2019 Federal Budget: What you need to know

On March 19, 2019, Finance Minister tabled Budget 2019, which outlines planned government spending, expected government revenue, and forecasts economic conditions for the upcoming year.

Prepared by Aziza Mohamed and Zainab Habib

Some of the most discussed pieces of the budget look at:

Housing: A new program for first-time homebuyers called new First-Time Home Buyer Incentive where they contribute up to 10% and bring down the mortgage loan, for what’s called a “shared equity mortgage.” An applicant must have a household income of less than $120,000 per year and be able to come up with a five per cent down payment. There’s also going to be more of an allowance for you to take out money from your RRSP to use towards your home purchase – $35,000, a 40% increase from the current level of $25,000 where it had been for the last decade (CBC).

Pharmacare: The government is creating the Canada Drug Agency for bulk-buying pharmaceuticals. By negotiating better prices, this could help lower the cost of drugs for Canadians by up to $3 billion. There is also a sizeable amount set aside for a national strategy for high-cost drugs for rare diseases to help Canadians get better access to the effective treatments they need. This is good news for anyone who is affected by a rare disease as it ensures that “patients with rare diseases have better and more consistent coverage for their treatments, which are often life-saving” (Budget 2019). There is also some money for a universal pharmacare program.

Good Jobs: Student loans will be made more affordable and accessible with lower interest rates and a new interest-free grace period of six months. The Canada Training Benefit is an investment of more than $1.7 billion over five years, starting in 2019–20, and $586.5 million per year ongoing (REMInetwork.com). This Benefit is broken down into two key components—a new, non-taxable Canada Training Credit to help with the cost of training fees by allowing people between the age of 25 and 64 to accumulate credits that can be used towards training costs; and a new Employment Insurance (EI) Training Support Benefit to provide income support when sometimes requires time off work for training (up to four weeks of EI).

Seniors: There are different programs and investments working for seniors in this budget. Financially, there are a few items related to seniors’ pensions, including safeguards to protect their workplace pensions and automatic enrollment in the Canada Pension Plan (CPP) for Canadians over the age of 70 if they have not applied yet for their retirement pension. Also, seniors who work and are low-income get to keep more of that income thanks to a GIS earnings exemption starting in 2020. Socially, the New Horizons for Seniors Program supports projects that improve the quality of life for vulnerable seniors, which could be both local projects or national in scope. This will mean some funding for community groups and other projects that help seniors with their quality of life and active participation in the community.

However, this is not where all the money will be allocated. The priorities of the Budget have been laid out into five key themes. Below is a selection of some highlights under those themes:

“Anti-Racism Strategy”: Recent events in Canada and abroad have shown that no community is immune to the effects of hateful rhetoric.

• Budget 2019 proposes to provide $45 million over three years, starting in 2019–20, to support a new Anti-Racism Strategy. Its key purpose will be to find ways to counter racism in its various forms, with a strong focus on community-based projects.
• These projects could include developing new public educational materials or programs that help to build skills and provide leadership and employment opportunities. At the core of this strategy will be an Anti-Racism Secretariat that will work across government to identify opportunities, coordinate activities and engage with our diverse communities.

“Investing in the Middle Class”: affordable homeownership, training and skills development, national pharmacare, and secure retirement.

• Most of the highlights above focus on this area. Some other highlights that will be of interest to seniors will be the $6 billion over six years to provinces and territories for home care and palliative care and the $77 billion for the Enabling Accessibility Fund to improve the safety and accessibility of community spaces.

“Building a Better Canada”: building strong communities through municipal infrastructure, affordable electricity bills and green energy, high-speed internet for more Canadians (broadband strategy), Arctic and Northern communities, Canada’s Innovation and Skills Plan, and research excellence in Canada (particularly around science and technology).

• We’ll see $2.2 billion for infrastructure spending in cities. Eligible categories of projects include local roads, bridges, regional and local airports, public transit, and drinking water. There will be $40 billion to deliver Canada’s first 10-year National Housing Strategy.
• Another interesting proposal is the $1.7 billion in new investments in the successful Connect to Innovate program (rural internet access) and the launch of a new Universal Broadband Fund with the promise of High-Speed internet for every Canadian by 2030.
• More affordable zero-emission vehicles will help to “foster a transition to a ‘greener economy.’” The budget will provide $300 million over 3 years for a federal incentive of up to $5,000 for electric or hydrogen fuel cell vehicles with a retail price under $45,000. The federal government seeks to increase the number of zero-emission vehicles sold in Canada to 10% of all new cars sold in 2025, and 100% of all new cars sold in 2040.

“Advancing Reconciliation”: addressing a range of reconciliation issues with Canada’s Indigenous populations including governance tools, better services for First Nations and Inuit children, preserving Indigenous languages and supporting post-secondary education, and health and safety measures in Indigenous communities.

• A big piece of this chapter is the work coming from the commitment that First Nations children would get the products, services, and supports they need when they need them, and the source of payments would be worked out later so as not to put children at risk. This commitment is called Jordan’s Principle. This commitment was made to close the gap in child services between the general population and on-reserve populations. Approximately $1.2 billion will be allocated here over the next three years.
• Infrastructure and community investments include eliminating boil water advisories on-reserve, supporting the National Inuit Suicide Prevention Strategy, and supporting Indigenous entrepreneurs.

“International Aid and Foreign Affairs”: health and wellbeing, support for arts and culture, support for veterans and their families, public safety and justice including cybersecurity and natural disaster responses, Canada’s international engagement, better government, and taxation

• Information on Canada’s international assistance efforts will be presented in a single consolidated report to help Canadian better understand international assistance efforts, and promote greater transparency and accountability. This will also include updates on implementing the Feminist International Assistance Policy.
• A 15% tax credit for digital news will be made available. News organizations wishing to qualify for this tax credit will need to be assessed and approved by a government body that will determine if they are a Qualified Canadian Journalism Organization.
• Approximately $3.9 billion will be dedicated to assisting Canadian dairy farmers and other supply-managed domestic sectors impacted by the Canada-European Union Trade Agreement (CETA) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) deals.
• The work of the LGBTQ2+ Secretariat will be expanded and a new Anti-Racism Strategy and Secretariat will be introduced by the federal government with this budget. These are definitely things to watch out for.

“Gender Equality Statement”: advancing gender equality and diversity (including a gender results framework), in areas such as leadership participation and gender-based violence, and the Gender-based Analysis Plus (GBA+) of this budget.

• There will be increased funding for community action that will tackle systemic barriers impeding women’s progress - specifically $160 million in investment over five years in the Women’s Program, managed by the Ministry of Women and Gender Equality. However, most of this funding will occur in 2022-2023 (Canadian Women’s Foundation).

To read the budget in greater detail, see https://www.budget.gc.ca/2019/home-accueil-en.html