By Canadian Press

Federal Budget 2021: Liberals bank on child care, e-commerce for growth

Apr 19, 2021 | 2:28 PM

OTTAWA – The federal Liberals are betting that billions more in debt will pay itself back in economic growth by helping thousands of workers find jobs and small businesses adapt to shifting consumer behaviour.

The government’s budget today estimates all the spending should create or maintain some 330,000 jobs next year and add about two percentage points to economic growth.

The largest contributor is $30 billion over five years on top of existing planned child-care spending to drive down fees in licensed daycares and eventually get to $10 a day by 2026.

There is also more money for broadband infrastructure and over $1.6 billion in funding for small and medium-sized businesses to make sure they aren’t left behind by the dash to online shopping.

All that extra spending with few new taxes will send the deficit to $154.7 billion this fiscal year, one year after a record-smashing $354.2 billion deficit induced by the pandemic.

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But first, the Liberals plan to keep open the taps of emergency aid until at least the fall as the labour market and businesses continue to struggle under the weight of COVID-19.

COVID aid program extensions

Ottawa’s budget measures for small and medium-sized businesses include pandemic-related program extensions and funding boosts even as the government rolls out a $15 federal minimum wage.

The Liberal government says it will extend the wage subsidy, the rent subsidy and its lockdown top-ups to Sept. 25, then gradually decrease them starting in June as vaccinations become more widespread.

The government will also expand the timeframe of its COVID-19 income support programs for those taking sick leave because they’ve contracted the virus, are in self-isolation or must take time off work to care for children and family.

As the rent and wage programs wind down, the government plans to introduce a new hiring subsidy of up to 50 per cent on the incremental remuneration paid to eligible employees between June 6 and Nov. 20 for a maximum of $1,129 per employee per week.

The government proposes a new Canada Digital Adoption Program, which would train and deploy 28,000 young Canadians to help small businesses move online and support e-commerce initiatives.

On the other side of the leger, some small business costs will increase with the new minimum wage set to rise with inflation and include provisions to ensure that where provincial or territorial minimum wages are higher, the higher wage prevails.

Spending billions on clean technology

Pushing the private sector to develop clean technology and heavy emitters to adopt it is where billions in new money will flow from the Liberals’ 2021 budget pledge to tackle climate change.

Around $17 billion is promised in the years ahead to promote a “green” recovery out of the COVID-19 pandemic and create jobs.

Included in that is $5 billion more into a fund meant for projects used by industry to reduce their greenhouse gas emissions.

The government says that will be spread out over seven years and is on top of the $3 billion announced last year when the Liberals unveiled their plan to reach net-zero emissions by 2050.

Another measure targeting heavy emitters is a new tax incentive to encourage companies to adopt technology that traps carbon dioxide into the ground from fuel combustion instead of seeing it released into the atmosphere.

The government says it will soon begin consultations on designing a tax credit for capital spent on carbon capture and storage technology in hopes of increasing how many million tonnes Canada traps annually.

This report by The Canadian Press was first published April 19, 2021.

The Canadian Press