
billions of dollars, cash basis
Sources: Strong, Secure, Engaged, Public Accounts of Canada, and the Department of National Defence.
2016-17 through 2020-21 reect actual expenditures. 2021-22 and later reect estimated expenditures
Reviewing Canada’s Defence Policy
Strong, Secure, Engaged set out clear direction on Canadian defence priorities
over a 20-year horizon. Informed by the international landscape of the day,
it included signicant investments to enhance the Canadian Armed Forces’
capabilities and capacity to respond to military operations ranging from
humanitarian and relief eorts, to peacekeeping, to combat.
However, recent events require the government to reassess Canada’s role, priorities,
and needs in the face of a changing world.
Budget 2022 announces a defence policy review to allow Canada to
update its existing defence policy, Strong, Secure, Engaged, in support of
its broader international priorities and the changed global environment.
The review will focus on, amongst other things, the size and capabilities of
the Canadian Armed Forces; its roles and responsibilities; and making sure
it has the resources required to both keep Canadians safe and contribute
to operations around the world.
134 Chapter 5
Reinforcing our Defence Priorities
In addition to a defence policy review, to ensure a strong and coordinated
global response to the ongoing challenges that the world today faces, Canada
will make immediate additional investments in our defence priorities, including
our continental defences, alliances and collective security, and in the capabilities
of the Canadian Armed Forces.
Investing in NORAD Modernization
Canada is resolute in our defence of the North American continent, especially
in the far North. Crucial to this eort is Canada’s partnership with the United
States under NORAD.
In Budget 2021, the government committed $252.2 million over ve years
to sustain existing continental and Arctic defence capabilities, and to lay
the groundwork for NORAD’s future. In August 2021, a joint statement
between Canada and the United States established the priorities for
modernizing NORAD.
The government is currently considering options to fulll this commitment
through signicant investments in the following areas:
• Advanced all-domain surveillance and intelligence;
• Modernized command, control, and communications;
• Improved capabilities to deter and defeat threats; and
• Increased research, development, and innovation.
Doing Our Part in NATO
In addition to making sure we are secure in North America, Canada remains
steadfast in its support of our NATO allies, including through assurance and
deterrence operations in Central and Eastern Europe.
Through our multi-year renewal of Operation REASSURANCE, Canada is
underscoring our commitment to this operation. We are increasing our
contribution by up to 460 Canadian Armed Forces personnel, for a total of up
to approximately 1,260. A further 3,400 Canadian Armed Forces personnel are
available to the NATO Response Force, should they be required.
Budget 2021 previously announced $847.1 million over ve years to increase
Canada’s contributions to NATO. But we recognize that more needs to be done.
Standing shoulder-to-shoulder with our allies means sharing the burden of
defending democracy against authoritarianism.
Canada is committed to ensuring NATO remains ready, strong, and united.
Canada’s Leadership in the World 135
Increasing the Capabilities of the Canadian Armed Forces
The review of Canada’s defence policy will include an assessment of the
equipment and technology that the Canadian Armed Forces need to fulll their
missions in a world that has fundamentally changed in the face of Russia’s
invasion of Ukraine. However, the government realizes that immediate further
investments are needed to bolster the capacity of the Canadian Armed Forces.
Budget 2022 proposes to provide $6.1 billion over ve years, starting
in 2022-23, with $1.3 billion in remaining amortization, and $1.4 billion
ongoing to the Department of National Defence in order to meet our
defence priorities, including our continental defences, commitments to our
allies, and for investments in equipment and technology to immediately
increase the capabilities of the Canadian Armed Forces.
Supporting Culture Change in the Canadian
Armed Forces
Those who serve Canada with our ag on their shoulder contend with enough
risks to their safety. Their workplace should not be one of them.
On December 13, 2021, the Minister of National Defence, Chief of the Defence
Sta, and the Deputy Minister of National Defence delivered a formal, public
apology to all current and former Defence Team members and Veterans who
have been aected by sexual assault, sexual harassment, and discrimination
based on sex, gender, gender identity or sexual orientation.
Together, the government and Canadian Armed Forces are working to create
a culture that ensures every member serves in an environment where they feel
safe, protected, and respected.
Budget 2022 proposes to provide $100.5 million over six years, starting
in 2021-22, with $1.7 million in remaining amortization, and $16.8
million ongoing to: strengthen leadership in the Canadian Armed Forces;
modernize the military justice system; bring into force the Declaration
of Victims Rights as set out in the National Defence Act; undertake
engagement and consultation on culture change; and enhance restorative
services, including dispute resolution and coaching services. Of this
amount, $3 million over three years, starting in 2021-22, will be sourced
from existing resources.
136 Chapter 5
Budget 2022 also proposes to provide $144.3 million over ve years,
starting in 2022-23, and $31.6 million ongoing to expand the Canadian
Armed Forces’ health services and physical tness programs to be more
responsive to women and gender-diverse military personnel.
This builds on funding from Budget 2021 of $236.2 million over ve years,
starting in 2021-22, and $33.5 million ongoing for the Department of National
Defence and Veterans Aairs Canada to support eorts to eliminate sexual
misconduct and gender-based violence in the military and support survivors.
Enhancing Canada’s Cyber Security
Budget 2018 announced an action plan to implement Canada’s rst
comprehensive National Cyber Security Strategy. That strategy is now
working to keep Canadians safe from evolving cyber security threats that
target Canadians, Canadian businesses, and our critical infrastructure. The
Communications Security Establishment (CSE) works to protect Canada from
cyber threats, including those that come from foreign actors. But as Canadians
grow more dependent on digital systems, the potential consequences of cyber
incidents continue to increase, and Canada needs to be ready.
Budget 2022 proposes to provide $875.2 million over ve years, beginning
in 2022-23, and $238.2 million ongoing for additional measures to address
the rapidly evolving cyber threat landscape. These measure include:
• $263.9 million over ve years, starting in 2022-23, and $96.5 million
ongoing to enhance CSE’s abilities to launch cyber operations to
prevent and defend against cyber attacks;
• $180.3 million over ve years, starting in 2022-23, and $40.6 million
ongoing to enhance CSE’s abilities to prevent and respond to cyber
attacks on critical infrastructure;
• $178.7 million over ve years, starting in 2022-23, and $39.5 million
ongoing to expand cyber security protection for small departments,
agencies, and Crown corporations; and
• $252.3 million over ve years, starting in 2022-23, and $61.7 million
ongoing for CSE to make critical government systems more resilient to
cyber incidents.
Canadian academics are some of the leading researchers in important emerging
and disruptive technologies, including quantum computing and articial
intelligence. This expertise can be leveraged to ensure Canada’s security and
intelligence community stay one step ahead of our adversaries.
Budget 2022 proposes to provide $17.7 million over ve years, starting in
2022-23, and $5.5 million thereafter until 2031-32 for CSE to establish a
unique research chair program to fund academics to conduct research on
cutting-edge technologies relevant to CSE’s activities. Researchers awarded
the grants will split their time between peer-reviewed publishable research
and classied research at CSE.
Canada’s Leadership in the World 137
5.2 Supporting Ukraine
Canada condemns in the strongest possible terms Russia’s cruel and illegal
invasion of Ukraine. Canadians stand with the brave people of Ukraine as they
ght for their lives, for their sovereignty, for their democracy, and for our own.
Canada is a reliable and long-standing partner of Ukraine. In 1991, Canada
became the rst Western country to recognize Ukraine’s independence.
Since then, the relationship between our two countries has been strengthened
by deep people-to-people ties, rooted in the Ukrainian-Canadian community,
and by our shared belief in democracy and the importance of the rules-based
international order.
In the face of Russia’s invasion, Canada has continued to send lethal and
non-lethal aid to support Ukraine’s heroic defence. Including new measures
proposed in Budget 2022, Canada has announced more than $1.2 billion in direct
contributions in support of Ukraine and its people in 2022, in addition to an oer
of up to $1.6 billion in loan support for the Ukrainian government. This support
has helped respond to the humanitarian crisis, and ensure that the Ukrainian
government can continue to provide essential services.
Canada is also examining opportunities to enhance our diplomatic capacity
in Eastern Europe, to be ready to assist as the repercussions of this conict
reverberate through the region.
Bolstering Ukraine’s Fight for Freedom
On January 26, 2022, Canada announced the expansion of Operation UNIFIER,
the Canadian Armed Forces mission to provide military training and support
to Ukrainian forces. Since 2015, Canada has trained nearly 33,000 Ukrainian
military and security personnel.
The federal government has also announced more than $90 million in military aid,
and is providing military aid—both lethal and non-lethal—to support Ukraine in
its eorts to defend its sovereignty. In partnership with our allies, Canada is also
sharing intelligence and providing support to enhance Ukraine’s cyber security.
Budget 2022 proposes to provide an additional $500 million in 2022-23 to
provide further military aid to Ukraine.
Holding Russia Accountable
In response to Russia’s illegal invasion, Canada and our allies have swiftly
imposed the strongest sanctions ever inicted on a major economy. In
threatening both Ukraine’s independence and the rules-based international
order, President Putin and his hangers-on have been personally sanctioned,
Russia’s major nancial institutions and sovereign wealth funds have been
cut out of the global economy, and the assets of Russia’s Central Bank have
been frozen.
138 Chapter 5
Since Russia’s invasion of Crimea in 2014, Canada has sanctioned more than
1,000 individuals and entities to prevent their access to Canada’s economy.
In partnership with our allies, Canada has formed the Russian Elites, Proxies,
and Oligarchs (REPO) Taskforce and committed federal resources to work with
our partners, both foreign and domestic, to target the assets and ill-gotten
gains of Russia’s elites and those who act on their behalf. This includes the
use of resources to identify, freeze, and seize assets to ensure that sanctioned
individuals and entities are no longer able to access their resources and wealth
abroad.
Budget 2022 announces the government’s intent to clarify the ability
of the Minister of Foreign Aairs to cause the forfeiture and disposal of
assets held by sanctioned individuals and entities to support Canada’s
participation in the REPO Taskforce.
On March 2, 2022, Canada became the rst country to revoke the Most-
Favoured-Nation trade partner status of both Russia and Belarus—an enabler
of Russia’s invasion—under the Customs Tari. This eectively imposed a
35 per cent tari on virtually all goods from those two countries, placing
them in a category previously occupied only by North Korea. Since then,
several countries have followed Canada’s lead and implemented their own
measures. We have also banned Russian-owned ships from Canadian ports and
international waters, banned Russian-owned aircraft from entering Canadian
airspace, and we were the rst to announce a ban on imports of Russian
petroleum products.
Canada is also taking every opportunity to isolate Russia at multilateral
institutions, including through international nancial institutions, and supports
eorts by these organizations to suspend operations and programming in both
Russia and Belarus.
Canada’s Leadership in the World 139
Supporting Ukrainians Through the Crisis
To date in 2022, Canada has committed $145 million in humanitarian assistance,
and $35 million in development assistance to provide direct support to
Ukrainians who have been aected by the illegal Russian invasion. This includes
$30 million that matched the donations of individual Canadians. However, we
know that more needs to be done to help Ukraine continue to provide essential
services to its people.
Canada has already oered a total of $620 million in loans this year to support
Ukraine’s nancial stability, economic resilience, and governance reforms.
Canada is providing additional support through our shareholdings in key
international nancial institutions, including the International Monetary Fund,
the World Bank, and the European Bank for Reconstruction and Development.
Since the onset of the invasion, these three institutions have together
committed more than $5.6 billion to support Ukrainians.
Budget 2022 announces that Canada will oer up to $1 billion in new
loan resources to the Ukrainian government through a new Administered
Account for Ukraine at the International Monetary Fund (IMF) so that the
government can continue to operate. Canada worked with the government
of Ukraine, the IMF, and other member countries to develop this facility
and encourage allies and partners to participate.
A Safe Haven for Ukrainians
On March 3, 2022, Canada announced two new immigration streams for
Ukrainians eeing Russia’s invasion.
• The Canada-Ukraine Authorization for Emergency Travel was launched
on March 17, 2022. With this authorization, Ukrainians and their
immediate family members of any nationality may stay in Canada
as temporary residents for up to three years. The government also
recently announced that additional supports, such as language
training and orientation services, will be available to help these
Ukrainians settle into their new communities.
• The federal government is also developing a special permanent
residence stream for Ukrainian immediate and extended family
members of Canadian citizens and permanent residents. This will
support Ukrainians who wish to reunite with their family and start a
new life in Canada.
All Ukrainians who come to Canada as part of these measures will be eligible
to apply for open work permits, making it easier for employers to quickly hire
Ukrainian nationals looking to nd work. The government will also issue open
work permits to Ukrainian visitors, workers, and students who are currently in
Canada and cannot safely go home.
140 Chapter 5
The government has provided new funding of $111 million over ve years,
with $6 million in future years, to implement these new immigration measures.
This funding will help to set up the new immigration pathways, expedite the
processing of applications, and provide support to Ukrainians once they arrive
in Canada.
5.3 Standing Up for Democracy, Transparency,
and the Rule of Law
The rules-based international order is built upon a shared commitment to
democracy and the rule of law. However, those values are being challenged by
hostile forces, including state actors like Russia, criminal organizations, and the
wilful purveyors of disinformation that threaten public institutions.
At the Summit for Democracy in December 2021, Canada announced that it will
pursue an ambitious agenda to better support good governance around the
world, and provide fast and exible support to fragile or emerging democracies.
As that important work continues, Canada remains resolute in its commitment
to push back against the forces that challenge the rules-based international
order. In Budget 2022, the federal government is proposing to further strengthen
democratic institutions and the rule of law, both in Canada and around the world,
including potentially through legislation.
Strengthening Canada’s Anti-Money Laundering and
Anti-Terrorist Financing (AML/ATF) Regime
Money laundering and terrorist nancing threaten Canadians’ safety,
the integrity and stability of our nancial sector, and the broader Canadian
economy. Ensuring that Canada has the ability to detect these threats through
a comprehensive AML/ATF Regime, as well as an equal ability to catch and
prosecute these oences is vital to protecting Canadians and safeguarding the
rule of law in an increasingly complex nancial world.
Fullling this commitment will involve a number of steps. First, the federal
government is working to bring into force new regulations that extend AML/
ATF obligations to payment service providers and crowdfunding platforms.
This will ensure that these businesses are required to monitor and report all
instances of suspicious activity that may involve attempted money laundering
or terrorist nancing.
The federal government is also developing legislative changes to, among other
things, strengthen the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, the Criminal Code, and other legislation to enhance the ability
of authorities to detect, deter, investigate, and prosecute nancial crimes and
ensure the government is well placed to manage current and emerging threats
outside of the scope of the current AML/ATF Regime.
Canada’s Leadership in the World 141
Further, the government will conduct a comprehensive review of the AML/
ATF Regime, and additional legislative proposals will be brought forward
over the coming months to address identied gaps including ensuring that
the government has the tools necessary to preserve nancial integrity and
economic security, as necessary.
Budget 2022 proposes to provide $89.9 million over ve years, and
$8.8 million ongoing, to support the Financial Transactions and Reports
Analysis Centre of Canada (FINTRAC). This amount represents a 24 per
cent funding increase to FINTRAC’s budget and a 13 per cent increase
in new sta. This increased capacity will enable FINTRAC to implement
new anti-money laundering and anti-terrorist nancing requirements
for crowdfunding platforms and payment service providers; support the
supervision of federally regulated nancial institutions; continue to build
expertise related to virtual currency; modernize its compliance functions; and
update its nancial management, human resources, intelligence, and disaster
recovery systems.
To bolster Canada’s ability to quickly respond to complex and fast-moving
cases of nancial crime, Budget 2022 announces the government’s intent
to establish a new Canada Financial Crimes Agency, which will become
Canada’s lead enforcement agency in this area. Budget 2022 proposes to
provide $2 million to Public Safety Canada in 2022-23 to undertake initial
work to develop and design the new agency, with further details to be
announced in the 2022 fall economic and scal update.
Implementing a Publicly Accessible Benecial
Ownership Registry
Anonymous Canadian shell companies can be used to conceal the true
ownership of assets, including businesses and expensive property. This also
makes them vulnerable to misuse for illegal activities, including money
laundering, corruption, and tax evasion. These anonymous corporations can
also be used to avoid sanctions and the tracing and freezing of nancial assets.
To counter this, authorities need access to timely and accurate information
about the true ownership of these entities.
To this end, the government is accelerating by two years its commitment
to amend the Canada Business Corporations Act to implement a public
and searchable benecial ownership registry, which will now be accessible
before the end of 2023. The registry will cover corporations governed
under the aforementioned Act and will be scalable to allow access to the
benecial ownership data held by provinces and territories that agree to
participate in a national registry. Legislative proposals will be forthcoming
as part of the Budget Implementation Act.
142 Chapter 5
As part of its ongoing eorts to improve benecial ownership transparency, the
government intends to work with provincial and territorial partners to advance
a national approach to a benecial ownership registry of real property, similar
to other countries, including the United Kingdom.
To ensure that corporate data provided to the registry is accurate and timely,
the government will also examine approaches that support the validation and
verication of the information in the registry.
The government will engage provincial and territorial governments at the earliest
opportunity to advance a national approach to benecial ownership transparency.
Combatting Misinformation and Disinformation
In Canada and around the world, misinformation can quickly spread and erode
the trust that people have in public institutions.
Foreign threats to democracy—including state-sponsored disinformation,
which is misinformation that is deliberately targeted to deceive people—
have continued to grow amidst rising geopolitical tensions, a global pandemic,
and the rapid evolution of technology.
At the G7 Summit in Charlevoix, Quebec, Canada led the establishment of
the G7 Rapid Response Mechanism as a coordinated eort with our allies
to confront the threat of disinformation and protect G7 democracies from
foreign threats. Since then, the program has played a key role in detecting and
identifying foreign interference and state-sponsored disinformation against
democracies and also in monitoring federal elections in Canada.
• Budget 2022 proposes to provide $13.4 million over ve years, starting in
2022-23, with $2.8 million ongoing to Global Aairs Canada to renew and
expand the G7 Rapid Response Mechanism.
The government will also continue its work to combat misinformation, which
includes supporting research at public institutions; ongoing cyber activities
to protect Canadians against disinformation; and expanding its eorts into
important new areas.
Budget 2022 proposes to provide $10 million over ve years, starting in
2022-23, with $2 million ongoing for the Privy Council Oce to coordinate,
develop, and implement government-wide measures designed to combat
disinformation and protect our democracy.
Canada’s Leadership in the World 143
5.4 Providing International Assistance
Now, more than ever, it is critical that Canada work to build a safer, more stable,
and more prosperous world for all. Canada has an important role to play in
promoting and strengthening democracy and human rights, and ensuring that,
through our Feminist International Assistance Policy, we do our part to improve
the lives of women, girls, and vulnerable populations around the world.
The signicant challenges facing the international community require strong,
united responses from the world’s leading democracies. That is why Canada
has continued to maintain high levels of international assistance, with our
International Assistance Envelope expenditures reaching a record total of more
than $7.6 billion on a cash basis in 2020-21.
Canada has provided signicant investments to support the global response to
COVID-19; doubled our commitment to help low- and middle-income countries
mitigate and adapt to climate change; and provided nancial support through
the World Bank and International Monetary Fund to help vulnerable countries
cope with new crises.
Through Budget 2022, Canada will continue to enhance our assistance eorts,
with a focus on bringing an end to the COVID-19 pandemic and strengthening
global health security.
Chart 5.2 shows growth going forward, and the government is committed to
increasing international assistance funding towards 2030.
Chart 5.2
Canada’s International Assistance Envelope: Actual Expenditures and
Projected Spending
0
1
2
3
4
5
6
7
8
9
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22* 2022-23*
billions of dollars, cash basis
Source: Statistical Reports on International Assistance, 2015-16 to 2020-21; International Assistance Envelope tracking for
2021-22 and 2022-23.
*Figures for 2021-22 and 2022-23 are forecasts. 2022-23 gures include Budget 2022 decision to provide an additional
$732 million for the Access to COVID-19 Tools Accelerator. 2022-23 gures do not include sunsetting elements that have
not yet been renewed.
144 Chapter 5
Leading in the Global Fight Against COVID-19
As we have seen over the past two years, COVID-19 knows no borders.
Since February 2020, Canada has committed more than $2.7 billion in
international assistance to ght the pandemic, including a contribution of more
than $1.3 billion to the Access to COVID-19 Tools Accelerator (ACT-A)—a global
eort to improve equitable access to COVID-19 vaccines, tests, and treatments.
This made Canada one of only six countries to meet or exceed the independently
assessed voluntary contribution target for the ACT-A’s 2020-21 funding cycle.
Budget 2022 proposes to provide $732 million in 2022-23 to Global Aairs
Canada to further support the eorts of the Access to COVID-19 Tools
Accelerator. and to ensure that Canada continues to provide its fair share
to global eorts to improve access to vaccines, therapeutics, and other
tools to ght COVID-19. This will bring Canada’s total contribution to the
Access to COVID-19 Tools Accelerator to more than $2 billion since the
start of the pandemic.
Strengthening Global Health Security
Canada is a long-standing contributor to global health security, which is a
shared challenge that requires strong and consistent collaboration between
countries around the world.
Budget 2022 proposes to provide an additional $296 million over
four years, starting in 2023-24, and $74 million ongoing, to Global Aairs
Canada to help support eorts to address global health security priorities,
such as infectious disease prevention and response.
In 2019, the government committed to increase annual global health spending
from $1.1 billion to $1.4 billion by 2023-24. With this additional support,
Canada will exceed this commitment, spending nearly $1.5 billion towards
global health in 2023-24.
Canada’s Leadership in the World 145
Chapter 5
Canada’s Leadership in the World
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
5.1. Reinforcing our
National Defence
0 224 1,204 1,718 1,906 2,183 7,235
Reinforcing our Defence
Priorities 0 100 1,025 1,475 1,625 1,875 6,100
Supporting Culture
Change in the Canadian
Armed Forces 1 38 49 52 53 53 245
Less: Funds Sourced
From Existing
Departmental
Resources -2 -1 0 0 0 0 -3
Less: Year-Over-
Year Reallocation of
Funding 1 -1 0 0 0 0 0
Enhancing Canada's Cyber
Security – Addressing the
Cyber Threat Landscape 0 88 128 187 223 249 875
Enhancing Canada’s
Cyber Security – Cutting-
Edge Research for the
Security and Intelligence
Community 0 1 1 4 6 6 18
5.2. Supporting Ukraine
0 689 137 110 2 2 940
Expansion of Operation
UNIFIER
1
0 116 112 109 0 0 338
Less: Funds Sourced
From Existing
Departmental
Resources 0 -5 -2 -2 0 0 -9
Bolstering Ukraine’s Fight
for Freedom 0 500 0 0 0 0 500
Humanitarian Assistance
in Ukraine
2
45 75 0 0 0 0 120
Less: Funds Sourced
From Existing
International
Assistance Envelope –
Crisis Pool and other -45 -75 0 0 0 0 -120
A Safe Haven for
Ukrainians
3
0 78 27 3 2 2 111
5.3. Standing Up for
Democracy
0 28 37 23 14 14 115
Strengthening Canada's
AML/ATF Regime
0 23 33 18 9 9 92
146 Chapter 5
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Combatting
Misinformation and
Disinformation – G7 Rapid
Response Mechanism
4
0 2 3 3 3 3 13
Combatting
Misinformation and
Disinformation – Privy
Council Oce
0 2 2 2 2 2 10
5.4. Providing
International Assistance
0 732 74 74 74 74 1,028
The Global Fight Against
COVID-19
0 732 0 0 0 0 732
Strengthening Global
Health Security
0 0 74 74 74 74 296
Additional Investments
– Canada’s Leadership in
the World
37 43 39 2 0 0 120
Renewal of Operation
ARTEMIS
41 48 43 2 0 0 134
Less: Funds Sourced
From Existing
Departmental
Resources
-4 -5 -5 0 0 0 -14
The mandate of Operation ARTEMIS, Canada’s military contribution to counter-terrorism and maritime security
operations in the Middle East, was renewed for three years beginning August 1, 2021.
Chapter 5 - Net Fiscal
Impact
37 1,716 1,491 1,927 1,996 2,272 9,438
Note: Numbers may not add due to rounding.
1
Announced on January 26, 2022.
2
Announced $100 million on March 1, 2022 and $20 million on March 11, 2022.
3
Announced on March 3, 2022.
4
Announced on March 9, 2022.
Chapter 6
Strong Public Health Care
6.1 A Stronger Health Care System ................................................................................ 151
Dental Care for Canadians .......................................................................................152
Reducing the Backlogs of Surgeries and Procedures ....................................152
Increasing Loan Forgiveness for Doctors and Nurses in Rural
and Remote Communities .......................................................................................152
Researching the Long-Term Impacts of COVID-19 ........................................153
Improving Canada’s Dementia and Brain Health Research ........................153
Supporting the Centre for Aging and Brain Health Innovation ................153
The Canada Health Transfer .....................................................................................154
6.2 Supporting Mental Health and Well-Being .........................................................155
Supporting Mental Well-Being With the Wellness Together
Canada Portal ................................................................................................................ 156
Addressing the Opioid Crisis ..................................................................................157
Better Mental Health Support for Black Federal Public Servants .............157
6.3 Investing in Public Health ..........................................................................................157
Strengthening Canada’s Ability to Detect and Respond to Public
Health Events and Emergencies .............................................................................. 158
Maintaining the National Emergency Strategic Stockpile ............................158
Piloting a Menstrual Equity Fund for Those in Need ....................................158
Help for Canadians Who Want to Become Parents .......................................159
Taxation of Vaping Products ...................................................................................159
Strong Public Health Care 149
Chapter 6
Strong Public Health Care
For more than two years, the COVID-19 pandemic has upended our lives,
our economy, and our health care system. It has been the greatest public health
challenge in more than a century, but historic federal investments in health
care—and the dedicated work of health care workers across the country—
helped Canada weather the darkest days of the pandemic.
A national eort to get Canadians vaccinated has resulted in Canada becoming
one of the most highly vaccinated countries in the world—more than
85 per cent of eligible Canadians have received at least two doses. With the
second lowest mortality rate in the G7, Canada’s collective response to the
pandemic has saved thousands of lives.
If we remain vigilant—if we protect the most vulnerable and make sure we are
prepared for any new outbreaks or variants that might arise—we can ensure
Canada can live safely with COVID-19.
Now, more than ever, we need to strengthen our health care system and ensure
that it delivers the care Canadians deserve. We need to increase the number of
doctors and nurses. We need to keep expanding access to mental health care.
We need to build on the successes of increased virtual care, so that Canadians
can easily consult with a health care professional no matter where they live.
And we need to make sure we have reliable, comparable health data.
As the federal government continues to work with provinces and territories
on investing in health care, Budget 2022 takes immediate steps to reduce
backlogs in surgeries and procedures, to make it easier for Canadians to
access the mental health care they need, and to continue bolstering our
health care system.
150 Chapter 6
Federal Health Care Support During the Pandemic
Since the start of the pandemic, the federal government has invested more
than $69 billion, with more funding to be rolled out in future years, to lead a
coordinated federal, provincial, and territorial response to ght COVID-19 and
protect the health and safety of Canadians. Some of this funding includes:
Over $17.6 billion to support vaccine procurement, deployment, and
administration;
Over $10 billion for testing, contact tracing, data management, and to
support provinces and territories in securing rapid tests for Canadians;
Over $12.8 billion for the procurement of personal protective equipment
and medical equipment for our health and essential service sectors;
$6.5 billion in top-ups to the Canada Health Transfer (CHT) for provinces
and territories to support their pandemic responses, including $2 billion
proposed in March 2022 to continue to address immediate pressures
including backlogs in surgeries and procedures;
Up to $4 billion through the 2020 Fall Economic Statement and
Budget 2021 for provinces and territories to help keep seniors safe in
long-term care;
$2 billion in Budget 2021, and an additional $100 million proposed in the
2021 Economic and Fiscal Update, for the Safe Return to Class Fund to
improve school ventilation, purchase personal protective equipment, and
keep kids, teachers, and sta safe;
$2 billion through the 2021 Economic and Fiscal Update to support the
procurement of COVID-19 therapeutics, and the associated logistics and
operational costs;
$1.2 billion to provinces and territories through the Safe Restart
Agreement to bolster health care capacity, support people experiencing
mental health and substance use challenges, and provide more than
$600 million for innovative mental health care for Canadians; and
$35 million over four years for Prince Edward Island to advance the
implementation of universal national pharmacare.
Strong Public Health Care 151
Chart 6.1
Federal Investments in Health Support
0
10
20
30
40
50
60
70
80
90
100
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
CHT Bilateral agreements COVID-19 health support
billions of dollars
Note: Bilateral agreements include the 2017 agreements on home and community care and mental health and addictions
services. COVID-19 health support includes relevant measures listed in Table A1.13.
Source: Department of Finance Canada.
6.1 A Stronger Health Care System
Canadians are proud of their publicly funded health care system, and justiably
so; it has saved thousands of lives over the last two years. However, the
pandemic has also placed our health care system under enormous strain and
worsened long-standing issues, like shortages of health care workers and the
lack of access to primary care in communities across Canada.
The federal government is proposing signicant measures to strengthen Canada’s
health care systems, to reduce pandemic-related backlogs, and to increase the
number of doctors and nurses in communities that need them most.
To ensure that no Canadian has to choose between the prescription drugs they
need and putting food on the table, the federal government will also continue
its ongoing work towards a universal national pharmacare program. This will
include tabling a Canada Pharmacare bill and working to have it passed by the
end of 2023, and then tasking the Canadian Drug Agency to develop a national
formulary of essential medicines and bulk purchasing plan.
152 Chapter 6
Dental Care for Canadians
Seeing a dentist is important for our health, but can be expensive. A third
of Canadians do not have dental insurance, and in 2018, more than one in
ve Canadians reported avoiding dental care because of the cost.
Budget 2022 proposes to provide funding of $5.3 billion over ve years,
starting in 2022-23, and $1.7 billion ongoing, to Health Canada to provide
dental care for Canadians. This will start with under 12-year-olds in 2022,
and then expand to under 18-year-olds, seniors, and persons living with a
disability in 2023, with full implementation by 2025. The program would be
restricted to families with an income of less than $90,000 annually, with no
co-pays for those under $70,000 annually in income.
Reducing the Backlogs of Surgeries and Procedures
As hospitals did everything they could to respond to surges in COVID-19
cases, Health Canada estimates that nearly 700,000 medical procedures were
cancelled or delayed.
On March 25, 2022, the federal government announced its intention to provide
provinces and territories with an additional $2 billion through a top-up to
the Canada Health Transfer to address these backlogs. This will build on the
$4 billion in support provided in 2020-21 as provinces and territories work
towards eliminating the backlogs in surgeries and procedures, and on providing
the health care that Canadians deserve.
Increasing Loan Forgiveness for Doctors and Nurses
in Rural and Remote Communities
In part due to a shortage of doctors and nurses, far too many rural
communities—like those in Nova Scotia and Newfoundland and Labrador—
still lack the primary health care they need.
As one means of addressing this shortage, the federal government provides
student loan forgiveness to doctors and nurses who work in underserved rural
or remote communities, including in the North. In 2019-20, nearly 5,500 doctors
and nurses beneted from the loan forgiveness program.
To help bring more health care workers to the communities that need them
most, Budget 2022 proposes to provide $26.2 million over four years, starting
in 2023-24, and $7 million ongoing, to increase the maximum amount of
forgivable Canada Student Loans by 50 per cent. This will mean up to $30,000
in loan forgiveness for nurses and up to $60,000 in loan forgiveness for
doctors working in underserved rural or remote communities.
