The Canadian Federal Budget 2021 – titled “A Recovery Plan for Jobs, Growth, and Resilience” – has unveiled a total spending of $101.4 billion. On April 19, 2021, the Government of Canada released its extensive Budget 2021 with a total of 724 detailed pages. This blog summarizes the main support options announced primarily for Canadian businesses, many of which focus on strong economic recovery during the ongoing COVID-19 pandemic, while boosting job creation, cleantech innovation, and digital transformation investment.
“Opportunity is coming. Growth is coming. Jobs are coming. After a long year of retrenchment, Canadians are ready to recover and rebuild. We will finish the fight against COVID-19. We will put our shoulders to the wheel. We will bounce back. And we will grow, not just to where we have been before, but to new heights.”
– Chrystia Freeland, Deputy Prime Minister and Minister of Finance
With new pandemic business and health support options including $30 billion towards a long-promised national child-care plan, a pledge to increase the federal minimum wage, and $17.6 billion towards cleantech innovation to combat climate change, the new Federal Budget 2021 plans for a strong recovery and growth for all Canadians.
Click the links in the summary below to learn more about your areas of interest:
Support for Canadian Small Business Recovery and Growth
Overview of New and Updated Small Business Support Options
This past year has been a challenging and unprecedented one for all Canadians. From guidelines to shutdowns, many families and businesses have suffered from negative COVID-19 impacts.
Budget 2021 proposes to provide continued business support during COVID-19 including:
- $12.1 billion in additional COVID-19 support to extend the CEWS, CERS, and lockdown support options for businesses and other employers until September 25, 2021.
- $4 billion for the new Canada Digital Adoption Program to help up to 160,000 small and medium-sized businesses buy the new technologies they need to grow and train up to 28,000 young Canadians.
- $2.6 billion to the Business Development Bank of Canada to offer grants, loans, incentives, and further business support options.
- $595 million for a new Canada Recovery Hiring Program (CRHP), which will run from June to November 2021, and will make it easier for businesses to hire back laid-off workers and/or to bring on new employees.
- $560 million to improve the Canada Small Business Financing Program.
- $500 million to revitalize community spaces through the Canada Community Revitalization Fund.
- $470 million over three years, beginning in 2021-22, to Employment and Social Development Canada to establish a new Apprenticeship Service.
- $101.4 million to create a Small Business and Entrepreneurship Development Program.
- $80 million to extend the CEBA and for Community Futures Network of Canada Regional Relief and Recovery Fund and Indigenous Business Initiative application deadline until June 30, 2021.
Extension to CEWS and CERS
The Canada Emergency Wage Subsidy (CEWS) has helped more than 5.3 million Canadians keep their jobs, and the Canada Emergency Rent Subsidy (CERS) and other lockdown support have helped more than 154,000 organizations with rent, mortgage, and other expenses.
- Budget 2021 proposes to extend the wage subsidy, the rent subsidy, and lockdown support by $12.1 billion until September 25, 2021.
The New Canada Technology Adoption Fund
To fuel economic recovery, jobs, and growth, the government is launching the Canada Digital Adoption Program, which will create thousands of jobs for young Canadians and help as many as 160,000 small and medium-sized businesses adopt new digital technologies.
- With $4 billion in promised support, eligible businesses will receive grants and zero-interest financing to help offset the costs of going digital—and will be able to access support from digital trainers within a network of up to 28,000 well-trained young Canadians.
Improving the Canada Small Business Financing Program
Small businesses need access to funding support options to invest in their workforce, in innovation, and to have the space to operate and grow.
- Budget 2021 proposes to improve the Canada Small Business Financing Program to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses, alongside other enhancements that will increase the eligibility for this financing and permit lending against intellectual property and start-up assets and expenses.
Canada Community Revitalization Fund
In many communities, the most vibrant spaces in Canada have laid dormant as Canadians took precautions to stay safe.
- Budget 2021 proposes to provide $500 million over two years, starting in 2021-22, to the regional development agencies for community infrastructure. These projects will stimulate local economies, create jobs, and improve the quality of life for Canadians from coast to coast to coast.
Creating New Opportunities for Skilled Tradespeople
The skilled trades are vital to our economy, and apprenticeships are the bridge that help skilled workers, especially young people starting their careers, connect with businesses and find well-paying jobs.
- Budget 2021 proposes to provide $470 million over three years, beginning in 2021-22, to Employment and Social Development Canada to establish a new Apprenticeship Service.
