Canada’s Federal Budget 2022: Investing in Sustainability, Housing, and the Economy
Canada’s federal budget 2022, titled “A Plan to Grow Our Economy and Make Life More Affordable,” was released on Thursday, April 7, 2022, and it will allot a total of billions more while attempting to reduce the nation’s debt. This blog highlights the key changes Canadian businesses should be aware of.
“Canada has a proud tradition of fiscal responsibility. It is my duty to maintain it—and I will. So now is the time for us to focus—with smart investments and a clarity of purpose—on growing our economy. That is what our government proposes to do. And this is how we propose to do it.”-The Honourable Chrystia Freeland, P.C., M.P. Deputy Prime Minister and Minister of Finance
Government funding programs discussed in the 2022–23 federal budget focus on growing the economy, sustainability, and affordability for Canada.
Investing in the Canadian Economy
Canada’s economy is emerging from the COVID-19 pandemic only to find new challenges in growth compared to our global neighbours. The Federal Budget 2022 is investing in an all-new program that will help Canada catch up in the race for growth on the world stage. Canada is also facing new challenges in supply chains and logistics that are causing delayed delivery in Canadian goods both internally and externally. Therefore, the government has placed an intense focus on infrastructure and supply chain programs to mitigate these challenges.
Growth for Canadian Businesses
- $15 billion over the next five years towards establishing the Canada Growth Fund (CGF) which will act as a public investment vehicle at arms-length from the federal government. The CGF will attract private sector investment to achieve crucial policy goals such as the following:
- Reducing emissions and reaching climate goals;
- Improving exports and growth in low-carbon initiatives as well as generating new technologies; and
- Accelerating supply chains in critical industries.
- $396.8 million towards high-frequency railway options that will branch Toronto and Quebec to reduce travel times between these two thriving economies; and
- $16 million through the Jobs and Growth Fund towards long-term investments that will support the growth and efficiencies of the PEI potato industry and supply chain.
- $1.5 billion over seven years for supporting the development of crucial mineral supply chains;
- $79.2 million over five years towards the National Resources Canada (NRC) for public access to data sets for mineral exploration projects;
- $1 billion over six years (starting in 2024/25) to the Innovation, Science and Economic Development Canada (ISEDC) for the Strategic Innovation Fund (SIF)to support projects in manufacturing, processing, and recycling applications to improve supply chains; and
- $144.4 million over five years for the NRC to invest in research and development in technologies and materials that will support critical mineral value chains.
Improving Supply Chains
- $450 million over five years for the National Trade Corridors Fund which will help reduce barriers for the movement of goods across Canada via transportation networks;
- $136.3 million over five years for government programs that will work to improve the use of data for supply chain efficiencies; and
- $16.9 million over five years to streamline cargo processes by removing unnecessary red tape.
$45 million over four years to assist in photonics research, pilot programs, and market analysis projects to strengthen the semiconductor industry in Canada as a whole. The intention is to limit Canada’s reliance on other countries and avoid other semiconductor shortages in the future.
$30 million over four years for investing in Canadian small and medium businesses that are improving health technologies. Projects such as research and development, scaling, and more will be invested in to improve upon the success made by CAN Health Network.
$750 million will be allotted towards the Canada Global Innovation Clusters to continue funding innovation across the country. This funding will be used to expand support across the nation, increase collaborations that align with national priorities, and address key Canadian disruptions from climate change and supply chain issues.
- $47.8 million over five years to launch a lab-to-market program that will help streamline ongoing innovation among Canadian researchers and students; and
- $35 million for the CanExport program to assist Canadian companies as they attempt to expand their products to other markets in a secure way.
- $160 million over five years towards increasing security for research initiatives in postsecondary institutions through a program called the Research Support Fund; and
- $40.9 million in funding for Black research initiatives via federally funded councils to continue to support and accelerate scholarships and fellowships for Black researchers in the Canadian community.
$20 million over two years via the Indigenous Tourism Fund with the goal of helping Indigenous communities reliant on tourism recover from the difficulties caused by the COVID-19 pandemic.
A Cleaner Canada
Canada’s Federal Budget 2022 is placing a large focus on sustainability for the future by investing in government funding programs that will continue to drive a cleaner Canada for tomorrow. These investments earmark electric vehicles, clean energy, and sustainable agriculture as the way forwards for Canadian businesses and the nation as a whole.