In addition, the federal government will expand the current list of eligible
professionals under the program, with details to be announced in the
coming year. The government is also undertaking a review to ensure that
the denition of rural communities under the program does not leave out
certain communities in need.
Strong Public Health Care 153
Researching the Long-Term Impacts of COVID-19
COVID-19 is still a new disease. Scientists and researchers have come a long
way in their understanding of how to treat and prevent it, but we still need to
better understand its long-term impacts on many Canadians and our health
care system.
Budget 2022 proposes to provide $20 million over ve years, starting
in 2022-23, for the Canadian Institutes of Health Research to support
additional research on the long-term eects of COVID-19 infections on
Canadians, as well as the wider impacts of COVID-19 on health and health
care systems.
Improving Canada’s Dementia and Brain Health
Research
An estimated one in four Canadian seniors over the age of 85 are diagnosed
with dementia. The eects on both those living with dementia and those who
care for them can be devastating.
Budget 2022 proposes to provide $20 million over ve years, starting in
2022-23, for the Canadian Institutes of Health Research to ramp up eorts
to learn more about dementia and brain health, to improve treatment and
outcomes for persons living with dementia, and to evaluate and address
mental health consequences for caregivers and dierent models of care.
Supporting the Centre for Aging and Brain Health
Innovation
The Centre for Aging and Brain Health Innovation, established in 2015 by
Baycrest Health Sciences, helps to accelerate innovative solutions in brain health
and aging, including to address dementia. The Centre is a unique collaboration
of health care, science, industry, not-for-prot and government partners whose
aim is to help improve quality of life for the world’s aging population, allowing
older adults of all backgrounds and abilities to age safely in the setting of their
choice while maintaining their cognitive, emotional, and physical well-being.
Budget 2022 proposes to provide $30 million over three years, starting in
2022-23, to the Public Health Agency of Canada, for the Centre for Aging
and Brain Health Innovation to help accelerate innovations in brain health
and aging.
154 Chapter 6
The Canada Health Transfer
The last two years have emphasized the need to fortify our health care system
and ensure that the signicant federal health transfers to provinces and territories
are resulting in the better health care outcomes that Canadians deserve.
The federal government has supported, on average, 33 per cent of provincial
and territorial health expenditures through cash and tax point transfers.
The Canada Health Transfer, which provides cash transfers to provinces and
territories to support health care, increases in line with economic growth and is
guaranteed to increase by at least 3 per cent each year.
In 2022-23, the Canada Health Transfer will provide provinces and territories
with $45.2 billion in support—an increase of 4.8 per cent over the baseline for
2021-22. Thanks to Canada’s strong economic recovery, the Canada Health
Transfer is projected to provide provinces and territories with $12 billion
more in funding over the next ve years than what was expected prior to
the pandemic.
Chart 6.2
Pre- vs. Post-Pandemic Canada Health Transfer Forecast
35
40
45
50
55
60
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Pre-pandemic Post-pandemic
billions of dollars
Note: Pre-pandemic forecast represents the CHT forecast from the 2019 Economic and Fiscal Update. Two additional years
have been extrapolated based on the gross domestic product forecast used in the Update.
Sources: Department of Finance Canada calculations (December 2019 forecast and March 2022 forecast).
Over the course of the pandemic, roughly eight out of every ten dollars invested
in Canada’s COVID-19 response have come from the federal government.
Tens of billions of dollars in federal spending have helped keep Canadians safe,
but they have also had a signicant, positive impact on the public nances of
provinces and territories.
Strong Public Health Care 155
The federal government wants to ensure that any additional federal funding
will improve Canada’s health care system. While Canada spends more of
its gross domestic product (GDP) on health care than the Organisation for
Economic Co-operation and Development (OECD) average—10.8 per cent vs.
8.8 per cent—the Commonwealth Fund ranks Canada behind peer countries,
such as Switzerland, France, Germany, U.K., and Australia, in both access to care
and in health care outcomes.
Any conversation between the federal government and the provinces and
territories will focus on delivering better health care outcomes for Canadians.
To strengthen our public health care, the federal government will remain
focused on advancing the priorities of Canadians, including increased access to
primary and mental health care; long-term, home, and community care; dental
care; and the eective use of high quality data and digital systems. On the
latter, the federal government will work with provinces and territories to ensure
that our health care system is underpinned by health data that will support
health care system improvements and Canadians’ access to their own personal
health records.
6.2 Supporting Mental Health and Well-Being
Mental health challenges—just like physical health challenges—can aect
anyone at any time. In any given year, one in ve Canadians will experience
some type of mental health issue or illness. Those challenges are greater, in
particular, among youth, Indigenous peoples, Black and racialized Canadians,
and members of the LGBTQ2 community.
The last two years have had a signicant impact on Canadians’ mental
health—half of all Canadians have reported that their mental health has
worsened during the pandemic.
To help ensure that everyone can receive the care they need, the federal
government will invest in identifying and expanding eective mental
health interventions.
The government also intends to engage with provinces and territories to inform
the development of a new Canada Mental Health Transfer that will support the
expansion and delivery of high quality and accessible mental health services
across Canada.
These investments will continue to build on the foundation laid in Budget 2021
to expand the delivery of high quality and accessible mental health services for
Canadians across the country.
156 Chapter 6
Budget 2021 Investments in Mental Health
Budget 2021 provided signicant funding for mental health care, including:
• $100 million over three years, starting in 2021-22, to support the mental
health of Canadians most aected by COVID-19;
• $140 million over ve years, starting in 2021-22, to cover the mental health
care costs of veterans with post-traumatic stress disorder (PTSD), depressive,
or anxiety disorders while their disability benet application is being
processed;
• $62 million in 2021-22 for the Wellness Together Canada portal;
• $45 million over two years, starting in 2021-22, to develop national
standards for mental health care;
• $598 million over three years, starting in 2021-22, to support distinctions-
based mental health and wellness strategies co-developed with Indigenous
partners; and
• $50 million over two years, starting in 2021-22, to help those experiencing
PTSD due to the pandemic.
Supporting Mental Well-Being With the Wellness
Together Canada Portal
The federal government launched the Wellness Together Canada portal in
April 2020 in response to the unprecedented rise in levels of stress, anxiety,
and depression associated with the pandemic. Since then, more than
two million people across Canada have accessed free information and support
through the portal. Children and young people make up almost 50 per cent of
users, and 42 per cent of texting users have identied themselves as LGBTQ2.
Budget 2022 proposes to provide $140 million over two years, starting in
2022-23, to Health Canada for the Wellness Together Canada portal so it
can continue to provide Canadians with tools and services to support their
mental health and well-being.
The Wellness Together Canada portal complements PocketWell, a free app
launched in January 2022 that helps Canadians access free and condential
sessions with social workers, psychologists and other professionals, as well as
other mental health and substance use prevention services from their phone.
Strong Public Health Care 157
Addressing the Opioid Crisis
An increase in opioid-related overdoses and deaths since the beginning of
the pandemic has devastated communities across Canada. Tragically, many
jurisdictions reported a record number of opioid-related deaths in 2021.
Budget 2022 proposes to provide $100 million over three years, starting in
2022-23 to Health Canada for the Substance Use and Addictions Program to
support harm reduction, treatment, and prevention at the community level.
This builds on the $116 million provided in Budget 2021 and $66 million
in the 2020 Fall Economic Statement for the Substance Use and Addictions
Program. The government continues to work closely with partners to provide
a compassionate and evidence-based response to the crisis. Since 2017,
the government has dedicated over $700 million to address the opioid
overdose crisis.
Better Mental Health Support for Black Federal
Public Servants
Black Canadians face distinct mental health challenges that can arise from
structural racism and inequities in access to mental health care. The 2020 Public
Service Employee Survey showed that Black federal public servants feel
less included in the workplace—a key component of a healthy and safe
work environment. The government is committed to supporting a more
equitable, diverse, and inclusive workplace for Black public servants across the
federal government.
Budget 2022 proposes to provide $3.7 million over four years, starting
in 2022-23, to the Treasury Board of Canada Secretariat for Black-led
engagement, design, and implementation of a Mental Health Fund for
Black federal public servants.
6.3 Investing in Public Health
In Canada and around the world, the pandemic has highlighted the essential
role of a strong public health system. In the years to come, it will be important to
ensure that Canada’s public health system is prepared for any crisis it may face.
Investing in public health will mean a Canada that is safer, healthier, and better
prepared. Budget 2022 includes investments to take stock of the important
lessons learned over the last two years and to ensure that both our health and
the well-being of our communities are protected.
158 Chapter 6
Strengthening Canada’s Ability to Detect and
Respond to Public Health Events and Emergencies
The COVID-19 pandemic has shown how important it is to be able to eectively
anticipate and respond to public health risks that threaten the health and safety
of Canadians. While the Public Health Agency of Canada has responded well
throughout the pandemic, it is crucial to take immediate steps to improve our
surveillance capabilities so we are better able to detect and respond to public
health events and emergencies in the future.
To ensure Canada is better prepared to detect and act on public health
threats, Budget 2022 proposes to provide $436.2 million over ve years,
starting in 2022-23, with $15.5 million in remaining amortization, to the
Public Health Agency of Canada, to strengthen key surveillance and risk
assessment capacities within the Agency. This will include supporting the
real-time tracking of the evolution of viruses, monitoring the longer-term
health impacts of COVID-19, and expanding risk assessment capacity and
research networks for new strains of u, emerging respiratory infections,
and vaccine safety and eectiveness.
Maintaining the National Emergency Strategic
Stockpile
The National Emergency Strategic Stockpile, managed by the Public Health
Agency of Canada, contains critical supplies that provinces and territories can
request in the event of an infectious disease outbreak, a natural disaster, or any
other major public health event. For the last two years, the stockpile has played
an important role in Canada’s response to COVID-19.
Budget 2022 proposes to provide $50 million in 2022-23 to the
Public Health Agency of Canada to support the operations of the
National Emergency Strategic Stockpile. Funding will be used to maintain
and diversify key medical supply holdings, including personal protective
equipment, to ensure that Canada can continue to quickly respond to
public health events and other emergencies.
Piloting a Menstrual Equity Fund for Those in Need
Access to menstrual products is a basic necessity, but current barriers make
it dicult for some women, girls, trans, and non-binary Canadians to fully
participate in school, work, and society. The federal government is committed
to addressing the barriers related to aordability and stigma that some
Canadians face when accessing menstrual products.
Budget 2022 proposes to provide $25 million over two years, starting in
2022-23, for Women and Gender Equality Canada to establish a national
pilot project for a Menstrual Equity Fund that will help make menstrual
products available to Canadians in need.
Strong Public Health Care 159
Help for Canadians Who Want to Become Parents
Across Canada, there are those who are facing challenges on their journey
to become parents. Whether facing fertility issues, being part of a same-sex
couple, or just wanting to be able to be a mom or a dad on their own terms,
some Canadians rely on surrogacy and expensive procedures in order to build
the family they dream of. But currently the Medical Expense Tax Credit is not
available to those who need to pay medical expenses of others in order to
become a parent.
Budget 2022 proposes to allow medical expenses related to a surrogate
mother or a sperm, ova, or embryo donor that are incurred in Canada
for 2022 and subsequent taxation years to be claimed. This would
include costs that have been reimbursed to a surrogate for in vitro
fertilization expenses.
Budget 2022 also proposes to allow fees paid to fertility clinics and donor
banks in Canada in order to obtain donor sperm and ova to be eligible under
the Medical Expense Tax Credit for 2022 and subsequent taxation years.
Taxation of Vaping Products
Vaping rates among young people in Canada remain high, and the federal
government recognizes the potential risks that vaping products pose to them.
Budget 2022 proposes to implement the previously announced excise duty
on vaping products, eective as of October 1, 2022. The proposed federal
excise duty rate would be $1.00 per 2 mL, or fraction thereof, for containers
with less than 10 mL of vaping liquid. For containers with more than 10 mL,
the applicable federal rate would be $5.00 for the rst 10 mL, and $1.00 for
every additional 10 mL, or fraction thereof.
The federal government also invites its provincial and territorial counterparts to
join a coordinated vaping taxation framework, under which an additional duty
equal to the proposed federal rate would be applied. Total resulting revenues
would be split between federal and provincial and territorial governments
on a 50/50 basis. The overall tax burden on vaping products will be regularly
reviewed to ensure that important public health objectives are being met.
160 Chapter 6
Chapter 6
Strong Public Health Care
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
6.1. A Stronger Health
Care System 2,000 313 624 1,227 1,517 1,715 7,396
Dental Care for Canadians
0 300 600 1,200 1,500 1,700 5,300
Reducing the Backlogs
of Surgeries and
Procedures
1
2,000 0 0 0 0 0 2,000
Increasing Loan
Forgiveness for Doctors
and Nurses in Rural and
Remote Communities
0 0 6 6 7 7 26
Researching the
Long-Term Impacts of
COVID-19
0 1 5 5 5 4 20
Improving Canada's
Dementia and Brain
Health Research
0 1 3 5 5 5 20
Supporting the Centre for
Aging and Brain Health
Innovation
0 10 10 10 0 0 30
6.2. Supporting Mental
Health and Wellbeing
0 104 104 34 1 0 244
Supporting Mental Well-
Being with the Wellness
Together Canada Portal
0 70 70 0 0 0 140
Addressing the Opioid
Crisis
0 33 33 33 0 0 100
Better Mental Health
Support for Black Federal
Public Servants
0 1 1 1 1 0 4
6.3. Investing in Public
Health
-646 80 62 43 -124 -129 -714
Strengthening Canada’s
Ability to Detect and
Respond to Public Health
Events and Emergencies
0 78 173 173 6 6 436
Maintaining the National
Emergency Strategic
Stockpile
0 50 0 0 0 0 50
Less: Year-Over-Year
Reallocation of Funding
-650 0 0 0 0 0 -650
Piloting a Menstrual
Equity Fund for Those in
Need
0 6 19 0 0 0 25
Help for Canadians Who
Want to Become Parents
4 15 15 15 15 15 79
Strong Public Health Care 161
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Taxation of Vaping
Products
0 -69 -145 -145 -145 -150 -654
Additional Investments
– Strong Public Health
Care -50 208 13 0 0 0 171
Canadian Food Inspection
Agency COVID-19
Business Continuity
Funding
0 20 0 0 0 0 20
Funding proposed for the Canadian Food Inspection Agency to maintain a reliable level of CFIA
inspection services during the ongoing COVID-19 pandemic, ensuring continued access to safe
food for Canadians and international market access for Canadian agricultural products.
Help Health Canada
Finish the Fight Against
COVID-19
0 50 0 0 0 0 50
Less: Year-Over-Year
Reallocation of Funding
-50 0 0 0 0 0 -50
Funding proposed to support Health Canada’s continued response to the COVID-19 pandemic.
This will allow Health Canada's scientists and ocials to continue to provide Canadians and the
health care system with expedited access to vaccines, therapeutics, tests and other health prod-
ucts and information critical for diagnosing, treating, and preventing the spread of the virus.
Making Service Canada
Centres Safe and Secure
0 30 0 0 0 0 30
Funding proposed for Employment and Social Development Canada to continue to oer
in-person services at Service Canada centres during the COVID-19 pandemic while implementing
necessary public health precautions. This is particularly important for vulnerable segments of the
population who rely more heavily on in-person services, especially youth, newcomers, racialized
communities, and individuals without reliable access to the internet.
Preventing the Spread of
COVID-19 in Correctional
Facilities
0 65 13 0 0 0 77
Funding proposed for the Correctional Service of Canada to continue its actions to limit the
spread of COVID-19 within federal correctional institutions and keep inmates and sta safe.
Maintaining the
ArriveCAN Application
0 25 0 0 0 0 25
Funding proposed for the Canada Border Services Agency to support the maintenance of the
ArriveCAN application.
Continued Support for
the Canadian Proof of
Vaccination Credential
0 18 0 0 0 0 18
Funding proposed for the Public Health Agency of Canada to continue to work with provincial
and territorial governments, and with international partners, to ensure that the Canadian Proof of
Vaccine Credential remains valid, secure, and accessible to Canadians
Chapter 6 - Net Fiscal
Impact
1,304 705 804 1,304 1,394 1,586 7,097
Note: Numbers may not add due to rounding.
1
Announced March 25, 2022.
Chapter 7
Moving Forward on Reconciliation
7.1 Addressing Past Harms and Discrimination Related to Indigenous
Children and Families .................................................................................................167
Supporting First Nations Children Through Jordan’s Principle .................168
Implementing Indigenous Child Welfare Legislation ....................................169
Addressing the Shameful Legacy of Residential Schools ............................170
7.2 Supporting Strong and Healthy Communities ................................................... 171
Improving Health Outcomes in Indigenous Communities .........................171
Distinctions-based Mental Health and Wellness ............................................172
First Nations Elementary and Secondary Education ...................................... 172
Clean Drinking Water and Better Infrastructure for First Nations
Communities .................................................................................................................172
Investing in Housing for Indigenous Communities .......................................174
7.3 Advancing Self-Determination and Prosperity ..................................................174
Implementing the United Nations Declaration on the Rights of
Indigenous Peoples Act ..............................................................................................175
Legislative Changes to Support Self-Determination .....................................175
Indigenous Climate Leadership .............................................................................176
Partnering with Indigenous Peoples in Natural Resource Projects .......... 176
Indigenous Economic Participation in Trans Mountain ................................ 177
Supporting Indigenous Businesses and Community Economic
Development ................................................................................................................. 177
Advancing Tax Jurisdiction for Indigenous Governments ...........................178
Moving Forward on Reconciliation 165
Chapter 7
Moving Forward on Reconciliation
The federal government is committed to a renewed nation-to-nation
relationship with Indigenous peoples based on recognition of rights, respect,
truth, co-operation, and partnership.
Since 2015, the federal government has been guided by the principle that
Indigenous nations are self-determining, self-governing, and rightfully aspire
to having strong and healthy communities. Historic investments have been
made to support Indigenous priorities and their path to self-determination.
These investments are building progress to address the inequalities that exist
between Indigenous and non-Indigenous peoples in Canada. But there is more
work to be done and the federal government will continue to be there to work
alongside Indigenous peoples to address historic injustices.
The government continues to work with Indigenous peoples to improve
housing infrastructure, to support education and child care, to take action on
the tragedy of missing and murdered Indigenous women and girls, and to
respond to the Truth and Reconciliation Commission’s Calls to Action.
With the help of $5.3 billion in new funding announced since 2015, 131 long-
term drinking water advisories have been lifted on reserve as of March 21, 2022,
and 212 short-term drinking water advisories have been prevented from
becoming long-term. The federal government remains committed to ensuring
all First Nations communities have access to clean drinking water.
Chart 7.1
As of March 21, 2022, 131 long-term drinking water advisories have been
lifted since 2015
3
10
13
10
6
13
7
3
4
17
19
38
9
11
28
5
2015 2016 2017 2018 2019 2020 2021 2022
LTDWAs added LTDWAs lifted
Source: Indigenous Services Canada
166 Chapter 7
The federal government has also co-developed key legislation that arms
Indigenous rights related to Indigenous languages and child welfare. The United
Nations Declaration on the Rights of Indigenous Peoples Act, which became law
in June 2021, provides a framework to uphold Indigenous rights, both now
and in the future. In the 2021 Economic and Fiscal Update, the government
provisioned $40 billion to compensate for past harms experienced through the
child and family services system and to support long-term program reforms
that will ensure no child faces discrimination again.
Building on this foundation, Budget 2022 proposes to invest an additional
$11 billion over six years to continue to support Indigenous children and families,
and to help Indigenous communities continue to grow and shape their futures.
Chart 7.2
Support for Indigenous Peoples (Actual and Projected)
Indigenous Investments 2015-16 to 2022-23
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23
First Nations Child and Family Services Program Reform (CHRT)
Projected Expenditures
Expenditures (Public Accounts of Canada)
Historical Growth Rate
billions of dollars
This gure does not include $20 billion in proposed compensation to address harms caused by the First Nations Child
and Family Services Program and for delays or denials in needed children's services (as announced in the 2021 Economic
and Fiscal Update).
The $20 billion previously announced to respond to orders from the Canadian Human Rights Tribunal and support
long-term reforms to the First Nations Child and Family Services Program is over ve years, starting in 2022-23 through
to 2026-27.
Sources: Public Accounts of Canada; Department of Finance Canada.
Moving Forward on Reconciliation 167
Key Ongoing Actions
Budget 2021 provided $18 billion in new investments to support Indigenous
peoples and Indigenous communities, including a range of measures that are
delivering important benets in 2022-23:
$6 billion over ve years to support community infrastructure projects
in Indigenous communities, including the launch of the $4.3 billion
Indigenous Community Infrastructure Fund;
$1.04 billion from the $4.3 billion Indigenous Community Infrastructure
Fund to support water and wastewater systems on reserve;
$1.4 billion over ve years to maintain and transform essential health
care services for First Nations and Inuit, including funding to support
First Nations communities’ reliable access to clean water.
$2.2 billion over ve years to respond to the tragedy of missing and
murdered Indigenous women and girls;
$1 billion over ve years to help keep families together and reduce the
number of children in care;
$2.5 billion over ve years to build on the distinctions-based approach to
Indigenous early learning and child care, including before- and after-school
care on reserve;
$1.2 billion over ve years to invest in the future of First Nations children
by strengthening elementary and secondary education; and
$2.7 billion over ten years in funding for core programs and services
provided through ten-year grants to ensure funding keeps pace with the
needs of First Nations.
7.1 Addressing Past Harms and Discrimination
Related to Indigenous Children and Families
Indigenous children are the future leaders of both their communities and
Canada, but generations of children were robbed of the chance to grow
up surrounded by their loved ones, language, and culture—whether due
to the tragedy of residential schools, or as a result of child welfare services.
Canada has acknowledged the harms suered and has begun the process of
compensating the survivors of this shameful legacy, starting with the Indian
Residential Schools Settlement Agreement and similar settlements for survivors
of the Sixties Scoop and Federal Indian Day Schools.
168 Chapter 7
Canada also continues to work with partners to nalize settlements that will
deliver on the historic $40 billion agreements-in-principle announced on
January 4, 2022. Once nal, these settlements will provide compensation
for First Nations children on reserves and in Yukon who were removed from
their homes, and those impacted by the government's narrow denition of
Jordan's Principle, including for their parents and caregivers. They will also
achieve long-term reform of the First Nations Child and Family Services
program and a renewed approach to Jordan's Principle to eliminate
discrimination and prevent it from recurring.
Budget 2022 continues the work of addressing the legacy of harms to
Indigenous children and families with additional investments of more than
$4.7 billion to support communities as they cope with their past and build a
future where Indigenous children can thrive.
Supporting First Nations Children Through Jordan’s
Principle
The federal government is committed to eliminating the systemic barriers that
prevent First Nations children from accessing services and support they need
to thrive. Jordan’s Principle is a vital part of this work, helping to ensure that
all First Nations children can access the health, social, and educational services
they need, when they need them. Since 2016, the government has committed
nearly $2.4 billion towards meeting the needs of First Nations children through
Jordan’s Principle.
Budget 2022 proposes to provide $4 billion over six years, starting in
2021-22, to ensure First Nations children continue to receive the support
they need through Jordan’s Principle. This funding will also support long-
term reforms to improve the implementation of Jordan’s Principle.
Moving Forward on Reconciliation 169
Honouring Jordan River Anderson
Jordan's Principle is named in memory of Jordan River Anderson, a young boy
from Norway House Cree Nation in Manitoba. He was born in 1999 with multiple
disabilities and stayed in the hospital from birth.
When he was two years old, doctors said Jordan could move to a special home
for his medical needs. However, dierent orders of government in Canada
fund dierent services for First Nations children. The federal and provincial
governments could not agree on who would pay for his home-based care, and
because of their dispute, Jordan stayed in hospital until he passed away at the
age of ve.
In his memory, the House of Commons passed a motion in support of Jordan's
Principle in 2007. Jordan’s Principle was a commitment that First Nations children
would be able to receive the services and supports they need, when they need
them—payments would be worked out later.
The government is working to reach a nal agreement with First Nations
representatives on how to support First Nations children for generations to come.
This is the legacy of Jordan River Anderson.
Implementing Indigenous Child Welfare Legislation
The government is committed to addressing the over-representation of
Indigenous children and youth in care. An Act respecting First Nations, Inuit and
Métis children, youth and families came into force on January 1, 2020, and is
an important step towards meaningfully addressing disparities in the child and
family services system. In 2021, the Cowessess First Nation in Saskatchewan
became the rst community to sign a Coordination Agreement, reclaiming
jurisdiction over their child welfare system and the right to make decisions
about what is best for their children and families.
Many more Indigenous communities are taking the steps they need to do the
same. Investments in Indigenous-led solutions are required to both reduce
the number of children in care, and to keep Indigenous children and youth
connected to their families, their communities, and their culture. Budget 2022
proposes important funding to support the Act’s implementation and arm
Indigenous jurisdiction over child and family services.
Budget 2022 provides $340.8 million over ten years, starting in 2021-22,
to support Wabaseemoong Independent Nations’ exercise of jurisdiction.
Budget 2022 also proposes to provide $87.3 million over three years,
starting in 2022-23, to enable Indigenous communities to continue to work
with the federal government and the provinces and territories to support
the implementation of Indigenous child welfare laws.
170 Chapter 7
Addressing the Shameful Legacy of Residential Schools
The country was shaken following the multiple discoveries of unmarked burial
sites at former residential schools over the past year, which are reminders of the
shameful legacy of residential schools and colonialism.
The announcements of these mass burial sites have brought up painful
memories, and triggered suppressed traumas within Indigenous communities.
Survivors and their families have experienced an increased need for emotional
and cultural support. The federal government will continue to be there to
support communities as they respond to and heal from intergenerational
trauma and the ongoing impact of residential schools. Addressing the legacy
of residential schools will take time, and Canada will undertake this work in
partnership with Indigenous people and communities.
Budget 2022 proposes to provide $209.8 million over ve years, starting
in 2022-23, to Crown-Indigenous Relations and Northern Aairs Canada
to increase the support provided to communities to document, locate,
and memorialize burial sites at former residential schools; to support the
operations of and a new building for the National Centre for Truth and
Reconciliation; and to ensure the complete disclosure of federal documents
related to residential schools.
Budget 2022 also proposes $10.4 million over two years, starting in
2022-23, to Justice Canada to support the appointment of a Special
Interlocutor who will work collaboratively with Indigenous peoples and
make recommendations for changes to strengthen federal laws and
practices to protect and preserve unmarked burial sites.
Budget 2022 also proposes $5.1 million over ve years, starting in 2022-23,
to Public Safety Canada to ensure the Royal Canadian Mounted Police can
support community-led responses to unmarked burial sites.
Budget 2022 also proposes $25 million over three years, starting in
2022-23, to Library and Archives Canada to support the digitization of
millions of documents relating to the federal Indian Day School System,
which will ensure survivors and all Canadians have meaningful access
to them.
Budget 2022 also proposes to provide $25 million over three years,
starting in 2022-23, to Parks Canada to support the commemoration and
memorialization of former residential schools sites.
Moving Forward on Reconciliation 171
7.2 Supporting Strong and Healthy Communities
Budget 2021 announced historic investments to support Indigenous
communities. However, making good on the government’s commitments to
close gaps between Indigenous and non-Indigenous peoples in Canada, and
building strong and resilient Indigenous communities will require sustained
focus and eort.
Bolstered by previous investments, Budget 2022 seeks to shore up the
foundations necessary for healthy communities, including housing and clean
drinking water. It also seeks to address ongoing health and mental wellness
challenges by ensuring continued access to culturally-appropriate services that
meet the unique needs of Indigenous peoples and communities. Proposed
investments will also strengthen First Nations control over elementary and
secondary education on reserve.
Improving Health Outcomes in Indigenous
Communities
As Canada comes through the pandemic, the government will continue making
high-quality and culturally-relevant health care, free from discrimination,
a reality for Indigenous peoples. This remains a signicant task, but work is
already underway with Indigenous partners and the provinces and territories to
co-develop distinctions-based Indigenous health legislation and ensure health
services are responsive to the distinct needs of all Indigenous people, no matter
where they live.
Budget 2022 proposes to invest $268 million in 2022-23 to continue to
provide high-quality health care in remote and isolated First Nations
communities on-reserve.
Indigenous communities continue to face unique challenges in responding
to COVID-19. Budget 2022 proposes to invest an additional $190.5 million
in 2022-23 to Indigenous Services Canada for the Indigenous Community
Support Fund to help Indigenous communities and organizations mitigate
the ongoing impacts of COVID-19.
172 Chapter 7
Distinctions-based Mental Health and Wellness
Addressing the unique and deeply rooted traumas of First Nations, Inuit,
and Métis communities—which include intergenerational trauma; overt and
systemic racism and discrimination; and social and economic inequality—
requires a distinctions-based approach to mental health and wellness that is
developed and delivered by Indigenous peoples.
Budget 2022 proposes to provide $227.6 million over two years, starting in
2022-23, to maintain trauma-informed, culturally-appropriate, Indigenous-
led services to improve mental wellness, and to support eorts initiated
through Budget 2021 to co-develop distinctions-based mental health and
wellness strategies.
First Nations Elementary and Secondary Education
Education is key to a strong start in life. In 2019, the federal government
implemented a new co-developed policy and funding approach to help ensure
First Nations children living on reserve receive a high-quality education that
meets their unique needs. Since then, First Nations education systems have
beneted from more than $3.8 billion in investments.
Budget 2022 proposes to invest an additional $310.6 million over 5 years to
support better student outcomes through a Regional Education Agreement
with the First Nations Education Council, which includes 22 member
communities in Quebec.
Clean Drinking Water and Better Infrastructure for
First Nations Communities
Working with First Nations communities to support sustainable access to safe
drinking water is at the heart of the federal government’s commitment to
Indigenous peoples. Since 2015, the government has invested $5.3 billion to
build and repair water and wastewater infrastructure and support the eective
management and maintenance of water systems.
With the support of these investments, since 2015, First Nations have lifted
131 long-term drinking water advisories on public systems on reserves as
of March 21, 2022 and initiatives are underway to resolve the remaining 34.
In addition, 212 short-term drinking water advisories have been lifted before
becoming long-term.
Moving Forward on Reconciliation 173
Chart 7.3
Progress on Lifting Long-Term Drinking Water Advisories
79%
12%
7%
1%
Feasibility study
being conducted
1%
In project design phase
Construction complete, advisory lift pending
Construction under way
Advisory lifted
Source: Indigenous Services Canada
To accelerate progress to end long-term drinking water advisories and continue
addressing critical infrastructure gaps in First Nations communities on reserve:
Budget 2022 proposes to provide $398 million over two years, starting
in 2022-23, to Indigenous Services Canada to support community
infrastructure on reserve, of which at least $247 million will be directed
toward water and wastewater infrastructure.
Budget 2022 proposes to provide Indigenous Services Canada with
$173.2 million over ten years, starting in 2022-23, to support the transfer
of water and wastewater services in 17 communities to the Atlantic First
Nations Water Authority. By putting service delivery into the hands of
communities themselves, this rst-of-its-kind, First Nations-led initiative
will help chart the path to self-determination, while strengthening the
management of water and wastewater infrastructure on reserves.
Ensuring lasting drinking water and wastewater infrastructure requires a
modern and eective regulatory regime. To this end, the government arms
its commitment to repeal the Safe Drinking Water for First Nations Act that
has been in place since 2013 and does not meet the needs of First Nations.
The federal government will work with First Nations to develop replacement
legislation. The government also intends to amend the Income Tax Act to
exclude from taxation the income of the Safe Drinking Water Trust established
under the Safe Drinking Water Class Action Settlement Agreement.
