On April 19th, Minister of Finance Chrystia Freeland unveiled the government’s first budget in over two years amid COVID-19 cases re-escalating across the country. This long-awaited budget is one of the most important budgets in recent history as many sectors of the economy, including campgrounds, are still reeling from the impacts of COVID-19, and provinces are navigating through new lockdowns and vaccine roll-outs.
Budget 2021, which could double as a re-election pitch for the Liberals, provides the government’s roadmap to Canada’s economic recovery post-crisis and a plan to build a stronger and greener economy of the future. Themes include: investments in green energy, support for hardest-hit sectors and for those who have been disproportionately impacted by COVID-19, including women, Indigenous peoples, young people and racialized Canadians, are recurring throughout the budget
Ongoing Support for Businesses
Budget 2021 largely attempts to balance the need of providing an ongoing rescue plan for the damaged economy while setting the stage for a stronger economic rebound. To help businesses and workers while the pandemic still rages, the government proposes to extend the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) until September, while also implementing a new program to temporarily subsidize new hiring, providing $1,100 per month for every new employee.
Overall, the budget proposes over $100 billion in stimulus spending in various programs and investments, including $30 billion in funding over five years for a national early learning and child care system and the introduction a new $15 federal minimum wage.
The Fiscal Update
Last year’s deficit came in at $354.2 billion, lower than the $400 billion deficit projected in the Fall Economic Statement. The deficit is projected to reach $154.7 billion in 2021-2022 and $59.7 billion in 2022-2023.
Key highlights to Canadian Camping and RV Council members:
Tax change for Small Campground Owners:
While CCRVC was optimistic that we would see our concerns regarding private campground’s clear eligibility of the small business tax deduction included in the 2021 Budget presented by Minister Freeland this week, this unfortunately did not occur.
While we are disappointed that the Budget did not address our concerns and adopt our recommendations, meaningful discussions have been taking place during our virtual RV and Camping Awareness Week April 19th-23rd which we will continue afterwards until we are successful.
Extension of COVID-19 Relief Measures
Budget 2021 proposes to extend the wage subsidy, the rent subsidy, and Lockdown Support until September 25, 2021. It also proposes to gradually decrease the rates for the wage subsidy and the rent subsidy, beginning July 4, 2021, in order to ensure an orderly phase-out of the programs as vaccinations are completed and the economy reopens.
The government recently extended the application deadline for the Canada Emergency Business Account (CEBA) to June 30, given the continued financial strain of the pandemic. The budget proposes to do the same for the Regional Relief and Recovery Fund and the Indigenous Business Initiative. If you haven’t applied for CEBA, it could be a beneficial program whereby $20,000 of the max. loan of $60,000 is forgiven if the $40,000 is repaid by 2022.
Canada Recovery Hiring Program
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.
Ottawa adds $1B to broadband fund for rural, remote communities
The federal government will add $1 billion to a fund for improving high-speed communications in rural and remote areas of Canada, bringing the total to $2.75 billion by 2026, the Liberals said Monday in their first full budget since the pandemic began last year. Wifi availability to campground owners is critical and we are pleased that our advocacy efforts are being heard in this regard.
The money is going to the Universal Broadband Fund, which is designed to support the installation of “backbone” infrastructure that connects underserved communities to high-speed internet.
The Budget also introduced a tax on luxury vehicles and aircraft costing $100,000 or more and boats costing $250,000 or more. The proposed tax, which would take effect Jan. 1, 2022, would be the lesser of two amounts: either 10% of the purchase price, or 20% of the amount by which the purchase price exceeds the luxury threshold ($100,000 for cars and aircraft and $250,000 for boats).
The RV and Camping Industry was relieved to learn that various vehicles will be exempt from the new tax, including motorcycles, all-terrain vehicles, snowmobiles, racing cars and recreational vehicles.
Key Highlights for Tourism Canada
· An investment of $500 million Tourism Relief Fund, administered by the regional development agencies. The Fund will support investments by local tourism businesses in adapting their products and services to public health measures and other investments that will help them recover from the pandemic and position themselves for future growth.
· $200 million through Canadian Heritage to support local festivals, community cultural events, outdoor theatre performances, heritage celebrations, local museums amateur sport events.
· $100 Million to Destination Canada for domestic marketing that will encourage tourism throughout Canada
Additional Business Support:
An investment of $960 million over three years to Employment and Social Development Canada for a new Sectoral Workforce Solutions Program. The Sectoral Workforce Solutions Program will work with associations and employers to fund the design and delivery of training that is relevant to the needs of businesses.
Investment to connect 90,000 Canadians with training to access jobs in sectors where employers are looking for skilled workers (i.e. PSWs, health, clean energy, construction)
Will look to diversify skilled sectors by ensuring 40% of funding goes towards supporting workers from underrepresented groups, including women, persons with disabilities, and Indigenous peoples.
View the Full Budget: