Canadian Contractor

Federal budget notes for contractors


April 20, 2021
By Patrick Flannery

The federal government released its 2021 budget on April 19. Here are some highlights of special interest to the window and door industry.

Home retrofits

Budget 2021 proposes to provide $4.4 billion on a cash basis ($778.7 million on an accrual basis over five years with $414.1 million in future years) to the Canada Mortgage and Housing Corporation (CMHC) to help homeowners complete deep home retrofits through interest-free loans worth up to $40,000. Loans would be available to homeowners and landlords who undertake retrofits identified through an authorized EnerGuide energy assessment. In combination with available grants announced in the Fall Economic Statement, this would help eligible participants make deeper, more costly retrofits that have the biggest impact in reducing a home’s environmental footprint and energy bills. This program will also include a dedicated stream of funding to support low-income homeowners and rental properties serving low-income renters including cooperatives and not-for-profit owned housing. The program would be available by summer 2021. It would be easily accessible through straightforward online tools, and is expected to help build Canadian supply chains for energy efficient products. It is estimated that more than 200,000 households would take advantage of this opportunity.

Affordable housing

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Budget 2021 proposes to provide an additional $2.5 billion over seven years to the Canada Mortgage and Housing Corporation, including an additional $1.5 billion for the Rapid Housing Initiative to address the urgent housing needs of vulnerable Canadians by providing them with adequate affordable housing in short order. At least 25 percent of this funding would go towards women-focused housing projects, and units would be constructed within 12 months of when funding is provided to program applicants. Overall, this new funding will add a minimum of 4,500 new affordable units to Canada’s housing supply, building on the 4,700 units already funded in the 2020 Fall Economic Statement through its $1 billion investment. The budget also includes $600 million over seven years to renew and expand the Affordable Housing Innovation Fund, which encourages new funding models and innovative building techniques in the affordable housing sector. To date, this program has committed funding to support the creation of over 17,600 units, including more than 16,300 affordable housing units and units for persons with accessibility challenges. This new funding will support the creation of up to 12,700 more units, bringing the total to over 30,000 units. The budget promises $118.2 million over seven years through the Federal Community Housing Initiative to support community housing providers that deliver long-term housing to many of our most vulnerable. In addition to these new investments, Budget 2021 proposes to advance and reallocate $1.3 billion, on a cash basis, of previously announced funding, including $750 million in funding under the National Housing Co-Investment Fund. This will accelerate the creation of 3,400 new units and the repair of 13,700 units. Also, $250 million in funding under the National Housing Co-Investment Fund, which will be allocated to support the construction, repair, and operating costs of an estimated 560 units of transitional housing and shelter spaces for women and children fleeing violence. This targeted funding is being reallocated—including advancing $200 million to 2021-22 and 2022-23—to make sure the government delivers on its commitments, and reinforces the government’s efforts to address gender-based violence, including the measures outlined in the forthcoming National Action Plan to End Gender-Based Violence. There is $300 million in funding in 2021-22 and 2022-23 from the Rental Construction Financing Initiative, which will be allocated to support the conversion of vacant commercial property into housing. As the demand for retail and office space has changed due to COVID, some landlords, particularly in major urban cores, are facing higher vacancies. This is an opportunity for property owners and communities to explore converting excess space into rental housing, enhancing the livability and affordability of urban communities. This funding will explore this new approach to development and target the conversion of excess commercial property space into 800 units of market-based rental housing.

Pyrrhotite remediation

Some homes in certain regions of Quebec have had serious and costly structural problems as a result of the presence of the mineral pyrrhotite in their foundations. In response, the Government of Quebec has provided significant financial support to affected homeowners to replace foundations and undertake other necessary repairs. To help more homeowners dealing with the consequences of pyrrhotite, the Government of Canada provided $30 million over three years in Budget 2016. Quebec recently announced an additional $25.7 million in its 2021 budget. The Government of Canada recognizes that an additional federal contribution might be needed. The Government of Canada will engage with Quebec to determine the appropriate amount. Details will be provided in the Fall Economic Statement.

COVID relief and stimulus

Budget 2021 proposes to extend the wage subsidy until Sept. 25. It also proposes to gradually decrease the subsidy rate, beginning July 4, in order to ensure an orderly phase-out of the program as vaccinations are completed and the economy reopens. It proposes to extend the rent subsidy and Lockdown Support until Sept. 25. It also proposes to gradually decrease the rate of the rent subsidy, beginning July 4. The government recently extended the application deadline for Canada Emergency Business Account to June 30. The government proposes to provide up to 12 additional weeks of Canada Recovery Benefit to a maximum of 50 weeks. The first four of these additional 12 weeks will be paid at $500 per week. As the economy reopens over the coming months, the government intends that the remaining eight weeks of this extension will be paid at a lower amount of $300 per week claimed. All new Canada Recovery Benefit claimants after July 17 would also receive the $300 per week benefit, available up until Sept. 25. Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or hiring more staff. This support would only be available for active employees and will be available from June 6 to November 20, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy. The aim is to make it as easy as possible for businesses to hire new workers as the economy reopens.

The budget also proposes many long-term changes to EI, saying “Canada needs a more effective income support system for the 21st century.”

Small business financing

Budget 2021 proposes to provide up to $101.4 million over five years to Innovation, Science and Economic Development Canada for the Small Business and Entrepreneurship Development Program. To provide affordable financing, increase data and strengthen capacity within the entrepreneurship ecosystem, Budget 2021 proposes to provide up to $146.9 million over four years to strengthen the Women Entrepreneurship Strategy. Women entrepreneurs would have greater access to financing, mentorship, and training. Funding would also further support the Women Entrepreneurship Ecosystem Fund and the Women Entrepreneurship Knowledge Hub.

Budget 2021 proposes to provide up to an additional $51.7 million over four years, starting in 2021-22, to Innovation, Science and Economic Development Canada and the regional development agencies for the Black Entrepreneurship Program.

Training

Budget 2021 proposes to provide $960 million over three years to Employment and Social Development Canada for a new Sectoral Workforce Solutions Program. Working primarily with sector associations and employers, funding would help design and deliver training that is relevant to the needs of businesses, especially small and medium-sized businesses, and to their employees. This funding would also help businesses recruit and retain a diverse and inclusive workforce. Budget 2021 proposes to provide $470 million over three years to Employment and Social Development Canada to establish a new Apprenticeship Service. The Apprenticeship Service would help 55,000 first-year apprentices in construction and manufacturing Red Seal trades connect with opportunities at small and medium-sized employers. Employers would be eligible to receive up to $5,000 for all first-year apprenticeship opportunities to pay for upfront costs such as salaries and training. In addition, to boost diversity in the construction and manufacturing Red Seal trades, this incentive will be doubled to $10,000 for employers who hire those underrepresented, including women, racialized Canadians, and persons with disabilities.

Employee ownership

Budget 2021 announces that the government will engage with stakeholders to examine what barriers exist to the creation of employee ownership trusts in Canada, and how workers and owners of private businesses in Canada could benefit from the use of employee ownership trusts.