Federal Budget 2016 – Impact on Grants & Incentives
Major investments are being made this year and committed for the next 2 years within the Federal Budget. This year the Federal Budget plans to spend $317.1 billion in total. That is $868 million daily, or $108 million every working hour. Nonetheless, the budget has a significant impact. The anticipated $29.4 billion deficit will be added to our total national debt of $619 billion.
Over the next 5 years, we will add $113 billion, or 18% to our national debt. In 1867, we had $75.7 million debt, today we have $619 billion. Until 1975, federal debt grew between 5% and 10% per year. After 1975 it grew for the next 12 years by more than 20%. Within a historical context, this would be considered a major spending budget, however, with debt growth within historical averages, it does not represent a significant risk to the future fiscal situation of Canada.
As a Canadian organization or community, it is important to follow the budget and understand the current and near future priorities of spending and investment. With an understanding of the investment strategy of the budget, an organization or community can start planning and advancing projects that align with the spending priority areas of the Federal government. When spending priorities of an organization or community align with those of the Federal Government, the opportunities to take advantage of Grants & Incentives increase.
Here are the budget highlights from a Grants & Incentives perspective:
Employment and Training Initiatives
- Youth Employment Strategy – $165.4 million in additional funding.
- Canada Summer Jobs Program – $339 million over 2 years, creating 35,000 additional student jobs.
- The program provides funding to not-for-profit organizations, public-sector employers and small businesses with 50 or fewer employees to create summer job opportunities for young people who are full-time students.
- Union Based Apprenticeship Training – $85.4 million over 5 years to support union based training program initiatives.
- Training Funding – Major Funding Program Canada Job Grant will continue, with an additional $175 million this year through Canada Job Fund Agreements.
- Public Transit – $3.4 billion over 3 years to upgrade and improve public transit systems across Canada.
- Post-Secondary Strategic Investment Fund – $2 billion over 3 years, starting in 2016–17. This initiative will support up to 50 per cent of the eligible costs of infrastructure projects at post-secondary institutions and affiliated research and commercialization organizations, in collaboration with provinces and territories.
- Water & Green Infrastructure – $5.0 billion over 5 years for investments in water, wastewater and green infrastructure projects across Canada.
- Social Infrastructure – $3.4 billion over 5 years, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserve.
- New Building Canada Fund – Accelerate the spending of the $9 billion available for infrastructure program.
- Federation of Canadian Municipalities – $75 million in new funding for local governments to address climate change. This investment will support municipality-led projects to identify and implement greenhouse gas reduction opportunities. It will also support the assessment of local climate risks, and the integration of these impacts into asset management plans.
- Federation of Canadian Municipalities – $50 million in new funding for Asset Management Plan Development.
- Clean Water and Wastewater Fund – $2 billion over 4 years for water distribution and treatment centres.
- Canada Cultural Spaces Fund – $168.2 million over 2 years will be allocated to enhancing cultural and recreational infrastructure, places like community centres, museums, parks and arenas.
- Canada 150th Anniversary – $150 million will be distributed through Regional Development Agencies over 2 years, starting in 2016–17. This funding, which is cost-shared with municipalities, community organizations and non-profit entities, will support projects to renovate, expand and improve existing community and cultural infrastructure in all regions of the country, including projects that advance a clean growth economy.
- Broad Band – $500 million will be invested over 5 years to enhance Rural Communities Internet Connectivity to the digital world.
- Enabling Accessibility Fund – $4 million in renewed funding for municipalities to retrofit facilities to improve accessibility.
- Small Craft Harbours – $149 million in investments that will revitalize small craft harbours across the country.
Innovation & Research Highlights:
- National Research Council’s – Industrial Research Assistance Program – An additional $50 million is being allocated to assist more businesses.
- Canadian Institutes of Health Research (CIHR) – $30 million allocated for 2016/17.
- National Sciences and Engineering Research Council (NSERC) – $30 million allocated for 2016/17.
- Social Sciences and Humanities Research Council – $16 million allocated for 2016/17.
- Innovation Networks & Clusters – $800 million over four years to support innovation networks and clusters.
- Growing Forward 2 – Existing $3 billion 5 year framework will continue. Government is committed to supporting this sector going forward.
- Agri-Innovation Fund – A new $160 million was proposed in the Liberal Party’s Platform, but was not mentioned in the budget.
- Automotive Innovation Fund originally planned to sunset in 2017–18, but has been extended through to the end of 2020–2021. However, the fund will be examined to maximize the impact of the program.
- Automate Supplier Innovation Program – No mention of existing funding program that provides $100 million over 5 years.