Federal Budget 2021: What You Need to Know
On April 19th, the Government of Canada presented its 2021-2022 budget, the first to have been tabled since 2019. It goes without saying that this budget includes measures to respond to the pandemic we are currently experiencing, but its common thread is undoubtedly economic stimulus. Here is a summary of what you, as a community economic development officer (CEDO) or entrepreneur, should take away from this budget.
Extension of assistance programs
Here is some news that should cause owners of many businesses to breathe a sigh of relief: most of the business assistance programs that were launched to support them in the context of COVID-19 will be extended. For example, the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Rent Subsidy and the Lockdown Support for Businesses will be extended until September 25, 2021. As for the Canada Emergency Business Account, it is extended until June 30, 2021.
The government will also create a new program, Canada’s Recovery Hiring Program, which will be intended for eligible employers struggling with declines in revenues since the start of the pandemic. This program appears to be similar to the CEWS in that employees will be asked to choose the most advantageous option between it and the new program when submitting an application.
Support for businesses
To support the First Nations economy, the Government of Canada is proposing to add $117 million to the Indigenous Community Business Fund, which, as its name suggests, helps businesses that are owned by local governments. In terms of private entrepreneurship, there will be investments of $42 million over three years to expand the Aboriginal Entrepreneurship Program.
Measures to support women’s entrepreneurship are also included in the budget with $22 million in funding over three years to support the Indigenous Women’s Entrepreneurship Initiative, supported by the National Aboriginal Capital Corporations Association (NACCA), and $146.9 million over four years to strengthen the Women Entrepreneurship Strategy, which, it should be noted, is not specific to First Nations. With this money, the government wants to make it easier for women to access funding, mentoring and training.
Another announcement that caught the attention of the FNQLEDC concerns the changes that will be made to the Canada Small Business Financing Program, which should increase its funding by $560 million annually. These changes will notably allow the maximum loan amount to be increased from $350,000 to $500,000 and to extend the loan coverage period from 10 to 15 years.
Finally, as the pandemic has accelerated the need for businesses to develop or improve their digital activities, the government will shortly launch the Canadian Digital Adoption Program, which will have a budget of $1.4 billion over four years.
Support for certain sectors
The tourism industry is one of the sectors of the Canadian economy that has been hardest hit by the pandemic. To help businesses, the Government of Canada is launching a $500 million assistance fund, which will be administered by regional development agencies, including Canada Economic Development for Quebec Regions. Another of the economic sectors severely affected by the many periods of lockdown and business closures is undoubtedly that of arts and culture. To help its businesses, a $300 million stimulus fund will be created and administered by Canadian Heritage.
Indigenous community infrastructure will also be the subject of $6 billion in investments over five years, which suggests the possibility for companies to secure contracts related to the work to be carried out. The Government of Canada is also maintaining its objective of awarding 5% of its contracts to Indigenous businesses.
In conclusion, this is just an overview of the main budget measures that were presented by Minister Chrystia Freeland. These measures will allow businesses to continue their activities and prepare themselves in order to be able to seize the opportunities that will present themselves in connection with the economic recovery. The FNQLEDC team will remain on the lookout for any new details concerning new programs and funds that will be created or launched soon.
To view the entire 2021 budget, visit the dedicated website.
Click here to view the document prepared by the Assembly of First Nations on the Budget 2021 Investment Areas.
To be informed of all the latest information available regarding government assistance programs, we encourage you to regularly visit the COVID-19 section of our blog.