Economic Update:  News for Business in Canada

Jose L. Riquelme, CPA, CGA

On December 14, 2021, Deputy Prime Minister and Minister of Finance Chrystia Freeland, released an Economic and Fiscal Update 2021 with measures that will impact businesses throughout the Nation. The most relevant measures are listed as follows:

• Proposed local lockdown support for workers and business: As the new Covid-19 Omicron variant expands, the Federal Government intends to avoid generalized lockdowns as the vaccination efforts increase. The new approach is to target the relief to areas and communities directly affected by lockdowns. As such, the Government is proposing to assist workers and businesses directly affected by lockdowns orders from Health Officials
• Paid sick leave: In connection to the above measure, the Government is moving forward to mandate ten days of paid sick leave for workers in federally regulated businesses such as crown corporations, banks, utility companies, etc
• Supply chain relief: Many areas of the economy have been affected by delays in the supply chains, creating backlogs and subsequent price increases. This affects businesses and individuals alike. In order to offer relief, the Government announces a $50 million fund to “call for proposals that will help Canadian ports acquire cargo storage capacity and take other measures to relieve supply chain congestion”.
• Canada Performing Arts Workers Resilience Fund: Businesses involved in the Performing Arts sector that have been affected by the pandemic will have access to relief from the Federal Government with this newly created $60 million fund
• Canada Emergency Business Account (CEBA): Almost 900,000 businesses have received the CEBA loan which is an interest-free loan of up to $60,000. A portion of this loan may become a grant if certain amounts are paid before December 31, 2022. The Government will bring forward legislation to expand this deadline in order to ease working capital pressures that this repayment may cause
• Small Businesses Air Quality Improvement Tax Credit: As an incentive for businesses to upgrade ventilation systems and air filtration, a new tax credit of 25% for these expenditures will be offered for amounts up to $10,000 per location and $50,000 in total
• Mandatory vaccination.  New legislation will come into force in early 2022 under the Canada Labour Code to make vaccination mandatory in federally regulated workplaces, including interprovincial transportation, banks, postal, courier and other areas of the economy

Ancillary measures include the additional $85 million funding to Canada’s immigration system to reduce backlogs and speed-up work permits, citizenship applications, etc. This will directly benefit businesses that are currently facing severe labour shortages. In addition, the Government is provisioning $4.5 billion “for possible further costs of fighting Omicron and other COVID-19 surges, including spending on border measures and income and business supports.”  

The above announcements are subject to modifications as part of the legislative process and their details, if approved, will be available when substantially enacted.

Jose Riquelme, CPA, CGA is a faculty member for the January 19, 2022 Virtual CE Summit as an author for the included Advanced Personal Tax Course. Act now, today is the deadline to receive a hard copy Knowledge Journal and lunch included in your tuition!