In 2018, Lubicon Lake Band and the governments of Canada and Alberta signed
a settlement to resolve the First Nation’s longstanding claim that included an
agreement to support new community infrastructure.
Budget 2022 proposes to provide $162.6 million over three years, starting
in 2022-23, to enable the completion of required infrastructure with respect
to the Lubicon Lake Band settlement agreement.
174 Chapter 7
Investing in Housing for Indigenous Communities
Access to safe and aordable housing is critical to improving health and
social outcomes and to ensuring a better future for Indigenous communities
and children. That is why the federal government has committed more than
$2.7 billion to support housing in Indigenous communities since 2015.
Building on these investments, Budget 2022 proposes to provide a further
$4 billion over seven years, starting in 2022-23, to Indigenous Services
Canada and Crown-Indigenous Relations and Northern Aairs Canada to
accelerate work in closing Indigenous housing gaps as follows:
• $2.4 billion over ve years to support First Nations housing on reserves;
• $565 million over ve years to support housing in First Nations Self-
Governing and Modern Treaty Holders communities;
• $845 million over seven years to support housing in Inuit communities;
and
• $190 million over seven years for housing in Métis communities.
We also know that Indigenous peoples, regardless of where they live,
face unique barriers to aordable housing.
Budget 2022 proposes to invest $300 million over ve years, starting
in 2022-23, through the Canada Mortgage and Housing Corporation
to co-develop and launch an Urban, Rural, and Northern Indigenous
Housing Strategy.
Along with these new investments, the federal government will allocate
$2 billion of the $20 billion provided for long-term reform of the First Nations
Child and Family Services program to target the housing needs of First Nations
children once a nal settlement agreement is reached.
These measures will result in a combined $6.3 billion over seven years towards
improving and expanding Indigenous housing in Canada.
7.3 Advancing Self-Determination and Prosperity
As stewards and rights-holders of land and resources—and with a young,
dynamic, and growing population—Indigenous communities play a vital role in
our shared economic recovery and in achieving our long-term environmental
goals. This path to shared prosperity, however, must be founded on a
recognition of Indigenous peoples’ inherent right to self-determination.
That is why Budget 2022 is investing to ensure the full implementation of the
United Nations Declaration on the Rights of Indigenous Peoples Act, and taking
steps to advance Indigenous climate leadership. Budget 2022 also proposes
investments to help position Indigenous communities to seize economic
opportunities, including in key sectors like tourism and natural resources.
Moving Forward on Reconciliation 175
Implementing the United Nations Declaration on the
Rights of Indigenous Peoples Act
The coming into force of the United Nations Declaration on the Rights of
Indigenous Peoples Act marked a historic milestone in Canada’s collective
journey towards reconciliation—one rooted in the recognition of rights, respect,
cooperation, and partnership. The federal government remains committed to the
Act’s full and eective implementation, in partnership with Indigenous peoples.
To this end, Budget 2022 proposes to provide $65.8 million over
ve years, starting in 2022-23, and $11 million ongoing, to Justice Canada
and Natural Resources Canada to accelerate work to meet legislated
requirements, including the co-development of an action plan with
Indigenous partners.
To complement this work, Budget 2022 also proposes $9.5 million over
ve years, starting in 2022-23, to the Department of National Defence to
align its operations and engagement with Indigenous peoples with the Act.
Legislative Changes to Support Self-Determination
Building strong Indigenous nations requires strong Indigenous governments
and Indigenous-led institutions. This is why Budget 2022 arms the federal
government’s commitment to make legislative changes that will help move
beyond colonial systems to advance Indigenous self-determination.
Budget 2022 announces the government’s intention to replace the
First Nations Land Management Act—which empowers First Nations to opt
out of Indian Act provisions related to land management and replace them
with their own laws—with the Framework Agreement on First Nation Land
Management Act. This shorter, simpler legislation will continue to advance
the First Nations Land Management Regime by giving force of law to the
nation-to-nation Framework Agreement on First Nation Land Management.
Budget 2022 also announces the government’s intention to enact the
Anishinabek Nation Governance Agreement Act, which will create the
Anishinabek Nation Government and community-level governments
for participating First Nations, marking the rst core self-governance
agreement in Ontario.
176 Chapter 7
Indigenous Climate Leadership
Climate change has exacerbated existing vulnerabilities for Indigenous peoples,
including ooding, wildres, permafrost thaw, and threats to local food sources.
As Indigenous peoples and their ancestors have long been the stewards
and managers of the lands and waters that make-up Canada’s ecosystem,
Indigenous peoples are critical partners to conversations about addressing
climate change at all levels of Canadian Society. That is why Indigenous climate
leadership, through a strong nation-to-nation, Inuit-Crown, and government-
to-government relationship is a cornerstone of Canada’s 2020 strengthened
climate plan.
As announced in the 2030 Emissions Reduction Plan, Budget 2022
proposes to provide $29.6 million over three years, starting in 2022-23, to
Crown-Indigenous Relations and Northern Aairs Canada to support the
co-development of an Indigenous Climate Leadership Agenda to support
self-determined action in addressing Indigenous peoples’ climate priorities.
The funding will also support the phased implementation of distinctions-
based climate strategies.
Partnering with Indigenous Peoples in Natural
Resource Projects
Many natural resource projects are located in or near Indigenous communities,
including projects to develop the critical minerals that will be needed for
Canada’s economy to reach net-zero by 2050. Investing in these partnerships
early in the development of resources projects can ensure meaningful
opportunities for Indigenous participation, as well as greater certainty
for investors.
Budget 2022 proposes to provide $131.3 million over ve years, starting in
2022-23, as follows:
• $103.4 million over ve years, starting in 2022-23, to Natural Resources
Canada to develop a National Benet-Sharing Framework, and the
expansion of both the Indigenous Partnership Oce and the Indigenous
Natural Resource Partnerships program. At least $25 million of this
funding should be dedicated to early engagement and Indigenous
communities' capacity building to support their participation in the
critical minerals strategy. These investments will provide opportunities
for Indigenous communities to benet from all types of natural
resources projects, including critical minerals.
• $27.9 million over two years, starting in 2022-23, to Natural Resources
Canada for the Line 3 and the Trans Mountain Expansion Project
pipelines’ Indigenous Advisory and Monitoring Committees, to enable
Indigenous communities to identify common priorities and provide
informed advice on these projects.
Moving Forward on Reconciliation 177
Indigenous Economic Participation in Trans Mountain
Once completed, the Trans Mountain Expansion Project will be an integral part
of Canada’s long term energy infrastructure. Over the life of the pipeline, the
Trans Mountain Corporation will generate billions in cash ow. The federal
government believes that Indigenous communities along the project corridor
and marine shipping route should have the opportunity to participate in
the economic opportunity created by the project. Indigenous economic
participation in Trans Mountain can serve as a signicant source of ongoing
funds for those communities’ economic development and a further step in the
development of an alternative model for Indigenous partnership in natural
resource development in Canada.
The federal government has been engaging with the Indigenous communities
along the project corridor and marine shipping route and will announce, later
this year, the next steps toward their participation in Trans Mountain.
Supporting Indigenous Businesses and Community
Economic Development
Advancing reconciliation requires a commitment to Indigenous
economic self-determination. With more than 50,000 Indigenous-owned
businesses in Canada—and with many investing prots back into their
communities—Indigenous economic development projects and community-
owned businesses provide sustainable revenue streams that support a better,
more prosperous future for generations to come. Together with support for the
Indigenous tourism industry outlined in Chapter 2, the following community-
level investments will support Indigenous communities’ contribution to
Canada’s economic recovery.
Budget 2022 proposes to provide $150 million over ve years, starting
in 2022-23, to Indigenous Services Canada’s Lands and Economic
Development Services Program and Community Opportunity Readiness
Program, to advance shovel-ready economic opportunities in
Indigenous communities.
To complement the above, Budget 2022 also proposes to provide
$15 million over ve years, starting in 2022-23, to the Canadian Northern
Economic Development Agency to support Indigenous economic
development in the North.
To ensure that all communities are well positioned to benet from these
investments, Budget 2022 also proposes to provide $35 million over
ve years, starting in 2022-23, to Indigenous Services Canada to increase
economic capacity supports, including specialized training opportunities
delivered by Indigenous-led organizations.
178 Chapter 7
We also know that the cumulative eects of multiple waves of COVID-19 have
had a signicant impact on Indigenous businesses, with more than 75 per cent
of businesses surveyed by the Canadian Council for Aboriginal Business
reporting decreases in revenues as a direct result of the pandemic.
To further support Indigenous small and medium-size enterprises,
Budget 2022 proposes to forgive up to 50 per cent of the
COVID-Indigenous Business Initiative loans that supported businesses in
need during the pandemic. This action will help ensure that Indigenous-
owned businesses are positioned for long-term success.
Advancing Tax Jurisdiction for Indigenous
Governments
Since 1998, the federal government has entered into 61 tax jurisdiction
agreements with Indigenous governments, generating important revenues that
support community priorities and advance self-determination.
The government conrms its commitment to negotiating agreements with
interested Indigenous governments to enable the implementation of a
First Nations Goods and Services Tax within their settlement lands or reserves.
The government also conrms its commitment to working with interested
self-governing Indigenous governments to enable them to implement personal
income taxes within their settlement lands.
As committed in Budget 2021, the government will work with Indigenous
groups and organizations on a potential fuel, alcohol, cannabis, and tobacco
(FACT) sales tax framework as an additional option for Indigenous governments
to exercise tax jurisdiction.
The government has a continued interest in facilitating taxation arrangements
between interested provinces or territories and Indigenous governments.
Moving Forward on Reconciliation 179
Chapter 7
Moving Forward on Reconciliation
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
7.1. Addressing
Past Harms and
Discrimination
Related to Indigenous
Children and Families
200 953 898 897 811 813 4,573
Supporting First
Nations Children
Through Jordan’s
Principle
1
153 773 773 773 773 773 4,017
Implementing
Indigenous Child
Welfare Legislation
47 48 58 65 30 32 280
Addressing the
Shameful Legacy of
Residential Schools
0 133 68 59 8 8 275
7.2. Supporting
Strong and Healthy
Communities
0 1,471 956 916 1,029 1,149 5,521
Improving Health
Outcomes in
Indigenous
Communities
0 459 0 0 0 0 459
Distinctions-based
Mental Health and
Wellness
0 114 114 0 0 0 228
First Nations Elementary
and Secondary
Education
0 50 57 61 68 76 311
Less: Funds Sourced
From Existing
Departmental
Resources
0 0 -5 -10 -15 -20 -50
Clean Drinking
Water and Better
Infrastructure for First
Nations Communities
0 196 350 52 18 22 639
Investing in Housing
for Indigenous
Communities
0 652 441 813 959 1,071 3,936
7.3. Advancing Self-
Determination and
Prosperity
0 99 123 115 91 75 503
Implementing the
United Nations
Declaration on the
Rights of Indigenous
Peoples Act
0 4 22 20 15 15 75
180 Chapter 7
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Indigenous Climate
Leadership
2
0 2 10 18 0 0 30
Partnering with
Indigenous Peoples
in Natural Resource
Projects
0 36 36 20 20 20 131
Supporting Indigenous
Businesses and
Community Economic
Development
0 57 57 57 57 40 267
Additional
Investments –
Moving Forward on
Reconciliation
0 1 1 0 0 0 2
Yellowknives Dene First
Nation (Giant Mine)
0 1 1 0 0 0 2
Funding provided to Crown-Indigenous Relations and Northern Aairs Canada to support the
implementation of a Collaborative Process Protocol Agreement respecting the historical impacts of
the operation of Giant Mine on the Yellowknives Dene First Nation.
Chapter 7 - Net
Fiscal Impact
200 2,524 1,979 1,927 1,932 2,037 10,599
Note: Numbers may not add due to rounding.
1
2021-22 funding announced in Supplementary Estimates (C), 2021-22.
2
Announced in the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy, released
on March 29, 2022..
Chapter 8
Safe and Inclusive Communities
8.1 A Diverse and Inclusive Canada .............................................................................. 184
A Federal LGBTQ2 Action Plan ...............................................................................184
Fighting Systemic Racism, Discrimination, and Hate .....................................184
Supporting Black Canadian Communities .........................................................185
Federal Funding for the Jean Augustine Chair in Education,
Community and Diaspora .........................................................................................186
Supporting the Muslims in Canada Archive .....................................................186
Building the Jewish Community Centre of Greater Vancouver .................186
Ensuring Fair Compensation for News Media in the Digital News
Ecosystem ....................................................................................................................... 187
Supporting Local and Diverse Journalism .........................................................187
Creating a Safer Sport System ................................................................................188
Supporting Special Olympics Canada .................................................................188
Supporting Our Seniors ........................................................................................... 188
Doubling the Home Accessibility Tax Credit ..................................................... 190
National School Food Policy ...................................................................................190
Support for Workers Experiencing Miscarriage or Stillbirth .......................191
8.2 Keeping Canadians Safe ............................................................................................191
Developing a Buy-Back Program for Assault Weapons ...............................191
Working with Provinces and Territories to Advance the National
Action Plan to End Gender-Based Violence ...................................................... 192
Preparing for Emergencies ......................................................................................192
Supporting Recovery and Completing the Rail Bypass in Lac-Mégantic .192
Increasing the Capacity of Superior Courts ......................................................193
Enhancing Legal Aid for Those Who Need It Most ........................................193
8.3 Supporting Artists and Charities in Our Communities ..................................194
Supporting Canada’s Performing Arts and Heritage Sectors ..................... 194
Supporting a More Inclusive Arts Training Sector .......................................... 195
Stronger Partnerships in the Charitable Sector ...............................................195
Boosting Charitable Spending in Our Communities .....................................196
Safe and Inclusive Communities 183
Chapter 8
Safe and Inclusive Communities
Now more than ever, we need to stand up in support of Canadian values and
ideals. We need to stand up for diversity and multiculturalism and ensure we
are building a truly inclusive society. We need to promote Canadian stories and
Canadian story-telling, including through our arts and culture sector and the
talented people who work in it.
We need to continue to tackle the systemic discrimination and racism which is
still a lived reality for too many Canadians. We need to continue taking steps to
make our communities safer for everyone.
Budget 2022 includes important measures to eect needed and positive change
and to continue to promote the values that have made Canada the diverse and
prosperous country that it is today.
Key Ongoing Actions
Budget 2022 builds on recent steps that the federal government has taken to
ensure opportunities for all Canadians to thrive, to protect our communities,
and to support the recovery of our arts and culture sector. These include:
$601.3 million over ve years to advance a new National Action Plan to End
Gender-Based Violence;
Banning assault-style rearms and investing more than $920 million to
protect Canadians from gun violence;
$200 million to establish the Black-led Philanthropic Endowment Fund, which
will create a sustainable source of funding to support Black communities;
Creating the Black Entrepreneurship Program—a partnership between the
government, Black-led business organizations, and nancial institutions—
with an investment of up to $265 million over four years;
$141.1 million to make federal disability programs, child care centres,
communities, and workplaces more accessible;
$500 million for the recovery of the arts, culture, heritage, and sports sectors,
and to support community-level festivals and other in-person cultural events;
$15 million over three years to establish the new LGBTQ2 Projects Fund;
$172 million over ve years to enhance our ability to collect disaggregated
data, especially on diverse populations, to bring more equity, fairness, and
inclusion into federal government decision making; and
$408.3 million to promote ocial languages and support the modernization
of the Ocial Languages Act, as introduced on March 1, 2022 by the
Government of Canada, in order to achieve the substantive equality of
Canada’s ocial languages, including improvements designed to meet the
challenges facing ocial language minority communities.
184 Chapter 8
8.1 A Diverse and Inclusive Canada
For generations, newcomers from around the world have helped build a Canada
that is as vibrant and prosperous as it is today.
In Canada, diversity is a fact, but inclusion is a choice—and there is still
work to be done to make Canada a country that is truly equal for everyone.
The past two years, in particular, have reminded us of the systemic barriers and
vulnerabilities faced by Black and racialized Canadians, Indigenous peoples,
persons with disabilities, women, seniors, and LGBTQ2 Canadians.
Budget 2022 introduces new measures to promote a more equitable, more
inclusive Canada, and to build communities where everyone is empowered
to succeed.
A Federal LGBTQ2 Action Plan
While Canada has made signicant progress since same-sex marriage was
legalized in 2005, many LGBTQ2 Canadians still face discrimination on the
basis of their sexual orientation, gender identity, or gender expression, which
continues to result in persistent health, social, and economic inequities.
Budget 2022 proposes to provide $100 million over ve years, starting
in 2022-23, to support the implementation of the forthcoming
Federal LGBTQ2 Action Plan, which will support a fairer and more equal
Canada for LGBTQ2 Canadians.
Fighting Systemic Racism, Discrimination, and Hate
Racism has no place in Canada. Our society and our economy are made
stronger every day by Canada’s remarkable cultural, linguistic, and ethnic
diversity. While as a country we have made real progress, racism continues to
be an everyday experience for many Canadians, as evidenced by a sharp rise in
anti-Asian racism, anti-Black racism, anti-Semitic hate, and a number of horric
Islamophobic attacks in recent years.
In 2019, the federal government launched an Anti-Racism Strategy to fund
important community projects, to promote understanding across Canada, and
to reduce the incidence of racism and discrimination.
Recognizing that Canada’s ght against racism is far from over, Budget 2022
proposes to provide $85 million over four years, starting in 2022-23, to the
Department of Canadian Heritage to support the work underway to launch
a new Anti-Racism Strategy and National Action Plan on Combatting Hate.
This funding will support community projects that ensure that Black and
racialized Canadians, and religious minorities have access to resources that
support their full participation in the Canadian economy, while also raising
awareness of issues related to racism and hate in Canada.
Safe and Inclusive Communities 185
To push back against religious discrimination, hateful rhetoric and racism at
home and abroad, Budget 2022 proposes to provide $11.2 million over ve
years, starting in 2022-23, with $2.4 million ongoing, to the Department of
Canadian Heritage and Global Aairs Canada as follows:
• $5.6 million over ve years, with $1.2 million ongoing to support
the Special Envoy on Preserving Holocaust Remembrance and
Combatting Antisemitism.
• $5.6 million over ve years, with $1.2 million ongoing to support the
new Special Representative on Combatting Islamophobia.
To keep alive the memory of those murdered during the Holocaust and
combat both historical distortions and Holocaust denial:
Budget 2022 proposes to provide $20 million in 2022-23 to the
Department of Canadian Heritage to support the construction of the
new Holocaust Museum in Montréal; and an investment of $2.5 million
for the Sarah and Chaim Neuberger Holocaust Education Centre, as
has been approved through the Canada Cultural Spaces Fund and
Museum Assistance Program.
This funding builds on important investments made since 2015 to ght racism
in Canada. This includes initiatives supported as part of the Anti-Racism Strategy
and investments announced in Budget 2021 to support the Canadian Race
Relations Foundation and communities at risk of hate-motivated crimes. Previous
investments have also enhanced community support for Black Canadian youth
and expanded research to develop more culturally focused mental health
programs and care. The government remains committed to working with local
faith based and cultural communities to advance important projects.
Supporting Black Canadian Communities
Data continues to show that Black Canadians face more precarious
employment, and an unjust prevalence of low-income households as a result
of anti-Black racism that has a detrimental impact on the socio-economic
well-being of many Black Canadians. The federal government is committed to
continue closing the systemic inequities faced by Black Canadian communities.
Budget 2022 proposes to provide $50 million over two years, starting
in 2022-23, to Employment and Social Development Canada for
the Supporting Black Canadian Communities Initiative, to continue
empowering Black-led and Black-serving community organizations and
the work they do to promote inclusiveness.
The Minister of Families, Children and Social Development will explore
further options to continue supporting capacity building within Black-led
and Black-serving community organizations in the long term.
186 Chapter 8
Federal Funding for the Jean Augustine Chair in
Education, Community and Diaspora
In 1993, the Honourable Jean Augustine made history as the rst
Black Canadian woman to be elected to the House of Commons and later
became the rst Black Canadian to be appointed to the Federal Cabinet.
Ms. Augustine has also had a distinguished career as a social justice activist and
educator. The Jean Augustine Chair in Education, Community and Diaspora,
housed at York University, is focused on addressing the systemic barriers and
racial inequalities in the Canadian education system to improve educational
outcomes for Black students.
Budget 2022 proposes to provide $1.5 million in 2022-23 to the
Department of Canadian Heritage for a federal contribution towards
an endowment which would support the ongoing activities of the
Jean Augustine Chair in Education, Community and Diaspora.
Supporting the Muslims in Canada Archive
For too long, Muslim communities in Canada have had their representations,
stories, and identities publicly shaped by predominantly non-Muslim media
sources. These depictions are often burdened by narratives of terrorism, war,
violence, Islamophobia, and extremism.
The Muslims in Canada Archive, a collaborative initiative of the Institute of
Islamic Studies at the University of Toronto, provides an opportunity to reshape
these narratives and provide Canada’s robust and diverse Muslim community a
chance to tell their own stories in their own words.
Budget 2022 proposes to provide $4 million in 2022-23 to the
Department of Canadian Heritage to help support the Muslims in
Canada Archive. This funding will allow the Archive to continue its
work with national archival and Muslim community organizations to
acquire, organize, preserve, and make accessible records of and about
Muslim people and organizations in Canada.
Building the Jewish Community Centre of Greater
Vancouver
For generations, the Jewish Community Centre of Greater Vancouver has
provided leadership in cultural, recreational, educational, and social activities
to families from all backgrounds. Today, the existing facilities are aging and
the centre’s services are over-subscribed. A signicant redevelopment project
is planned, which will see a modernized community centre that will serve
diverse communities with new arts, culture, seniors, and recreational facilities.
The project will also make a signicant contribution to addressing aordability
in Vancouver through the creation of hundreds of new aordable rental
housing units and child care spaces. The government intends to announce
funding for the Jewish Community Centre of Greater Vancouver in the future.
Safe and Inclusive Communities 187
Ensuring Fair Compensation for News Media in the
Digital News Ecosystem
Accurate, diverse, and relevant news contributes to a thriving and functioning
democracy in Canada. As readers change habits and get increasingly more
of their information online, it is important that news media continue to be
independent and reliable. In order for that to happen, news media businesses
must be able to receive fair compensation when their content is shared online.
Budget 2022 proposes to provide $8.5 million over two years, starting
in 2022-23, to the Canadian Radio-television and Telecommunications
Commission to establish a new legislative and regulatory regime to require
digital platforms that generate revenues from the publication of news
content to share a portion of their revenues with Canadian news outlets.
Supporting Local and Diverse Journalism
The diversity of media and news stories in Canada should reect the diversity
of Canadians. As digital technologies have fundamentally restructured the
economic foundations of the news media sector—both decreasing access and
diversity of perspectives—it is important, now more than ever, for Canadians to
have reliable information from and about their own communities.
To support diverse and local stories in news media, Budget 2022 proposes to
provide $15 million in 2023-24 to Canadian Heritage as follows:
• $10 million in 2023-24 for the Local Journalism Initiative to continue
to support the production of local journalism for underserved
communities across Canada.
• $5 million in 2023-24 to launch a new Changing Narratives Fund
to break down systemic barriers in the media and cultural sectors
and help racialized and religious minority journalists, creators,
and organizations have their experiences and perspectives
better represented.
Budget 2022 also proposes to provide $40 million over three years, starting
in 2022-23, to Canadian Heritage for the Canada Periodical Fund to support
the availability of journalistic content and to help these publications adapt
to the continually evolving technology and media consumption habits
of Canadians.
188 Chapter 8
Creating a Safer Sport System
Canada’s high performance athletes should feel safe in an environment that is free
from abuse, harassment, and discrimination. However, many Canadian athletes
have brought forward evidence of unsafe environments in competitive sports.
Budget 2022 proposes to provide $16 million over three years, starting
in 2022-23, to the Department of Canadian Heritage, to support
actions to create a safer sport system. This will include funding for the
Sport Dispute Resolution Centre of Canada for the implementation of the
new Independent Safe Sport Mechanism, and funding to ensure national
sport policies and practices reduce the risk of harassment, abuse, and
discrimination and create a safer and more inclusive sport system.
Supporting Special Olympics Canada
Special Olympics is a global movement that provides programs and competition
opportunities to enrich the lives of millions of people with intellectual
disabilities around the world through sport—including in communities
across Canada.
Budget 2022 proposes to provide $1.8 million in ongoing funding, starting
in 2022-23, as an extension to the $16 million investment in Special
Olympics Canada through Budget 2018. This funding will support more
than 45,000 children, youth, and adults through its strong network of
21,000 volunteers.
Supporting Our Seniors
Canada owes our seniors a great deal and the federal government plays the
leading role in providing seniors with much-needed income support.
The Old Age Security (OAS) program—consisting of the OAS pension,
the Guaranteed Income Supplement (GIS), and the Allowances—is Canada’s
largest non-pandemic federal program and it is forecasted to provide
$68.2 billion in support to seniors in 2022-23, growing to $87.2 billion in
2026-27. As of February 2022, there were close to 6.9 million OAS recipients,
including 2.2 million GIS recipients, plus about 72,000 Allowance recipients.
With OAS and GIS benets indexed quarterly to the Consumer Price Index, seniors
do not have to worry about the value of their benets keeping pace with ination,
and the level and indexation of these benets means that the share of seniors in
poverty is only about half that of the overall population.
Safe and Inclusive Communities 189
Chart 8.1
Percentage of Persons in Poverty
Source: Statistics Canada, Canadian Income Survey (2020), Market Basket Measure.
Since 2016, the federal government has taken signicant action to further
support our seniors. This has included:
A ten per cent increase to the maximum GIS benet for single seniors;
Reversing the announced increase to the eligibility age for OAS and GIS
back to age 65 from 67; and
Beginning this July, a ten per cent increase to the OAS pension for seniors
age 75 and over, which will provide additional benets of over $766 to full
pensioners in the rst year.
Many seniors prefer to stay in their own homes for as long possible. The federal
government provides signicant support for aging in place, including, as of
2017, through $6 billion over ten years to provinces and territories for the
delivery of home care services.
Seniors also want to stay active and engaged in their communities as they age,
and the New Horizons for Seniors Program—which has supported more than
33,500 projects in hundreds of communities across Canada since 2004—helps
them do so.
As the government assesses any further increase to the GIS, Budget 2022 seeks
to expand on the important programs above, and to continue to support the
quality of life for our seniors as they age.
Budget 2022 proposes the creation of an expert panel to study the idea of an
Aging at Home Benet. The panel will report to the Minister of Seniors and
the Minister of Health. More details will be provided in the months to come.
0
1
2
3
4
5
6
7
Seniors (65+) All Canadians
per cent
190 Chapter 8
Budget 2022 proposes $20 million over two years, beginning in 2022-23, for
an expanded New Horizons for Seniors Program to support more projects
that improve the quality of life for seniors and help them continue to fully
participate in their communities.
Doubling the Home Accessibility Tax Credit
Seniors and persons with disabilities deserve the opportunity to live and age
at home, but renovations and upgrades that make homes safe and accessible
can be costly. The Home Accessibility Tax Credit provides support to oset
some of these costs. But with the increased costs of home renovations, many
seniors and persons with disabilities are often nding it hard to aord the home
improvements that would allow them to continue living safely at home.
Budget 2022 proposes to double the qualifying expense limit of the
Home Accessibility Tax Credit to $20,000 for the 2022 and subsequent tax
years. This will mean a tax credit of up to $3,000—an increase from the
previous tax credit of up to $1,500—for important accessibility renovations
or alterations.
Doubling the credit’s annual limit will help make more signicant alterations
and renovations more aordable, including:
• The purchase and installation of wheelchair ramps, walk-in bathtubs, and
wheel-in showers;
• Widening doorways and hallways to allow for the passage of a wheelchair
or walker;
• Building a bedroom or a bathroom to permit rst-oor occupancy; and
• Installing non-slip ooring to help avoid falls.
National School Food Policy
Ensuring that the most vulnerable children have the healthy, nutritious food
they need to grow and learn is vitally important. However, nearly two million
children in Canada are at risk of going to school hungry on any given day.
Over the next year, the Minister of Agriculture and Agri-Food and
the Minister of Families, Children and Social Development will work with
provinces, territories, municipalities, Indigenous partners, and stakeholders
to develop a National School Food Policy and to explore how more
Canadian children can receive nutritious food at school.
Safe and Inclusive Communities 191
Support for Workers Experiencing Miscarriage
or Stillbirth
A miscarriage or stillbirth is a profoundly tragic event in someone’s life, and can
cause physical and psychological trauma.
In 2021, the federal government took steps to support federally regulated
employees who experience pregnancy loss by introducing new bereavement
leave provisions under the Canada Labour Code. These provisions provide up
to eight weeks of unpaid leave for employees who lose a child or experience a
stillbirth. The rst three days will be paid for employees who have completed
three months of continuous employment.
The government intends to introduce legislative amendments to the
Canada Labour Code in the coming year to provide additional support to
federally regulated employees who experience a miscarriage or stillbirth.
8.2 Keeping Canadians Safe
Canadians should always feel secure in their homes and communities, but gun
violence can threaten the safety of Canadians in too many towns and cities
across the country.
Budget 2022 rearms the federal government’s commitment to tackle gun
violence in Canada by ensuring that assault-style weapons are no longer in
our communities. It also announces new funding to better prepare Canada for
emergency events, address gender-based violence in partnership with provinces
and territories, and ensure that our courts are able to provide the timely access
to justice that Canadians deserve.
Developing a Buy-Back Program for Assault Weapons
Gun violence continues to pose a very real threat in communities across
Canada, particularly to women and girls.
Since 2016, the federal government has invested more than $920 million to
address gun violence and keep guns out of the hands of gangs and criminals.
These investments are supporting work with provinces and territories to deliver
gun and gang violence prevention and intervention initiatives; increase law
enforcement and prosecution capacity; and crack down on gun smuggling
at our border. On May 1, 2020, the government announced a ban on more
than 1,500 models and variants of assault-style rearms. The government will
implement a mandatory buy-back program to ensure these weapons are safely
removed from our communities, for good.
192 Chapter 8
Working with Provinces and Territories to Advance
the National Action Plan to End Gender-Based
Violence
The government is committed to working with provinces and territories, as
well as stakeholders and Indigenous partners, to prevent and address gender-
based violence in Canada. Building on investments to date—including over
$600 million over ve years provided through Budget 2021—the government
is now moving forward with provinces and territories to ensure a coordinated,
national response to end gender-based violence across Canada.
Budget 2022 proposes to provide $539.3 million over ve years, starting in
2022-23, to Women and Gender Equality Canada to enable provinces and
territories to supplement and enhance services and supports within their
jurisdictions to prevent gender-based violence and support survivors.
This investment will support provinces and territories in their eorts to
implement the forthcoming National Action Plan to End Gender-Based
Violence. Further details on the National Action Plan will be provided in the
months ahead.
Preparing for Emergencies
Recent events, like the COVID-19 pandemic and the devastating wildres and
ooding in British Columbia, have reminded us of the importance of Canada
being prepared for any emergency when lives and communities are at stake.
Budget 2022 proposes to provide $24.7 million over ve years, starting
in 2022-23, with $0.3 million in remaining amortization, and $5.4 million
ongoing for the Privy Council Oce to establish a secretariat to support
the Minister of Emergency Preparedness and to enhance federal
coordination of emergency responses.
Supporting Recovery and Completing the Rail Bypass
in Lac-Mégantic
In July 2013, a train carrying crude oil derailed, causing 47 fatalities in
Lac-Mégantic, Quebec. To support the community’s recovery from this tragedy,
in February 2014 the federal government committed to share the costs with the
Government of Quebec for response, recovery, and decontamination eorts,
and to date, the federal government has provided $120 million to support that
vitally important work.
