March 20, 2019
Government of Canada Releases 2019 Budget
Yesterday, Canada’s Minister of Finance, the Hon. Bill Morneau, revealed the Government of Canada’s 2019 Budget titled Investing in the Middle Class. The document is primarily focused on financial issues including the creation of the Canadian Drug Agency, an additional grace period for federal student loans and new provisions to help first-time home buyers.
The Budget also contains several initiatives that are of interest to Ontario’s unionized ICI construction sector:
Doubling the Municipal Gas Tax Transfer in 2019
The federal budget commits to a doubling of the gas tax transfer to municipalities for 2018-2019, aiming to stimulate infrastructure spending in the short-term. These funds can be used by municipalities for eligible categories of projects including public transit, water/wastewater, and brownfield redevelopment. These one-time transfers to municipalities will amount to $2.2 billion in the 2018-2019 fiscal year.
Slower Than Expected Infrastructure Spending
Budget 2019 provides some explanation of the Government’s challenges with spending committed infrastructure dollars. The federal government has approved more than 33,000 projects, amounting to $19.9 billion. Ontario’s share of approved projects amounts to $4.9 billion. Of the $19.9 billion in approved projects Canada-wide, the Government says that more than $7 billion has been fully spent.
According to the Government, the pace of its infrastructure spending has been slow due to reasons including: “delays between construction activity and receipt by the Government of claims for payment, and by some jurisdictions being slower to prioritize projects than expected.”(Budget 2019, p. 75) The document explains that it is working with the provinces and territories to accelerate projects through their bilateral agreements, streamline processes for prioritizing project funding, and improve financial reporting processes.
Included in Budget 2019 is a Government proposal to introduce prompt payment legislation intended to ensure that payments flow down the construction supply chain for federal projects on federal property. The proposed legislation will include an adjudicative mechanism.
Overall, with previous budgets taken into account, the Government has committed $180 billion to infrastructure projects across Canada for over 12 years.
New Training Benefits
Budget 2019 introduces the Canada Training Benefit and the Employment Insurance (EI) Training Support Benefit. These two benefits are intended to allow workers to accumulate credits for training every year and take time off work for training purposes. The Canada Training Benefit will allow eligible workers between the ages of 25 and 64 would accumulate a credit balance at a rate of $250 per year, up to a lifetime limit of $5,000. Those who are eligible can use the credit to refund up to half the costs of taking a course or enrolling in a training program.
The Employment Insurance Training Support Benefit, which is expected to launch in late 2020, could provide Canadians with up to four weeks of income support so they can take leave from work to pursue training. The Government also intends to consult with provinces and territories on new leave provisions to protect workers’ ability to take time away from work to pursue training.
The Government has committed $1.7 billion over the next five years to the Canada Training Benefit and the Employment Insurance (EI) Training Support Benefit.
Encouraging Young People to Enter Skilled Trades
Budget 2019 allocates $46 million to encourage young people to pursue careers in the skilled trades and technology. This investment includes $40 million over four years (starting in 2020-2021) to help Skills Canada promote skilled trades and technologies through its skills competitions and other resources.
The remaining $6 million (over two years starting in 2019-2020) will be put towards creating a national campaign to promote skilled trades to young people as a first-choice career. The national campaign will also work to change perceptions around careers in the skilled trades. The Government is planning to appoint campaign co-chairs this year. It will then conduct consultations and explore partnerships to assist with the campaign.
Strategies for Supporting Apprentices and Improving Gender and Diversity Outcomes in Skills Programs
The Budget commits $5 million dollars over five years (starting in 2019-2020) to develop a strategy for addressing gender disparity in skills programs, and promoting access of under-represented groups. The strategy will include steps to better measure and monitor gender disparity in skills programs, building upon work being done in partnership with Statistics Canada and the Labour Market Information Council.
The Government also indicates in the Budget that it is developing a new strategy to support apprentices and those employed in the skilled trades. The purpose of this strategy will be to ensure that programs are effectively targeting entry barriers for those who want to work in the skilled trades, along with aiding the progression of those employed in skilled trades.
Additional Funds for Rental Construction Financing Initiative
Budget 2019 has proposed an additional $10 billion in financing over nine years to the Rental Construction Financing Initiative. This initiative, which began in 2017, would support the construction of 42,500 new rental units. Over the next five years, the Government has budgeted $385 million for the program.
More information and a digital copy of the 2019 Federal Budget can be found here: https://www.budget.gc.ca/2019/docs/plan/toc-tdm-en.html
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FOR MORE INFORMATION, CONTACT:
Katherine Jacobs
Director of Research, or
Ian Worte
Research Analyst,
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222
F 416.620.5310
kjacobs@iciconstruction.com