Funding Investments for Canadian Cleantech Innovation
Overview of New Support Options for Cleantech Innovation
- $7.2 billion over the next seven years for the Strategic Innovation Fund (SIF).
- $2.2 billion to strengthen Canada’s biomanufacturing and life sciences sector.
- $500 million to the Industrial Research Assistance Program (IRAP).
- $450 million renewal of VCCI, with $50 million dedicated to life science tech and $50 million to create a new Inclusive Growth Stream to increase access to venture capital for underrepresented groups, such as women and racialized communities.
- $443.8 million for the Pan-Canadian Artificial Intelligence Strategy.
- $400 million over six years, starting in 2021-22, in support of a Pan-Canadian Genomics Strategy to kick-start the new strategy, and complement the government’s existing genomics research and innovation programming.
- $360 million over seven years, starting in 2021-22, to launch a National Quantum Strategy.
- $90 million over five years on a cash basis, starting in 2021-22, to the National Research Council to retool and modernize the Canadian Photonics Fabrication Centre.
- $60 million for the Innovation Superclusters Initiative.
“A plan for a long-term recovery must look to challenges and opportunities that lie ahead in the years and decades to come. It must be led by a growth strategy that builds on the unique competitive advantages of the Canadian economy, and make sure that Canada is well-positioned to meet the demands of the next century. This work begins with innovation.”
– Canadian Federal Budget 2021: Building an Innovation Economy of the Future
Accelerating the Strategic Innovation Fund’s Net Zero Initiative
Administered through the Strategic Innovation Fund (SIF), the Net Zero Accelerator Program will help build and secure Canada’s clean industrial advantage. By investing in decarbonizing large emitters, transforming key sectors, and accelerating the adoption of clean technology across the economy, the Net Zero Accelerator will spur Canada’s shift to innovative net-zero technologies and attract the large-scale investments needed to meet Canada’s goal of net-zero by 2050.
- Budget 2021 proposes to provide $5 billion over seven years, starting in 2021-22, to the Net Zero Accelerator. Building on the support for the Net Zero Accelerator announced in the strengthened climate plan, this funding would allow the government to provide up to $8 billion of support for projects that will help reduce domestic greenhouse gas emissions across the Canadian economy.
Strengthening Canada’s Biomanufacturing Sector
Growing Canada’s life sciences and biomanufacturing sector is a priority that goes beyond responding to COVID-19. This is a growing sector that supports thousands of good, middle-class jobs.
- Budget 2021 proposes to provide a total $2.2 billion over seven years towards growing a vibrant domestic life sciences sector. This support would provide foundational investments to help build Canada’s talent pipeline and research systems, and support the growth of Canadian life sciences firms.
Expanding the Industrial Research Assistance Program
Canada’s most innovative small and medium-sized businesses have an outsized impact on job creation and economic growth, but they need access to expertise and capital to grow. For several decades, the National Research Council’s Industrial Research Assistance Program (NRC-IRAP) has provided expertise and capital and has helped business to scale up.
- Budget 2021 proposes to provide $500 million over five years, starting in 2021-22, and $100 million per year ongoing, to expand the Industrial Research Assistance Program (IRAP) to support up to 2,500 additional innovative small and medium-sized firms.
Renewing the Pan-Canadian Artificial Intelligence Strategy
Artificial intelligence is one of the greatest technological transformations of our age. Canada has communities of research, homegrown talent, and a diverse ecosystem of start-ups and scale-ups.
- Budget 2021 proposes to provide $443.8 million over ten years, starting in 2021-22, in support of the Pan-Canadian Artificial Intelligence Strategy.
Support Options and Opportunities for Canadian Youth
Overview of New Support Options for Canadian Students and Youth
The Federal Budget 2021 plans to provide a wealth of support to Canadian youth including:
- $4.1 billion to provide direct support for more affordable postsecondary education.
- $721 million over the next two years to help youth connect with employers and provide them with over 100,000 new, quality job opportunities.
- $100 million over three years to support projects for innovative mental health interventions and support programs.
Canadian Financial Support for Current and Future Students
Canada’s Budget 2021 plans to invest a total $4.1 billion to help make postsecondary education more affordable, and to provide direct support to students with the greatest need.
This will include:
- Doubling of the Canada Student Grants for two additional years.
- Waiving interest on federal student loans until March 31, 2023.