In 2018, the Governments of Canada and Quebec also committed to build a bypass
to divert rail trac around the town. Since then, signicant progress has been
made to move the project forward. The federal government remains committed to
completing the bypass in partnership with the Government of Quebec, with both
parties providing their fair share of funding to realize the project.
Safe and Inclusive Communities 193
Budget 2022 proposes to provide $13.2 million in 2022-23 to Public
Safety Canada for the nal federal payment through the Lac-Mégantic
Contribution Program.
Budget 2022 also proposes to provide $237.2 million over ve years,
starting in 2022-23, to Transport Canada to complete the construction
of the Lac-Mégantic rail bypass. The federal government will continue to
advance elements of the project while a cost-sharing agreement with the
Government of Quebec is reached.
These investments will help the community to rebuild and recover from this
tragic incident.
Increasing the Capacity of Superior Courts
Superior court delays can impede Canadians’ access to justice and prevent
timely resolutions. To address and prevent delays, the government is committed
to both creating new judicial positions and to increasing the capacity of our
superior courts.
Budget 2022 proposes to amend the Judges Act, the Federal Courts Act,
and the Tax Court of Canada Act to add 24 new superior court positions,
including new Associate Chief Justices for the Court of Queen’s Bench for
Saskatchewan and for the Court of Queen’s Bench of New Brunswick. This
will mean more opportunities to appoint diverse candidates who can better
represent the communities they serve.
Budget 2022 also proposes to provide $83.8 million over ve years, starting
in 2022-23, and $17.8 million ongoing, for these 24 additional superior
court positions.
Enhancing Legal Aid for Those Who Need It Most
All Canadians should have access to a fair justice process. The federal
government helps fund criminal legal aid services, in partnership with provinces
and territories, to support access to justice for Canadians who are unable to
pay for legal support. In Canada, Indigenous peoples, Black and racialized
Canadians, and those with mental health issues disproportionately go before
criminal courts. In order to ensure that no one is disadvantaged before the
courts and that every Canadian receives a fair hearing, more support is needed.
Budget 2022 proposes to provide $60 million in 2023-24 to increase the
federal contribution to criminal legal aid services.
194 Chapter 8
8.3 Supporting Artists and Charities in Our
Communities
Growing and vibrant communities help make Canada the best place in the
world to live, work, and raise a family.
The past two years have reminded us that we are all better o when we look
out for each other. Budget 2022 will make it easier for Canada’s charities to
do their important work and ensure that Canadians—and people around the
world—can benet from their generosity.
As we come through the pandemic and Canadians get back on their feet, our
performing arts sector is continuing to feel the impact of the closures and
capacity limits of the past two years. Budget 2022 will continue to support the
recovery of the performing arts sector that brings Canadians together.
Supporting Canada’s Performing Arts and
Heritage Sectors
Canada’s performing arts, including our world-class theatre sector, have
been devastated by closures and capacity restrictions during the pandemic.
Today, both the number of productions and the employment levels in the
performing arts sector remain signicantly below pre-pandemic levels.
Budget 2021 provided $500 million over two years to support the reopening
and recovery of Canada’s arts, culture, heritage, and sports sectors. This includes
funding to support Canadian festivals, outdoor theatres, and local museums in
delivering in-person experiences and events to draw visitors to our communities
and encourage the safe return of in-person audiences.
The federal government has been there to support artists and performing arts
organizations and workers throughout the pandemic. Critical investments in
Budget 2021, including $250 million to be delivered in 2022-23, will continue
to support Canada’s performing arts, and the talented Canadians who make up
our arts, culture, and heritage sectors.
In addition, the 2021 Economic and Fiscal Update provided $62.3 million
in 2022-23 to create a temporary program aimed at directly supporting
performing artists and behind-the-scenes workers who were nancially
impacted by public health restrictions and closures. Funding is expected to be
disbursed to these workers by summer 2022.
To complement previous initiatives, Budget 2022 proposes to provide
$12.1 million over two years, starting in 2022-23, to the National Arts
Centre to support the creation, co-production, promotion, and touring
of productions with Canadian commercial and not-for-prot performing
arts companies.
Safe and Inclusive Communities 195
To compensate Canadian arts, culture, and heritage organizations for
revenue losses due to public health restrictions and capacity limits,
Budget 2022 proposes to provide an additional $50 million in 2022-23 to
the Department of Canadian Heritage, the Canada Council for the Arts, and
Telelm Canada.
Supporting a More Inclusive Arts Training Sector
As the arts sector recovers from the COVID-19 pandemic, its continued vitality
and success will depend, in large part, on the next generation of Canadian
artists. The Canada Arts Training Fund helps build this next generation of
Canadian creators and cultural leaders by supporting the training of artists with
high potential.
While support for equity and inclusion is embedded in the delivery of the Fund,
additional support for Indigenous and racialized arts training organizations
will increase the participation, promotion, and representation of historically
underserved communities.
To continue to support the arts sector’s recovery from the COVID-19
pandemic and to address historic inequities in funding levels for Indigenous
and racialized arts training organizations, Budget 2022 proposes to provide
$22.5 million over ve years starting in 2022-23, and $5 million ongoing, to
Canadian Heritage for the Canada Arts Training Fund.
Stronger Partnerships in the Charitable Sector
Canadian charities carry out a wide range of important work, including vital
international development and relief activities around the world and providing
direct support to Canadians here at home. Canada’s tax rules should support
their work and minimize their administrative burdens, while still ensuring
accountability for how charitable resources are used.
Both the charitable sector and parliamentarians have put forward a number of
proposals to achieve these goals, while allowing greater exibility for charities
to support non-prot groups that may not have the ability to pursue charitable
status of their own. The government supports these eorts.
To ensure sucient exibility for charities to carry out their work,
Budget 2022 proposes to amend the Income Tax Act to allow a charity
to provide its resources to organizations that are not qualied donees,
provided that the charity meets certain requirements designed to ensure
accountability. This is intended to implement the spirit of Bill S-216,
the Eective and Accountable Charities Act, which is currently being
considered by Parliament.
196 Chapter 8
Boosting Charitable Spending in Our Communities
Every year, charities are required to spend a minimum amount based on the
value of their investment assets. This is known as the “disbursement quota” and
it ensures that charitable donations are being invested into our communities.
Following consultations with the charitable sector in 2021, Budget 2022
proposes to introduce a new graduated disbursement quota rate for
charities. For investment assets exceeding $1 million, the rate of the
disbursement quota will be increased from 3.5 per cent to 5 per cent.
This new, higher rate will boost support for the charitable sector while being set
at a level that is sustainable, ensuring the continued availability of funding over
the longer term.
These changes will be eective in respect of a charity’s scal period beginning
on or after January 1, 2023, and will be reviewed after ve years.
The Canada Revenue Agency will also improve the collection of information
from charities, including whether charities are meeting their disbursement
quota, and on information related to investments and donor-advised funds held
by charities.
Safe and Inclusive Communities 197
Chapter 8
Safe and Inclusive Communities
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
8.1. A Diverse and
Inclusive Canada
3 126 145 92 61 31 458
A Federal LGBTQ2
Action Plan
0 18 26 30 14 12 100
Fighting Systemic
Racism, Discrimination,
and Hate – Launching
the New Anti-Racism
Strategy and National
Action Plan on
Combatting Hate
0 4 27 27 27 0 85
Fighting Systemic
Racism, Discrimination,
and Hate – Special
Envoy on Preserving
Holocaust
Remembrance
and Combatting
Antisemitism and
Special Representative
on Combatting
Islamophobia
0 2 2 2 2 2 11
Fighting Systemic
Racism, Discrimination,
and Hate – Montreal
Holocaust Museum
0 20 0 0 0 0 20
Supporting Black
Canadian Communities
0 25 25 0 0 0 50
Federal Funding for the
Jean Augustine Chair in
Education, Community
and Diaspora
0 2 0 0 0 0 2
Supporting the Muslims
in Canada Archive
0 4 0 0 0 0 4
Ensuring Fair
Compensation for News
Media in the Digital
News Ecosystem
0 4 4 4 4 4 20
Less: Projected
Revenues
0 0 0 -4 -4 -4 -11
Supporting Local and
Diverse Journalism
0 15 27 13 0 0 55
Creating a Safer Sport
System
0 6 6 4 0 0 16
Supporting Special
Olympics Canada
0 2 2 2 2 2 9
198 Chapter 8
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Supporting our Seniors
0 10 10 0 0 0 20
Doubling the Home
Accessibility Tax Credit
3 15 15 15 15 15 78
8.2. Keeping
Canadians Safe 0 44 255 235 220 204 958
Working with Provinces
and Territories to
Advance the National
Action Plan to End
Gender-Based Violence
0 2 78 153 153 153 539
Preparing for
Emergencies
0 4 5 5 5 5 25
Supporting Recovery
and Completing
the Rail Bypass in
Lac-Mégantic
0 21 96 61 44 28 250
Increasing the Capacity
of Superior Courts
0 17 16 17 17 17 84
Enhancing Legal Aid
for Those Who Need
It Most
0 0 60 0 0 0 60
8.3. Supporting
Artists and Charities
in Our Communities
0 64 25 40 50 70 250
Supporting Canada’s
Performing Arts and
Heritage Sectors
0 54 8 0 0 0 62
Supporting a More
Inclusive Arts Training
Sector
0 3 4 5 5 5 22
Stronger Partnerships in
the Charitable Sector
0 7 13 35 45 65 165
Additional
Investments – Safe
and Inclusive
Communities
0 8 8 12 12 12 54
Funding for Access to
Reading and Published
Works for Canadians
with Print Disabilities
0 2 3 7 7 7 25
Funding proposed for Employment and Social Development Canada to support the production
and distribution of alternative format materials by the Centre for Equitable Library Access and
the National Network for Equitable Library Service; conduct research to better understand gaps
in availability of accessible reading materials; and launch a new Equitable Access to Reading
Program to boost the production of accessible format reading materials through innovative part-
nerships. This will promote the economic and social inclusion of persons with print disabilities
and help to create a barrier-free Canada.
Safe and Inclusive Communities 199
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Enhancing the Biology
Casework Analysis
Contribution Program 0 6 5 6 6 6 29
Funding proposed for Public Safety Canada to enhance the Biology Casework Analysis Contribu-
tion Program, which supports the provincial forensic laboratories of Ontario and Quebec.
Chapter 8 - Net
Fiscal Impact
3 243 434 380 343 318 1,720
Note: Numbers may not add due to rounding.
Chapter 9
Tax Fairness and Eective Government
9.1 A Fair Tax System ..........................................................................................................204
Requiring Financial Institutions to Help Pay for the Recovery ...................205
Preventing the Use of Foreign Corporations to Avoid Canadian Tax .....206
Next Steps Towards a Minimum Tax for High Earners ...................................206
Limiting Aggressive Tax Avoidance by Financial Institutions .....................207
Closing the Double-Deduction Loophole .......................................................... 208
Expanding Anti-Avoidance Tax Rules ..................................................................208
Strengthening the General Anti-Avoidance Rule ............................................ 208
International Tax Reform ............................................................................................ 209
International Accounting Standards for Insurance Contracts .................... 210
Reinforcing the Canada Revenue Agency ..........................................................211
Eliminating Excise Duty on Low-Alcohol Beer ..................................................212
Bill C-208 Follow-up ...................................................................................................212
9.2 Eective Government .................................................................................................212
Reducing Planned Spending in the Context of a Stronger Recovery .....213
Strategic Policy Review .............................................................................................. 213
Council of Economic Advisors .................................................................................214
Addressing the Digitalization of Money .............................................................214
A Fairer Banking Complaints Handling System for Canadians ..................215
Embracing Digital Government ............................................................................215
Public Sector Pension Plan Governance .............................................................215
Review of the Public Servants Disclosure Protection Act ..............................215
Tax Fairness and Eective Government 203
Chapter 9
Tax Fairness and Eective Government
An economy that works for everyone is an economy where everyone plays by
the same set of rules. Since 2015, the federal government has worked to ensure
that the wealthiest people and businesses pay their fair share; that sophisticated
tax planning does not allow anyone to avoid paying the taxes they owe; and
that tax measures disproportionately beneting the wealthiest at the expense of
everyone else are eliminated.
At the same time, Canadians expect their tax dollars to be put to good use by
an ecient and responsible federal government.
Budget 2022 proposes additional measures that will make the tax system more
fair, and new steps to ensure that the federal government is delivering the
eective programs and services that Canadians deserve.
Key Ongoing Actions
Signicant steps that the federal government has announced since 2015 to
promote fairness and integrity in the tax system include:
Raising taxes on the wealthiest one per cent of Canadians, and cutting taxes
for 20 million low- and middle-income Canadians;
New taxes on luxury goods, like yachts and private jets;
A tax on vacant or underused housing owned by non-resident, non-
Canadians;
Reforming the tax treatment of employee stock options to ensure it does
not disproportionately benet the very wealthy;
Limiting excessive interest deductions to ensure that large companies pay
their fair share;
Restricting the ability of large nancial institutions to use complicated
nancial transactions to create articial tax deductions;
Implementing all minimum standards from the OECD’s Base Erosion and
Prot Shifting project to tackle international tax avoidance; and
Ensuring that the GST/HST applies in a fair and eective manner to the
growing digital economy.
204 Chapter 9
The federal government has also taken steps to reinforce the Canada Revenue
Agency (CRA) as it works to unravel tax avoidance schemes. Investments
announced in the 2020 Fall Economic Statement and Budget 2021 have included:
Strengthening the CRA’s ability to ght tax crimes such as money
laundering and terrorist nancing by upgrading its tools and increasing
international cooperation;
Increasing the CRA’s oshore audit capacity to focus on people who avoid
taxes by hiding income and assets abroad;
Modernizing GST/HST risk assessment systems to review high-risk refund
and rebate claims prior to payment;
Improving the CRA’s ability to collect outstanding taxes; and
Providing legal resources to support audits and to defend against appeals
to the courts by wealthy taxpayers motivated to spend large amounts
on litigation.
These eorts, which began in 2021-22, are expected to support the recovery
of $2.3 billion in revenues, and the collection of $5 billion in taxes assessed but
remaining outstanding over ve years.
9.1 A Fair Tax System
Canada’s public programs and services—from public health care to
infrastructure to national defence—are built on a robust national tax base
where those who live and do business in Canada pay their fair share.
The federal government’s response to COVID-19 allowed our economy to
weather the pandemic better than almost any in the world. Canada has seen
the fastest jobs recovery in the G7—recouping 112 per cent of the jobs lost at
the outset of the pandemic. Fiscal support was necessary, and it has paid o.
However, the cost of that support was also signicant.
As previously committed, the government is requiring the largest banking
and life insurance groups to help pay a portion of the costs of the pandemic
response they beneted from.
Budget 2022 is also taking action to close tax loopholes, to work with our
international partners, and to strengthen tax enforcement that will stop wealthy
Canadians and businesses from sheltering their money overseas.
Tax Fairness and Eective Government 205
Requiring Financial Institutions to Help Pay for the
Recovery
The COVID-19 pandemic has been the greatest public health challenge in a
generation. It has threatened the lives and livelihoods of Canadians, and it
posed an existential threat to the Canadian economy.
To protect Canadians and keep our economy aoat through the darkest days
of the pandemic, the federal government provided unprecedented nancial
support. Signicant investments in our health care system and a world-leading
vaccination campaign saved thousands of Canadian lives. Programs like the
Canada Emergency Response Benet (CERB), the Canada Emergency Business
Account (CEBA), and the Canada Emergency Wage Subsidy (CEWS) helped
millions of Canadians make ends meet, and tens of thousands of our small
businesses to remain open.
While the federal government’s support worked, it came at a high price—more
than $350 billion in total for health and safety and direct support measures.
While many sectors continue to recover, Canada’s major nancial institutions
made signicant prots during the pandemic and have recovered faster than
other parts of our economy—in part due to the federal pandemic supports
for people and businesses that helped de-risk the balance sheets of some of
Canada’s largest nancial institutions. The federal government is accordingly
proposing two measures to ensure those large nancial institutions help
support Canada’s broader recovery.
Budget 2022 proposes to introduce a temporary Canada Recovery
Dividend, under which banking and life insurers’ groups (as determined
under Part VI of the Income Tax Act) will pay a one-time 15 per cent tax on
taxable income above $1 billion for the 2021 tax year. The Canada Recovery
Dividend will be paid in equal installments over ve years.
Budget 2022 also proposes to permanently increase the corporate income
tax rate by 1.5 percentage points on the taxable income of banking and
life insurance groups (as determined under Part VI of the Income Tax Act)
above $100 million, such that the overall federal corporate income tax rate
above this income threshold will increase from 15 per cent to 16.5 per cent.
Together, these measures are expected to raise $6.1 billion over ve years, with
the 1.5 per cent permanent tax on banking and life insurance groups expected
to raise $445 million ongoing.
206 Chapter 9
Preventing the Use of Foreign Corporations to Avoid
Canadian Tax
Currently, some people are manipulating the Canadian-controlled private
corporation (CCPC) status of their corporations to avoid paying the additional
refundable corporate income tax that they would otherwise pay on investment
income earned in their corporations. This may be done in a number of
ways, such as by moving a corporation into a foreign low-tax jurisdiction,
by using foreign shell companies, or by moving passive portfolios to an
oshore corporation.
Budget 2022 proposes targeted amendments to the Income Tax Act
to ensure that, for taxation years that end on or after April 7, 2022,
investment income earned and distributed by private corporations that are,
in substance, CCPCs is subject to the same taxation as investment income
earned and distributed by CCPCs.
This measure would increase federal revenues by $4.2 billion over ve years
starting in 2022-23.
Next Steps Towards a Minimum Tax for High Earners
The federal government has taken signicant steps to increase the fairness of
the tax system, including by increasing taxes on the wealthiest one per cent of
Canadians. However, some high-income Canadians still pay relatively little in
personal income tax (PIT) as a share of their income—28 per cent of lers with
gross income above $400,000 pay an average federal PIT rate of 15 per cent or
less, which is less than some middle class Canadians pay. These Canadians make
signicant use of deductions and tax credits, and typically nd ways to have
large amounts of their income taxed at lower rates.
Tax Fairness and Eective Government 207
Chart 9.1
Proportion of People With Gross Income Over $400,000 Who Are Paying
Less Than 15 Per Cent in Federal Tax, 2019
1.6%
9.8%
6.5%
9.9%
0
5
10
15
0 0 to 5 5 to 10 10 to 15
Share of Filers with Gross Income Above
$400,000 (%)
Federal PIT as a Share of Gross Income (%)
Source: Department of Finance Canada calculations using 2019 T1 Universe File. Chart excludes 72 per cent of lers with
gross income above $400,000 whose eective federal PIT rates are above 15 per cent. Gross income includes 100% of
realized capital gains and uses the cash value of dividend income. The 99.5
th
percentile of gross income in 2019 was
approximately $400,000.
The Alternative Minimum Tax (AMT), which has been in place since 1986, plays a
role in ensuring that the wealthiest Canadians do not take advantage of the tax
system to lower their federal tax bill.
However, the AMT has not been substantially updated since its introduction,
and there are still thousands of wealthy Canadians who pay little to no personal
income tax each year. That is unfair, and the federal government is committed
to changing it.
Budget 2022 announces the government’s commitment to examine a new
minimum tax regime, which will go further towards ensuring that all wealthy
Canadians pay their fair share of tax. The government will release details on a
proposed approach in the 2022 fall economic and scal update.
Limiting Aggressive Tax Avoidance by Financial
Institutions
The government expects federally regulated nancial institutions to
demonstrate an exemplary level of corporate behaviour.
Budget 2022 proposes to examine potential changes to the nancial
transaction approval process to limit the ability of federally regulated
nancial institutions to use corporate structures in tax havens to engage in
aggressive tax avoidance.
208 Chapter 9
Closing the Double-Deduction Loophole
Some Canadian nancial institutions have been using hedging and short
selling arrangements in aggressive tax planning strategies. Put simply, two
dierent parts of an institution take dierent positions in relation to a Canadian
dividend-paying stock—one short, or betting against the stock; one long,
or betting on the stock—to take advantage of special treatment that those
Canadian stocks receive.
Budget 2022 proposes to amend the Income Tax Act to deny the deduction for
a dividend received where the taxpayer has entered into such transactions.
This measure would increase federal revenues by $635 million over ve years
starting in 2022-23, and by $150 million ongoing.
Expanding Anti-Avoidance Tax Rules
Interest coupon stripping is a way that some taxpayers avoid paying tax on
cross-border interest payments. Due to dierences between Canada’s various
tax treaties, the interest received from Canadian residents is often subject to
dierent tax rates depending on where the recipient resides. Interest coupon
stripping arrangements exploit these dierences and allow some to pay less
in taxes.
To improve the fairness of Canada’s international tax system, Budget 2022
proposes to create a specic anti-avoidance rule in the Income Tax Act to
ensure that the appropriate amount of tax is paid when an interest coupon
stripping arrangement is used.
This measure will increase federal revenues by $640 million over the next
six years, and by $150 million ongoing.
Strengthening the General Anti-Avoidance Rule
The general anti-avoidance rule (GAAR) is intended to prevent abusive tax
avoidance transactions, while not interfering with legitimate commercial and
family transactions. If abusive tax avoidance is established, the GAAR applies to
deny the tax benet that was unfairly created.
Budget 2022 proposes to amend the Income Tax Act to provide that the
GAAR can apply to transactions that aect tax attributes that have not yet
been used to reduce taxes.
The government intends to release in the near future a broader
consultation paper on modernizing the GAAR, with a consultation period
running through the summer of 2022, and with legislative proposals to be
tabled by the end of 2022.
Tax Fairness and Eective Government 209
International Tax Reform
Canada strongly supports international eorts to end the corporate tax race
to the bottom, ensure that all corporations pay their fair share, and level the
playing eld for Canadians and Canadian businesses.
Canada is one of 137 members of the OECD/G20 Inclusive Framework on
Base Erosion and Prot Shifting that joined a two-pillar plan for international tax
reform agreed to in October 2021.
Pillar One (Reallocation of Taxing Rights)
Pillar One of the plan will ensure that the largest and most protable global
corporations, including large digital corporations, pay their fair share of tax in
the jurisdictions where their users and customers are located.
This is a long-overdue updating of international tax rules to reect the way
business works in today’s digitalized and globalized economy. The federal
government is actively working with its international partners to develop the
multilateral convention and model rules required to establish the new Pillar One
tax framework and bring the new rules into eect.
The government is encouraged by the progress being made and will continue
to press forward and be prepared to introduce implementing legislation
after the terms are multilaterally agreed. To ensure that Canadians’ interests
are protected in any circumstance, the government is prepared to advance
legislation for a Digital Services Tax to ensure that corporations in all sectors,
including digital corporations, pay their fair share of tax on that money they
earn by doing business in Canada. It is Canada’s sincere hope that the timely
implementation of the new international system will make this unnecessary.
210 Chapter 9
Pillar Two (Global Minimum Tax)
Pillar Two would ensure that large multinational enterprises are subject
to a minimum eective tax rate of 15 per cent on their prots in every
jurisdiction in which they operate. This will help end the race to the bottom in
corporate taxation.
The Pillar Two framework is now largely nalized and countries are taking
steps towards their own domestic implementation. The members of the
European Union are discussing a draft directive that would require member
states to implement Pillar Two in their own countries in 2023. The U.K. has
similarly announced its intention to implement Pillar Two in 2023. Recent U.S.
legislative proposals would more closely align its minimum tax with Pillar Two,
ensuring a more level playing eld.
In light of these developments, Budget 2022 proposes to implement
Pillar Two in Canada, along with a domestic minimum top-up tax.
The primary charging rule and domestic minimum top-up tax would
be eective in 2023, with the secondary charging rule eective not
before 2024.
Budget 2022 is also launching a public consultation on the implementation
of Pillar Two and the domestic minimum top-up tax in Canada. Details can
be found in Supplementary Information: Tax Measures.
International Accounting Standards for Insurance
Contracts
On January 1, 2023, IFRS 17—a new international accounting standard for
insurance contracts—will substantially change the nancial reporting for
Canadian insurers. Changes to the Income Tax Act are required to address
the impact of the new international accounting standard, and are consistent
with the proposals for implementation that were consulted on last year.
These changes will ensure income is recognized when key economic activities
occur, as under the current rules generally.
Budget 2022 proposes legislative amendments to conrm support of the
use of IFRS 17 accounting standards for income tax purposes, with the
exception of a new reserve known as the contract service margin, subject to
some modications. Without this exception, prots embedded in the new
reserve would be deferred for income tax purposes.
It is estimated that this measure will increase federal revenues by $2.35 billion
over the next ve years. Relieving transitional rules and consequential changes
to protect the minimum tax base are also proposed.
Tax Fairness and Eective Government 211
Reinforcing the Canada Revenue Agency
Canadians understand the importance of everyone paying their fair share.
The federal government has invested in strengthening the ability of the Canada
Revenue Agency (CRA) to target a full spectrum of compliance work, including
initial verication, uncovering aggressive planning schemes, and prosecuting
criminal tax evasion.
Building on recent investments, Budget 2022 proposes to provide
$1.2 billion over ve years, starting in 2022-23, for the CRA to expand
audits of larger entities and non-residents engaged in aggressive tax
planning; increase both the investigation and prosecution of those
engaged in criminal tax evasion; and to expand its educational outreach.
These measures are expected to recover $3.4 billion in revenues over ve years,
with additional benets to be realized by provinces and territories whose tax
revenues will also increase as a result of these initiatives.
This investment builds on the previous $2.2 billion in resources provided to the
CRA since Budget 2016 which has yielded a return of ve dollars to each dollar
invested until 2020-21.
Chart 9.2
Additional Investments in CRA Compliance Activities by Budget and
Fiscal Year
Source: Department of Finance Canada.
0
100
200
300
400
500
600
700
800
900
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25
Budget 2022 Budget 2016 to Budget 2021
Investment (millions of dollars)
212 Chapter 9
Eliminating Excise Duty on Low-Alcohol Beer
Currently, low-alcohol beer—beer with no more than 0.5 per cent alcohol by
volume—is subject to excise duty, while low-alcohol wine and spirits are not.
Budget 2022 proposes to eliminate excise duty on low-alcohol beer,
eective as of July 1, 2022. This will bring the tax treatment of low-alcohol
beer into line with the treatment of wine and spirits with the same alcohol
content, and make Canada’s practices consistent with those in other
G7 countries.
Bill C-208 Follow-up
The Income Tax Act contains a rule to prevent people from converting dividends
into lower-taxed capital gains using certain self-dealing transactions—a practice
referred to as “surplus stripping.” Private Member’s Bill C-208, which received
Royal Assent on June 29, 2021, introduced an exception to this rule in order
to facilitate intergenerational business transfers. However, the exception may
unintentionally permit surplus stripping without requiring that a genuine
intergenerational business transfer takes place.
Budget 2022 announces a consultation process for stakeholders to share
their views as to how the existing rules could be strengthened to protect
the integrity of the tax system while continuing to facilitate genuine
intergenerational business transfers. The government is committed to
bringing forward legislation, as necessary to address this specic issue,
which could be included in a bill to be tabled in the fall after conclusion of
the consultation process.
9.2 Eective Government
Like most organizations across Canada and around the world, the COVID-19
pandemic has forced the federal government to adapt and change the way
it works.
Budget 2022 proposes actions that will improve how the government operates
and ensure that it continues to eectively and to eciently serve Canadians.
Tax Fairness and Eective Government 213
Reducing Planned Spending in the Context of a
Stronger Recovery
Supporting Canadians and businesses through the COVID-19 pandemic
required extraordinary, time-limited government supports and programs.
The government remains committed to unwinding COVID-related special
measures and normalizing the overall level of program spending. In this
context, the government will launch a process to re-examine previously
announced spending plans to ensure government programs are t to changing
circumstances, including a stronger than anticipated economic recovery.
In this context, Budget 2022 announces the government’s intention to
review previously announced spending plans with a view to reducing the
pace and scale of spending that has yet to occur by up to $3 billion over
the next four years.
An update on the progress of this initiative will be outlined in the 2022 fall
economic and scal update.
Strategic Policy Review
The government remains focused on managing public nances in a prudent
and responsible manner. This requires ongoing review to ensure Canadians’ tax
dollars are being used eectively and to ensure that government programs are
delivering the intended results.
To support these eorts, Budget 2022 announces the launch of a
comprehensive Strategic Policy Review. Led by the President of the
Treasury Board, the review will include two streams:
• Stream 1 will assess program eectiveness in meeting the government’s
key priorities of strengthening economic growth, inclusiveness, and
ghting climate change.
• Stream 2 will identify opportunities to save and reallocate resources to
adapt government programs and operations to a new post-pandemic
reality. Further areas of focus could include real property, travel, and
increased digital service delivery, based in part on key lessons taken
from how the government adapted during the pandemic, such as
through increased virtual or remote work arrangements.
These eorts would target savings of $6 billion over ve years, and
$3 billion annually by 2026-27. Budget 2023 will provide an update on the
review’s progress.
214 Chapter 9
Council of Economic Advisors
Strengthening Canada’s prospects for long-term economic growth is essential
for achieving continued improvements to living standards and the quality of
life of all Canadians. To reinforce the government’s access to expert advice
and provide policy options for harnessing new opportunities and navigating
increasingly complex economic challenges, the government intends to establish
a permanent Council of Economic Advisors.
The government will announce further details on the makeup of the Council in
the coming months.
Addressing the Digitalization of Money
A safe and secure nancial system is a cornerstone of our economy.
However, the digitalization of money, assets, and nancial services—which is
transforming nancial systems and challenging democratic institutions around
the world—creates a number of challenges that need to be addressed.
In the last several months, for example, there have been a number of high-
prole examples—both around the world and here in Canada—where digital
assets and cryptocurrencies have been used to avoid global sanctions and fund
illegal activities.
Budget 2022 includes measures that will help maintain the integrity of the
nancial system, promote fair competition, and protect both the nances of
Canadians and our national security.
Budget 2022 announces the government’s intention to launch a nancial
sector legislative review focused on the digitalization of money and
maintaining nancial sector stability and security. The rst phase of the
review will be directed at digital currencies, including cryptocurrencies and
stablecoins.
Budget 2022 also proposes $17.7 million over ve years, starting in
2022-23, to the Department of Finance to lead the review.
The review will examine, among other factors: how to adapt the nancial sector
regulatory framework and toolbox to manage new digitalization risks; how
to maintain the security and stability of the nancial system in light of these
evolving business models and technological capabilities; and the potential need
for a central bank digital currency in Canada.
Separately, the government is investing in the Financial Transactions and
Reports Analysis Centre of Canada (FINTRAC) and will develop legislative
proposals to strengthen the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, the Criminal Code, and other legislation, to investigate and
prosecute nancial crimes, manage emerging threats, such as those posed by
the digitalization of money, and ensure the government has the tools necessary
to preserve nancial integrity and economic security in Canada.
Tax Fairness and Eective Government 215
A Fairer Banking Complaints Handling System for
Canadians
Canadians deserve a fair and impartial process to address unresolved
complaints with their banks. Banks should not be able to choose the complaints
handling body they participate in, and the system should not be run on a
for-prot basis. To strengthen Canada’s external complaints handling process
and enhance consumer condence in the system:
Budget 2022 announces the government’s intention to introduce targeted
legislative measures to strengthen the external complaints handling system
and to put in place a single, non-prot, external complaints body to
address consumer complaints involving banks.
Embracing Digital Government
The federal government is committed to accelerating and expanding the
oering of digital services to Canadians and to improving the ease-of-use,
accessibility, security, consistency, and reliability of government services.
