Finance Minister and Deputy Prime Minister Chrystia Freeland tabled the first budget since the 2021 federal election yesterday in Ottawa. The budget, entitled “A Plan to Grow Our Economy and Make Life More Affordable,” pegs the current deficit at $113.8 billion, which is down from estimates in the fall, and anticipates a deficit of $52.8 billion for the fiscal year ahead. Canada will approach budgetary balance by 2026-2027 when the deficit is expected to be just $8.4 billion.
For ACEC members, it is worth noting that the 304-page budget held 90 mentions of infrastructure, a relatively short document based on recent history.
It was widely shared in advance of the announcement that there would be a significant focus on new defence spending and on housing. Both were heavily invested in to address two of the most significant challenges facing Canada and the world. In terms of new defence spending, the military will receive $8.5 billion in new investments over the next five years. Over $10 billion will be spent on construction, retrofits, maintenance and tax changes to increase housing supply and availability. Individual supports for people trying to buy a first home were also prominent.
Notably, there was significant emphasis on the transition to a cleaner economy. Many of the investments outlined as part of the chapter dedicated to “Clean Air and a Strong Economy” feature infrastructure prominently. The budget lacked the framing to show that infrastructure fuels economic growth on its own but did not skimp on new programs and initiatives that will keep many ACEC member firms busy over the years ahead. Especially noteworthy was the emphasis on, and investment in, critical mineral supply chains.
The centrepieces of the budget only tangentially affect infrastructure. New housing, particularly large complexes, will require the services of consulting engineering firms, but marquee national defence investments are not focused on infrastructure assets. Still, a plethora of economic growth, clean energy, finance and workforce adjustment priorities will benefit ACEC members over the coming years.
This budget shows that the federal government is aware of the increased urgency to use funds already committed to infrastructure. At the same time, the budget creates additional flexibility and incentives for project owners—whether private or public sector—to prepare for construction rapidly. This represents an honest effort to pull economic activity forward now, rather than running out the clock on funding that has been committed over the long-term. Municipalities and provinces both have disincentives to leave federal money on the shelf, and businesses should expect to be busier over the next 3 to 5 years as a result.
New investments in electrification, for Canada’s vehicle fleet, an expanded grid, and small modular reactors are more tangible than theoretical after today. Further, money is now committed for the development of critical minerals supply chains that will support the technological development needed to help industries leap forward with cleaner, greener technologies. The groundwork is being laid—figuratively—for more megaprojects and the government is rolling out a welcome mat for foreign investment and other private sector investment through incentives like the Canada Growth Fund and an Investment Tax Credit for Carbon Capture, Utilization and Storage.
It is concerning that there is little mention of skills development and training, given Canada’s demographic realities and the commitment to aim even higher in terms of new construction. Many firms, suppliers, and contractors are already operating at full capacity and one of the key bottlenecks in the economy seems to be a lack of skills, a lack of workers, or both depending on the sector and segment. The budget does aim to alleviate some of that pressure by enhancing the Temporary Foreign Worker Program in a way that will make it easier for reputable employers to recruit and retain workers. ACEC will need to be involved in these discussions as the budget makes it clear more details will be forthcoming.
Some grey areas will require the attention of our industry. It is concerning that the vague notion of “green procurement” by Public Services and Procurement Canada (PSPC) continues to be promoted with ‘more details to come.’ However, this may also offer an opportunity for ACEC to push for meaningful procurement reform. PSPC had already undertaken five trial procurements using Qualifications Based Selection (QBS) and 2022 has seen the release of several studies demonstrating how QBS can achieve better outcomes.
Finally, there is one area of potential overreach where ACEC will also have to register its concern. The federal government put forward a bill two weeks ago to authorize $750 million to municipalities to support public transit shortfalls. Now it intends to make that funding conditional on the willingness of municipalities and provinces to match funds and accelerate work on housing. These types of conditions may set a precedent that could cause further delays, which are counterproductive to the growth agenda set forth in the budget.
Overall, the budget presents a number of openings for ACEC to be vocal about the need for a National Infrastructure Assessment. Next steps will also include re-engaging departments and politicians to discuss the potential of a national infrastructure corridor to be a key pillar of intergovernmental cooperation on improvements to the national grid infrastructure, supply chains for critical minerals, and other nation building projects.
ACEC defends opportunity for firms to participate in federal procurement in official language of their choice.
QBS (Qualifications Based Selection) is an internationally recognized best practice for the procurement of professional engineering services.
Learn more about the activities ACEC undertook throughout the year to make the voice of the consulting engineering sector heard.
Read ACEC's Submission to the National Infrastructure Assessment in response to the Federal Government’s Engagement Paper Building the Canada We Want in 2050.
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Now more than ever we need to advocate strategically for our industry. Join to program to strengthen our voice with our elected officials.
Selected highlights of the 2021 Federal Budget relevant to the ACEC-Canada membership.
ACEC-Canada delves into the federal government's policies and programs through in-depth invterviews with key government officials.
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Creating a national right of way that connects Canadians, communities, and markets.
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