2024 Federal Budget – Our Policy Experts’ Insights

Photo Credit: The Canadian Press, Darren Calabrese

On April 16, 2024, the Government of Canada released its 2024 Federal Budget. 

Policy experts from the Canadian Chamber of Commerce have reviewed the Budget in detail, and their perspective on its implications for Canadian business can be found below. 

General

Today’s budget contains few surprises. Most of the major new spending was announced by the government over the last few weeks, and the government’s projections for the deficit are largely in line with previous predictions. Instead of using a revenue windfall to reduce the deficit more quickly, the government chose to use it along with changes to the capital gains tax, to fund this new spending.

What’s still missing is a clear plan to promote productivity and restore economic growth in Canada. Canada continues to slip further behind our competitors in both of these categories.

Our lagging productivity and stalled GDP growth means Canadians are becoming collectively poorer and working harder to just remain where they are today. Among the positive announcements in today’s Budget, we’re happy to see a focus on streamlining internal trade. Strengthening our internal trade could elevate GDP growth by up to 8% and fortify Canada’s economic foundation. It shouldn’t be easier to trade with Europe than it is within our own country.

Perrin Beatty, President and CEO, Canadian Chamber of Commerce

Capital Gains 

Canada must end the cycle of tax and spend politics. Fueling economic growth is the key to improving quality of life and affordability for Canadians. 

We oppose any measure which will increase the costs for businesses and Canadians when both are currently experiencing challenging economic headwinds. Throttling the success of Canadian businesses with new taxes will limit opportunities and employment for Canadians, putting economic growth and productivity even further out of reach. We will continue to consult with Canadian businesses to understand the full impacts of today’s capital gains tax increase.

Jessica Brandon-Jepp, Senior Director, Fiscal and Financial Services Policy

Digital Services Tax 

The Canadian Chamber was disappointed to see the government double down on the harmful and punitive Digital Services Tax in today’s budget.  This tax will affect far more than just large multi-national corporations:  if enacted, the DST will ripple across the Canadian economy to affect many small and medium businesses, and hurt Canadians.

Jessica Brandon-Jepp, Senior Director, Fiscal and Financial Services Policy 

Housing 

Today’s Budget helped us move in the right direction on a long road to housing affordability. 

The Canada Housing Infrastructure Fund addresses a critical and often overlooked requirement for the creation of new housing, while putting a freeze on new development charges that persistently drive up the cost to build. 

It is also encouraging to see funds to bring in labour in the homebuilding sector, as well as to develop skilled trades domestically. 

But we’ll need to see more. Restoring affordability will require government to pull every tool out of the toolbox to boost supply. While funding helps, enabling the private sector to allocate capital to new projects is critical.

Pascal Chan, Senior Director, Transportation, Infrastructure & Construction 

International Trade

We welcome the government’s commitment to renewing the Canada-U.S. Energy Transformation Task Force, new funding to bolster private sector investment within Latin America, and also the creation of a new Market Watch Unit within CBSA to help protect Canadian workers and businesses from unfair trade practices. However, given Canada will hold the G7 Presidency in the coming year, it is unfortunate that this budget’s commitments relating to international economic engagement are piecemeal and do not reflect an ambitious and cohesive international trade agenda for the Indo-Pacific and for North America.

Gaphel Kongsta, Director, International Policy

Transportation Infrastructure 

Canada must build and maintain transportation infrastructure that can transport goods to market. Unfortunately, today’s budget did not present a long-term trade infrastructure plan or national corridor strategy.

Pascal Chan, Senior Director, Transportation, Infrastructure & Construction 

Internal Trade 

Streamlining internal trade is a pivotal catalyst, potentially elevating GDP growth by up to 8% and fortifying Canada’s economic foundation. It shouldn’t be easier to trade with Europe than it is within our own country. These are positive steps to reduce federal trade barriers. We look forward to working with the federal and provincial governments to continue to strengthen internal trade.

Robin Guy, Vice President and Deputy Leader, Government Relations 

Labour 

Recurring labour disruptions continue to inflict damage to Canada’s economy and reputation as a reliable trading partner. While Budget 2024 will look to address labour stability, it continues to push forward replacement worker legislation that would do the opposite. Our already-fragile reputation as a reliable place to do business is at risk if the government doesn’t bolster our ability to resolve labour disputes.

Robin Guy, Vice President and Deputy Leader, Government Relations 

Getting Major Projects Built 

We must ensure we shed our reputation of a place where major projects can’t get built in order to attract and retain investment.  It’s therefore great to see several budget initiatives aimed at getting major projects built faster and shortening permitting timelines, particularly in mining and minerals development.

Bryan Detchou, Senior Director, Natural Resources, Environment and Sustainability 

The New Canada Carbon Rebate for Small Business 

After five years, Budget confirms that the government will return proceeds from the price on pollution to small and medium-sized businesses (SMEs). This commitment, coupled with the proposed accelerated and automated return process, will hopefully alleviate the additional barriers and costs disproportionately affecting SMEs in today’s challenging market. Businesses need certainty from government, and continue to struggle under layers of taxes and regulation.

Bryan Detchou, Senior Director, Natural Resources, Environment and Sustainability

EV Supply Chain Investment Tax Credit 

We commend the government’s announcement of the EV Supply Chain Investment Tax Credit. Investment Tax Credits (ITCs) are instrumental in driving investments toward decarbonization, facilitating the transition to low-carbon energy solutions across various sectors of Canada’s economy.  We eagerly anticipate engaging with the government to refine the specifics and ensure these credits maximize their impact on advancing Canada’s decarbonization efforts.

