2017 Federal Budget Update

Today the federal government tabled its 2017 budget. Following large investments in its inaugural 2016 plan, the federal government’s follow-up budget for 2017 is focused on flushing out the details of previously-announced policies, and introducing a variety of targeted, smaller measures. The budget adds $4.8 billion in new government spending over the next five years, with most beginning after 2018.

For municipalities, the budget primarily contained confirmation of previous commitments as well as a few promising new investments in housing, childcare and infrastructure. Reaction from the municipal sector was largely positive:

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While AMCTO will conduct a more thorough analysis of the budget over the coming days and weeks, below are a few of the highlights.

Housing: 

The budget commits the government to a National Housing Strategy, which will see the government invest more than $11.2 billion (already budgeted) in a range of housing initiatives, including:

  • $225 million to improve housing conditions for Indigenous Peoples not living on reserve
  • $300 million over the next 11 years to build housing in northern territories
  • A new national housing fund, which will be administered through CMHC and receive an investment of $5 billion over the next 11 years to address critical housing issues and prioritize support for vulnerable citizens
  • Preserving baseline funding for Canada Mortgage and Housing Corporation related to the experts of long-term social housing operating agreements

The government has also committed $40 million over five years, and $6.6 million per year after that to develop and implement a Housing Statistics Framework, which is designed to help the government address soaring home prices in some of Canada’s biggest cities.

Infrastructure: 

The budget includes more details on the $21.9 billion committed towards green infrastructureFrom the budget:

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The budget also includes details about the government’s previously announced $81.2 billion infrastructure plan. Specifics include:

  • More details on the Canada Infrastructure Bank, which is tasked to work with provincial, territorial, municipal and Indigenous, and private sector investors to fund infrastructure across the country. It will be responsible for investing at least $35 billion over 11 years, using loans, loan guarantees and equity investments
  • $2 billion for rural and northern communities to help grow local economies and support community and environmental projects. An additional $400 million will be provided through the Arctic Energy Fund for energy security in communities north of the 60th parallel
  • $300 million to launch a “Smart Cities Challenge Fund”
  • $4 billion for indigenous communities to build and improve housing, water treatment systems, health facilities and other community infrastructure
  • $10.1 billion over 11 years to modernize Canada’s transportation system
  • $20.1 billion, through bilateral agreements with the provinces and territories, to building new urban transit networks. From the budget:

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Child Care

The budget includes $7 billion over the next ten years (already budgeted) for new child care spaces, starting in 2018-19 and pending agreement with the provinces and territories

Ride-sharing:

Beginning on July 1st, Uber and other ride-sharing services will be subjected to the same GST/HST rules as taxis

Opioids and the Fentanyl Crisis: 

The budget proposes listing naloxone, one of the drugs used to treat fentanyl overdoses, to the list of prescription drugs that are exempted from the GST/HST as a result of their utility in treating life-threatening conditions.

Skills Training and Innovation: 

The budget creates Innovation Canada, with a $950 million budget over five years to support innovators and build more innovation hubs known as “super clusters.”

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The government also pledge new commitments to skills development, including boosting funding to the Labour Market Transfer Agreement by $2.7 billion over six years.

Debt, balance, and fiscal outlook

The budget doesn’t currently contain plans to move towards balance. The 2016-17 deficit projection is $23 billion, risking to $28.5 billion by 2017-18 and then down to $18.8 billion by 2021-22.

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For more: 

2016 Federal Budget Update 

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