Budget 2022 conrms the government’s intent to introduce legislative
amendments to the Financial Administration Act to enable the Canadian
Digital Service to provide its digital platform services more broadly,
including to other jurisdictions in Canada, and to clarify its responsibilities
under the Privacy Act and Access to Information Act with respect to the
services it provides.
Public Sector Pension Plan Governance
The federal government is committed to continuously improving the
governance, transparency, and accountability of its pension plans.
Budget 2022 announces the government’s intent to expand the Public
Sector Pension Investment Board from 11 to 13 members, with the board’s
new additional seats to be lled by representatives of federal public service
bargaining agents. The government will consult all federal bargaining
agents in determining an appropriate process for the selection of these
new members.
Review of the Public Servants Disclosure Protection Act
The government is committed to continuing to take action to improve
government worker whistleblower protections and supports:
Budget 2022 proposes to provide $2.4 million over ve years, starting in
2022-23, to Treasury Board of Canada Secretariat to launch a review of the
Public Servants Disclosure Protection Act.
216 Chapter 9
Chapter 9
Tax Fairness and Eective Government
millions of dollars
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
9.1. A Fair Tax System
0 -1,931 -3,220 -3,537 -3,643 -3,780 -16,111
Requiring Financial Institutions
to Help Pay for the Recovery –
Canada Recovery Dividend
0 -810 -810 -810 -810 -810 -4,050
Requiring Financial Institutions
to Help Pay for the Recovery –
Additional Tax on Banks and Life
Insurers
0 -290 -460 -430 -430 -445 -2,055
Preventing the Use of Foreign
Corporations to Avoid Canadian
Tax
0 -735 -965 -885 -825 -825 -4,235
Closing the Double-Deduction
Loophole
0 -65 -135 -140 -145 -150 -635
Expanding Anti-Avoidance Tax
Rules
0 -80 -125 -140 -145 -150 -640
International Accounting
Standards for Insurance Contracts
0 0 -575 -630 -565 -580 -2,350
Reinforcing the Canada Revenue
Agency
0 99 222 291 304 320 1,235
Less: Projected Revenues
0 -51 -374 -794 -1,029 -1,142 -3,390
Eliminating Excise Duty on Low-
Alcohol Beer
0 1 2 2 2 2 9
9.2. Eective Government
0 4 -746 -1,746 -2,746 -3,746 -8,980
Reducing Planned Spending in the
Context of a Stronger Recovery
0 0 -750 -750 -750 -750 -3,000
Strategic Policy Review
0 0 0 -1,000 -2,000 -3,000 -6,000
Addressing the Digitalization of
Money
0 3 4 4 3 3 18
Review of the Public Servants
Disclosure Protection Act
0 1 1 1 0 0 2
Additional Actions – Tax
Fairness and Eective
Government
0 -15 -65 -65 -89 -101 -335
Funding Related to the
Implementation of the Western
Arctic Oshore Oil and Gas Accord
0 26 1 1 0 0 28
Proposed one-time payment of $25.8 million to the Government of Yukon and Government of
the Northwest Territories to fulll Canada’s commitment under the 1993 Accord, and $2.5 million
to support the Inuvialuit Regional Corporation’s participation in the implementation of the new
Western Arctic Oshore Oil and Gas Accord.
Tax Fairness and Eective Government 217
2021–
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027 Total
Employment and Social
Development Canada Rent Price
Adjustment
0 3 3 3 3 3 17
Less: Funds From CPP
Account
0 -1 -1 -1 -1 -1 -4
Funding proposed for Employment and Social Development Canada to cover rent increases related
to its national network of service centres and oces.
Reporting Requirements for RRSPs
and RRIFs
0 0 0 0 -20 -30 -50
Administrative Costs
0 1 2 2 3 5 13
The Canada Revenue Agency’s enhanced risk-assessment activities related to RRSPs and RRIFs are
expected to generate additional audit revenues.
WTO Settlement on the 100-per-
cent Canadian Wine Exemption
0 -55 -80 -80 -85 -90 -390
Repeal of the 100-per-cent Canadian wine excise duty exemption eective as of June 30, 2022.
GST/HST Health Care Rebate 0 3 3 3 3 4 16
This measure proposes to amend the GST/HST eligibility rules for the expanded hospital rebate
so that to be eligible for the expanded hospital rebate, a charity or non-prot organization must
deliver the health care service with the active involvement of, or on the recommendation of, either
a physician or a nurse practitioner, irrespective of their geographical location. This measure would
generally apply to rebate claim periods ending after Budget Day in respect of tax paid or payable
after that date.
Enhancing Privy Council Oce
Capacity 0 7 7 7 7 7 35
Funding to support the Privy Council Oce, including to enhance analysis of key government
priorities, and to support government transparency through the timely production of documents for
Access to Information requests.
Supporting the Modern Senate 0 0 1 1 1 1 3
Less: Funds Previously
Provisioned in the Fiscal
Framework 0 0 -1 -1 -1 -1 -3
Budget 2022 proposes to amend the Parliament of Canada Act and other Acts to support a more
independent, non-partisan, transparent, and accountable Senate. Since the federal government
established the Independent Advisory Board for Senate Appointments in 2016, 60 senators have
been appointed to the Senate and three new non-partisan groups have formed. The proposed
amendments would provide allowances for senators occupying leadership positions in parties
or groups beyond only the Government and Opposition and authorize participation in certain
senate committees.
Chapter 9 - Net Fiscal Impact
0 -1,942 -4,031 -5,347 -6,479 -7,627 -25,426
Note: Numbers may not add due to rounding.
Details of Economic and Fiscal Projections 219
Annex 1
Details of Economic and Fiscal Projections
1.1 Economic Projections
The average of private sector forecasts has been used as the basis for economic
and scal planning since 1994. This helps ensure objectivity and transparency,
and introduces an element of independence into the government’s economic
and scal forecast. The economic forecast presented in this section is based
on a survey conducted in early February 2022. The survey average has been
adjusted to incorporate the actual results of the National Accounts for the
fourth quarter of 2021 and the historical revisions released on March 1, 2022.
The February survey includes the views of 13 private sector economists:
• BMO Capital Markets,
• Caisse de dépôt et placement du Québec,
• CIBC World Markets,
• The Conference Board of Canada,
• Desjardins,
• IHS Markit,
• Industrial Alliance Insurance and Financial Services Inc.,
• Laurentian Bank Securities,
• National Bank Financial Markets,
• Royal Bank of Canada,
• Scotiabank,
• TD Bank Financial Group, and
• The University of Toronto (Policy and Economic Analysis Program).
The macroeconomic inputs of the February 2022 survey continue to provide
a reasonable basis for scal planning. However, the outlook is clouded by
a number of key uncertainties, including the impact of Russia’s invasion of
Ukraine. Throughout March, the Department closely tracked evolving external
views and forecasts. This information was used to inform two alternative
economic scenarios that illustrate the eects of unusually high uncertainty
around the Russian invasion of Ukraine and its spillovers (Annex 1 for details).
220 Annex 1
Following a strong rebound of 4.6 per cent in 2021, private sector economists
expected real gross domestic product (GDP) growth at a still solid 3.9 per cent for
2022. Growth for 2022 has been revised down from 4.2 per cent expected in the
2021 Economic and Fiscal Update (EFU 2021), reecting slower expected growth in
the rst quarter of this year resulting from renewed restrictions in most provinces
due to the fast spread of the Omicron variant. The outlook for real GDP growth
has been revised up for 2023, from 2.8 per cent in EFU 2021 to 3.1 per cent.
Overall, the revisions leave the level of real GDP roughly unchanged relative
to EFU 2021 by 2023. Real GDP growth is then expected to moderate to near
2 per cent on average per year over the remaining years of the forecast horizon,
reecting a return to trend long-run growth rates.
This forecast for real GDP is generally in line with recent estimates from the
International Monetary Fund, which in January 2022, projected Canada as having
the second fastest growth this year and the fastest growth next year, of all G7
countries. Indeed, private sector economists foresee Canada experiencing faster
GDP growth than the United States in both 2022 and 2023.
The outlook for the unemployment rate has substantially improved relative
to EFU 2021 and was expected to average 5.8 per cent in 2022 and to decline
further to 5.5 per cent in 2023, remaining at that historically low level over the
remaining years of the forecast horizon.
Private sector economists expected the recent price pressures to continue
for some time. Consistent with global trends, the outlook for Consumer Price
Index (CPI) ination has been revised signicantly, up to 3.9 per cent in 2022
compared to 3.1 per cent in EFU 2021. CPI ination was then expected to
gradually normalize to around 2 per cent over the remainder of the forecast
horizon, which is consistent with the average rate of ination in Canada over the
last 30 years.
Reecting recent strength in commodity prices, the outlook for West Texas
Intermediate crude oil prices has been revised up to US$80 per barrel for 2022
and to US$74 per barrel for 2023, about US$6 to US$7 per barrel higher on
average than in EFU 2021. Going forward, crude oil prices were expected to
remain higher than in EFU 2021 by about US$3 per barrel on average per year.
While private sector economists forecast the average for 2022 as lower than
prices exhibited in the last several weeks, current price levels are operating in an
environment of both high volatility and uncertainty. The alternative economic
scenarios developed by the Department provide a useful illustration of how a
sustained increase in commodity prices could aect the overall economic and
scal outlook.
Details of Economic and Fiscal Projections 221
As a result of this strength in both domestic ination and crude oil prices,
the outlook for GDP ination (the broadest measure of economy-wide price
ination) has been revised up signicantly to 3.7 per cent in 2022 compared
to 2.4 per cent in EFU 2021. Going forward, the GDP ination outlook was
expected to be broadly in line with the EFU 2021 outlook.
As a result of these developments, the level of nominal GDP (the broadest
measure of the tax base) was expected to be higher than projected in EFU 2021
by about $41 billion per year over the 2021-26 period.
The outlook for short- and long-term interest rates has been revised up in the
February 2022 survey by about 30 and 10 basis points, respectively, over the
2021-26 period compared to EFU 2021.
222 Annex 1
Table A1.1
Average Private Sector Forecasts
Per cent, unless otherwise indicated
2021 2022 2023 2024 2025 2026
2021-
2026
Real GDP growth
1
2021 Economic and Fiscal Update
4.5 4.2 2.8 2.0 1.8 1.8 2.8
Budget 2022
4.6 3.9 3.1 2.0 1.9 1.8 2.9
GDP ination
1
2021 Economic and Fiscal Update
8.0 2.4 1.5 1.9 1.9 1.9 2.9
Budget 2022
8.2 3.7 1.7 1.8 1.9 1.9 3.2
Nominal GDP growth
1
2021 Economic and Fiscal Update
12.8 6.7 4.3 3.9 3.7 3.8 5.9
Budget 2022
13.1 7.7 4.8 3.9 3.8 3.7 6.2
Nominal GDP level (billions of
dollars)
1
2021 Economic and Fiscal Update
2,488 2,656 2,771 2,879 2,987 3,100
Budget 2022
2,496 2,689 2,819 2,929 3,040 3,153
Dierence between EFU 2021 and
Budget 2022
8 33 48 50 53 53 41
3-month treasury bill rate
2021 Economic and Fiscal Update
0.1 0.5 1.2 1.6 1.9 2.0 1.2
Budget 2022
0.1 0.8 1.7 2.0 2.1 2.1 1.5
10-year government bond rate
2021 Economic and Fiscal Update
1.4 1.9 2.3 2.5 2.7 2.9 2.3
Budget 2022
1.4 2.0 2.4 2.6 2.8 3.0 2.4
Exchange rate (US cents/C$)
2021 Economic and Fiscal Update
80.0 80.6 80.7 80.4 80.4 80.6 80.5
Budget 2022
79.8 79.9 80.2 80.5 80.4 80.1 80.2
Unemployment rate
2021 Economic and Fiscal Update
7.6 6.1 5.7 5.7 5.6 5.7 6.1
Budget 2022
7.4 5.8 5.5 5.5 5.5 5.5 5.8
Consumer Price Index ination
2021 Economic and Fiscal Update 3.3 3.1 2.3 2.1 2.1 2.0 2.5
Budget 2022 3.3 3.9 2.4 2.2 2.1 2.0 2.6
U.S. real GDP growth
2021 Economic and Fiscal Update
5.6 3.9 2.6 1.9 1.8 1.8 2.9
Budget 2022
5.7 3.8 2.6 2.0 1.8 1.9 3.0
West Texas Intermediate crude oil
price ($US per barrel)
2021 Economic and Fiscal Update
68 73 68 66 65 63 67
Budget 2022
68 80 74 70 68 66 71
Note: Forecast averages may not equal average of years due to rounding. Numbers may not add due to rounding.
1
Figures have been restated to reect the historical revisions in the Canadian System of National Accounts.
Sources: Statistics Canada; for the 2021 Economic and Fiscal Update, Department of Finance Canada November 2021
survey of private sector economists, which has been adjusted to incorporate the actual results of the National Accounts
for the third quarter of 2021 released on November 30, 2021; for Budget 2022, Department of Finance Canada February
2022 survey of private sector economists, which has been adjusted to incorporate the actual results of the National
Accounts for the fourth quarter of 2021 released on March 1, 2022.
Details of Economic and Fiscal Projections 223
1.2 Fiscal Projections
The scal outlook presented in this budget is based on the economic
projections presented above. The tables that follow present changes to the
scal outlook since EFU 2021, including the impact of government policy
actions taken since EFU 2021 and measures in this budget, year-to-date
nancial results, and the improved economic outlook.
Changes to the Fiscal Outlook Since EFU 2021
Table A1.2
Economic and Fiscal Developments and Policy Actions and Measures
billions of dollars
Projection
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Budgetary balance – EFU 2021
-144.5 -58.4 -43.9 -29.1 -22.7 -13.1
Economic and scal
developments since EFU 2021
36.1 14.3 11.7 7.5 8.5 7.4
Budgetary balance before
policy actions and measures
-108.5 -44.1 -32.3 -21.6 -14.2 -5.8
Policy actions since EFU 2021
-3.1 -1.3 -0.6 0.6 0.4 0.3
Budget 2022 measures (by
chapter)
1. Making Housing More
Aordable
-0.7 -2.0 -2.2 -2.1 -2.2 -1.0
2. A Strong, Growing, and
Resilient Economy
0.0 -0.3 -1.4 -1.2 -1.3 -1.3
reproling infrastructure
investments
0.1 0.2 0.8 1.2 2.0 2.1
3. Clean Air and a Strong
Economy
0.0 -1.3 -2.2 -3.0 -2.9 -3.0
4. Creating Good Middle Class
Jobs
0.0 -0.8 -1.3 -1.4 -1.2 -1.2
5. Canada’s Leadership in the
World
0.0 -1.7 -1.5 -1.9 -2.0 -2.3
6. Strong Public Health Care
-1.3 -0.7 -0.8 -1.3 -1.4 -1.6
7. Moving Forward on
Reconciliation
-0.2 -2.5 -2.0 -1.9 -1.9 -2.0
8. Safe and Inclusive Communities
0.0 -0.2 -0.4 -0.4 -0.3 -0.3
9.1 Tax Fairness
0.0 2.0 3.3 3.6 3.7 3.9
9.2 Eective Government
0.0 0.0 0.7 1.7 2.7 3.7
Total – Budget 2022 measures
-2.2 -7.4 -7.1 -6.7 -4.8 -3.0
Budgetary balance
-113.8 -52.8 -39.9 -27.8 -18.6 -8.4
Budgetary balance (% of GDP)
-4.6 -2.0
-1.4
-0.9 -0.6 -0.3
Federal debt (% of GDP)
46.5 45.1 44.5 43.8 42.8 41.5
224 Annex 1
Economic and Fiscal Developments Since EFU 2021
Table A1.3
Economic and Fiscal Developments Since EFU 2021
billions of dollars
Projection
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Economic and scal
developments by component
1
Change in budgetary revenues
(1.1) Income taxes
19.1 12.0 8.9 6.9 7.9 8.1
(1.2) Excise taxes/duties
1.6 1.9 2.0 2.0 2.2 2.7
(1.3) Proceeds from the
pollution pricing framework
0.1 0.2 0.1 0.0 0.0 0.0
(1.4) Other revenues
2
3.1 1.3 1.9 3.2 3.3 1.9
(1) Total budgetary revenues
24.0 15.4 12.9 12.2 13.4 12.7
Change in program expenses
(2.1) Major transfers to persons
3.9 1.2 -0.9 -1.4 -1.6 -1.7
(2.2) Major transfers to other
levels of government
0.4 -0.4 -0.5 -1.0 -1.2 -1.2
(2.3) Proceeds from the
pollution pricing framework
returned
0.0 -0.3 -0.1 0.0 -0.1 0.0
(2.4) Direct program expenses
8.2 0.4 2.2 -0.7 -0.5 -0.3
(2) Total program expenses,
excluding net actuarial losses
12.5 0.9 0.6 -3.2 -3.3 -3.2
(3) Net actuarial losses (gains)
0.0 -1.1 -0.2 0.0 -0.3 -0.2
(4) Public debt charges
-0.4 -1.0 -1.6 -1.5 -1.2 -1.9
(5) Total economic and scal
developments
36.1 14.3 11.7 7.5 8.5 7.4
1
A negative number implies a deterioration in the budgetary balance (lower revenues or higher spending). A positive
number implies an improvement in the budgetary balance (higher revenues or lower spending).
2
Includes Employment Insurance premiums, Digital Services Tax and Underused Housing Tax in this table only for
presentation purposes.
The outlook for budgetary revenues has improved relative to EFU 2021
reecting signicant upward revisions to economic projections, as well as
stronger-than-anticipated year-to-date monthly scal results.
• Driven by an improvement in the outlook for corporate protability and the
labour market, income tax revenues are projected to be higher by roughly
$10.5 billion per year on average over the forecast horizon.
• The outlook for excise taxes and import duty revenues has been revised up
due to strong monthly results and a better outlook for taxable consumption.
Details of Economic and Fiscal Projections 225
• Proceeds from the federal pollution pricing framework that arise from
the provinces and territories that are a part of the federal backstop are
projected to be higher, largely due to a slight improvement in projections
of economic growth. Direct proceeds will continue to be fully returned in
the provinces or territories where they are generated.
• Projected other revenues, such as those resulting from sales of goods and
services, investments and loans, interest and penalties, and Crown corporations’
net prots, have been revised upwards over the forecast horizon. In 2021-22,
the improvement largely reects higher enterprise Crown corporation prots
as a result of the improved economic outlook and lower anticipated provisions
for losses relative to what was previously assumed in their corporate plans.
Over the remainder of the forecast horizon, higher projected interest rates also
lift enterprise Crown revenues, as well as interest and penalty revenues.
Program expenses, particularly major transfers to persons and direct program
expenses, are projected to be signicantly lower in 2021-22 relative to EFU 2021,
largely reecting improved economic projections, as well as lower anticipated
departmental spending, in part from reduced COVID-related program expenses.
• Over the remainder of the forecast horizon, the outlook for major transfers
to persons has been revised upwards to reect the impact of higher
expected CPI ination, to which the Canada Child Benet and elderly
benet rates are indexed.
• Relative to EFU 2021, major transfers to other levels of government are
projected to be lower in 2021-22, primarily because Fiscal Stabilization
claims from provinces related to 2020-21 are now expected to be received
in 2022-23. In the outer years of the forecast, expenses have been revised
upwards as a result of the stronger economic outlook, as the Canada Health
Transfer and Equalization payments are indexed to growth in nominal GDP.
• Direct program expenses have been adjusted downward in 2021-22
through 2023-24, relative to the EFU 2021 forecast, due primarily to
re-estimation of pandemic-related public health supports and slower
departmental spending. This eect is partially oset by an increase in the
forecast of wage and rent subsidy programs in 2021-22 resulting from
worse economic conditions in hard-hit industries (e.g. lower sales in service
and retail industries) relative to previous expectations. In all other years of
the projection period, direct program expenses are modestly higher relative
to EFU 2021, reecting revised departmental spending plans.
Net actuarial losses, which represent changes in the measurement of the
government’s obligations for pensions and other employee future benets
accrued in previous scal years, are expected to be slightly higher across the
horizon relative to EFU 2021, reecting updated demographic and economic
assumptions used in estimating these amounts.
Relative to EFU 2021, public debt charges have increased in 2021-22 due to
the impacts of higher ination on Real Return Bonds. Over the remainder of
the forecast, public debt charges are higher due to the increased outlook for
226 Annex 1
short- and long-term interest rates as forecast by private sector economists.
That being said, as outlined further in the Overview, public debt charges
as a share of GDP remain below the average of the last two decades over
the forecast period, despite the large extraordinary borrowing necessitated
by COVID-19.
Summary Statement of Transactions
Table A1.4
Summary Statement of Transactions
billions of dollars
Projection
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Budgetary revenues
316.4 394.4 408.4 429.5 450.8 475.1 496.0
Program expenses,
excluding net actuarial
losses
608.5 473.0 425.4 430.4 439.2 453.1 463.3
Public debt charges
20.4 24.9 26.9 32.9 37.0 39.8 42.9
Total expenses,
excluding net actuarial
losses
628.9 497.9 452.3 463.3 476.2 492.9 506.1
Budgetary balance
before net actuarial
losses
-312.4 -103.5 -43.9 -33.8 -25.5 -17.8 -10.2
Net actuarial losses
-15.3 -10.3 -8.9 -6.1 -2.4 -0.8 1.8
Budgetary balance
-327.7 -113.8 -52.8 -39.9 -27.8 -18.6 -8.4
Financial Position
Total liabilities
1,652.2 1,803.8 1,819.5 1,854.8 1,907.6 1,949.2 1,976.1
Financial assets
1
502.4 541.3 504.3 496.5 518.0 537.4 553.0
Net debt
1,149.8 1,262.5 1,315.1 1,358.2 1,389.6 1,411.8 1,423.1
Non-nancial assets
101.1 101.7 101.5 104.7 108.2 111.8 114.7
Federal debt
1,048.7 1,160.8 1,213.7 1,253.6 1,281.4 1,300.0 1,308.4
Per cent of GDP
Budgetary revenues
14.3 15.8 15.2 15.2 15.4 15.6 15.7
Program expenses,
excluding net actuarial
losses
27.6 18.9 15.8 15.3 15.0 14.9 14.7
Public debt charges
0.9 1.0 1.0 1.2 1.3 1.3 1.4
Budgetary balance
-14.9 -4.6 -2.0 -1.4 -0.9 -0.6 -0.3
Federal debt
47.5 46.5 45.1 44.5 43.8 42.8 41.5
Note: Totals may not add due to rounding
1
The projected level of nancial assets for 2021-22 includes an estimate of other comprehensive income.
Details of Economic and Fiscal Projections 227
Outlook for Budgetary Revenues
Table A1.5
The Revenue Outlook
billions of dollars
Projection
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Income tax revenues
Personal income tax
174.8 189.4 197.3 205.7 214.7 225.5 236.1
Corporate income tax
54.1 72.8 68.4 69.9 72.5 76.8 79.5
Non-resident income tax
8.1 10.3 10.9 11.5 12.0 12.4 13.0
Total
237.0 272.5 276.6 287.1 299.2 314.7 328.6
Excise tax and duty revenues
Goods and Services Tax
32.4 44.0 47.8 49.5 51.2 52.8 54.7
Customs import duties
4.3 5.1 5.5 5.9 6.2 6.5 6.9
Other excise taxes/duties
10.3 11.1 12.0 12.5 12.6 12.7 12.8
Total
47.0 60.2 65.3 67.9 69.9 72.0 74.4
Other taxes
0.0 0.0 0.2 0.9 0.9 1.0 1.0
Total tax revenues
283.9 332.7 342.1 355.9 370.0 387.8 404.1
Proceeds from the pollution
pricing framework
4.4 6.7 8.2 10.2 12.3 14.2 16.2
Employment Insurance premium
revenues
22.4 23.8 25.8 28.0 30.4 32.2 33.3
Other revenues
Enterprise Crown corporations
-10.5 12.3 10.1 9.5 9.9 11.2 12.4
Other programs
14.1 17.8 20.4 23.5 25.4 26.6 26.5
Net foreign exchange
2.2 1.2 1.7 2.4 2.8 3.1 3.5
Total
5.7 31.2 32.3 35.4 38.1 40.9 42.3
Total budgetary revenues
316.4 394.4 408.4 429.5 450.8 475.1 496.0
Per cent of GDP
Total tax revenues
12.9 13.3 12.7 12.6 12.6 12.8 12.8
Proceeds from the pollution
pricing framework
0.2 0.3 0.3 0.4 0.4 0.5 0.5
Employment Insurance premium
revenues
1.0 1.0 1.0 1.0 1.0 1.1 1.1
Other revenues
0.3 1.3 1.2 1.3 1.3 1.3 1.3
Total budgetary revenues
14.3 15.8 15.2 15.2 15.4 15.6 15.7
Note: Totals may not add due to rounding.
Table A1.5 above provides an overview of projected budgetary revenues by
major component.
228 Annex 1
Income Tax Revenues
Personal income tax revenues—the largest component of budgetary revenues
at 55.2 per cent in 2020-21—are projected to increase to $189.4 billion in
2021-22, or 8.4 per cent, largely reecting the robust recovery in household
income (including labour income and employment). For the remainder of the
forecast, personal income tax revenue growth averages 4.5 per cent, in line with
projected nominal GDP growth.
Corporate income tax revenues are projected to increase by 34.6 per cent,
to $72.8 billion in 2021-22, propelled by broad-based gains across industry
sectors. Beyond this, corporate income tax revenues are expected to retreat by
-6.1 per cent, in 2022-23, and then grow at an average rate of 3.9 per cent per year.
This reects the corporate prot outlook, which falls in 2022-23 due to a projected
stabilization of commodity prices and the absence of one-time factors inuencing
growth in 2021-22, such as the release of pandemic-related loss provisions in the
nancial sector.
Overall, as a result of both higher commodity prices and a faster overall
economic recovery than originally anticipated, corporate income tax revenues
for 2021-22 are forecast to be 45 per cent higher than their pre-pandemic level
in 2019-20.
Income taxes paid by non-residents on Canadian-sourced income, notably
dividends and interest payments, are expected to grow to $10.3 billion in
2021-22, or 27 per cent, driven by robust corporate prot and investment
income growth. Over the remainder of the forecast horizon, growth in non-
resident income tax revenues is expected to average 4.8 per cent reecting the
outlook for corporate prots, dividends and interest rates.
Excise Tax and Duty Revenues
Goods and Services Tax (GST) revenues are projected to rebound to $44 billion in
2021-22, or 35.7 per cent, from a very weak 2020-21 outcome that was the result
of the temporary pandemic driven shutdown of large portions of the retail sector
and the reduction in revenues due to the cost of the one-time enhanced GST credit
payment. Over the remainder of the projection period, GST revenues are forecast
to grow by 4.4 per cent per year, on average, reecting the outlook for taxable
consumption.
Customs import duties are projected to increase 19.1 per cent in 2021-22,
due to the economic recovery and the reduced demand for remissions of duties
due to lower-than-expected imports of personal protective equipment and
other medical goods. Customs import duty revenue is then estimated to grow
at an average annual rate of 6.3 per cent, driven by projected growth in imports.
Details of Economic and Fiscal Projections 229
Other excise taxes and duties are expected to increase to $11.1 billion in 2021-22,
or 8.4 per cent, as demand recovers, before softening to growth of an average
annual rate of 2.9 per cent over the remainder of the projection period, reecting
expected consumption growth of motive fuels and tobacco products, in particular.
Other taxes include revenues from the Underused Housing Tax announced in
Budget 2021. Revenues from this tax are projected to be $0.2 billion in 2022-23.
Proceeds From the Pollution Pricing Framework
Proceeds from the pollution pricing framework represent the direct proceeds
from the federal fuel charge and the Output-Based Pricing System in
jurisdictions in which the federal carbon pollution pricing system applies.
Growth in the proceeds from the federal pollution pricing framework
will be driven primarily by the increase in the carbon price over the scal
planning horizon.
1
All direct proceeds from the pollution pricing framework
are returned to the jurisdictions where they were collected, with a majority of
proceeds returned directly to Canadians through Climate Action
Incentive payments.
Employment Insurance Premium Revenues
Employment Insurance (EI) premium revenues are projected to grow at
6.9 per cent over the horizon due to the signicant projected improvement in
the labour market, with the unemployment rate expected to fall to 5.5 per cent, a
historically low level. The two-year freeze in premium rates is scheduled to end in
2023, returning to a premium rate-setting structure under current legislation that
balances accumulated spending from the account over seven years. Premium
rates are assumed to increase gradually from $1.58 in 2022 to $1.73 per $100
insurable earnings (see Box A1.1 for details of the outlook for the EI Operating
Account). As a result of the faster and swifter recovery in the labour market over
the last year, which led to both increased revenues as Canadians returned to
work and reduced expenditures from less demand for Employment Insurance,
this forecast represents a 10 cent improvement (reduction) in premiums
compared to Budget 2021, which estimated a long-term premium rate of
$1.83 as of 2028. If achieved, this rate would still be 15 cents lower than the
$1.88 premium rate in 2015.
1
The carbon price trajectory reects annual increases of $15/tonne, from $50/tonne, beginning
in 2023-24, as set out in the Update to the Pan-Canadian Approach to Carbon Pollution Pricing
2023-30, released in August 2021.
230 Annex 1
Box A1.1 Employment Insurance Operating Account
Employment Insurance Operating Account Projections
2020-
2021
2021-
2022
2022-
2023
2023-
2024
2024-
2025
2025-
2026
2026-
2027
EI premium
revenues
22.4 23.8 25.8 28.0 30.4 32.2 33.3
EI benets
1
33.7 39.0 31.3 24.4 24.8 25.4 26.3
EI administration
and other
expenses
2
2.5 2.9 2.1 2.0 2.0 2.0 2.0
2020
3
2021 2022 2023 2024 2025 2026 2027 2028 2029
EI Operating
Account annual
balance
-6.4 -21.5 -10.8 0.7 3.7 5.3 5.8 5.7 5.7 4.7
EI Operating
Account
cumulative balance
-1.3 -22.8 -33.6 -32.9 -29.2 -23.8 -18.0 -12.3 -6.6 -1.9
4
Projected premium
rate
(per $100 of
insurable earnings)
1.58 1.58 1.58 1.63 1.68 1.73 1.73 1.73 1.73 1.73
1
EI benets include regular EI benets, sickness, maternity, parental, compassionate care, shing and work-sharing
benets, and employment benets and support measures. EI benets exclude EI-Emergency Response Benet
costs in line with the government’s commitment to credit the EI Operating Account.
2
The remaining EI costs relate mainly to administration and are included in direct program expenses.
3
Values for 2020 are actual data. Values for 2021 and future years are a projection.
4
The EI Operating Account cumulative balance does not reach exactly zero at the end of the seven-year period as
projected EI rates are rounded to the nearest whole cent per $100 of insurable earnings, in accordance with the
Employment Insurance Act.
The Employment Insurance (EI) Operating Account operates within the
Consolidated Revenue Fund. As such, EI-related revenues and expenses that
are credited and charged to the Account, respectively, in accordance with the
Employment Insurance Act, are consolidated with those of the government, and
impact the budgetary balance. For consistency with the EI premium rate, which is
set on a calendar-year basis with the objective of having the Account break even
over time, the annual and cumulative balances of the Account are also presented
on a calendar-year basis.
The EI Operating Account is expected to record annual decits from 2020 to 2022
as a result of the increase in EI benets (excluding the Emergency Response Benet)
and the temporary freeze on EI premiums through 2022. The Account is then
projected to record annual surpluses due to projected increases in the premium
rate, which are expected to rise in 5 cent increments, consistent with the legislated
limit, until reaching $1.73. The increases reect the practice of the break-even rate-
setting mechanism that started with the setting of the 2017 premium rate.