- Enhancing repayment assistance so that no person earning $40,000 per year or less will need to make any payments on their federal student loans.
- Extending disability supports for recipients of student financial assistance whose disabilities are persistent or prolonged, but not necessarily permanent.
Supporting Canadian Youth in Career Skills and Experiences
To ensure Canadian youth and students can access valuable job skills and experience, Budget 2021 is proposing to invest $721 million over the next two years to help connect them with employers and provide them with over 100,000 new, quality job opportunities.
- $371.8 million in new funding for Canada Summer Jobs (CJG)to support approximately 75,000 new job placements for the summer of 2022.
- $239.8 million for the Student Work Placement Program in 2021-22 to encourage successful work-integrating learning opportunities for post-secondary students. This program offers valuable skill development experiences for youth, while also benefiting Canadian employers via a wage subsidy. The budget commits to a 50-75% wage subsidy up to $5,000-$7,500 per candidate for qualifying employers.
- $109.3 million for the Youth Employment and Skills Strategy (YESS) to meet the needs of vulnerable youth that face barriers to employment.
- $80 million over three years to ISED Canada, assisting CanCode to reach an additional 3 million students and 120,000 teachers.
Mental Health Support Following Impacts of COVID-19
As part of an overall investment of $1 billion in the mental health of Canadians, including veterans and Indigenous peoples, Budget 2021 proposes to provide $100 million over three years, starting in 2021-22, to support projects for innovative mental health interventions for populations disproportionately impacted by COVID-19, including health care workers, front-line workers, youth, seniors, Indigenous peoples, and racialized and Black Canadians.
Investments in Child Care, Women, and Early Learning
Establishing a Canada-Wide Early Learning and Child Care System
Budget 2021 makes a generational investment to build a Canada-wide early learning and childcare system. This plan will aim to reduce fees for parents with children in regulated childcare by 50 per cent on average, by 2022, with a goal of reaching $10 per day on average by 2026, everywhere outside of Quebec.
- Budget 2021 will invest almost $30 billion over the next five years and provide permanent ongoing funding, working with provincial and territorial and Indigenous partners to support quality, not-for-profit childcare, and ensuring the needs of early childhood educators are at the heart of the system.
Supporting Women Entrepreneurs
To provide affordable financing, increase data, and strengthen capacity within the entrepreneurship ecosystem:
- Budget 2021 proposes to provide up to $146.9 million over four years, starting in 2021-22, to strengthen the Women Entrepreneurship Strategy. Women entrepreneurs would have greater access to financing, mentorship, and training. Funding would also further support the Women Entrepreneurship Ecosystem Fund and the Women Entrepreneurship Knowledge Hub.
Other Notable Federal Budget 2021 Investments
To ensure that Canada prevails in the global fight against COVID-19, creates a stronger economy for all Canadians, and advances in cleantech innovation, the plan will invest:
- $3 billion over five years, starting in 2022-23, to support the provinces and territories in creating and upholding high standards of care inside long-term care facilities.
- $424 million in 2021-22 to ensure the “safe reopening” of Canada’s borders, through funding further air travel protections and mandatory quarantine measures.
- $375 million to Global Affairs Canada to support Canada’s international COVID-19 response, with a focus on addressing the health needs of developing countries. This would facilitate the world’s poorest countries to access the tools necessary to help contain the spread of COVID-19.
- $271.1 million in 2021-22 to CATSA to maintain operations and enhanced screening services at the 89 airports where it works.
- $195 million over two years, starting in 2021-22, to Health Canada, the Public Health Agency of Canada, and the Canadian Institutes of Health Research to help develop national mental health service standards, in collaboration with provinces and territories, health organizations, and key stakeholders.
- $82.5 million in 2021-22 to Transport Canada to support major Canadian airports in making investments in COVID-19 testing infrastructure.
- $41.3 million over six years, starting in 2021-22, and $7.7 million ongoing, for Statistics Canada to improve data infrastructure and data collection on supportive care, primary care, and pharmaceuticals.
Find More Canadian Government Funding Support Options
The business support options cited in the Federal Budget 2021 are only a small portion of all government funding programs available to Canadian businesses. Discover all the funding programs currently available for your business by visiting our Canadian government funding program directory.
If you are looking for COVID-19 business support programs from Canada’s provincial or federal governments, view our COVID-19 Support Page to find the latest program news, infographics, statistics, and webinars on how your business can access funding support.