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A closer look at Budget 2019 

 

A deeper dive on the budget and what it means for you and your firm.

On March 19th, the Minister of Finance Bill Morneau tabled the last budget of the Liberal’s mandate in the House of Commons. The budget sets the tone for the government's re-election effort ahead of a busy unofficial campaign season and the writ drop expected late this summer. In the lead up to the budget, seniors were expected to be an area of focus for the government, as well as housing affordability and rural infrastructure, especially for broadband internet. Themes of support for the middle class, helping working people get ahead, and supporting women and marginalized communities’ access equitable opportunities in the labour force carry through this budget.

The government has been battling scandal since the beginning of 2019 and this budget aimed to turn the page on a period defined by high-profile resignations, opposition gains, and missteps on files important to the Liberals’ re-election hopes. Certainly, older Canadians and people struggling with adapting their skills and training to the labour force will benefit from measures tabled on budget day. Other beneficiaries include rural communities and municipalities which will oversee the distribution of energy efficiency funding. In areas where the government has to retain support targeted investments were made. Support from the liberal base, including women and youth, as well as environmentally conscious consumers and innovative businesses, has the potential to be shored up with the budget announcement.

The deficit for this year is pegged at $19.8 billion, which is anticipated to decline to a deficit of $9.8 billion in 2023-2024.

 

Canada Infrastructure Bank

The Canada Infrastructure Bank (CIB) has identified clean hydroelectricity and electrical connectivity infrastructure as an area it will look to support in its upcoming workplans, which could be broken down in two ways:

The CIB has been allocated $5 billion for investments in green infrastructure, which could include electricity projects such as interties between provinces and territories.

Working to maximize the contribution of private capital, the Bank will seek to invest $1 billion over the next 10 years, and leverage at least $2 billion in additional private sector investment to increase broadband access for Canadians.

 

Investing in Canada Plan: Update

Since the last update in the 2018 Fall Economic Statement, long-term agreements have been signed with all provinces and territories that will deliver more than $33 billion in federal infrastructure investments.

 

Projects Approved and Underway

Working with provinces and territories, the Government has approved more than 33,000 infrastructure projects for communities across Canada, supported by federal investments of approximately $19.9 billion.

At the same time, the pace of spending under the Investing in Canada Plan has been slower than originally anticipated. The Government is currently working with the provinces and territories to accelerate projects under their bilateral agreements to ensure momentum continues.

The Government is taking steps to streamline the process for the provinces and territories to prioritize projects for funding and to improve financial reporting so that it is clear when project costs are incurred, and when federal funds will flow to recipients.

 

New infrastructure funding for local communities through a municipal top-up

The Government transferred remaining uncommitted funds from older federal infrastructure programs to municipalities through the federal Gas Tax Fund and has ensured that the $81.2 billion in long-term infrastructure funding announced in Budget 2017 is available for jurisdictions when it is needed.

Budget 2019 proposes a one-time transfer of $2.2 billion through the federal Gas Tax Fund to address short-term priorities in municipalities and First Nation communities. This will double the Government’s commitment to municipalities in 2018–19 and will provide much-needed infrastructure funds for communities of all sizes, all across the country.

 

Engaging Indigenous Communities in Major Resource Projects

Budget 2019 proposes to provide $12.8 million in 2019–20 to Natural Resources Canada to maintain its capacity to conduct meaningful consultations with Indigenous communities on major energy projects and to support Indigenous economic participation in the natural resource sectors.

Budget 2019 proposes to provide a further $18 million, over three years, starting in 2019–20, to Crown-Indigenous Relations and Northern Affairs Canada to support planning by the Government of Northwest Territories for its proposed Taltson hydroelectricity expansion project.

The Government manages a number of contaminated sites in northern Canada that were formerly mines and since abandoned by their previous owners. The contamination of these properties is the result of private sector mining and oil and gas activities from many years ago before the environmental impacts were fully understood.

To clean up the largest and most high-risk of these sites, Budget 2019 proposes to provide $49.9 million over fifteen years ($2.2 billion on a cash basis), starting in 2020–21, to Crown-Indigenous Relations and Northern Affairs Canada to create the Northern Abandoned Mine Reclamation Program.

 

Investment in the National Trade Corridors Fund

To date, $400 million over 11 years has been dedicated for transportation infrastructure in the three territories under the National Trade Corridors Fund.

Budget 2019 proposes to increase the allocation of the National Trade Corridors Fund to Arctic and northern regions by up to $400 million over eight years, starting in 2020–21, bringing the total allocation to these regions to $800 million. This will help build new roads and other vital connections to and between Arctic and northern communities.

 

Conclusion

Budget 2019 maintains the Trudeau government’s focus on infrastructure as a source of economic prosperity and good long-term investments. This is a good sign for the industry as an added focus on reporting as well as on accelerating funding delivery will also be put forward.

By following the promised collaboration between federal, provinces and territories, more infrastructure projects should be approved and started.

Lastly, the added focus on community building as well as rural economic development echoes one of our key asks of the importance of a network of right of way connecting all Canadians.

 

On the evening of March 19th, ACEC provided a high level overview of Budget 2019.