Details of Economic and Fiscal Projections 231
Other Revenues
Other revenues consist of three broad components: net income from
enterprise Crown corporations; other program revenues from returns on
investments, proceeds from the sales of goods and services, and other
miscellaneous revenues; and net foreign exchange revenues.
• Enterprise Crown corporation revenues are projected to rebound by
$22.8 billion in 2021-22 and then decline slightly in 2022-23 and 2023-24
as the impact of one-time factors recedes—in particular, the impact
of Bank of Canada programs introduced during COVID-19, including
purchases of Government of Canada securities on the secondary market
to support liquidity in nancial markets. Beyond this, growth averages
9.1 per cent annually reecting the outlooks presented in corporate plans
of respective enterprise Crown corporations.
• Other program revenues are aected by consolidated Crown corporation
revenues, interest rates, ination, and exchange rate movements (which
aect the Canadian-dollar value of foreign-denominated assets).
These revenues are projected to increase by 26 per cent in 2021-22,
primarily due to:
o An increase in interest and penalty revenue since waivers provided
as part of the government’s COVID-19 response in 2020-21,
which reduced that year’s revenue, are no longer in eect; and,
o A projected increase in revenue from sales of goods and services
(e.g., VIA Rail revenue, fees for passports and visas, and wireless
spectrum auction revenue).
• Over the remainder of the forecast horizon, other program revenues are
projected to continue to grow largely as a result of increased interest rates
and revenue from sales of goods and services.
• Net foreign exchange revenues, which consist mainly of returns on Canada’s
ocial international reserves held in the Exchange Fund Account, are
volatile and sensitive to uctuations in foreign exchange rates and foreign
interest rates. Assets in the Exchange Fund Account are mainly invested in
debt securities of sovereigns and their agencies, and are held to aid in the
control and protection of the external value of the Canadian dollar and to
provide a source of liquidity for the government, if required. These revenues
are projected to decrease in the near term due to lower gains on sales of
investments, but increase over the remainder of the forecast horizon as a
result of growth in reserves and higher projected interest rates.
232 Annex 1
Outlook for Program Expenses
Table A1.6
The Expense Outlook
billions of dollars
Projection
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Major transfers to persons
Elderly benets
58.5 61.0 68.2 73.6 78.0 82.6 87.2
Employment Insurance benets
1
58.4 39.0 31.3 24.4 24.8 25.4 26.3
COVID-19 income support for
workers
2
55.8 17.7 0.4 0.0 0.0 0.0 0.0
Canada Child Benet
3
27.4 26.3 25.2 26.6 27.6 28.5 29.4
Total
200.1 144.0 125.1 124.6 130.4 136.4 142.9
Major transfers to other levels
of government
Canada Health Transfer
45.9 45.1 45.2 49.1 51.8 53.9 56.0
Canada Social Transfer
15.0 15.5 15.9 16.4 16.9 17.4 17.9
Equalization
20.6 20.9 21.9 23.8 25.1 26.1 27.1
Territorial Formula Financing
4.2 4.4 4.6 4.9 5.1 5.2 5.4
Canada Community-Building Fund
4.3 2.3 2.3 2.4 2.4 2.5 2.5
Home care and mental health
1.3 1.5 1.2 1.2 1.2 1.2 1.2
Canada-wide early learning and
child care
4
0.0 2.9 4.5 5.6 6.6 7.9 7.9
Other scal arrangements
5
15.4 -5.2 -5.6 -6.5 -6.8 -7.1 -7.5
Total
106.7 87.4 90.0 96.9 102.2 107.2 110.5
Proceeds from the pollution
pricing framework returned
4.6 4.1 8.0 11.9 12.4 14.3 16.2
Direct program expenses
Canada Emergency Wage Subsidy
80.2 20.9 0.0 0.0 0.0 0.0 0.0
Other transfer payments
98.0 94.2 86.3 83.7 81.3 81.3 79.1
Operating expenses
6
119.1 122.4 116.0 113.4 112.9 113.8 114.5
Total
297.2 237.5 202.2 197.1 194.2 195.2 193.6
Total program expenses,
excluding net actuarial losses
608.5 473.0 425.4 430.4 439.2 453.1 463.3
Net actuarial losses (gains)
15.3 10.3 8.9 6.1 2.4 0.8 -1.8
Per cent of GDP
Major transfers to persons
9.1 5.8 4.7 4.4 4.5 4.5 4.5
Major transfers to other levels of
government
4.8 3.5 3.3 3.4 3.5 3.5 3.5
Direct program expenses
13.5 9.5 7.5 7.0 6.6 6.4 6.1
Total program expenses
27.6 18.9 15.8 15.3 15.0 14.9 14.7
Note: Totals may not add due to rounding.
1
EI benets include regular EI benets, sickness, maternity, parental, compassionate care, shing and work-sharing benets,
and employment benets and support measures. Remaining EI costs relate mainly to administration and are part of
operating expenses. This includes the portion of payments for the Emergency Response Benet charged to the EI Operating
Details of Economic and Fiscal Projections 233
Account in 2019-20 and 2020-21, but there is no impact on the EI Operating Account as a credit has been made in 2020-21.
2
Includes the Canada Emergency Response Benet, the Canada Recovery Benet, the Canada Recovery Caregiving
Benet, the Canada Recovery Sickness Benet, and the Canada Worker Lockdown Benet.
3
Includes the Child Disability Benet and residual payments for the Universal Child Care Benet, now replaced by the
Canada Child Benet.
4
Canada-wide early learning and child care transfer payments to provinces and territories exclude funding for
Indigenous early learning and child care, which are included in the other transfer payments line. Funding of $25
million over 2021-22 and 2022-23 to support child care centres to improve their physical accessibility was reclassied
from major transfers to other levels of government to other transfer payments, with no impact on total program
expenses.
5
Other scal arrangements include the Quebec Abatement (Youth Allowances Recovery and Alternative Payments
for Standing Programs); payments under the Canada-Nova Scotia Arrangement on Oshore Revenues; and
potential Fiscal Stabilization payments. It also includes certain COVID-19 response measures such as the Safe Restart
Agreement, Safe Return to Class Fund, the COVID-19 Essential Workers Support Fund, and Canada’s COVID-19
Immunization Plan. In addition, it also includes funding to support transit and improve housing supply and
aordability.
6
This includes capital amortization expenses.
Table A1.6, above, provides an overview of the projection for program expenses
by major component. As shown in the outlook, total program expenses as a share
of GDP will continue to track downward, reecting prudent and responsible scal
management and a more normal trend in spending post-pandemic.
Program expenses consist of four main categories: major transfers to persons,
major transfers to other levels of government, proceeds from the pollution
pricing framework returned, and direct program expenses.
Major Transfers to Persons
Major transfers to persons consist of elderly benets, Employment Insurance (EI)
benets, the Canada Child Benet, and the COVID-19 income supports for workers.
Elderly benets are projected to reach $61 billion in 2021-22, up 4.2 per cent.
Over the forecast horizon, elderly benets are forecast to grow by 7.4 per cent
on average annually. Growth in elderly benets is due to the increasing
population of seniors and projected consumer price ination, to which benets
are fully indexed, as well as the 10 per cent increase to Old Age Security
payments for pensioners 75 and over on an ongoing basis as of July 2022,
announced in Budget 2021.
EI benets are projected to decrease to $39 billion in 2021-22, largely
reecting the expiration of temporary COVID-related EI measures and a lower
unemployment rate. EI benets are expected to fall further to $24.4 billion by
2023-24 as a result of the projected improvement in the labour market and
grow at an average of 2.5 per cent annually thereafter.
234 Annex 1
The Canada Emergency Response Benet was introduced as part of Canada’s
COVID-19 Economic Response Plan to provide immediate assistance to
Canadians. In September 2020, when this program ended, the government
continued to support Canadians with the Canada Recovery Benet, the Canada
Recovery Sickness Benet, and the Canada Recovery Caregiving Benet.
While the Canada Recovery Benet ended on October 23, 2021, the government
extended the sickness and caregiving benets until May 7, 2022 and introduced
the Canada Worker Lockdown Benet. The Canada Worker Lockdown Benet
remains available for workers who face direct work interruptions due to public
health lockdowns until May 7, 2022. These income support programs for
workers are expected to cost $17.7 billion in 2021-22, decreasing to $0.4 billion
in 2022-23 as the recovery strengthens and temporary programs end.
Canada Child Benet (CCB) payments are projected to decrease 3.8 per cent
to $26.3 billion in 2021-22, largely reecting the phasing out of 2020-21
temporary top-up transfer. CCB benets will decline further in 2022-23 due to
the phasing out of the temporary supplement for families with young children
introduced in the 2020 Fall Economic Statement. Over the remainder of the
forecast horizon, CCB payments are expected to grow at an average annual
rate of 3.9 per cent, reecting forecasted recipient growth and consumer price
ination, to which the benets are indexed.
Major Transfers to Other Levels of Government
Major transfers to other levels of government include the Canada Health
Transfer (CHT), the Canada Social Transfer (CST), Equalization, Territorial
Formula Financing, and the Canada Community-Building Fund, as well as
signicant COVID-related payments made to provinces and territories such
as the Safe Restart Agreement and the Safe Return to Class Fund, among
others. In 2021-22, these transfers are expected to decrease by 18.1 per cent to
$87.4 billion, as transfers to provinces and territories normalized following the
unprecedented level of support provided during the height of the pandemic.
Including the $2 billion top-up announced by the government
on March 25, 2022, to address the backlog of surgeries and procedures, total
CHT support is projected to be $45.1 billion in 2021-22. Beginning in 2022-23,
the CHT is projected to grow from $45.2 billion to $56 billion in 2026-27, in
line with a three-year moving average of nominal GDP growth, with funding
guaranteed to increase by at least 3 per cent per year.
As a result of both the formula’s protection against down-side risk in the event
of a recession (3 per cent oor), as well as the up-side from being linked to
nominal GDP, provinces and territories are expected to receive $12 billion
more in Canada Health Transfer payments over the next 5 years than originally
forecast prior to the pandemic.
Details of Economic and Fiscal Projections 235
Chart A1.1
Pre- vs. Post-Pandemic Canada Health Transfer Forecast
35
40
45
50
55
60
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
Pre-pandemic Post-pandemic
billions of dollars
Note: Pre-pandemic forecast represents the CHT forecast from the 2019 Economic and Fiscal Update. Two additional
years have been extrapolated based on the gross domestic product forecast used in the Update.
Sources: Department of Finance Canada calculations (December 2019 forecast and March 2022 forecast).
The CST is legislated to grow at 3 per cent per year. Canada Community-
Building Fund payments are indexed at 2 per cent per year, with increases
applied in $100 million increments. Home care and mental health transfers are
projected to be $1.5 billion in 2021-22, before stabilizing at $1.2 billion starting
in 2022-23. Canada-wide early learning and child care transfer payments are
expected to increase from $2.9 billion in 2021-22 to $7.9 billion in 2026-27,
which includes the proposed Budget 2022 funding of $625 million over
four years, beginning in 2023-24, to Employment and Social Development
Canada for an Early Learning and Child Care Infrastructure Fund.
Proceeds From the Pollution Pricing Framework Returned
Proceeds from the pollution pricing framework returned represent the return of
direct proceeds from the federal fuel charge and Output Based Pricing System
to the jurisdiction from which they were collected. Proceeds from the pollution
pricing framework returned are expected to be $4.1 billion in 2021-22,
increasing to $16.2 billion by 2026-27, reecting the increase in direct proceeds
resulting from a higher price on carbon pollution.
236 Annex 1
Direct Program Expenses
Direct program expenses consist of the Canada Emergency Wage Subsidy, other
transfer payments administered by departments, and operating expenses.
• Other transfer payments administered by departments are projected to
decrease across the budgetary horizon from $94.2 billion in 2021-22 to
$79.1 billion in 2026-27. The decline is steepest from 2021-22 to 2022-23,
reecting the phasing out of pandemic support programs. This trend is
somewhat oset by measures announced in this budget, including funding
to support investments in clean transportation and energy, such as the
Zero-Emission Vehicles and the Low Carbon Economy Fund, and new
housing supply.
• Operating expenses reect the cost of doing business for more than
100 government departments, agencies, and Crown corporations.
Operating expenses are forecasted to reach $122.4 billion in 2021-22 and
decline to $112.9 billion in 2024-25, as pandemic-related expenses for
procurement of vaccines, personal protective equipment, therapeutics, and
rapid testing kits wind down. Operating expenses are then expected to
grow modestly to $114.5 billion in 2026-27.
Net Actuarial Losses
Net actuarial losses, which represent changes in the measurement of the
government’s obligations for pensions and other employee future benets, are
expected to gradually decline over the forecast horizon, from a projected loss
of $10.3 billion in 2021-22 to a projected net actuarial gain of $1.8 billion in
2026-27, reecting higher expected interest rates used to measure the present
value of the obligations.
Financial Source/Requirement
The nancial/source requirement measures the dierence between cash coming
in to the government and cash going out. In contrast, the budgetary balance
is presented on a full accrual basis of accounting, meaning that government
revenues and expenses are recorded when they are earned or incurred,
regardless of when the cash is received or paid.
Table A1.7 provides a reconciliation of the two measures, starting with the
budgetary balance. Non-budgetary transactions shown in the table reect the
reversal of certain revenues and expenses included in the budgetary balance
that have no impact on cash ows in the year, such as the amortization of non-
nancial assets, and the addition of changes in asset and liability balances that
have no accrual impact in a year but do result in the inow or outow of cash,
such as the payment of accounts payable. An increase in a liability or decrease
in an asset represents a nancial source, whereas a decrease in a liability
or increase in an asset represents a nancial requirement. The sum of the
budgetary balance and changes in asset and liability balances reected under
non-budgetary transactions is equal to the government’s net source of (+), or
requirement for (-), cash.
Details of Economic and Fiscal Projections 237
Table A1.7
The Budgetary Balance, Non-Budgetary Transactions and Financial Source/
Requirement
billions of dollars
Projection
2020–
2021
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Budgetary balance
-327.7 -113.8 -52.8 -39.9 -27.8 -18.6 -8.4
Non-budgetary transactions
Pensions and other accounts
16.9 11.8 10.4 6.7 2.1 -0.1 -3.1
Non-nancial assets
-9.5 -0.6 0.2 -3.2 -3.5 -3.7 -2.9
Loans, investments and advances
Enterprise Crown corporations
5.5 -12.7 -6.5 -9.2 -9.2 -9.9 -8.3
Other
-31.9 -1.8 -3.0 24.8 -3.8 -3.6 -1.8
Total
-26.4 -14.5 -9.5 15.7 -13.0 -13.5 -10.1
Other transactions
Accounts payable, receivable,
accruals and allowances
19.9 16.7 -25.0 -1.0 -1.7 -2.6 -2.9
Foreign exchange activities
12.3 -5.2 -8.2 -8.1 -7.9 -4.1 -4.1
Total
32.2 11.5 -33.2 -9.1 -9.5 -6.7 -6.9
Total
13.2 8.2 -32.0 10.0 -23.9 -23.9 -22.9
Financial source/requirement
-314.6 -105.6 -84.9 -29.9 -51.8 -42.5 -31.3
As shown in Table A1.7, a nancial requirement is projected in each year
over the forecast horizon, largely reecting nancial requirements associated
with the projected budgetary balance and projected growth in nancial
assets. Reecting an overall better scal outlook and less need for cash,
the total nancial requirement for 2021-22 of $105.6 billion is approximately
$50.2 billion lower than forecast in EFU 2021 and about $85 billion lower than
forecast in Budget 2021.
A nancial source is projected for pensions and other accounts for 2021-22 to
2024-25. Pensions and other accounts include the activities of the Government
of Canada’s employee pension plans and those of federally appointed judges
and Members of Parliament, as well as a variety of other employee future benet
plans, such as health care and dental plans, and disability and other benets for
veterans and others. The nancial source for pensions and other accounts reects
the dierence between non-cash pension and benet expenses recorded as part
of the budgetary balance to reect the value of benets earned by employees
during a scal year and the annual cash outows for benet payments.
Financial requirements are projected for 2025-26 and 2026-27, as the balance of
the government’s liabilities for pension and other accounts is expected to decline.
238 Annex 1
Financial requirements for non-nancial assets mainly reect the dierence
between cash outlays for the acquisition of new tangible capital assets and
the amortization of capital assets included in the budgetary balance. They also
include disposals of tangible capital assets and changes in inventories and
prepaid expenses. Financial requirements are projected from 2023-24 to
2026-27, reecting forecast net growth in non-nancial assets.
Loans, investments and advances include the government’s investments in
enterprise Crown corporations, including Canada Mortgage and Housing
Corporation, Export Development Canada, the Business Development Bank
of Canada, and Farm Credit Canada. They also include loans, investments
and advances to national and provincial governments and international
organizations, and under government programs, including the Canada
Emergency Business Account (CEBA). The projected nancial source for loans,
investments and advances in 2023-24 is due to the expected repayment of
CEBA loans, reecting the recent extension of the forgiveness repayment date
from December 31, 2022 to December 31, 2023.
In general, loans, investments and advances are expected to generate
additional revenues for the government in the form of interest or additional
net prots of enterprise Crown corporations, which partly oset debt charges
associated with these borrowing requirements. These revenues are reected in
projections of the budgetary balance.
Other transactions include the payment of tax refunds and other accounts
payable, the collection of taxes and other accounts receivable, the conversion
of other accrual adjustments included in the budgetary balance into cash,
as well as foreign exchange activities. Projected cash requirements from
2022-23 to 2026-27 mainly reect the payment of accounts payable and
forecast increases in the government’s ocial international reserves held in the
Exchange Fund Account.
Details of Economic and Fiscal Projections 239
Alternative Economic Scenarios
While the macroeconomic inputs of the February 2022 survey of private
sector economists continue to provide a reasonable basis for scal planning,
the economic outlook is clouded by a number of key uncertainties.
Notably, Russia’s invasion of Ukraine, and related economic and nancial
sanctions, created a negative global supply shock that is pushing up commodity
prices and ination. The Canadian economy is less exposed to the economic
fallout than other regions (e.g., Europe) given our limited trade links to Russia
and Ukraine and Canada’s position as a net exporter of many commodities
now in short supply. On the other hand, the conict and the resulting sanctions
disrupted global trade, led to tighter nancial conditions, and put additional
pressures on already stretched supply chains. Further, increased uncertainty
around geopolitical risks could lead to more cautious behaviour by consumers
and businesses. Overall, the net impact on economic activity is highly uncertain
and depends on the path forward for global growth, commodity prices, and
global interest rates. All of these drivers are intrinsically linked to the duration
and impacts of the supply shock.
Beyond the conict, further uncertainties continue to obscure the outlook,
including the impact of the COVID-19 resurgence in China and other regions on
supply chains, the eects of supply and labour shortages on ination, and the
impact of rising interest rates on the Canadian economy. On the other hand,
Canada’s solid underlying fundamentals, including improved balance sheets and
elevated prots, could also boost consumer spending and business investment
by more than expected.
The Department of Finance actively engages with external economists to assess
risks and uncertainties to the outlook. To illustrate the eects of unusually
high uncertainty around the Russian invasion of Ukraine and its spillovers,
the Department has considered two alternative economic scenarios to the
private sector projections. Notably, the scenarios consider a wide range of
views on the potential fallout from Russia’s invasion of Ukraine, including on
the outlook for crude oil prices. Beyond the next two years, projections for
crude oil prices are largely consistent with oil futures (i.e. a benign scenario for
oil supply disruptions with crude oil prices easing back to pre-conict levels).
The scenarios also recognize that, while higher commodity prices should trigger
investment in the oil and gas sector, the response is unlikely to be as strong as
in past commodity booms given that supply disruptions – not stronger global
demand – are behind the run-up in prices.
240 Annex 1
Heightened Impact Scenario
This scenario considers the economic repercussions of a drawn-out conict in
Ukraine with surging commodity prices, prolonged supply-chain disruptions, and
more rapid monetary policy tightening. The result is weaker economic activity and
temporarily stronger ination.
• Supply disruptions resulting from a reduction in Russian energy exports lead
to a spike in commodity prices, with WTI crude oil prices reaching a peak of
US$180 in the second quarter of 2022.
• In response to higher ination, global interest rates rise higher and more
quickly than anticipated, with Canada’s three-month treasury bill rate up
by almost 50 basis points on average per year compared to the February
survey, contributing to weaker growth.
• Higher energy bills and weaker condence substantially reduce
consumption while ongoing supply shortages and trade disruptions hold
back activity, leading to a sharp slowdown in global economic growth,
potentially tipping some regions into recession (e.g., Europe).
• With a sharp slowdown in global economic activity, and a recession in
some parts of the world, global crude oil prices moderate quickly and
converge to the February survey by the second half of 2023.
• Weaker global activity reduces demand for Canadian products generally.
Overall, growth in real GDP for 2023 as a whole remains slightly positive,
though substantially lower than in the baseline forecast.Despite improved
terms of trade, energy-related investment and exports remain relatively
muted (compared to the February survey) due to lower global activity and
uncertainty about longer-term demand for fossil fuels.
• Altogether, Canada sees signicantly weaker real GDP growth in 2022 and
2023 compared to the February survey (close to 2 percentage points lower
on average per year), while the unemployment rate is 0.7 percentage point
higher in 2022, reecting spillovers from global supply disruptions and
higher interest rates.
• Despite slower growth compared to the February survey, higher domestic
and commodity prices push up GDP ination and nominal GDP in the
near term before it falls below the survey in 2024 amid easing commodity
prices and weaker economic growth. Initially, nominal GDP is $126 billion
higher than the survey in 2022. The dierence in nominal GDP shrinks
to $18 billion in 2023 and turns below the survey level by around
$23 billion on average per year over the last three years of the forecast
horizon. Notably, this temporary spike in nominal GDP drives a temporary
improvement to the budgetary balance and the debt-to-GDP ratio.
Details of Economic and Fiscal Projections 241
Moderate Impact Scenario
This scenario considers a de-escalation of tensions in Ukraine and a world
in which supply disruptions from the conict and pandemic are smaller
than expected while global demand remains resilient along with an easing
of geopolitical tensions. Although commodity prices and ination spike
immediately following Russia’s invasion of Ukraine, the global economy
successfully adapts to COVID-19 risks and pivots to more secure commodity
suppliers, reducing inationary pressures as geopolitical tensions ease.
• After peaking at almost US$100 in the rst quarter of 2022, global crude
oil prices fall quickly but remain slightly above the February survey
over the forecast horizon, limiting inationary pressures compared
to the Heightened Impact scenario, and thus the loss of consumers’
purchasing power.
• This leads to a smaller drag on global growth, as well as a smaller increase
in interest rates (up by 20 basis points on average per year compared
to the February survey) needed to bring ination back to target without
derailing the economic expansion.
• At the same time, Canadian commodity producers make full use of current
spare capacity and increase investment, albeit not commensurate to
the rise in energy prices. This along with improved sentiment provides
a boost to economic growth. Increased activity in the sector also
supports employment growth and real incomes, pushing up spending on
domestically-produced goods and services.
• Altogether, Canada sees stronger real GDP growth in 2022 and 2023
compared to the February survey, supported by Canada’s strong
underlying fundamentals, increased activity in commodity sectors, and
faster adjustments to the supply shock.
• With higher commodity prices and stronger real GDP growth, nominal GDP
remains well above the February survey over the entire forecast horizon.
Altogether, nominal GDP is about $77 billion higher than the February
survey outlook on average per year.
242 Annex 1
Table A1.8
Department of Finance Alternative Scenarios
Per cent, unless otherwise indicated
2022 2023 2024 2025 2026
2022-
2026
Real GDP Growth
Budget 2022
3.9 3.1 2.0 1.9 1.8 2.5
Heightened Impact Scenario
2.8 0.4 2.0 2.4 2.2 2.0
Moderate Impact Scenario
4.3 4.0 2.1 1.8 1.7 2.8
GDP Ination
Budget 2022
3.7 1.7 1.8 1.9 1.9 2.2
Heightened Impact Scenario
9.7 0.4 0.5 1.3 1.6 2.7
Moderate Impact Scenario
5.4 1.8 1.5 1.8 1.9 2.5
Nominal GDP Growth
Budget 2022
7.7 4.8 3.9 3.8 3.7 4.8
Heightened Impact Scenario
12.8 0.8 2.5 3.7 3.8 4.7
Moderate Impact Scenario
10.0 5.8 3.6 3.6 3.6 5.3
Nominal GDP Level ($ billions)
Budget 2022
2,689 2,819 2,929 3,040 3,153
Heightened Impact Scenario
2,815 2,837 2,908 3,015 3,130
Moderate Impact Scenario
2,746 2,905 3,011 3,119 3,232
Dierence between Budget 2022 and
Heightened Impact Scenario
126 18 -21 -25 -22 15
Dierence between Budget 2022 and
Moderate Impact Scenario
57 86 82 79 79 77
Unemployment Rate
Budget 2022
5.8 5.5 5.5 5.5 5.5 5.5
Heightened Impact Scenario
5.9 6.2 6.1 6.0 5.9 6.0
Moderate Impact Scenario
5.6 5.2 5.2 5.3 5.3 5.3
3-month Treasury Bill Rate
Budget 2022
0.8 1.7 2.0 2.1 2.1 1.7
Heightened Impact Scenario
1.5 2.3 2.4 2.3 2.3 2.2
Moderate Impact Scenario
1.1 1.9 2.2 2.2 2.3 1.9
CPI Ination
Budget 2022
3.9 2.4 2.2 2.1 2.0 2.5
Heightened Impact Scenario
6.3 2.7 1.8 2.0 2.0 3.0
Moderate Impact Scenario
5.7 2.9 1.9 2.0 2.0 2.9
WTI Crude Oil Price ($US/barrel)
Budget 2022
80 74 70 68 66 72
Heightened Impact Scenario
126 79 70 68 66 82
Moderate Impact Scenario
89 79 74 72 69 77
Sources: Department of Finance Canada February 2022 survey of private sector economists, which has been adjusted
to incorporate the actual results of the National Accounts for the fourth quarter of 2021 released on March 1, 2022;
Department of Finance Canada calculations.
Details of Economic and Fiscal Projections 243
The potential impact of these increased uncertainties on the projected
federal decit and debt-to-GDP ratio is shown in Charts A1.2 and A1.3 below.
The relative change in economic activity under both scenarios would be
expected to aect tax revenues, and expenses such as Employment Insurance
benets, and major health and social transfer payments to provinces.
• In the Heightened Impact scenario, the budgetary balance worsens in all
years except 2022-23, due to lower revenues stemming from the economic
deterioration. In the rst year, the near-term improvement in nominal GDP,
driven by commodity prices, dominates and more than osets the increase
in expenses.
• In the Moderate Impact scenario, revenue is projected to experience a
broad-based increase reecting greater income, prots, and employment,
and lower use of income supports, partially oset by higher health and
social transfers.
In total, the Heightened Impact scenario could be expected to add about
$6 billion on average to the decit across the horizon, and the federal debt-
to-GDP ratio would would be 1.3 percentage points higher, at 42.8 per cent,
by 2026-27. In the Moderate Impact scenario, the decit would be reduced by
$6.1 billion on average across the projection, and the federal debt-to-GDP ratio
would fall to 39.5 per cent by 2026-27, 2 percentage points below the Budget
2022 projection.
Chart A1.2
Decit Under Alternative Economic
Scenarios
Chart A1.3
Federal Debt-to-GDP Ratio Under
Alternative Economic Scenarios
-39.5
-43.7
-41.1
-32.2
-21.1
-52.8
-39.9
-27.8
-18.6
-8.4
-48.2
-31.3
-21.6
-13.2
-2.7
-60
-30
0
2022-23 2023-24 2024-25 2025-26 2026-27
Heightened Impact Scenario
Budget 2022
Moderate Impact Scenario
billions of dollars
44.0
42.7
41.9
40.9
39.5
45.1
44.5
43.8
42.8
41.5
46.5
42.6
43.9
44.2
43.7
42.8
38.0
40.0
42.0
44.0
46.0
48.0
2021-22 2022-23 2023-24 2024-25 2025-26 2026-27
per cent of GDP
Budget 2022
Moderate Impact
Heightened
Impact
Source: Department of Finance Canada calculaons. Source: Department of Finance Canada calculaons.
244 Annex 1
Supplementary Information
Sensitivity of Fiscal Projections to Economic Shocks
Changes in economic assumptions aect the projections for revenues and
expenses. The following tables illustrate the sensitivity of the budgetary
balance to a number of economic shocks relative to the baseline Budget 2022
projections, which already incorporate forecast changes in levels to these
components over the budget horizon:
• A one-year, 1-percentage-point decrease in real GDP growth driven equally
by lower productivity and employment growth.
• A decrease in nominal GDP growth resulting solely from a one-year,
1-percentage-point decrease in the rate of GDP ination (assuming that the
Consumer Price Index moves in line with GDP ination).
• A sustained 100-basis-point increase in all interest rates.
These sensitivities are generalized rules of thumb that assume any decrease in
economic activity is proportional across income and expenditure components,
and are meant to provide a broad illustration of the impact of economic shocks
on the outlook for the budgetary balance. The sensitivity analysis conducted in
this section has been presented routinely in budgets since 1994, and is separate
from the scenarios for a faster or slower recovery presented earlier in this
annex. Actual economic shocks may have dierent scal impacts. For example,
they may be concentrated in specic sectors of the economy or cause dierent
responses in key economic variables (e.g., GDP ination and CPI ination may
have dierent responses to a given shock).
Details of Economic and Fiscal Projections 245
Table A1.9
Estimated Impact of a One-Year, 1-Percentage-Point Decrease in Real GDP
Growth on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues
Tax revenues
Personal income tax
-2.7 -2.9 -3.3
Corporate income tax
-0.6 -0.7 -0.9
Goods and Services Tax
-0.4 -0.4 -0.5
Other
-0.2 -0.2 -0.2
Total tax revenues
-3.9 -4.1 -4.9
Employment Insurance premiums
-0.1 -0.2 -0.2
Other revenues
-0.1 -0.1 -0.1
Total budgetary revenues
-4.1 -4.3 -5.1
Federal expenses
Major transfers to persons
Elderly benets
-0.1 0.0 0.0
Employment Insurance benets
1.0 1.0 1.1
Canada Child Benet
0.1 0.2 0.2
Total major transfers to persons
1.0 1.2 1.3
Other program expenses
-0.2 -0.3 -0.6
Public debt charges
0.0 0.2 0.6
Total expenses
0.8 1.1 1.3
Budgetary balance
-5.0 -5.4 -6.4
A 1-percentage-point decrease in real GDP growth proportional across income
and expenditure components reduces the budgetary balance by $5.0 billion
in the rst year, $5.4 billion in the second year, and $6.4 billion in the fth year
(Table A1.9).
• Tax revenues from all sources fall by a total of $3.9 billion in the rst year.
Personal income tax revenues decrease as employment and the underlying
tax base fall. Corporate income tax revenues fall as output and prots
decrease. GST revenues decrease as a result of lower consumer spending
associated with the fall in employment and personal income.
• EI premium revenues are relatively unchanged, as the EI premium rate is
bound by the 5-cent maximum annual increase for the majority of the
baseline forecast. EI revenues would typically rise as a result of this shock, as
the EI premium rate increases under the seven-year break-even mechanism,
adjusting to oset the increase in benets such that the EI Operating
Account balances over time.
