For Immediate Release
April 7, 2022
VANCOUVER, B.C.—The Greater Vancouver Board of Trade’s President and CEO, Bridgitte Anderson, issued the following statement today in response to the federal government’s 2022 Budget.
“The 2022 Budget makes some progress on critical issues such as housing, climate change and strengthening the country's national defence, but considerable challenges remain for our members trying to recover from more than two years of pandemic impacts.
Greater Vancouver businesses are being challenged by a lack of available workers, rapid increases in the cost of goods, continued supply chain disruptions and debt accumulated during the pandemic. The pandemic has accelerated global competition and as a nation we must do better to build better and faster, become more productive and accelerate innovation.
Some positive measures included in the budget that affect B.C. businesses are:
- Increasing the taxable capital threshold that triggers the phase-out of the small business tax rate from $15 million to $50 million.
- Investments to support the development of the critical minerals sector alongside more than $600 million to support supply chain infrastructure.
- A new trusted employer stream to reduce red tape around accessing the Temporary Foreign Workers program.
- New investments to advance large-scale urban and commercial ZEV charging infrastructure.
However, there were missed opportunities to take needed action in several areas:
- The budget does make some investments in growth but leaves out a whole-of-government economic strategy that will move the dial on long-term growth, competitiveness and productivity.
- Many small businesses continue to face financial challenges and will be disappointed that there were no debt forgiveness measures or changes to the Canada Emergency Business Account.
- While the focus on housing supply is laudable, it is unclear whether the target of 100,000 net new units is achievable through these measures, and it is unlikely that the new ban on foreign investment housing will make housing more affordable for Canadians.
Three other significant announcements to promote innovation include $750 million in renewed funding for a rebranded Canada's Superclusters, a $15 billion Canada Growth Fund and a $1 billion Canadian Innovation Investment Agency. We look forward to learning more about the potential of these investments for our business community in B.C.
Finally, while debt and deficits remain high, new spending was more modest than predicted. The most significant improvement in the fiscal circumstance came from $90 billion in higher-than-anticipated revenues, primarily corporate and personal income taxes, due to an improved economic outlook. In an encouraging sign, federal debt-to-GDP is projected to decline throughout the forecast from 46.5% to 41.5% by 2026-27. While the federal government’s books appear to have improved, businesses' balance sheets will continue to be challenged by inflation and rising costs.”
About the Greater Vancouver Board of Trade:
Since its inception in 1887, the Greater Vancouver Board of Trade has been recognized as Pacific Canada’s leading business association, engaging members to positively impact public policy at all levels of government and to succeed and prosper in the global economy. With a Membership whose employees comprise one third of B.C.’s workforce, we are the largest business association between Victoria and Toronto. We leverage this collective strength, facilitating networking opportunities, and providing professional development through unique Signature Programs. In addition, we operate one of the largest events businesses in the country, providing a platform for national and international business and thought leaders to further enlighten B.C.’s business leaders.
Greater Vancouver Board of Trade
Below are a few of the major measures impacting the business community.
Canada Growth Fund: The government is establishing an economic growth fund capitalized at $15 billion over the next five years to invest in reducing GHG emissions, diversifying Canada's economy and bolstering exports, and restructuring critical supply chains (including resource sectors).
Innovation, Infrastructure and Investment: The government has committed to the following measures to increase innovation and business investment in Canada:
- Create an operationally independent federal agency with private sector leadership to spur private business investment and support research and innovation. It will be initially funded at $1 billion.
- Facilitate a stakeholder engagement process aimed at increasing support for the semiconductor industry in Canada.
- Over six years, the government will provide $750 million to support Global Innovation Clusters, modeled around existing superclusters that incentivizes industry collaboration and competition on projects that innovate to achieve national priorities.
Transportation and Infrastructure: The government has committed to measures to increase transportation and infrastructure investment at the provincial level and through the private sector:
- Extend the construction deadline for projects funded through the Investing in Canada Infrastructure Program to by 6 years to 2033, while also accelerating the deadline for Provinces to commit their remaining funds to new projects by March 1, 2023.
- Provide an additional $450 million over 5 years through the National Trade Corridors Fund to ease pressures on goods movement, as well as $136 million to develop industry-driven data solutions to increase supply chain efficiency.
- Provide $396.8 million over two years for planning of the high-frequency rail between Toronto and Quebec City and further funding for VIA Rail Canada construction through the Windsor to Quebec City corridor.
Intellectual property and business security: The government will review the Scientific Research and Experimental Development program.
Investing in and supporting small businesses: The government will phase out the small business tax rate more gradually so that it fully phases out at $50 million in taxable capital rather than the current rate of $15 million.
