Highlights from Budget 2022
Budget 2022 invests in three main things: people; economic growth; and a clean future for everyone.
Through these targeted and responsible investments our government will help make life more affordable, create jobs and prosperity today, and build a stronger economic future for all Canadians.
In this Budget, we are:
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- Making it easier for Canadians to buy a home;
- Moving forward on dental care;
- Helping our businesses scale up and grow;
- Making wealthy corporations pay their fair share; and
- Investing in a clean future and helping Canada become a world leader in producing electric vehicles.
Now, as we emerge from the pandemic, our government is focused on the priorities that Canadians expect us to deliver on: making life more affordable, creating jobs and growing the economy, and ensuring a clean future for everyone.
Making life more affordable
- Budget 2022 includes a range of measures that will help to bring down the cost of living, including:
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- $5.3 billion over five years to provide dental care for Canadians with family incomes of less than $90,000 annually, starting with under 12 years-olds in 2022, expanding to under 18 years-olds, seniors and persons living with a disability in 2023, with full implementation by 2025;
- Doubling support provided through the First Time Home Buyers’ Tax Credit from $750 to $1,500;
- Introducing a Multigenerational Home Renovation Tax Credit, which provides up to $7,500 in support for constructing a secondary suite; and,
- $475 million in 2022-23 to provide a one-time, $500 payment to those facing housing affordability challenges.
- These investments will provide the foundation for boosting Canada’s long-term growth and creating good paying jobs — the best way to make life affordable for years to come.
Making housing more affordable
- Our government will build more homes, help Canadians save for and buy their first home, protect renters and buyers, and ban foreign owners and curb speculation.
- Budget 2022 will:
- Introduce the Tax-Free First Home Savings Account;
- Launch a new $4 billion Housing Accelerator Fund to support and incentivize municipalities to build more homes faster;
- Take initial steps to develop a Home Buyers’ Bill of Rights and bring forward a national plan to end blind bidding.
- Ban foreign buyers from owning non-recreational residential property for two years.
- Our federal government’s plan will make housing more affordable by doubling housing construction across Canada over the next 10 years.
A strong, growing, and resilient economy
- Our government will make it easier for businesses to invest in innovation and technology that will help grow the economy and create good-paying jobs in Canada by:
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- Launching the $15 billion Canada Growth Fund to attract substantial private sector investment in good jobs and new industries that will drive the green transition.
- Creating a Canadian Innovation and Investment Agency with $1 billion in funding;
- Cementing Canada’s position in global supply chains by providing up to $3.8 billion in support to implement Canada’s Critical Minerals and Clean Industrial Strategies;
- Phasing out access to the small business tax rate more gradually, with access to be fully phased out when taxable capital reaches $50 million, rather than at $15 million, meaning growing companies can keep more of what they earn;
- Supporting supply chain projects through the National Trade Corridor with an investment of $450 million, on top of last year’s $1.9 billion;
- Strengthening Canada’s semiconductor industry with $45 million to support projects;
- Strengthening the ability of Canadian companies to defend and use patents, as well as strengthen the Competition Act; and,
- Undertaking a comprehensive review to modernize how we support innovation and innovative companies through the tax system.
- We have a plan to make Canada’s economy more innovative and more productive by adopting best practices and new approaches to business innovation from around the world.
Clean air and a strong economy
- Smart climate investments today are good for Canadian workers, good for the Canadian economy, and good for the planet.
- That’s why our federal government will be:
- Launching a world-leading $15 billion Canada Growth Fund;
- Protecting our freshwater by creating the Canada Water Agency that will be set up in 2022;
- Reducing emissions on the road with $1.7 billion in incentives for the Zero-Emission Vehicles program;
- Expanding and extending the Low Carbon Economy Fund with $2.2 billion over seven years;
- Establishing an investment tax credit of up to 30%, focused on net-zero technologies, battery storage solutions and clean hydrogen; and,
- Renewing and Expanding the Oceans Protections Plan with an additional $2 billion.
- Budget 2022 reiterates the $9.1 billion commitment presented in the Emissions Reductions Plan.
- With the largest mobilization of global capital since the Industrial Revolution already underway, Canada has the chance to become a leader in the clean energy of the future.
Creating good middle-class jobs
- Canada has the strongest jobs recovery in the G7 having recouped 115% of the jobs lost since the peak of the pandemic and our unemployment rate is down to just 5.2% —the lowest in the past five decades.
- Despite our unemployment rate hitting near-record lows, some businesses are still struggling to find workers, and yet, too many Canadians are facing barriers to finding meaningful and well-paid work. This is a problem in Canada and around the world.
- That’s why our federal government is:
- Building on our child care agreements with all provinces and territories by providing $625 million for an Early Learning and Child Care Infrastructure Fund that will enable provinces and territories to make additional child care investments, including the building of new facilities;
- Introducing a Labour Mobility Deduction, which would provide tax recognition on up to $4,000 per year in eligible travel and temporary relocation expenses to tradespersons and apprentices;
- Supporting the processing and settlement of new permanent residents to Canada as part of Canada’s Immigration Levels Plan with an additional $317.6 million in funding;
- Implementing an employment strategy for persons with disabilities with $272.6 million; and,
- Doubling the Union Training and Innovation Program with an investment of $84.2 million.
Canada’s leadership in the world
- In partnership with like-minded democracies around the world, Canada will continue to stand up to the global threats that recognize no borders.
- To immediately reinforce Canada’s national defence, announcements in Budget 2022 will provide a total of more than $8 billion in new funding over five years—on top of planned increases associated with Canada’s 2017 defence policy, Strong, Secure, Engaged.
- Canada will continue to stand with Ukraine through a new $1 billion loan to the Ukrainian government through a new Administered Account for Ukraine at the International Monetary Fund
- To support Ukraine in its efforts to defend its sovereignty, our federal government will also be providing an additional $500 million in further military aid.