246 Annex 1
• Expenses rise, mainly reecting higher EI benets (due to an increase in the
number of unemployed) and higher public debt charges (reecting a higher
stock of debt due to the lower budgetary balance). This rise is partially
oset by lower other program expenses, primarily the Canada Health
Transfer and Equalization, as the decline in real GDP is reected in nominal
GDP, to which these payments are indexed.
Table A1.10
Estimated Impact of a One-Year, 1-Percentage-Point Decrease in GDP Ination
on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues
Tax revenues
Personal income tax
-2.6 -2.5 -2.7
Corporate income tax
-0.6 -0.7 -0.9
Goods and Services Tax
-0.4 -0.4 -0.5
Other
-0.2 -0.2 -0.2
Total tax revenues
-3.8 -3.7 -4.3
Employment Insurance premiums
0.0 -0.1 -0.2
Other revenues
-0.1 -0.1 -0.1
Total budgetary revenues
-3.9 -3.9 -4.6
Federal expenses
Major transfers to persons
Elderly benets
-0.4 -0.8 -0.9
Employment Insurance benets
-0.1 -0.1 -0.2
Canada Child Benet
0.1 -0.1 -0.2
Total major transfers to persons
-0.5 -1.0 -1.4
Other program expenses
-0.6 -0.7 -1.7
Public debt charges
-0.6 0.1 0.2
Total expenses
-1.7 -1.6 -2.9
Budgetary balance
-2.2 -2.3 -1.8
Details of Economic and Fiscal Projections 247
A 1-percentage-point decrease in nominal GDP growth proportional across
income and expenditure components, resulting solely from lower GDP ination
(assuming that the CPI moves in line with GDP ination), lowers the budgetary
balance by $2.2 billion in the rst year, $2.3 billion in the second year, and
$1.8 billion in the fth year (Table A1.10).
• Lower prices result in lower nominal income and, as a result, personal
income tax revenues decrease. As the parameters of the personal income
tax system are indexed to ination, the scal impact is smaller than under
the real shock. For the other sources of tax revenue, the negative impacts
are similar under the real and nominal GDP shocks.
• EI premium revenues decrease in response to lower earnings.
• Other revenues decline slightly as lower prices lead to lower revenues from
the sales of goods and services.
• Partly osetting lower revenues are the declines in the cost of statutory
programs that are indexed to CPI ination, such as elderly benet payments,
which puts downward pressure on federal program expenses. In addition,
other program expenses are also lower as certain programs are linked
directly to growth in nominal GDP, such as the Canada Health Transfer and
Equalization.
• Public debt charges decline in the rst year due to lower costs associated
with Real Return Bonds.
Table A1.11
Estimated Impact of a Sustained 100-Basis-Point Increase in All Interest Rates
on Federal Revenues, Expenses and Budgetary Balance
billions of dollars
Year 1 Year 2 Year 5
Federal revenues
-1.4 0.2 2.4
Federal expenses
3.7 6.1 9.3
Of which: public debt charges
3.7 6.1 9.3
Budgetary balance
-5.1 -5.9 -6.9
248 Annex 1
A 1 per cent increase in interest rates decreases the budgetary balance by
$5.1 billion in the rst year, $5.9 billion in the second year, and $6.9 billion in the
fth year (Table A1.11). Higher interest rates directly impact estimated public debt
charges on marketable debt in two ways. First, interest costs increase as existing
debt matures and is renanced at higher rates. Second, rising rates increase the
expected cost of future borrowing needs. Public debt charges are estimated
based on the current expectations for future changes in interest rates, which are
subject to change based on economic conditions.
It is important to note that interest rates also directly aect other government
revenues and expenses and that they typically do not change in isolation.
That is, with higher interest rates, the government would realize some osetting
benets, including:
• Higher revenues from the government’s interest-bearing assets, which are
recorded as part of other revenues;
• Corresponding downward adjustments that reduce the valuations of
public sector pensions and employee benets obligations, which are not
incorporated in the table above; and,
• Higher government tax revenues if interest rate increases were due to
stronger economic growth (also not included in the table above).
Even with a 1 per cent increase in interest rates, public debt charges are
sustainable and would remain near historic lows as a proportion of GDP.
Further discussion of public debt charges can be found in the Overview
(Chart 27), which also compares forecasted increases in interest rates and
borrowing costs over the budget horizon to historical trends.
Details of Economic and Fiscal Projections 249
Policy Actions Taken Since the 2021 Economic and
Fiscal Update
Since 2016, the government has provided a transparent overview of all
policy actions taken between budgets and updates. These measures, listed in
Table A1.12, ensure that Canadians are continually well served by the programs
they rely on and that government operations carry on as usual.
Table A1.12
Policy Actions Since the 2021 Economic and Fiscal Update
millions of dollars
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Finishing the Fight Against COVID-19 3,619 1,503 447 -126 -26 1
Support for Proof of Vaccination —
International Travel
28 1 1 1 1 1
Funding provided to Immigration, Refugees and Citizenship Canada, the Canada Border
Services Agency, and the Public Health Agency of Canada to cover federal costs associated with
implementing veriable proof of vaccination tools at Canadian borders.
Rapid Test Kits 3,500 0 0 0 0 0
Funding to support the procurement of rapid test kits to help curb the transmission of the
COVID-19 virus. This could include the procurement of additional rapid test kits, treatments or
therapeutics, or biomedical assets, including associated logistics and operational costs.
COVID-19 Testing Capacity and Border
Operations
650 350 0 0 0 0
Less: Funds Previously Provisioned in
the Fiscal Framework
-650 0 0 0 0 0
Funding to enhance COVID-19 testing capacity and border operations, in particular related to
the Omicron variant, in order to continue to protect Canadians and limit the spread of COVID-19.
Funding also supports the Safe Voluntary Isolation Sites program.
Temporary Accommodations for Asylum
Seekers
88 0 0 0 0 0
Funding provided for Immigration, Refugees and Citizenship Canada to provide temporary lodging
sites in 2021-22 for asylum seekers arriving without a suitable COVID-19 quarantine plan or
alternative accommodation options.
Supporting the Ongoing Delivery of
Employment Insurance
0 448 0 0 0 0
Funding provided in 2022-23 to maintain Service Canada’s capacity to meet service standards for
processing EI claims and to answer Canadians’ enquiries about their EI claims in a timely manner.
Regional Relief and Recovery Fund
Adjustments
3 0 0 0 0 0
Less: Funds Sourced From Existing
Departmental Resources
-6 0 0 0 0 0
Funding adjustment for the Atlantic Canada Opportunities Agency to enable a greater use of
repayable contributions as part of the Regional Relief and Recovery Fund.
250 Annex 1
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Extension of the Short-Term
Compensation Fund for Canadian
Audiovisual Productions
0 150 0 0 0 0
Funding provided to Telelm Canada to extend the Short-Term Compensation Fund until
March 31, 2023 to mitigate the lack of insurance coverage for COVID-19 production stoppages
in the Canadian audiovisual industry. This one-year program extension was announced on
February 11, 2022.
COVID-19 Benets and the Guaranteed
Income Supplement (GIS), 2021 and
Future Years
0 333 120 3 0 0
Funding provided to Employment and Social Development Canada pursuant to Bill C-12 (An Act
to amend the Old Age Security Act), which received Royal Assent on March 3, 2022. These changes
ensure that seniors who received pandemic benets in 2021 or future years will not have their GIS
or Allowance benets aected.
Canada Worker Lockdown Benet 942 18 0 0 0 0
Less: Funds Previously Provisioned in
the Fiscal Framework
-942 0 0 0 0 0
As announced on October 21, 2021, the Canada Worker Lockdown Benet was introduced to
support Canadians who are unable to work as a result of public health lockdowns in their region.
Between December 19, 2021 and March 12, 2022, the benet was temporarily expanded to include
workers in regions where capacity-limiting restrictions of 50 per cent or more were in eect, during
the peak of the Omicron wave. The benet is set to end on May 7, 2022.
Expanding Access to the Local
Lockdown Program
1,320 0 0 0 0 0
Less: Funds Previously Provisioned in
the Fiscal Framework
-1,320 0 0 0 0 0
As announced on December 22, 2021, this measure expanded access to the Local Lockdown
Program from December 19, 2021 to February 12, 2022 to include employers subject to capacity-
limiting restrictions of 50 per cent or more and with current-month revenue declines of at least
25 per cent. On February 9, 2022, this measure was extended until March 12, 2022.
Extending the Repayment Deadline
for the Canada Emergency Business
Account (CEBA)
6 221 326 -130 -27 0
The repayment deadline for CEBA loans to qualify for partial loan forgiveness was extended by one
year to December 31, 2023, for eligible borrowers in good standing.
Government Operations, Fairness,
and Openness
49 53 53 54 55 56
Prince Edward Island Potato Wart
Response Plan
1
25 0 0 0 0 0
Less: Funds Sourced From Existing
Departmental Resources
-7 0 0 0 0 0
Funding provided to Agriculture and Agri-Food Canada to support Prince Edward Island potato
producers aected by trade disruptions relating to the potato wart outbreak, as announced on
December 20, 2021. Funding is aimed at supporting the diversion of surplus potatoes, including
help to redirect surplus potatoes to organizations addressing food insecurity and support for the
environmentally sound disposal of surplus potatoes. Funding also seeks to support marketing
activities and will help industry to develop long-term strategies to manage future challenges.
Details of Economic and Fiscal Projections 251
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Implementing Tax Measures and
Advancing Policy Priorities
6 17 17 18 18 18
Funding provided to the Department of Finance Canada to support increased expertise and
analytical capacity to advance key priorities, including the design and implementation of a broad
range of new and complex tax measures, Indigenous policy advancement, and work in emerging
economic, social, and scal policy areas. Funding will also stabilize and secure the department’s
information technology and other core operational functions.
Supporting Essential Goods and
Services Within Federal Correctional
Facilities
0 12 12 12 12 12
Funding adjustments for the Correctional Service of Canada to reect non-discretionary cost
increases for goods and services it uses, including electricity, water, food, prescription drugs, and
contracted medical services for inmates.
Supporting the National Day for Truth
and Reconciliation
18 19 19 20 21 21
Funding for the Treasury Board Secretariat to address federal public service costs associated with
the statutory holiday—the National Day for Truth and Reconciliation.
Supporting Judicial Compensation and
Benets
7 5 5 5 5 5
Funding for the Courts Administration Service, Oce of the Commissioner for Federal Judicial
Aairs, and Oce of the Registrar of the Supreme Court of Canada, to implement all of the
recommendations from the sixth Quadrennial Commission on Judicial Compensation and Benets’
report, as announced on December 29, 2021.
Growth, Innovation, Infrastructure,
and the Environment
39 11 0 0 0 0
Emergency Response to the MV
Schiedyk shipwreck
33 0 0 0 0 0
Funding for Fisheries and Oceans Canada to recover the costs expended for the response operation
to remove pollutants from the sunken shipwreck MV Schiedyk. The Canadian Coast Guard worked
with partners to remove heavy fuel oil inside the sunken ship and manage any residual pollutants in
the surrounding area to protect the marine environment in Nootka Sound, British Columbia.
Funding for the Canadian
Transportation Agency
0 11 0 0 0 0
Funding proposed for the Canadian Transportation Agency to address operating pressures related
to the Agency’s broadened authorities and activities. This will enable the Agency to continue to
provide timely dispute resolution services to Canadians when they are unable to resolve issues
directly with service providers.
Support for Ottawa Businesses
Impacted by Illegal Blockades
20 0 0 0 0 0
Less: Funds Previously Provisioned in
the Fiscal Framework
-14 0 0 0 0 0
Funding provided to the Federal Economic Development Agency for Southern Ontario to support
eligible downtown Ottawa businesses who have suered losses due to illegal blockades, as
announced on February 19, 2022.
252 Annex 1
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Labour Markets, Health, Safety, and
Economic Prosperity of Canadians
253 191 74 0 0 0
First Nations Emergency Response and
Recovery
194 0 0 0 0 0
Funding for Indigenous Services Canada to support First Nations in responding to and recovering
from emergencies.
2021-22 Adjustment to the Grant
for the Canada-Quebec Accord on
Immigration
47 0 0 0 0 0
Funding provided to Immigration, Refugees and Citizenship Canada for the annual adjustment to the
payment to Quebec under the Canada-Quebec Accord on immigration.
Supporting Access to Post-Secondary
Education for At-Risk and Indigenous
Youth
0 18 0 0 0 0
Funding for Employment and Social Development Canada to ensure a continuity in nancial and
mentorship supports provided by Pathways to Education Canada and Indspire.
Reducing Veterans Disability Benet
Wait-Times
0 85 74 0 0 0
Less: Funds Previously Provisioned in
the Fiscal Framework
0 -19 0 0 0 0
Funding for Veterans Aairs Canada to continue working on reducing disability benet applications
wait-times. Osets include funding provided in Budget 2021 to extend temporary disability
adjudicators hired in 2018 for an additional year.
AgriRecovery Response for B.C. Floods 12 108 0 0 0 0
Funding for Agriculture and Agri-Food Canada to support the creation of a $120 million
AgriRecovery response initiative to help agricultural producers recover from ood damages in
British Columbia.
Trade, International Relations, and
Security
17 -50 -29 -16 -23 -41
World Expo Osaka 2025 0 5 11 21 17 0
Funding provided to Global Aairs Canada for Canada's participation in the next World Expo event,
which will be held in Osaka in 2025.
Global Aairs Canada Adjustments for
Non-Discretionary Cost Fluctuations
17 32 47 50 47 47
Less: Projected Savings 0 -87 -87 -87 -87 -87
Funding provided to Global Aairs Canada for non-discretionary cost increases, such as changes
in exchange rates and ination, aecting missions abroad. This will allow Canada's missions to
continue delivering a high standard of service to support the needs of Canadians.
Extension of Special Envoy on
Preserving Holocaust Remembrance
1 0 0 0 0 0
Less: Funds Sourced From Existing
Departmental Resources -1 0 0 0 0 0
An extension for the appointment of the Honourable Irwin Cotler as Canada's Special Envoy on
Preserving Holocaust Remembrance and Combatting Anti-Semitism for a term of up to one year.
Details of Economic and Fiscal Projections 253
2021–
2022
2022–
2023
2023–
2024
2024–
2025
2025–
2026
2026–
2027
Tax and Financial Sector Policy 24 496 280 120 -195 -140
Expanding Immediate Expensing to a
Broader Range of Taxpayers -10 420 265 110 -210 -155
As announced on February 4, 2022, the government proposed to expand eligibility for the
immediate expensing measure announced in Budget 2021 to include unincorporated businesses
and certain partnerships. Technical amendments were also proposed in relation to certain
passenger vehicles (i.e., Class 10.1 assets).
Luxury Tax 34 140 140 145 145 145
Less: Projected Revenues 0 -79 -140 -145 -145 -145
Budget 2021 proposed the introduction of a tax on the sale of new luxury cars and aircraft with a retail
sale price over $100,000, and new boats over $250,000, eective as of January 1, 2022. The tax would
be calculated at the lesser of 20 per cent of the value above these price thresholds or 10 per cent of the
full value of the luxury vehicle, aircraft or vessel. On March 11, 2022, the Department of Finance Canada
launched a public consultation on draft legislative proposals to implement the proposed tax framework.
Subject to Parliamentary approval, this tax would now come into eect on September 1, 2022.
Changes to the Automobile Deduction
Limits
0 15 15 10 15 15
On December 23, 2021, the government announced changes to the automobile deduction limits
that would apply in 2022: (1) the ceiling applicable to capital cost allowances (CCA) for zero-emission
passenger vehicles was increased from $55,000 to $59,000, before tax, in respect of vehicles (new and
used) acquired on or after January 1, 2022; (2) the ceiling applicable to CCA for passenger vehicles
was increased from $30,000 to $34,000, before tax, in respect of vehicles (new and used) acquired on
or after January 1, 2022; and (3) the ceiling applicable to deductible leasing costs was increased from
$800 to $900 per month, before tax, for new leases entered into on or after January 1, 2022.
(Net) Fiscal Impact of Non-Announced
Measures Since Budget 2021 -855 -895 -211 -588 -222 -215
The net scal impact of measures that are not announced is presented at the aggregate level, and
would include provisions for anticipated Cabinet decisions not yet made (including the use of such
provisions from previous budgets or updates) and funding decisions related to national security,
commercial sensitivity, contract negotiations, and litigation issues.
Net Fiscal Impact – Total Policy
Actions Taken Since the 2021
Economic and Fiscal Update 3,147 1,310 614 -556 -412 -339
Note: Totals may not add due to rounding.
1
Funding prole has since been revised to $19 million in 2021-22 and $6 million in 2022-23.
254 Annex 1
Canada's COVID-19 Economic Response Plan
Since March 2020, the government has committed over $350 billion—16.0 per cent
of 2020 GDP—to support Canadians through the pandemic, with major
investments in health care, procuring vaccines and personal protective equipment,
in income support, and responding to businesses’ urgent needs. Altogether, these
investments by the federal government represent approximately eight out of every
ten dollars provided in Canada to ght COVID-19 and support Canadians.
Table A1.13 below updates the overview of Canada’s COVID-19 Economic
Response Plan detailed in Chapters 1 and 2 of the 2020 Fall Economic Statement,
with new COVID response measures taken since then, up to and including
Budget 2022.
Table A1.13
Canada’s COVID-19 Economic Response Plan – Detailed Overview
Net Fiscal Impact (Accrual)
Impact
Value
1
2019–
2020
2020–
2021
2021–
2022
Future
Years
2
Protecting Health and Safety
Safe Restart Agreement 19,909 - 19,909 - -
Safe Return to Class 2,000 - 2,000 - -
Vaccines and Therapeutics 14,340 - 7,520 6,530 826
PPE and Medical Equipment 5,352 200 3,331 1,821 289
Long-Term Care 1,340 - 824 516 1
Helping Health Care Systems
Recover
4,000 - 4,000 - -
Canada’s COVID-19 Immunization
Plan
1,000 - 1,000 - -
Rapid Tests - Provinces, Territories
and Workplaces
1,450 - - 1,450 -
Therapeutics 1,000 - - 1,000 1,000
Other Public Health Support 12,839 382 6,831 5,272 578
Rapid Test Kits
3
3,500 3,500
COVID-19 Testing Capacity and
Border Operations
3
650 - - 650 350
Of which: amount provisioned in
EFU 2021 for Omicron variant
response
4
650 - - 650 -
Support for Proof of Vaccination
— International Travel
3
34 - - 29 4
Reducing the Backlogs of
Surgeries and Procedures
5,6
2,000 - - 2,000 -
Total - Protecting Health and
Safety
69,414 582 45,414 22,767 3,047
Of which:
Policy Actions in EFU 2021
4
63,880 582 45,414 17,239 2,694
Policy Actions Since EFU 2021 (net) 3,534 - - 3,529 354
Policy Actions in Budget 2022 2,000 - - 2,000 -
Details of Economic and Fiscal Projections 255
Net Fiscal Impact (Accrual)
Impact
Value
1
2019–
2020
2020–
2021
2021–
2022
Future
Years
2
Direct Support Measures
Canada Emergency Wage Subsidy 101,050 - 80,166 20,884 -
EFU 2021 100,495 - 80,166 20,329 -
Revised estimate 101,050 - 80,166 20,884 -
Dierence 555 - - 555 -
Canada Emergency Rent Subsidy
and Lockdown Support
7,930 - 4,045 3,885 -
EFU 2021 8,015 - 4,045 3,970 -
Revised estimate 7,930 - 4,045 3,885 -
Dierence -85 - - -85 -
Canada Emergency Response
Benet
70,671 6,505 64,166 - -
EFU 2021 70,671 6,505 64,166 - -
Enhancements to Employment
Insurance
13,133 - 3,240 9,893 2,954
EFU 2021 13,133 - 3,240 9,893 2,954
Canada Recovery Benet
6
28,324 - 14,442 13,875 76
EFU 2021
6
28,661 - 14,442 14,212 76
Revised estimate
6
28,324 - 14,442 13,875 76
Dierence -338 - - -338 -
Canada Recovery Sickness Benet
6
1,479 419 960 115
EFU 2021
6
1,383 - 419 864 115
Revised estimate
6
1,479 - 419 960 115
Dierence 96 - - 96 -
Canada Recovery Caregiver Benet
6
4,620 1,967 2,333 341
EFU 2021
6
5,273 - 1,967 2,986 341
Revised estimate
6
4,620 - 1,967 2,333 341
Dierence -653 - - -653 -
Canada Workers Lockdown Benet
3
960 - - 942 18
Of which: amount
provisioned in EFU 2021
for Omicron variant
response
942 - - 942 -
Canada Emergency Business
Account – Incentive
7
15,167 - 13,085 2,082 -
EFU 2021 14,076 - 13,085 992 -
Revised estimate 15,167 - 13,085 2,082 -
Dierence 1,090 - - 1,090 -
Targeting Supports for Deeply
Aected Businesses
6
6,075 - - 5,655 420
EFU 2021
6
3,185 - - 3,010 175
Local Lockdown
Program – Expanded
Eligibility (announced
December 22, 2021 and
February 9, 2022)
3,6
1,320 - - 1,320 -
Revised estimate
6
6,075
- -
5,655 420
Dierence
6
1,570 - - 1,325 245
256 Annex 1
Net Fiscal Impact (Accrual)
Impact
Value
1
2019–
2020
2020–
2021
2021–
2022
Future
Years
2
Of which: amount
provisioned in EFU 2021
for Omicron Variant
response
2,645 - - 2,645 -
Other Direct Support Measures
(EFU 2021)
33,401 106 28,151 3,771 2,157
Remaining EFU 2021 provision for
Omicron Variant response
263 - - 263 -
Total - Direct Support Measures 282,790 6,611 209,681 64,279 6,081
Of which:
Policy Actions in EFU 2021
4
282,143 6,611 209,681 63,877 5,818
Impact of re-estimated costs 2,235 - - 1,990 245
Policy Actions Since EFU 2021 (net) -1,588 - - -1,588 18
Total-Protecting Health and Safety
and Direct Support Measures
352,204 7,193 255,095 87,046 9,128
Tax and Customs Duty Payment
Liquidity (in FES 2020)
85,050 56 2,938 15 -5
Business Credit Availability
Program and Other Credit
Liquidity Support
80,122 - 5,073 3,602 2,666
Of which:
Policy Actions in EFU 2021 80,571 - 5,073 4,051 2,666
Impact of re-estimated costs -449 - - -449 -
Total- COVID-19 Economic
Response Plan
517,376 7,249 261,753 90,663 11,789
Of which:
Policy Actions in EFU 2021
6,8
511,644 7,249 261,753 85,182 11,173
Impact of re-estimated costs 1,786 - - 1,541 245
Policy Actions since EFU 2021 (net)
6
1,946 - - 1,940 371
Policy Actions in Budget 2022 2,000 - - 2,000 -
Note: Numbers may not add due to rounding.
1
The impact value reects projected cash expenditures and liquidity support over the 2019-20 to 2021-22
period. Measures listed in footnote 6 also include projected expenditures in 2022-23 (totalling $2.8 billion). The
impact value is higher than the scal (budgetary) impact on an accrual basis, owing to cash-accrual accounting
dierences, and the fact that some of these measures relate to loans and tax deferrals, for which only provisions
for potential losses, and forgone interest and penalties would aect the budgetary balance, respectively. Of
note, these gures do not include all adjustments to spending proles that may have occurred since they were
announced, as a result of operational requirements (for instance, timing of actual payments, particularly for health
expenditures).
2
2022-2023 to 2025-2026.
3
Announced since the Economic and Fiscal Update 2021.
4
$150 million of the amount provisioned in EFU 2021 for Omicron variant response has been reclassied to
Protecting Health and Safety from Direct Support Measures.
5
Cash expenditure to be recorded in 2022-23.
6
Impact value of Reducing the Backlogs of Surgeries and Procedures, Recovery Benets and Targeting Supports for
Deeply Aected Businesses include costs in 2022-2023 for extensions announced since Budget 2021 as programs
are available until May 7, 2022.
7
Cost revisions to the Canada Emergency Business Account estimates reect largely a revision to the loan
provisioning methodology on the stock of loans.
Details of Economic and Fiscal Projections 257
1.3 Long-Term Economic and Fiscal Projections
Long-Term Debt Projections
As with any projection that extends over several decades, the long-term debt-
to-GDP ratio projection presented in this budget is subject to a high degree
of uncertainty and is sensitive to assumptions. It should not be viewed as a
prediction of the future, but instead as a modelling scenario based on a set
of reasonable economic and demographic assumptions, assuming no future
changes in policies.
Building on the Budget 2022 forecasts, the long-term scal projection continues
to indicate that federal public nances are sustainable beyond the usual budget
forecast horizon, as demonstrated by a continuously declining debt-to-GDP
ratio (Chart A1.4). This is despite adverse demographic trends, assumed modest
future productivity growth rates, and projected increases in interest rates.
As discussed in more detail in the next section, this conclusion is also robust to
some changes in assumptions, including, for example, the projected growth rate
of real GDP.
Chart A1.4
Long-Term Projections of the Federal Debt
Real GDP growth is 0.25 p.p. higher
Budget 2022
Real GDP growth is 0.25 p.p. lower
0
10
20
30
40
50
2015-16 2020-21 2025-26 2030-31 2035-36 2040-41 2045-46 2050-51 2055-56
per cent of GDP
Note: Alternative simulations assume higher/lower real GDP growth starting in 2027.
Sources: Statistics Canada; Department of Finance Canada
Budget 2022 is taking critical steps to advance the government’s long-term
objectives of building a stronger and more resilient economy by reinvesting
in areas that drive long-term growth while maintaining long-term scal
sustainability. The government’s commitment to unwinding COVID-19-related
decits and reducing the federal debt-to-GDP ratio over the medium term will
help ensure that scal room remains available to face future challenges and
the risks that are not accounted for in this projection. These include, among
others, climate change, the transition to net-zero, recessions, new pandemics,
and deglobalization.
258 Annex 1
Methodology and Key Assumptions
To form the long-term economic projections, the medium-term (2022 to 2026)
economic forecast presented in this budget is extended to 2055 using the long-
term economic projection model of the Department of Finance Canada.
In this model, annual real GDP growth depends on labour productivity growth,
which is calibrated over its 1974-2019 historical average (1 per cent), and
labour input growth, which is based on demographic projections produced by
the Centre for Demography at Statistics Canada using assumptions provided
by the Department of Finance Canada and projections for the labour force
participation rate and average hours worked using econometric models
developed by the Department. Assuming a constant 2 per cent annual rate for
GDP ination, nominal GDP is projected to grow by an average of 3.7 per cent
per year from 2027 to 2055 (Table A1.14).
Table A1.14
GDP Growth Projection, Average Annual Growth Rates
per cent, unless otherwise indicated
1970–
2021
2022–
2026
2027–
2055
Real GDP growth
2.6 2.5 1.7
Contributions of (percentage points):
Labour supply growth
1.5 1.4 0.7
Working-age population
1.5 1.4 0.9
Labour force participation
0.2 -0.5 -0.2
Unemployment rate
-0.1 0.4 0.0
Average hours worked
-0.2 0.1 0.0
Labour productivity growth
1.1 1.1 1.0
Nominal GDP growth
6.8 4.8 3.7
Notes: Contributions may not add up due to rounding. The productivity growth assumption represents a change from
previous practice where projected productivity growth was based on the slightly longer 1970-2019 average (1.2 per cent).
Sources: Statistics Canada; Department of Finance Canada calculations.
The long-term scal projections are obtained through an accounting model
in which each revenue and expense category is modelled as a function of its
underlying demographic and economic variables, with the relationships dened by
a mix of current government policies and assumptions. The key assumptions are:
• All tax revenues as well as direct program expenses grow with nominal GDP.
• The Canada Health Transfer, Canada Social Transfer, and Equalization grow
with their respective legislated escalators. The remaining federal transfers to
other levels of government, depending on the transfer, grow with nominal
GDP, the targeted populations and ination, or current legislation.
Details of Economic and Fiscal Projections 259
• Old Age Security program and children’s benets grow with the targeted
populations and ination. Employment Insurance (EI) benets grow in line
with the number of beneciaries and the growth in average weekly earnings.
The EI premium rate grows according to current program parameters.
• The eective interest rate on interest-bearing federal debt is assumed to
gradually increase from about 2.4 per cent in 2026–27 to 3.3 per cent by the
mid-2040s and to remain broadly stable around this level thereafter.
The sensitivity analysis below shows that the long-term scal projections
are robust to some changes to these assumptions (Tables A1.15 and A1.16).
It also conrms that government policies aimed at increasing labour force
participation, immigration, and productivity could further help improve scal
sustainability going forward.
Table A1.15
Description of Alternative Assumptions
1
alternative assumption less baseline
Baseline
2
High Low
Demographic:
Fertility rate (average births per
woman)
1.6 births +0.5 births -0.5 births
Immigration (per cent of
population)
0.9 +0.25 p.p. -0.25 p.p.
Life expectancy at 65
22.6 years +3 years -3 years
Economic:
Total labour force participation
rate (per cent)
61.5 +2.0 p.p. -2.0 p.p.
Average weekly hours worked
33.3 hours +1.0 hour -1.0 hour
Unemployment rate (per cent)
5.5 +1.0 p.p. -1.0 p.p.
Labour productivity (per cent)
1.0 +0.25 p.p. -0.25 p.p.
Interest rates (per cent)
3.2 +1.0 p.p. -1.0 p.p.
Note: p.p. = percentage point.
1
These alternative assumptions are applied starting in 2027 except for changes in life expectancy, which are gradually
applied over the projection horizon.
2
Baseline shown as the average over the period 2027 to 2055.
260 Annex 1
Table A1.16
Budgetary Balance and Debt in 2055–56 under Alternative Assumptions
per cent of GDP
Baseline High Low
Budgetary
Balance
Debt
Budgetary
Balance
Debt
Budgetary
Balance
Debt
Demographic:
Fertility rate
0.5 16.5 0.3 19.9 0.7 13.0
Immigration
0.5 16.5 0.9 10.8 0.0 23.5
Life expectancy at 65
0.5 16.5 0.2 19.9 0.8 13.7
Economic:
Total labour force
participation rate
0.5 16.5 0.8 11.8 0.2 22.0
Average weekly hours worked
0.5 16.5 0.8 12.2 0.2 21.5
Unemployment rate
0.5 16.5 0.4 18.1 0.6 15.0
Labour productivity
0.5 16.5 1.0 10.2 0.0 23.4
Interest rates
0.5 16.5 0.0 25.0 0.8 9.9
Debt Management Strategy 261
Annex 2
Debt Management Strategy
Introduction
The 2022-23 Debt Management Strategy sets out the Government of Canada’s
objectives, strategy, and borrowing plans for its domestic and foreign debt
program and the management of its ocial reserves.
The Financial Administration Act (FAA) requires that the Minister of Finance
table, in each House of Parliament, a report on the anticipated borrowing to
be undertaken in the scal year ahead, including the purposes for which the
money will be borrowed and the management of the public debt, no later
than 30 sitting days after the beginning of the scal year. The 2022-23 Debt
Management Strategy fullls this requirement.
Since the beginning of the pandemic, the government has been successful in
maximizing long bond issuance to fund COVID-19-related debt. This year’s
debt management strategy continues to implement this strategic direction,
rst outlined in the 2020 Economic and Fiscal Snapshot.
Objectives
For 2022-23, the government will maintain its long-term emphasis in the debt
management strategy. This prudent approach aims to lower future annual
renancing and provides predictability in public debt charges.
The fundamental objectives of debt management are to raise stable and
low-cost funding to meet the nancial requirements of the Government of Canada
and to maintain a well-functioning market for Government of Canada securities.