The government will also commit to the following actions to strengthen its trade remedy and revenue systems for SMEs.
Support for critical minerals projects: The government will provide direct assistance to mining companies in navigating the regulatory process for critical minerals investment. Additionally, they will :
- Provide a new 30% Critical Mineral Exploration tax credit for specified mineral exploration expenses
- $1.5 billion over seven years to enhance mineral exploration infrastructure.
- $1.5 billion for a Strategic Innovation Fund to attract investment in critical minerals supply chains
- Create a National Benefits-Sharing Framework for expanding Indigenous participation and partnerships in the mining sector.
Support for the Tourism Sector: In addition to the ongoing Tourism and Hospitality Recovery program, the government has proposed two additional measures to support recovery in the tourism sector:
- $20 million in new funding to support a new Indigenous Tourism fund to support recovery for Indigenous tourism businesses and $4.8 million to the Indigenous Tourism Association of Canada
The government has announced new measures aimed at making housing more affordable in Canada. Many of these measures are highly targeted and piecemeal policies that will likely have little impact, but the significant measures that are of interest to the business community are highlighted below.
Housing Accelerator Fund: $4 billion over five years to CMHC to incentivize municipalities to approve new housing either through a per-door incentive payment or up-front funding for planning investments. Targets 100,000 net new units over the next five years.
Tying infrastructure funding to housing construction: Signals intention to allow federal infrastructure programs to tie access to infrastructure funding to requirements for actions that increase housing supply, but it is unclear how the government intends to structure this initiative. Government also intends to condition transportation-related fiscal transfers to lower governments on province's taking action to increase housing supply.
First-time homebuyers supports: First-time home buyers may now contribute to a TFSA-style account through tax-deductible contributions and tax-free withdrawals to save up to $40,000 toward the purchase of a home. The government is also doubling the First-Time Home Buyers' Tax Credit.
Rental Construction Financing Initiative: Government intends to strengthen the affordability and energy efficiency requirements under the current rental construction financing program. Businesses that exceed these requirements will be eligible to have a portion of the loan financing forgiven. 40% of units will need to have rent lower than 80% of the average market rent. .
Co-operative housing: $500 million dollar program to support expansion of co-op housing to be developed with CHFC. Additional $1 billion dollars from rental construction financing program to support co-op development.
Reducing homelessness: Infrastructure Canada will have $562.2 million over two years to double annual funding for the government's homelessness strategy, as well as additional funding for research on best methods to reduce homelessness and a targeted $62.2 million program for homeless veterans.
Jobs and Employment
Childcare: $625 million over four years for an Early Learning and Childcare Infrastructure Fund for provinces to make additional child care investments including the building of new facilities.
Employment Insurance Act Changes: Amending the Employment Insurance Act to ensure more workers are eligible for help before they become unemployed and that employers can receive direct support to retrain their workers.
Union Advisory Table: $2.5 million for ESDC to launch a new union-led advisory table to bring together unions and trade associations. In addition, $84.2 million over four years to double funding for the Union Training and Innovation Program.
Labour Mobility Tax Reduction for Tradespeople: A new Labour Mobility Deduction, a tax recognition of up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices.
Foreign Credential Recognition in Healthcare: $115 million over 5 years to help up to 11,000 internationally trained healthcare professionals per year get their credentials recognized and find work in their field.
Immigration: $385.7 million over five years to facilitate the timely and efficient entry of a growing number of visitors, workers and students, and other investments in improving the citizenship program and support services for immigrants to Canada.
Changes to Temporary Foreign Worker Program: Reducing red tape for repeat employers, implementing a new foreign labor program for agriculture and fish processing, increasing capacity to process employer applications.
Employment Equity Act Review:Reviewing the Employment Equity Act in the coming months, final report to be publicized fall 2022.
Employment Strategy for Persons with Disabilities:$272.6 million over five years to ESDC to support the implementation of an employment strategy for persons with disabilities through the Opportunities Fund.
Tax Credit for Clean Technology: Government will engage with experts to establish an investment tax credit of up to 30%, focused on net-zero technologies, battery storage solutions and clean hydrogen.
Tax-Credit for Carbon Capture, Utilization and Storage (CCUS): New refundable investment tax credit for businesses that incur eligible CCUS expenses, starting in 2022.
Role of Canada Infrastructure Bank (CIB): CIB will have a broadened role and invest in private sector-led infrastructure projects that will accelerate Canada's transition to a low-carbon economy.
Zero-emissions vehicles: Canada Infrastructure Bank will invest $500 million in large-scale urban and commercial ZEV charging and refueling infrastructure. The budget will provide $1.7 billion over 5 years to extend the Incentives for Zero-Emission Vehicles program until March 2025. A new mandate will be put in place to ensure at least 20% of new light-duty vehicle sales will be ZEVs by 2026, 30% by 2030 and 100% by 2035.
Helping Businesses Switch to ZEVs: $547.5 million over four years to launch a new purchase incentive program for medium- and heavy-duty ZEVs, $33.8 million over five years to work with provinces to develop and harmonize regulations and to conduct safety testing for long-haul zero-emissions trucks and $199.6 over five years to expand the Green Freight Assessment Program.
Green Buildings Strategy: The government will provide $150 million over five years to Natural Resources Canada to develop a Green Buildings Strategy that will include building code reform, adoption of performance-based national building codes, climate resilience, and low-carbon construction. The government will also commit $4.4 billion to a Green Home Loans project to provide low-interest loans to housing providers for energy efficiency.
National Benefit-Sharing Framework for Natural Resources Projects: $103.4 million over five years to develop a National Benefit-Sharing Framework with Indigenous Peoples in Natural Resources Projects.
Supporting Indigenous Business and Community Economic Development: $150 million over five years to advance shovel-ready economic opportunities in Indigenous communities, $15 million over five years to support Indigenous economic development in the North, $35 million over five years to increase economic capacity supports, including specialized training opportunities delivered by Indigenous-led organizations.
Dental Care: $5.3 billion over five years and $1.7 billion ongoing to Health Canada to provide dental care for Canadians. Starting with under 12-year-olds in 2022, then expanding to under 18-year-olds, seniors and persons living with a disability in 2023, with full implementation by 2035.
Opioid Crisis: $100 million over 3 years to support harm reduction, treatment and prevention at the community level.
Mental Health: $140 million over 2 years to Health Canada for the Wellness Together Canada portal to provide Canadians with tools and services to support their mental health and wellbeing.
Public Safety and Community Development
Emergency Response: $24.7 million over five years and $5.4 million ongoing to establish a secretariat to support the Minister of Emergency Preparedness and to enhance federal coordination of emergency responses like in circumstances such as wildfires and flooding.
Anti-Racism Strategy: $85 million over four years to launch the new Anti-Racism Strategy and National Action Plan on Combatting Hate.
New Tax Measures:
The government has introduced a series of new tax measures targeting professionals and financial institutions. While some of these measures are sensible, the government should ensure that it does not disincentivize investment and job creation, and access to capital during a time of economic recovery.
Financial Institution Taxes: The government is introducing a temporary "Canada Recovery Dividend," under which banking and life insurers' groups will pay a one-time 15% tax on taxable income above $1 billion for the 2021 tax year. The dividend will be paid in equal installments over five years.
Corporate Income Tax Increase:The government will be permanently increasing the corporate income tax rate by 1.5 percentage points on the taxable income of banking and life insurance groups above $100 million.
Tax avoidance measures: Canada will amend the Income Tax Act to ensure that 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. Undertaking a review to modernize the general anti-avoidance rule.
International Taxes: The government signaled its commitment to the ongoing international tax reform process, including its intention to implement the Global Minimum Tax.
Reduce Planned Spending: Government intends to review previously announced spending plans with a view to reduce the pace and scale of spending that has yet to occur by up to $3 billion over the next four years.
Digitalization of Money: Government intends to launch a financial sector legislative review focused on the digitization of money and maintaining financial sector stability and security. The first phase of the review will be directed at digital currencies, including cryptocurrencies and stablecoins.
Supporting the Canadian Armed Forces: $6.1 billion over five years and $1.4 billion going to meet our defense priorities and for investments in equipment and technologies, as well as $100.5 million over six years to strengthen leadership in the Canadian Armed Forces, modernize the military justice system and bring into force the Declaration of Victims Rights.
Cybersecurity: $875.2 million over five years to address and prevent cyber threats.
Supporting Ukraine: $500 million to provide further military aid to Ukraine, and $1 billion in new loan resources to the Ukrainian government, new immigration streams for Ukranians.
Anti-Money Laundering: $89.9 million over five years and $8.8 million ongoing to implement new anti-money laundering and anti-terrorist financing requiements for crowdufnding platforms and payment service providers, support the supervision of federally regulated financial institutions, continue to build expertise related to virtual currency, etc.
Publicly Accessible Beneficial Ownership Registry: Accelerating by two years to amend the Canada Business Corporations Act to implement a public and searchable beneficial ownership registry to allow access to the beneficial ownership data held by provinces and territories that agree to participate in a national registry.