On Thursday Nov. 3rd, the federal government released its 2022 Fall Economic Statement. The statement included an overview of the Canadian economy, expanded upon supports and benefits to help those most vulnerable amid rising inflation and interest rates, reaffirmed commitments in support of net-zero, and outlined strategies and investments to grow the workforce.
Canada experienced a strong recovery from the pandemic, as real GDP returned to pre-pandemic levels in Q4 of 2021, and in the first half of 2022, Canada had the fastest growth of the G7 countries. This was accompanied by near record low unemployment rates and 400,000 more workers than before the pandemic. However, due to rebounding demand and global supply shocks (such as in commodities and energy), inflation has increased. In response to this, central banks across the world, including the Bank of Canada, have massively increased interest rates.
While demand is cooling and supply chain issues are easing, there are many risks which increase the likelihood of a recession. Risks include climate change related disasters, geopolitical risks, and an aging population.
Considering the high cost of living and the upcoming slowdown, the government is expanding and introducing new supports. Some of the supports include doubling the GST credit for 6 months, a top up to the Canada Housing Benefit, eliminating the interest on federal student loans and apprenticeship loans, as well as improved benefits and supports for first-time home buyers.
The government is also reaffirming its commitment to net-zero with incentives such as the Investment Tax Credit for Clean Technologies (up to 30% refundable credit) and Investment Tax Credit for Clean Hydrogen (up to 40% refundable credit). A key feature of these benefits is that receiving the full credit requires the employer to meet certain labour conditions, one of which includes creating apprenticeship training opportunities. In developing these credits, the Department of Finance will consult with a variety of stakeholders, namely unions, on how to implement labour conditions into the incentive.
To prepare for a transition to net-zero, the government is also investing in skills and training. Two major projects include the Sustainable Jobs Training Centre and the Union Training and Innovation Program (UTIP) Sustainable Jobs Stream. The Sustainable Jobs Training Centre will “bring together workers, unions, employers, and training institutions across the country to examine the skills of the labour force today, forecast future skills requirements, and develop curriculum, micro-credentials, and on-site learning to help 15,000 workers upgrade or gain new skills for jobs in a low-carbon economy.” One of the prioritized areas would include low-carbon building and retrofits (the other being the sustainable battery industry). The UTIP Sustainable Jobs Stream will support union apprenticeship training in the skilled trades with the aim of developing green skills. An anticipated 20,000 apprentices and journeypersons would benefit from this program.
The government also plans to address labour shortages through increased immigration, as per its 2023-2025 Immigration Levels Plan. The plan entails bringing 500,000 immigrants in 2025, with the majority being workers in healthcare, manufacturing, and building trades. Additionally, $50 million in funding would go to Immigration, Refugees, and Citizenship Canada in 2022-2023 to help address backlogs, speed up processing times, and to fill labour gaps faster.
The full 2022 Federal Economic Statement can be found here.
_____________________________
FOR MORE INFORMATION, CONTACT:
Katherine Jacobs
Director of Research
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