The government will closely monitor nancial markets and may adjust
issuance in response to shifts in market demand and/or changes to nancial
requirements. Having access to a well-functioning government securities market
contributes to lower costs and less volatile pricing for the government, ensuring
that funds can be raised eciently over time to meet the government’s nancial
requirements. Moreover, to support a liquid and well-functioning market
for Government of Canada securities, the government strives to promote
transparency and consistency.
262 Annex 2
Outlook for Government of Canada Debt
Prudent scal management means Canada continues to have an enviable scal
position relative to international peers, with the lowest net debt-to-GDP ratio
in the G7. Rating agencies have indicated that Canada's eective, stable, and
predictable policymaking and political institutions, economic resilience and
diversity, well-regulated nancial markets, and its monetary and scal exibility
contribute to Canada's strong current credit ratings: Moody’s (Aaa), S&P (AAA),
DBRS (AAA), and Fitch (AA+).
Planned Borrowing Activities for 2022-23
The projected sources and uses of borrowings for 2022-23 are presented in
Table A2.1. The comparison of actual sources and uses of borrowings against
projections will be reported in the Debt Management Report for 2022-23.
This document will be released soon after the Public Accounts of Canada 2022,
which provides detailed accounting information on the government’s interest-
bearing debt.
Sources of Borrowings
The aggregate principal amount of money to be borrowed by the government
in 2022-23 is projected to be $435 billion, about 80 per cent of which is
composed of existing debt that is maturing and being renanced. This level of
borrowing is consistent with the maximum borrowing amount of $1,831 billion
set out in the Borrowing Authority Act and the approved Governor in Council
Order that set the annual borrowing limit for 2022-23 at $513.3 billion.
Debt Management Strategy 263
Uses of Borrowings
The government’s borrowing needs are driven by the renancing of debt and
projected incremental nancial requirements. The size of the program reects
both requirements to renance domestic debt of $369 billion as well as the
projected nancial requirement of $85 billion. Borrowings for domestic needs
will be sourced from domestic wholesale markets (Table A2.1).
The government has maintained higher cash balances during the COVID-19
pandemic to be prepared for uncertain spending needs such as emergency
supports for people and businesses. These cash balances are expected
to be reduced during 2022-23 to oset some of the government’s
nancial requirements, as part of a general shift in the return to normal
government operations.
Despite record borrowings to support Canadians and the economy during the
COVID-19 pandemic, public debt charges are projected to remain sustainable
at $26.9 billion for 2022-23, representing 1 per cent of GDP. Interest rates are
forecasted to increase slightly throughout the forecast horizon, resulting in
public debt charges rising to $42.9 billion, or 1.4 per cent of GDP by 2026-27.
This is still substantially lower than the average cost of nancing debt over
the last two decades, even with a signicantly higher public debt because of
COVID-19. As a share of total government revenue, debt charges are projected
to sit at approximately 8.6 per cent by 2026-27, similar to the level in 2014-15.
Actual borrowings for the year may dier due to uncertainty associated with
economic and scal projections, the timing of cash transactions, and other
factors such as changes in foreign reserve needs and Crown corporation
borrowings. To adjust for these unexpected changes in nancial requirements,
debt issuance can be altered during the year, typically through changes in the
issuance of treasury bills.
In addition, the government will closely monitor market conditions and
may adjust issuance for treasury bills and bonds in response to shifts in
market demand.
264 Annex 2
Table A2.1
Planned/Actual Sources and Uses of Borrowings for Fiscal Year 2022-23
$ Billions
Sources of borrowings
Payable in Canadian Currency
Treasury bills
1
213
Bonds
212
Total payable in Canadian currency
425
Payable in foreign currencies
10
Total sources of borrowings
435
Uses of borrowings
Renancing needs
Payable in Canadian Currency
Treasury bills
187
Bonds
182
Retail debt
0
Total payable in Canadian currency
369
Payable in foreign currencies
9
Total renancing needs
378
Financial requirement
Budgetary balance
53
Non-budgetary transactions
Pension and other accounts
-10
Non-nancial assets
0
Loans, investments and advances
10
Of which:
Enterprise Crown corporations
7
Other
3
Other transactions
2
33
Total nancial requirement
85
Total uses of borrowings
463
Change in other unmatured debt transactions
3
0
Net increase or decrease (-) in cash
-28
Source: Department of Finance Canada calculations.
Notes: Numbers may not add due to rounding. In the uses of borrowings section, a negative sign denotes a nancial
source.
1
Treasury bills are rolled over, or renanced, a number of times during the year. This results in a larger number of new
issues per year than the stock of outstanding at the end of the scal year, which is presented in the table.
2
Other transactions primarily comprise the conversion of accrual transactions to cash inows and outows for taxes
and other accounts receivable, provincial and territorial tax collection agreements, amounts payable to taxpayers
and other liabilities, and foreign exchange accounts.
3
Includes cross-currency swap revaluation, unamortized discounts on debt issues, obligations related to capital
leases, and other unmatured debt, where this refers to in the table.
Debt Management Strategy 265
2022-23 Borrowing Program
Canada will continue, as much as possible, to fund the remaining COVID-19-
related debt through long-term issuance. This strategic direction will provide
security and stability to the government balance sheet by lowering annual debt
renancing needs and providing more predictability in public debt charges.
The share of bond issuances with a maturity of 10 years or greater will remain
high, at 35 per cent of total issuances (Table A2.2). The government will
continue issuance of the ultra-long 50-year bond for 2022-23. Accordingly,
the Average Term to Maturity of the government’s market debt is expected to
increase from just over 5 years at the end of June 2020 to nearly 7 years by the
end of 2022-23.
In the decade prior to the pandemic, on average about 20 per cent of the
bonds issued by the government were issued at maturities of 10 years or
greater. Over the course of 2021-22, federal government allocations of long
bonds was about 45 per cent. The government is now proposing to target
about 35 per cent in long bond issuance in 2022-23 to fund the remaining
COVID-19-related debt through long-term issuance while also maintaining a
well-functioning market in other issuance sectors.
As was the case last year, this target may be adjusted in response to shifts in
market demand and/or changes to nancial requirements.
Table A2.2
Gross Bond Issuances by Maturity
$ Billions, end of scal year
2021-22
Previous Year
2022-23
Planned
10 Year
Average
1
Issuance Share of
Bond
Issuance
Issuance Share of
Bond
Issuance
Share
of Bond
Issuance
Short (2, 3, 5-year
sectors)
136 53% 132 62%
80%
Long (10-year+)
114 45% 75 35% 20%
Green bonds
5 2% 5
2
2% -
Gross Bond
Issuance
255 100% 212 100% 100%
Note: Numbers may not add due to rounding.
1
The average of the previous 10 scal years (2011-12 through 2020-21).
2
Target issuance, subject to expenditure availability and market conditions.
266 Annex 2
Composition of Market Debt
The total stock of market debt is projected to reach $1,291 billion by the end of
2022-23 (Table A2.3).
Table A2.3
Change in Composition of Market Debt
$ Billions, end of scal year
2018-19
Actual
2019-20
Actual
2020-21
Actual
2021-22
Estimated
2022-23
Projected
Domestic bonds
1
569 597 879 1,031 1,063
Treasury bills
134 152 219 187 213
Foreign debt
16 16 15 14 15
Retail debt
1 1 0 0 0
Total market debt
721 765 1,114 1,232 1,291
Sources: Bank of Canada; Department of Finance Canada calculations.
Note: Numbers may not add due to rounding.
1
Includes additional debt that accrues during the scal year as a result of the ination adjustments to Real
Return Bonds.
Gross debt issuance will fall in 2022-23 compared to 2021-22, reecting lower
nancial requirements (Table A2.4). However, the level of issuance of bonds with
a term to maturity of 10 years or more is planned to remain high by historical
standards (Chart A2.1).
Table A2.4
Projected Gross Issuance of Bonds and Bills for 2022-23
$ Billions, end of scal year
2020-21
Actual
2021-22
Estimated
2022-23
Planned
Treasury bills
219 187 213
2-year
129 67 74
3-year
56 29 24
5-year
82 40 34
10-year
74 79 54
30-year
32 30 16
Real Return Bonds
1 1 1
Ultra-long
- 4 4
Green bonds
- 5 5
1
Total bonds
374 255 212
Total gross issuance
593 442 425
Sources: Bank of Canada; Department of Finance Canada calculations.
Notes: Numbers may not add due to rounding. The share of issuance per bond sector is relative to total
bond issuance.
1
Target issuance, subject to expenditure availability and market conditions
Debt Management Strategy 267
Chart A2.1
Government of Canada Issuance of Long-term Bonds
0
20
40
60
80
100
120
2006-
07
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
2013-
14
2014-
15
2015-
16
2016-
17
2017-
18
2018-
19
2019-
20
2020-
21
2021-
22
2022-
23
10-Year 30-Year Ultra-long RRB
billions of dollars
Projected
Source: Department of Finance Canada calculations.
Treasury Bill Program
Bi-weekly issuance of 3-, 6-, and 12-month maturities are planned for 2022-23,
with auction sizes planned to be largely within the $14 billion to $26 billion
range. The government targets an increase in the year-end stock of treasury
bills to $213 billion by the end of 2022-23, from an estimated $187 billion
on March 31, 2022. This approach is intended to support a liquid and
well-functioning market for Canadian federal government treasury bills,
which helps investors, as a whole, who need access to short-term,
interest-bearing securities in lieu of cash.
This approach is also informed by consultations with market participants held in
October 2021. Market participants indicated that treasury bills were currently in
high demand due to excess cash in the nancial markets, both from domestic
and international investors. Market participants noted that treasury bill issuance
could be increased but should denitely not be decreased in the event of lower
nancial requirements. A detailed summary of these consultations can be found
online at: https://www.bankofcanada.ca/2021/12/summary-comments-fall-
2021-debt-management-strategy-consultations.
Cash management bills (i.e., short-dated treasury bills) help manage
government cash requirements in an ecient manner. These instruments will
also be used in 2022-23 when needed.
268 Annex 2
2022-23 Bond Program
Annual gross bond issuance is planned to be about $212 billion in 2022-23,
$43 billion lower than the $255 billion issued for 2021-22 (Table A2.4). This
approach balances liquidity requirements in both the treasury bill and core
benchmark bond sectors, while also satisfying the government’s objective of
funding COVID-19-related debt through long-term issuance.
Maturity Date Cycles and Benchmark Bond Target
Range Sizes
For 2022-23, benchmark sizes will be lower in many sectors relative to 2021-22,
reecting the decreased overall issuance in bonds (Table A2.5).
Table A2.5
Maturity Date Patterns and Benchmark Size Ranges
1
$ Billions
Feb. Mar. Apr. May June Aug. Sept. Oct. Nov. Dec.
2-year
16-20 16-20 16-20 16-20
3-year
10-14 10-14
5-year
16-20 16-20
10-year
18-32 18-32
30-year
2
25-40
Real Return
Bonds
2,3
8-12
Ultra-long
4
N/A
Source: Department of Finance Canada calculations.
Note: These amounts do not include coupon payments.
1
Actual annual issuance may dier.
2
The 30-year nominal bond and Real Return Bond do not mature each year or in the same year as each other.
3
Benchmark size range includes estimate for ination adjustment, while planned annual issuance does not.
4
There is currently no benchmark size set for the 50-year ultra-long bond, which matures on December 1, 2064.
Bond Auction Schedule
In 2022-23 there will be quarterly auctions of 2-, 3-, 5-, 10-, 30-, and 50-year
bonds. Some of these bonds may be issued multiple times per quarter.
The number of planned auctions in 2022-23 for each sector is shown in
Table A2.6. The actual number of auctions for 2022-23 may be dierent from
the planned number due to unexpected changes in borrowing requirements or
shifts in market demand.
Debt Management Strategy 269
Table A2.6
Number of Planned Auctions for 2022-23
$ Billions
Sector Planned Bond Auctions
2-year
17
3-year
8
5-year
8
10-year
14
30-year
8
Real Return Bonds
4
Ultra-long
1
4
Source: Department of Finance Canada
Note: These amounts do not include coupon payments.
1
Issuances for ultra-long bonds will take the format of a modied auction.
The dates of each auction will continue to be announced through the Quarterly
Bond Schedule, which is published on the Bank of Canada’s website prior to
the start of each quarter (https://www.bankofcanada.ca/markets/government-
securities-auctions/calls-for-tenders-and-results/bond-auction-schedule/).
Federal Green Bond Program
To support the growth of the sustainable nance market in Canada, in March 2022
the government published a green bond framework and issued its inaugural
federal green bond, delivering on commitments made in Budget 2021.
The inaugural issuance of $5 billion received strong demand from green bond
investors. Canada’s inaugural green bond issuance, the largest Canadian dollar
green bond oering in Canadian history, saw strong demand from green and
socially minded investors, who represented 72 per cent of buyers.
Consistent with Canada’s green bond framework, the government plans to
release the allocation report for its inaugural green bond in 2022-23 and the
rst impact report will follow. Additionally, another green bond issuance is
planned for 2022-23. Future decisions on size, tenor, and timing of the next
green bond issuance will take into consideration views from market participants
and the availability of eligible green expenditures.
The ongoing success of Canada’s green bond program will involve a
whole-of-government approach via continued support from federal
departments that develop and deliver Canada’s programs to meet climate
and environmental objectives.
270 Annex 2
Management of Canada’s Ocial International
Reserves
The Exchange Fund Account, managed by the Minister of Finance on behalf
of the Government of Canada, represents the largest component of Canada’s
ocial international reserves. It is a portfolio of Canada’s liquid foreign
exchange reserves and special drawing rights (SDRs) used to aid in the control
and protection of the external value of the Canadian dollar and provide a
source of liquidity to the government, if needed. In addition to the Exchange
Fund Account, Canada’s ocial international reserves include Canada’s reserve
position held at the International Monetary Fund.
The government borrows to invest in liquid reserves, which are maintained at
a level at or above 3 per cent of nominal GDP. Net funding requirements for
2022-23 are estimated to be around US$16 billion, but may vary as a result of
movements in foreign interest rates and exchange rates.
Foreign debt is used exclusively to provide funding for Canada’s ocial
international reserves. The anticipated rise in foreign funding in scal year
2022-23 is required to fund the increase in the reserves level and the maturing
liabilities.
The mix of funding sources used to nance the liquid reserves in 2022-23
will depend on a number of considerations, including relative cost, market
conditions, and the objective of maintaining a prudent foreign-currency-
denominated debt maturity structure. Potential funding sources include a
short-term US-dollar paper program (Canada bills), medium-term notes,
cross-currency swaps involving the exchange of Canadian dollars for foreign
currency to acquire liquid reserves, and the issuance of global bonds.
Further information on foreign currency funding and the foreign reserve assets
is available in the Report on the Management of Canada’s Ocial International
Reserves (https://www.canada.ca/en/department-nance/services/publications/
ocial-international-reserves.html) and in The Fiscal Monitor (https://www.
canada.ca/en/department-nance/services/publications/scal-monitor.html).
Cash Management
The core objective of cash management is to ensure that the government has
sucient cash available at all times to meet its operating requirements.
At this time, the government’s cash is entirely on deposit with the Bank of
Canada, including operational balances and balances held for prudential
liquidity. Periodic updates on the liquidity position are available in The Fiscal
Monitor (https://www.canada.ca/en/department-nance/services/publications/
scal-monitor.html).
Debt Management Strategy 271
Prudential Liquidity
The government holds liquid nancial assets in the form of domestic cash
deposits and foreign exchange reserves to safeguard its ability to meet
payment obligations in situations where normal access to funding markets may
be disrupted or delayed. The government’s overall liquidity levels are managed
to normally cover at least one month of net projected cash ows, including
coupon payments and debt renancing needs.
Borrowing Authority
In spring of 2021, in response to pressure created by the COVID-19 pandemic,
the Government of Canada invoked section 46.1(c) of the FAA to borrow under
extraordinary circumstances. The borrowing that ensued totals approximately
$8.4 billion and has occurred between March 23, 2021, and May 6, 2021,
inclusively.
Since then, the government has reported to Parliament on the extraordinary
amounts borrowed through the 2021-22 Extraordinary Borrowing Report
to Parliament, which was tabled in Parliament on May 25, 2021.
Given that the period of extraordinary borrowing has ended, and that the
government has reported on it to Parliament, the government is proposing to
introduce legislation to treat this amount as regular borrowings and to cause
it to be counted against the Borrowing Authority Act maximum amount. This is
consistent with the approach taken in fall 2020, when a similar tranche of
extraordinary borrowing was completed and subsequently consolidated into
the overall borrowing limit.
Additionally, the government is proposing to amend the FAA to no longer
treat this amount as extraordinary borrowing for the purpose of reporting
requirements under the FAA and to simplify the legislative reporting
requirements associated with extraordinary borrowing amounts in the annual
Debt Management Report to only require that the amounts be reported as at
the scal year-end. This ensures a consistent and transparent approach for
reporting and understanding the government’s overall borrowing activity.
Legislative Measures 273
Annex 3
Legislative Measures
This annex includes a number of measures (other than tax-related measures)
that would be implemented through legislation.
Subject of the Measure Proposed Legislative Action
Strengthening the Federal
Pension Framework
In Budget 2022, the government proposes to amend
the Pension Benets Standards Act, 1985 and the Pooled
Registered Pension Plans Act to improve the sustainability
and long-term security of federally regulated pensions
for all plan members and retirees through improved
governance and administration and new frameworks
for solvency reserve accounts and variable payment
life annuities.
A Fairer Banking
Complaints Handling
System for Canadians
In Budget 2022, the government proposes to introduce
legislative amendments to the Bank Act and the Financial
Consumer Agency of Canada Act to provide for a single,
non-prot external complaints handling body (ECB) in
banking and to strengthen the ECB system.
Financial Sector
Legislative Measures
In Budget 2022, the government proposes to amend
the Bank Act, Insurance Companies Act, Trust and
Loan Companies Act, and Canada Deposit Insurance
Corporation Act to facilitate access to capital for property
and casualty insurance companies, ensure that approval
requirements for nancial sector transactions apply
regardless of how they are structured, adjust the time-
limited permissions of the investment regime to ensure
they are used appropriately, strengthen governance
at the Canada Deposit Insurance Corporation, and
update proxy solicitation provisions for certain
nancial institutions.
Strengthening the Anti-
Money Laundering
Regime
In Budget 2022, the government proposes to develop
legislative changes to strengthen the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act,
Criminal Code, and other legislation, to enhance the
ability of authorities to detect, deter, investigate, and
prosecute nancial crimes as well as ensure that the
government is well placed to manage emerging threats
outside the scope of the current AML/ATF Regime and
has the tools necessary to preserve nancial integrity and
economic security.
274 Annex 3
Subject of the Measure Proposed Legislative Action
Amendments to the
Copyright Act
In Budget 2022, the government proposes to introduce
amendments to the Copyright Act to extend the general
term of copyright protection from 50 to 70 years after
the life of the author as agreed under the Canada-United
States-Mexico Agreement.
The government is committed to ensuring that the
Copyright Act protects all creators and copyright holders.
As such, the government will also work to ensure a
sustainable educational publishing industry, including
fair remuneration for creators and copyright holders, as
well as a modern and innovative marketplace that can
eciently serve copyright users.
Lunar Gateway In Budget 2022, the government proposes to introduce
legislative amendments to the Criminal Code and
the Government Employees Compensation Act, make
consequential amendments to other Acts, and
introduce new legislation necessary to enable Canada’s
participation in the Lunar Gateway. Canada is one of the
countries planning the Lunar Gateway—a space station in
lunar orbit that will serve a variety of purposes including
as a laboratory and, eventually, a stepping stone for
voyages to Mars.
Annual Regulatory
Modernization
On March 31, 2022, the second Annual Regulatory
Modernization Bill, which includes legislative
amendments to remove outdated regulatory
requirements and allow for the updating of regulations,
was tabled in the Senate.
Amendments to the
Competition Act
In Budget 2022, the government proposes to introduce
legislative amendments to the Competition Act as a
preliminary step in modernizing the competition regime.
The College of Patent
Agents and Trademark
Agents Act
In Budget 2022, the government proposes to make
legislative amendments to the College of Patent Agents
and Trademark Agents Act to better enable directors
of the College to prioritize the public interest and to
improve the eciency of the College’s operations. The
College is mandated to regulate the intellectual property
agent profession in the public interest.
Renewing and Expanding
the Oceans Protection
Plan
In Budget 2022, the government proposes to introduce
legislative amendments to the Canada Shipping Act to
include all types of pollution and enable the proactive
management of marine emergencies, and to the Marine
Liability Act and the Bill of Lading Act to clarify the liability
and compensation regime for ship-source incidents.
Legislative Measures 275
Subject of the Measure Proposed Legislative Action
Amendments to the
Financial Administration
Act to Support the
Canadian Digital Service
In Budget 2022, the government proposes to introduce
amendments to the Financial Administration Act to
enable the Canadian Digital Service to provide its digital
platform services more broadly, including to other
jurisdictions in Canada, and to clarify its responsibilities
under the Privacy Act and Access to Information Act with
respect to the services it provides.
Amendments to the
Service Fees Act
In Budget 2022, the government proposes to introduce
amendments to the Service Fees Act to clarify existing
requirements, improve transparency, and reduce
administrative burden on departments in their eort to
modernize regulatory charges and service fees.
Strengthening Canada’s
Trade Remedy and
Revenue Systems
In Budget 2022, the government proposes to introduce
amendments to the Special Import Measures Act and the
Canadian International Trade Tribunal Act to strengthen
Canada’s trade remedy system and improve access for
workers. The government also proposes to introduce
amendments to the Customs Act to allow for electronic
assessments and payments and clarify importer liability
to address revenue leakage risks.
Canada Growth Fund In Budget 2022, the government proposes to introduce
legislation or legislative amendments to establish the
Canada Growth Fund as a new government investment
fund, to invest in projects that will catalyze private capital
to invest, when it would not otherwise, in Canada’s
climate transition.
First Nations Land
Management Act
In Budget 2022, the government proposes to replace the
First Nations Land Management Act with the Framework
Agreement on First Nation Land Management Act,
concise legislation that will give force of law to the
Framework Agreement on First Nation Land Management
and make consequential amendments to other Acts to
reect this change.
Anishinabek Nation
Governance Agreement
In Budget 2022, the government proposes to enact
the Anishinabek Nation Governance Agreement Act
and make related and consequential amendments to
other Acts.
Prohibiting the Promotion
of Antisemitism
In Budget 2022, the government proposes to amend
the Criminal Code to prohibit the communication of
statements, other than in private conversation, that
willfully promote antisemitism by condoning, denying or
downplaying the Holocaust.
276 Annex 3
Subject of the Measure Proposed Legislative Action
Extending Temporary
Supports for Seasonal
Workers
In Budget 2022, the government proposes to amend
the Employment Insurance Act to extend the rules of a
temporary measure that provides 5 additional weeks to
seasonal workers in targeted regions, until October 2023.
Improving the
Employment Recourse
Process
In Budget 2022, the government proposes to amend
the Employment Insurance Act and the Department of
Employment and Social Development Act to enable the
creation of the new EI Boards of Appeal, replacing the
EI appeals process under the Social Security Tribunal
General Division.
COVID19 Benet Integrity In Budget 2022, the government proposes to amend the
Canada Emergency Response Benet Act and the Canada
Emergency Student Benet Act in order to provide the
Canada Revenue Agency with the authority to establish
and collect debts, on a weekly basis, due to overlapping
weeks of payments in situations where a worker has
accessed more than one benet at once.
Modernizing Labour
Market Transfer
Agreements
In Budget 2022, the government proposes to amend Part
II of the Employment Insurance Act to broaden eligibility
and the types of interventions funded under the Labour
Market Development Agreements with provinces and
territories.
Supporting Judicial
Compensation and
Benets
In Budget 2022, the government proposes to amend the
Judges Act, the Federal Courts Act, and the Interpretation
Act to implement the recommendations from the sixth
Quadrennial Commission on Judicial Compensation and
Benets’ report.
Increasing the Capacity of
Superior Courts
In Budget 2022, the government proposes to amend
the Judges Act, the Federal Courts Act, and the Tax Court
of Canada Act to add 24 new superior court positions,
including new Associate Chief Justices for the Court of
Queen’s Bench for Saskatchewan and for the Court of
Queen’s Bench of New Brunswick.
Allowing Use of Canada
Revenue Agency-collected
Data for Canada Pension
Plan Analysis and
Evaluation
In Budget 2022, the government proposes to make
legislative amendments to the Canada Pension
Plan legislation to allow the use of Canada Revenue
Agency-collected data by Employment and Social
Development Canada when performing policy analysis,
reporting, and evaluation functions for the Canada
Pension Plan. Access to this data would support the
government’s commitment to evidence-based policy
development and GBA Plus analysis.
Legislative Measures 277
Subject of the Measure Proposed Legislative Action
Legislative Changes to
Canada Pension Plan
In Budget 2022, the government proposes to make
technical changes to the Canada Pension Plan legislation
to ensure the correct calculation of eligibility and benets
for a small number of individuals qualifying for the
Post-Retirement Disability Benet and the child-rearing
and disability drop-ins. These changes will ensure that the
eligibility and calculation of these benets is consistently
applied for all individuals.
Government Annuities
Improvement Act
In Budget 2022, the government proposes to make an
amendment to the Government Annuities Improvement
Act to reduce duplicative audit requirements. Canadians
and annuitants would continue to have access to
information on the program through the Public Accounts
and the actuarial reports published by the Oce of the
Chief Actuary.
Old Age Security 75+
One-Time Payment
In Budget 2022, the government proposes to amend the
Old Age Security Act to clarify that the one-time payment
made in August 2021 to seniors age 75 and older will
be exempted from the income test for the Guaranteed
Income Supplement and Allowances. This amendment
corrects a reference error resulting from the passage of
the Budget Implementation Act, 2021, No. 1.
Exemptions From the
Service Fees Act for
Certain Service Fees
Under the Immigration
and Refugee Protection Act
In Budget 2022, the government proposes to amend
the Immigration and Refugee Protection Act to exempt
the following four fees from the Service Fees Act:
Authorization to Return to Canada, Determination of
Rehabilitation (Criminality and Serious Criminality),
Restoration of Temporary Resident Status, and Temporary
Resident Permit.
Improving Express Entry In Budget 2022, the government proposes to amend
the Immigration and Refugee Protection Act to provide
the Minister of Immigration, Refugees and Citizenship
Canada with authority to use Ministerial Instructions to
help select those candidates who best meet Canada’s
labour market needs from among the growing pool of
candidates who wish to become permanent residents
through the Express Entry System.
Clean Drinking Water
and Better Infrastructure
for First Nations
Communities
In Budget 2022, the government arms its commitment
to introduce legislation that would repeal the Safe
Drinking Water for First Nations Act and work with First
Nations to develop a replacement. The government
also intends to amend the Income Tax Act to exclude
the income of the Safe Drinking Water Trust established
under the Safe Drinking Water Class Action Settlement
Agreement from taxation.
278 Annex 3
Subject of the Measure Proposed Legislative Action
Improving the Citizenship
Program
In Budget 2022, the government proposes to amend
the Citizenship Act to enable automated and machine-
assisted processing, and the collection and use of
biometric information.
Securing the Integrity of
Canada’s Asylum System
In Budget 2022, the government proposes to amend
the Immigration and Refugee Protection Act to allow
Immigration, Refugees and Citizenship Canada to require
electronic submission of asylum claims.
Amending the Corrections
and Conditional Release
Act
In Budget 2022, the government proposes to introduce
amendments to the Corrections and Conditional Release
Act (Act) that will prohibit the Correctional Service of
Canada from placing inmates, who are suspected of
concealing contraband in the vaginal cavity, in dry cells.
This measure will bring the Act into compliance with the
Canadian Charter of Rights and Freedoms.
Leveraging Transit
Funding to Build More
Homes
On March 25, 2022, the government tabled a bill to
authorize the Minister of Finance to provide up to
$750 million to provinces and territories to address
municipal and other transit shortfalls and needs
and to support housing supply and aordability.
The government intends to proceed with this measure.
Elimination of the
Canadian Pacic Railway
Tax Exemption
Budget 2022 announces the government’s intention
to introduce legislation that will, retroactive to
August 29, 1966, eliminate the Canadian Pacic Railway
Company (CPR)’s purported tax exemption under
Clause 16 of the 1880 agreement between Canada
and CPR’s founders, annexed to An Act respecting the
Canadian Pacic Railway (1881), and extinguish any
potential federal liability that may arise directly or
indirectly from the elimination of the purported tax
exemption. This measure is expected to enhance the
fairness and integrity of Canada’s tax system.
Reducing the Backlogs of
Surgeries and Procedures
On March 25, 2022, the government tabled a bill to
amend the Federal-Provincial Fiscal Arrangements Act to
provide up to $2 billion to provinces and territories on
a per capita basis through the Canada Health Transfer.
This measure is to support provinces and territories
in continuing to address health system concerns, in
particular to reduce the pandemic induced backlog of
surgeries and procedures. The government intends to
proceed with this measure.
Benecial Ownership
Registry
In Budget 2022, the government proposes to amend the
Canada Business Corporations Act to implement a publicly
accessible benecial ownership registry of corporations
governed under the Act by 2023.
Legislative Measures 279
Subject of the Measure Proposed Legislative Action
Borrowing Authority
Administrative
Amendments
In Budget 2022, the government proposes to introduce
administrative amendments to the Borrowing Authority
Act, and the Financial Administration Act (FAA) as
required, to roll in extraordinary borrowing from spring
2021 into the borrowing authority maximum amount
and no longer treat this amount as extraordinary
borrowing for the purpose of reporting requirements.
The government also proposes to amend the FAA to
simplify the legislative reporting requirements associated
with extraordinary borrowing amounts in the annual
Debt Management Report to only require that the
amounts be reported as at the scal year-end.
Strengthening Supports
for Workers Experiencing
Miscarriage or Stillbirth
In Budget 2022, the government announces its intention
to amend the Canada Labour Code in the coming year
to further support federally regulated employees who
experience a miscarriage or stillbirth.
Supporting the Modern
Senate
In Budget 2022, the government proposes to make
amendments to the Parliament of Canada Act and
consequential amendments to other related Acts to
recognize and support greater independence and non-
partisanship in the Senate. The government will continue
to take steps to support and protect Canada’s democratic
institutions and processes, including through legislation
when necessary.
Strengthening Sanctions
Implementation
In Budget 2022, the government proposes to introduce
legislation that would clarify the ability of the Minister of
Foreign Aairs to seize and cause the forfeiture and
disposal of assets held by sanctioned individuals
and entities.
A Ban on Foreign
Investment in Canadian
Housing
In Budget 2022, the government proposes to introduce
new legislation to prohibit certain foreign entities and
individuals who are not Canadian citizens or permanent
residents from acquiring non-recreational, residential
property in Canada for a period of two years. Refugees
and other individuals eeing international crises are to be
exempted from the prohibition. International students on
the path to permanent residency would also be exempt
in certain circumstances, as would individuals on work
permits who are residing in Canada.
280 Annex 3
Subject of the Measure Proposed Legislative Action
Supporting
Implementation of
10 Days of Paid Sick Leave
for Federally Regulated
Workers
In Budget 2022, the government proposes to introduce
minor amendments to the Act to Amend the Criminal
Code and the Canada Labour Code (Bill C-3) to support
timely and eective implementation of 10 days of paid
medical leave for workers in the federally-regulated
private sector.
Public Sector Pension Plan
Governance
In Budget 2022, the government proposes to amend
the Public Sector Pension Investment Board Act to increase
the size of the board of directors of the Public Sector
Pension Investment Board.