Bryan Detchou, Senior Director, Natural Resources, Environment and Sustainability

Indigenous Loan Guarantee Program 

The announced parameters of Indigenous Loan Guarantee Program is a significant step in fostering financial independence for Indigenous communities, enhancing their ability to engage, invest, and prosper from commercial projects. We are also pleased to hear that the program will be sector-agnostic for natural resources and energy projects

Bryan Detchou, Senior Director, Natural Resources, Environment and Sustainability 

Manufacturing 

We need robust measures to reverse our negative productivity trends, improve our labour market, and enhance our economic competitiveness. We’re overdue for an ambitious and robust manufacturing strategy focused on growth, technology adoption and innovation.

Alex Greco, Senior Director, Manufacturing and Value Chains 

Scientific Research and Experimental Development (SR&ED)

The new funding made available will help support business research and development and encourage new innovations for Canadian business. Funding needs to be made available quickly so enhancements can be made to the program swiftly and efficiently. We look forward to engaging in additional consultations to modernize the program to foster research, development and innovation in Canada.

Alex Greco, Senior Director, Manufacturing and Value Chains 

Regulatory Modernization 

New work on regulatory sandboxes will enable smarter regulatory systems, better processes, and well-designed regulations to help minimize the costs to business and unlock economic growth while improving public health and safety outcomes.

Alex Greco, Senior Director, Manufacturing and Value Chains 

Artificial Intelligence 

Today’s Budget made significant investments in AI. The Canadian Chamber has been calling for a focus on increased AI business adoption due to its strong link to productivity. New funding for AI compute infrastructure and for AI business adoption in critical sectors is an important step in the right direction. However, we continue to advocate for an AI federal regulatory environment that, in tandem with funding, will allow for that critical AI adoption to materialize amongst all sizes of Canadian businesses and across all sectors.

Ulrike Bahr-Gedalia, Senior Director, Digital Economy, Technology & Innovation 

Cybersecurity

We saw the government make significant commitments to cyber defence last week and today’s budget highlights some cyber security investments across government. Now, we need to see more ambition to improve Canada’s cyber security resilience across our economy and business communities. If we don’t, Canadian businesses, individuals, and critical infrastructure will continue to be at growing risk of cyber threats.

Ulrike Bahr-Gedalia, Senior Director, Digital Economy, Technology & Innovation 

Canada Digital Adoption Program (CDAP) 

One doesn’t have to be an expert to know that digital technology is more important than ever for the success of Canadian businesses. Renewing CDAP’s discontinued Boost Your Business Technology Grant would have presented an excellent opportunity for many SMEs across Canada to adopt new technologies and successfully partake in the digital economy.

Ulrike Bahr-Gedalia, Senior Director, Digital Economy, Technology & Innovation 

Agri-food 

Canada has the food and fertilizer needed to address global food insecurity. Our agri-food sector can be a key part of the solution, but we need action from policymakers to create an environment that encourages investment and growth. That means encouraging capital investment in agricultural processing, which would help Canada meet global food demand while promoting value-added economic activity through our exports.

Liam MacDonald, Director, Policy and Government Relations 

Talent and skills 

We cannot emphasize enough the importance of building a skilled and resilient workforce ready to respond to today’s labour needs and tomorrow’s jobs.  

We welcome investments to encourage more Canadians to pursue careers in the skilled trades and improve internal labour mobility and foreign credentials recognition, particularly in the construction and healthcare sectors. Budget 2024 also includes specific measures to support youth employment by creating more work-integrated learning opportunities, job placements and employment support opportunities. 

Missing from Budget 2024 is the inclusion of more measures to upskill and reskill Canada’s workforce, so Canadian businesses have access to the critical talent and skills they need to grow and seamlessly navigate the future.

Diana Palmerin-Velasco, Senior Director, Future of Work 

Pharmacare  

The pharmacare proposal will spend billions of tax dollars, and grow over time, to pay for less coverage than what many Canadians have now through their private providers. The government should focus its attention on providing help for those who really need it. The Government chose a targeted approach for dental care, and there’s no reason the same approach could not be followed with pharmacare.

Kathy Megyery, Senior Vice-President

Biomanufacturing and Life Sciences Strategy

We are pleased that the Government continues to advance its Biomanufacturing and Life Sciences Strategy to ensure Canada’s overall resilience and national security while investing in a durable national platform for future competitiveness and growth.

Kathy Megyery, Senior Vice-President

Defence Policy 

Today’s Defence Policy Update brings us closer to meeting our NATO spending commitments and addresses some longstanding challenges facing our defence industrial base. What’s important here is that we’re investing in our arctic sovereignty, reviewing how we can grow our defence manufacturing ecosystem, while better protecting Canadians from cyber threats.  But our Armed Forces won’t be served by more deferred investments. The regular reviews of our national security and defence strategies are a starting point, but the ever-increasing threats to Canada’s national and economic security requires a defence policy that is ready to respond to tomorrow’s threats, today.

Perrin Beatty, PC, OC, President and Chief Executive Officer

Business Data Lab 

Today’s commitment of renewed funding for the Business Data Lab (BDL) will allow these important, free, online tools to continue to provide essential data and insights that our small businesses, municipalities and other community organizations need to make evidenced-based decisions to innovate, grow and succeed in a dynamic, challenging economy.

Dr. Stephen Tapp, Chief Economist