Federal Budget, March 22, 2016
The Trudeau government’s first budget follows through on several election promises. Its main objective is stimulating growth. However, the significant deficit, which we can expect in coming budgets as well, is a call to prudence, in particular to avoid generating negative impacts on how Canada is being evaluated, especially by credit rating agencies.
According to the government, boosting the Canadian economy can be achieved through a series of measures designed to assist the middle class and communities. One key measure is a $11.9B injection in the first phase of a five-year infrastructure plan, with $3.4B over three years to modernize and rehabilitate public transit and $5B over five years for green infrastructure projects, water and wastewater systems across Canada.
In this respect, Raymond Chabot Grant Thornton wishes to point out, that for such projects, considering each project’s life cycle cost should be an integral part of its evaluation. To maximize the returns on all strategic projects, it’s essential to ensure that the construction budget takes account of operating, maintenance, financing and other costs to ensure they are a long-lasting success in Canadian communities.
Postsecondary education and research institutions
The government also considers institutional research a key issue. It has therefore increased financing for fundamental research by $95M annually and is investing $2B over three years in a new Post-Secondary Institutions Strategic Investment Fund to modernize on-campus research, commercialization and training facilities.
On the innovation front, the government has also opted to invest $800M over four years for innovation networks and clusters designed to increase collaboration and create value through innovation.
Moreover, the Canada Student Grant will be increased by 50%, from $2,000 to $3,000 per year for students from low-income families, and from $800 to $1,200 per year for students from middle-income families.
As arts and culture are a driving force in the economy, the government has announced investments of about $1.9M over five years. These targeted investments will be provided to, among others, the Canada Council for the Arts, Telefilm Canada, the National Film Board and unique programs that will allow our artists to shine on the international stage.
Labour-sponsored venture capital corporation tax credit
Lastly, the government has decided to restore the labour-sponsored venture capital corporation tax credit, an initiative Raymond Chabot Grant Thornton applauds as an efficient measure to boost business growth.