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Impact of the Federal Budget

By Bill Ferreira, vice-president, government relations and public affairs, Canadian Construction Association

On March 22, the federal government presented its latest budget which is more of a clarification rather than a new document. With so much uncertainty in the U.S., the federal government has decided to limit new initiatives. Changes to existing programs, while directional, have very little new money attached to them. Deficit and debt The projected deficit will reach a peak of $28.6 billion in 2017-18 before falling slightly over the next five years. As a measure of debt-to-GDP, the federal government is expected to maintain a 31.6 per cent level for the next two years before the ratio begins to fall again to 30.9 per cent by 2021-22. Infrastructure There was no new money announced in the budget, but a few additional details were released regarding the second phase of the infrastructure program. First, the new funds will require the signing of new framework agreements with the provinces and territories. These are expected to be finalized by the fall of 2017. Second, the funding formula for Phase II is changing, with the federal government now only covering 40 per cent of estimated costs for projects

with a municipal or private, not-for-profit partner; 50 per cent for projects involving a provincial government; and 75 per cent for projects involving Indigenous communities or the territories. Innovation Budget 2017 also makes available $950 million to support innovation across Canada in seven superclusters, including infrastructure and transportation. Skills development and training This year’s budget announced the creation of a new organization that will work with the private sector, educational institutions and the not-for-profit sector to identify employer-demanded skills, explore new approaches to delivery of skills training, and share information and analysis to inform future training investments. Budget 2017 will invest $1.8 billion over six years to expand the labour market development agreements, plus an additional $900 million over six years to create new workforce development agreements which will replace the previous labour market agreements (LMA) for EI-ineligible unemployment.

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