Prairie Post (West Edition)

Federal government budget 2021: RMA’s initial analysis


On April 19, the Government of Canada tabled the first federal budget in more than two years. Federal Finance Minister Chrystia Freeland framed the budget by stating in her speech to the House of Commons that it is simultaneo­usly about three themes: Finishing the fight against COVID-19; Healing the economic wounds left by the COVID-19 recession; and Creating more jobs and prosperity.

The budgetary deficit for the fiscal year 2020 - 2021 is $354.2 billion, or 49% of the GDP. The budget outlines that the annual deficits will continue for the foreseeabl­e future, although they are projected to shrink significan­tly. Projected deficits in the near term are:

$154.7 billion in 2021 - 2022

$59.7 billion in 2022 - 2023

$30.7 billion, or 1.1% of GDP, at the end of 2025 - 2026.

The following are details of the 2021 2022 budget that will be important for RMA members:

Budget 2021 includes COVID-related programs that extend pandemic support programs for businesses and individual­s. This includes a $3 billion allocation to work with provinces to improve the standards of care in long-term care facilities. Budget 2021 proposes to provide an additional $1 billion over six years, starting in 2021 - 2022, to the Universal Broadband

Fund (UBF) to support a more rapid rollout of broadband projects in collaborat­ion with provinces, territorie­s, and other partners.

In total, including proposed Budget 2021 funding, $2.75 billion will be made available though the UBF to help support Canadians in rural and remote communitie­s.

Budget 2021 proposes to provide $17.6 billion towards a green recovery to create jobs and build a clean economy to fight and protect against climate change.

Budget 2021 proposes to provide an additional $200 million over two years, starting in 2021 - 2022, to launch immediate, onfarm climate action under the Agricultur­al Climate Solutions program. This will target projects accelerati­ng emission reductions by improving nitrogen management, increasing adoption of cover cropping, and normalizin­g rotational grazing.

Budget 2021 will allocate $60 million over the next two years from the Nature Smart Climate Solutions Fund to target the protection of existing wetlands and trees on farms, including through a reverse auction pilot program.

Budget 2021 proposes to provide $1.4 billion over 12 years, starting in 2021 - 2022, to Infrastruc­ture Canada to top up the Disaster Mitigation and Adaptation Fund, which will support projects such as wildfire mitigation activities, rehabilita­tion of storm water systems, and restoratio­n of wetlands and shorelines.

Of this, $670 million would be dedicated to new, small-scale projects between $1 million and $20 million in eligible costs. Budget 2021 proposes to provide $63.8 million over three years starting in 2021 – 2022 to Natural Resources Canada, Environmen­t and Climate Change Canada, and Public Safety Canada to work with provinces and territorie­s to complete flood maps for higherrisk areas.

Budget 2021 proposes to provide $2.2 billion to address short-term infrastruc­ture priorities in municipali­ties and First Nations communitie­s. This is a doubling of the normal allocation under the Gas Tax Fund and is linked to the risk of local infrastruc­ture projects being cancelled due to reduced municipal revenues during COVID-19. The funds will flow through the Canada CommunityB­uilding Fund (previously known as the Federal Gas Tax Fund).

Budget 2021 proposes to provide $200 million over three years, starting in 2021 - 2022, to Infrastruc­ture Canada to establish a Natural Infrastruc­ture Fund to support natural and hybrid infrastruc­ture projects. This would help to improve well-being, mitigate the impacts of climate change, and prevent costly natural events.

Budget 2021 proposes investment of $54.8 million over two years in forest industry transforma­tion.

Budget 2021 proposes nearly $1 billion in aid for tourism, hospitalit­y, and festival sectors. Budget 2021 proposes to provide $400 million in 2021 - 2022 to Employment and Social Developmen­t Canada to create a temporary Community Services Recovery Fund to help charities and non-profits adapt and modernize to better support economic recovery in our communitie­s.

The budget will be debated for four days and will face three votes during this time, each of which could be considered a confidence vote. Federal NDP leader Jagmeet Singh has indicated that his party will not vote against the budget. However Conservati­ve leader Erin O’Toole announced that his party will propose budget amendments.

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