- $1.7 billion over five years to be invested in Incentives for Zero-Emission Vehicles (iZEV) program. This initiative is having its scope broadened so that it may include more vans and trucks and make ZEVs more affordable for the general population;
- $500 million invested in Canada’s growing ZEV charging centres across the country with the goal of allowing Canadians to drive from coast to coast on charging for electric vehicles;
- $33.8 million over 5 years to initiate testing and research and development projects for a larger refuelling infrastructure;
- $400 million over five years for a program called the Zero-Emission Vehicle Infrastructure Program (ZEVIP) to ensure that more remote communities also have access to charging infrastructure;
- $547.5 million over four years towards purchase incentive programs for those interested in buying ZEVs;
- $33.8 million over five years towards generating a new platform that will allow for long-haul ZEVs to be improved via research and development programs; and
- $199.6 million will be granted towards rebranding the Green Freight Assessment Program to the Green Freight Program and providing new funding to help businesses retrofit their fleets to meet upcoming national priorities.
- $329.4 million will be provided over six years to significantly increase the size of the Agricultural Clean Technology Program which will assist in the agricultural challenges being faced by climate change by improving the technologies available for Canadian agri-food businesses so they may remain competitive;
- $469.5 million over six years towards the Agricultural Climate Solutions – On-Farm Climate Action Fund to further assist in combatting the negative impacts of climate change on the agriculture sector;
- $150 million will be allotted towards a program called the Resilient Agriculture Landscape Program which will assist agriculture businesses in necessary projects such as carbon sequestration and other beneficial practices for the environment; and
- $100 million over six years will be divided among post-secondary institution initiatives that are designed to help improve agriculture technologies and practices with the hope of achieving a net-zero agriculture sector.
- $2.2 billion over seven years towards improving and extending the Low Carbon Economy Fund (LCEF) which is designed to support projects that reduce greenhouse gas (GHG) emissions; and
- $32.2 million over two years to support the LCEF’s British Columbia project called Atlin Hydro Expansion, which will improve the provisions of electricity to Yukon and reduce GHGs.
- $2.6 billion over five years for a new carbon capture, utilization, and storage (CCUS) investment tax incentive will be created to help with the rapid adoption of carbon capture technologies and systems with the goal of encouraging a faster transition to lower emissions for the country as a whole. The incentive will represent the following:
- 60% for CO2 capture equipment acquisition for direct air capture projects;
- 50% for investment in equipment to capture CO2 in all other CCUS projects; and
- 37.5% for investment in equipment for transportation, storage, and use.
- $250 million will be allotted towards the NRC for the development of more national clean-electricity projects that will help the nation transition to a more robust clean energy grid;
- $600 million over seven years for a Smart Renewables and Electrification Pathways Program that will support in modernizing and creating new electricity grids across communities; and
- $69.9 million for the NRC to implement research and development programs that will help in minimizing the waste caused my small modular reactors to improve reactor safety.
- $2 billion more will be added to the Oceans Protection Plan to significantly increase the amount of spending and investment that is being dedicated to protecting oceans. These funds look to ensure that Canadian confidence in ocean safety is secure and that fisheries are operating at a sustainable level;
- $43.5 million over five years towards the creation of a new group called the Canada Water Agency, which will work to improve Canada’s waters; and
- $19.6 million towards the Freshwater Action Plan to assist in the clean-up of Canadian bodies of water across the nation.
$183.1 million over five years will be allotted to a variety of Canadian programs to help accelerate the reduction in plastic waste and single-use plastics via research and development projects that seek to understand the impacts of microplastics and technologies and systems to reduce them.
Federal Budget 2022’s Investment in Job Opportunities
The Canadian government is also focussed on investing in the jobs and opportunities of Canadians who are looking to improve their skills and drive the labour force.
Working for Canada
- $84.2 million over four years for the Union Training and Innovation Program to assist over 3,500 apprentices from underrepresented groups to begin and scale-up their careers in skilled-trades positions; and
- $272.6 million over five years to assist with securing and implementing employment opportunities for workers with disabilities in Canada by making workplaces more accepting and accessible.
