The $7.5 billion in new measures over the next five years are spread across a wide array of new programs. The most important new budget measures are described here.
Support for families and communities emerges as a priority in this year’s budget, with targeted spending exceeding $1 billion in each of the next two years. The Guaranteed Income Supplement (GIS) will be enhanced, allowing for a benefit increase up to $600 per single senior ($840 per couple). This measure alone is anticipated to cost $530 million over the next two fiscal years, and could extend to more than 680,000 senior citizens across Canada. Those senior citizens who earn less than $2,000 per year ($4,000 per couple)—not including GIS or Old Age Security income—will earn the full amount. The benefit is then gradually phased out to an income level of $4,400 ($7,360 per couple).
There is also support in the budget for the unemployed. The budget extends three EI programs that allowed for an additional five weeks of EI coverage, allowed for EI claimants to work, and based claims on the highest 14 weeks of earnings over the preceding year. Extending these programs will cost $420 million.
Recognizing the unique role that small businesses play in innovation for the Canadian economy, the government has declared 2011 the “Year of the Entrepreneur,” and it has proposed several measures that will encourage small firms to hire, reduce barriers that entrepreneurs face, and improve their access to financing. For example, the temporary Hiring Credit for Small Business will provide a one-time credit up to $1,000 against the increase in EI premiums in 2011. As many as 525,000 employers across the country will be eligible for this credit, potentially lowering cumulative payroll taxes paid this year by $165 million. Moreover, recognizing that overly complex regulatory requirements weaken competitiveness and impose real costs on entrepreneurs, the government will continue to consult with stakeholders through its Red Tape Reduction Commission, which was set up to streamline regulatory processes.
An estimated $111 million will be spent over the next two years to strengthen Canada’s public infrastructure. This will further advance public–private partnerships, and set aside funding for bridge repairs, ensuring that Canada’s highways extend to the Arctic coast. This funding will also extend to repairing storm damages to small craft harbours across Canada, where approximately 90 per cent of all fish landings in Canada take place.
The government has also allocated $142 million over the next two years to increase innovation and productivity in the agricultural and forestry industries. The accelerated capital cost allowance for investment in machinery and equipment for the manufacturing sector will be extended for two years, and some types of clean energy generation will be eligible for this credit. In addition, nearly $100 million will be extended to industry to fund technology and innovation in the areas of clean energy and efficiency. All in all, total spending to support job creation over the next two years is anticipated to be $724 million.
The government will also provide support to communities through a smattering of small initiatives, including:
- a volunteer firefighters tax credit;
- student loan forgiveness for doctors and nurses who choose to relocate to rural communities;
- funding for CBC/Radio-Canada to promote Canadian programming;
- support for Canada’s cultural sector; and
- investments in on-reserve infrastructure.
The government saves its largest investments for protection of Canada’s natural environment. In renewing the Clean Air Agenda, the government aims to achieve real reductions in GHG emissions, while generating jobs. Chief among these investments is $400 million (in 2011–12) for the ecoENERGY Retrofit program. This program aims to make homes more energy efficient, reducing demand for energy across the country and lowering energy costs for all Canadians. In addition, more than $300 million has been set aside to address regulatory issues surrounding climate change, air quality, and energy efficiency. Another $200 million will be directed to the Chemicals Management Plan, which assesses and manages the risks associated with new and existing chemical substances.
The Conference Board has long been a proponent of advancing Canada’s relative competitiveness by enhancing our ability to innovate. Therefore, new funding in excess of $250 million over the next two years to enhance Canada’s digital economy is particularly welcome. The government proposes a new pilot program—the Industrial Research Assistance Program—to support collaboration between colleges and small businesses with the goal of accelerating their adoption of information and communication technologies. In addition, the government will allocate funds for the creation of new research positions and to promote enrolment in disciplines related to the digital economy. Several changes to the current student-loan program are proposed that will lower the cost of post-secondary education for many lower-income households and for part-time students. In total, spending on innovation, education, and training will be in excess of $300 million in each of the next two fiscal years.