- This funding will strengthen Canada’s contributions to our core alliances; bolster the capabilities of the Canadian Armed Forces; continue to support culture change and a safe and healthy working environment in the Canadian Armed Forces; and reinforce Canada’s cyber security.
Strong public health care
- Since the start of the pandemic, the federal government has invested more than $69 billion, with more funding to be rolled out in future years, to lead a coordinated federal, provincial, and territorial response to fight COVID-19 and protect the health and safety of Canadians.
- Budget 2022 proposes to invest:
- $2 billion through a top-up to the Canada Health Transfer to reduce the backlogs of surgeries and procedures;
- $45.2 billion in support to the provinces and territories through the Canada Health Transfer, an increase of 4.8% over the 2021-22 baseline;
- $5.3 billion over five years, and $1.7 billion ongoing, to provide dental care for Canadians, starting with those under 12 years old, with full implementation by 2025;
- Supporting additional research of long-term effects of COVID-19 infections on Canadians;
- Support to attract more doctors and nurses to rural communities;
- Improving Canada’s Dementia and Brain Health research;
- $140 million for the Wellness Together Canada portal to continue providing Canadians with tools and services to support their mental health; and,
- Addressing the opioid crisis with an additional $100 million for the Substance Use and Addictions Program.
- From reducing backlogs in surgeries and procedures, to providing dental care for Canadians and making it easier for Canadians across the country to access the mental health care they need, our federal government has a plan to strengthen Canada’s public health care systems.
Moving forward on reconciliation
- The federal government is committed to a renewed nation-to-nation relationship with Indigenous peoples based on recognition of rights, respect, truth, co-operation, and partnership.
- Budget 2022 proposes to invest an additional $11 billion over six years to continue to:
- Support First Nations Children through Jordan’s Principle with $4 billion that will also support long-term reforms to improve implementation;
- Address the shameful legacy of residential schools by supporting communities in locating, documenting and memorializing burial sites at former residential schools;
- Implement Indigenous child welfare legislation, affirming Indigenous jurisdiction over child and family services;
- Improve health outcomes in Indigenous communities;
- Accelerate progress to end long-term drinking water advisories and continue addressing critical infrastructure gaps in First Nations communities on reserve;
- Invest $4 billion to accelerate work in closing Indigenous housing gaps; and
- Support Indigenous business and community economic development.
Safe and inclusive communities
- For generations, newcomers from around the world have helped build a Canada that is as vibrant and prosperous as it is today.
- Budget 2022 includes important measures to effect needed and positive change, including:
- A $100 million Federal LGBTQ2 Action Plan, which will support a fairer and more equal Canada for LGBTQ2 Canadians;
- $85 million for a new Anti-Racism Strategy and National Action Plan on Combatting Hate;
- Increasing investments to support the Special Envoy on Preserving Holocaust Remembrance and Combatting Antisemitism, and the new Special Representative on Combatting Islamophobia;
- Supporting the Black Canadian Communities Initiative with $50 million;
- Ensuring fair compensation for news media in the digital news ecosystem
- Supporting racialized, and religious minority journalist, content creators, and organizations with the Changing Narratives Fund;
- Doubling the qualifying expense limit of the Home Accessibility Tax Credit to $20,000;
- Providing $22.5 million over five years and $5 million ongoing, for the Canada Arts Training Fund;
- Developing a Buy-Back program for assault weapons; and,
- Introducing a new graduated disbursement quota rate for charities, from 3.5% to 5% for investment assets exceeding $1 million.
- Our federal government will continue to promote the values that have made Canada the diverse and prosperous country that it is today.
Tax fairness
- Since 2015, the federal government has worked to ensure that the wealthiest people and businesses pay their fair share; that sophisticated tax planning does not allow anyone to avoid paying the taxes they owe; and that tax measures disproportionately benefiting the wealthiest at the expense of everyone else are eliminated.
- Budget 2022 proposes additional measures, such as:
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- Introducing a temporary Canada Recovery Dividend for banks and insurance companies to pay a one-time 15 per cent tax on taxable income above $1 billion for the 2021 tax year;
- Implementing a public and searchable beneficial ownership registry, which will be accessible before the end of 2023;
- Proposing to permanently increase the corporate income tax rate by 1.5% on the taxable income of banking and life insurance groups above $100 million, increasing the overall federal corporate income tax rate above this income thread from 15% to 16.5%;
- Limiting the ability of wealthy Canadians to use foreign shell companies to avoid taxes in Canada.
- Examining a new minimum tax regime, so that high income earners pay at least 15%, the same as the lowest income Canadians subject to tax;
- Closing the Double-Deduction loophole and expand anti-avoidance tax rules;
- Implementing the minimum tax rate of 15% for large multinational enterprises that as agreed to by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, along with a domestic minimum top-up tax; and,
- Providing $1.2 billion to the Canada Revenue Agency to expand audits of larger entities and non-residents engaged in aggressive tax planning.
Effective government
- Budget 2022 proposes actions that will improve how the government operates and ensure that it continues to effectively and to efficiently serve Canadians, such as:
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- Reviewing previously announced spending plans with a view to reducing the pace and scale of spending that has yet to occur by up to $3 billion, as a result of a stronger than anticipated economic recovery;
- Launching a Comprehensive Strategic Policy Review to assess program effectiveness in meeting the government’s key priorities, and identify opportunities to save and reallocate resources to adapt government programs and operations; and,
- Launching a financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security.
- These efforts would target savings of $6 billion over five years, and $3 billion annually by 2026-27. The government remains focused on managing public finances in a prudent and responsible manner.
For more information on Budget 2022, go to: https://budget.gc.ca/2022/home-accueil-en.html