Federal Budget 2022’s Funding for Housing
Housing has become a hot topic for Canadians as the housing market continues to have a low supply to address the rising demand. Therefore, the budget has provided multiple programs that are geared towards making new housing more affordable for Canadians, as well as retrofitting current communities for a more sustainable future.
New Housing Programs
- $4 billion over five years towards the launch of a new program called the new Housing Accelerator Fund that will help cities and communities increase the supply of houses that are balanced between affordable housing and more expensive properties;
- An expected renewal of the Canada Community-Building Fund to assist in infrastructure projects for housing throughout territories, provinces, and municipalities;
- $1.5 billion over two years for the Rapid Housing Initiative for affordable housing units and units for women-focussed housing; and
- $2.9 billion for the National Housing Co-Investment Fund for the creation of up to 4,300 new houses and the repair of up to almost 18,000 other housing units.
Funding for Retrofitting
- $150 million over five years to initiate a Canada Green Buildings Strategy that will assist in the adoption of national building codes for climate resilience; and
- $200 million over five years for the Deep Retrofit Accelerator Initiative which will help with the financial costs of retrofitting audits or project management activities associated with large projects.
- $33.2 million over five years for the creation of a new program called the Greener Neighbourhoods Pilot Program which will approach bulk community housing retrofitting via an approach called “Energiesprong”; and
- $183.2 million via the National Research Council (NRC) to fund research and development initiatives that will aim to generate new construction materials for low-carbon structures.
Investing in Global Initiatives
Canada remains a leader on the world stage. In order to continue in this capacity, the Federal Budget 2022 has allotted significant investments towards global initiatives, such as cybersecurity and Ukraine support.
$875.2 million over five years to address the rapidly evolving cyber security threats that continue to grow as the world becomes more technologically engaged. Initiatives will engage in cyber attack defences, cyber infrastructure, and more to keep Canada competitive and secure on the world stage.
$1.2 billion has been announced in support of Ukraine as war efforts in the East continue to wage on. This support will be realized in the means of training, supplies, humanitarian support, and more. There will also be an approved loan of an additional $1.6 billion to the Ukrainian government.
Investing in Healthcare
Government funding via the Federal Budget 2022 will be provided towards a variety of healthcare services and programs to continue the nation’s focus on getting healthier. Key areas of health will be mental health, addictions, COVID-19 support, and more.
- $732 million will be allotted to global initiatives that are addressing the continuing fight against the COVID-19 pandemic by offering supplies, vaccines, logistics, and more;
- $30 million over three years towards innovations in the brain health and aging industry to accelerate technologies and medical practices that can reduce the impacts of severe medical conditions;
- $140 million over two years to implement further support for the Wellness Together Canada portal that strives to provide the necessary tools for helping Canadians with their mental health challenges and well-being;
- $100 million for addressing serious addictions, such as the opioid crisis, with government funding programs that work to reduce, treat, and prevent addictions to dangerous substances;
- $3.7 million over four years for the design and implementation of a Mental Health Fund for Black federal public servants to help with the mental health challenges of Canadians in these communities; and
- $20 million will be invested over five years in support of research on the long-term impacts of the COVID-19 virus on the human body and how these challenges may be addressed.
Reconciliation for Indigenous Communities in Canada
As Canada continues to work with Indigenous communities for reconciliation, there will be further funding programs provided to address some of the outstanding challenges Canada still faces.
- $4.7 billion in investments towards reconciliation efforts meant to address past struggles for Indigenous communities, as well as work to build a brighter future for Indigenous children and other organizations;
- $190.5 million towards the Indigenous Community Support Fund which will help Indigenous communities address the ongoing complications of the COVID-19 pandemic within their communities; and
- $4 billion over four years towards Jordan’s Principle which works to address the needs of First Nations children at the moment of need by allowing for settlement of payments at a later time. The purpose is to prevent situations in which children may be refused services they need due to financial disputes.
To learn more about tax incentives and policy changes that have been implemented as a result of the Federal Budget 2022, review the comprehensive Ryan Tax Review Federal Budget 2022. Ryan excels at synthesizing complex information into logical applications for Canadian businesses thanks to their stellar professional network.
More Canadian Government Funding Opportunities
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