Investin g in the Middle Class

Investing in the Middle Class

BUDGET 2019

Tabled in the House of Commons by the Honourable

William Francis Morneau, P.C., M.P. Minister of Finance March 19, 2019

?Her Majesty the Queen in Right of Canada (2019) All rights reserved

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Table of Contents

Introduction........................................................................................................ 9

Facing an Uncertain Future ........................................................................................ 10 Results for the Middle Class ........................................................................................ 11 A Long-Term Plan for Canadians ............................................................................... 13 Investing in the Middle Class...................................................................................... 13 Conclusion ................................................................................................................... 14

Overview .......................................................................................................... 15

Canadian Economic Context .................................................................................... 15 Budget 2019 Investments ............................................................................................ 17 Maintaining Canada's Low-Debt Advantage .......................................................... 19

Chapter 1 ? Investing in the Middle Class.................................................... 21

Part 1: An Affordable Place to Call Home................................................................. 22 Improving Affordability Today: Support for First-Time Home Buyers....................... 22

Introducing the First-Time Home Buyer Incentive .................................................... 23 How the First-Time Home Buyer Incentive Would Work............................... 23

Modernizing the Home Buyers' Plan ...................................................................... 25 Working Together: Increasing Housing Supply Through Partnerships and Targeted Investments .................................................................... 27

Expanding the Rental Construction Financing Initiative .................................... 27 Encouraging Innovation With the Housing Supply Challenge .......................... 28 Launching an Expert Panel on the Future of Housing Supply and Affordability ................................................................................................................ 29 Delivering on Canada's First National Housing Strategy.................................... 29 Increasing Fairness: Strengthening Rules and Compliance in Canada's Housing Market...................................................................................... 31 Taking Action to Enhance Tax Compliance in the Real Estate Sector............ 31 Deterring Financial Crime in Real Estate .................................................................. 32 Monitoring Purchases of Canadian Real Estate .................................................. 32 Part 2: A New Approach to Helping Middle Class Canadians Find and Keep Good Jobs...................................................................... 33 Horizontal Skills Review.............................................................................................. 35 Introducing the Canada Training Benefit ............................................................. 37

How the Canada Training Benefit Will Work ................................................. 38 How the Canada Training Benefit Will Help Workers and Employers ....... 40 Using the Canada Training Benefit ................................................................. 41 Preparing Young Canadians for Good Jobs........................................................ 43 Affordable and Accessible Education ............................................................. 43 Helping With the High Cost of Post-Secondary Education ........................ 43 Making Canada Student Loans More Affordable....................................... 44

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Making Canada Student Loans More Accessible....................................... 45 Enhancing Supports for Apprenticeship ........................................................ 46 Paid Parental Leave for Student Researchers .............................................. 47 Supporting Graduate Students Through Research Scholarships............... 48 Supporting Indigenous Post-Secondary Education..................................... 48 Skills for Canada and the World................................................................................. 50 Expanding the Canada Service Corps ................................................................. 50 Giving Young Canadians Digital Skills ............................................................ 51 Modernizing the Youth Employment Strategy.............................................. 52 Canada's New International Education Strategy ....................................... 52 On-the-Job Learning and Work Experience......................................................... 53 Expanding the Student Work Placement Program ..................................... 54 Part 3: Moving Forward on Implementing National Pharmacare ........................... 57 Advisory Council on the Implementation of National Pharmacare ................ 58 Introducing the Canadian Drug Agency ............................................................. 60 Making High-Cost Drugs for Rare Diseases More Accessible ............................ 61 Part 4: A Secure Retirement ........................................................................................ 62 A Better Quality of Life for Canada's Seniors ....................................................... 63 Improving the Economic Security of Low-Income Seniors ......................... 63 Making Sure Everyone Who Is Eligible Receives Canada Pension Plan Benefits ........................................................................ 66 Protecting Canadians' Pensions ..................................................................... 66 Empowering Seniors in Their Communities .................................................... 67 The Canada Pension Plan: Retirement Security for Today and Tomorrow..... 68 Further Investments Benefitting the Quality of Life of Seniors ............................ 70

Chapter 2 ? Building a Better Canada.......................................................... 73

Part 1: Building Strong Communities .......................................................................... 74 The Investing in Canada Plan: An Update ........................................................... 74 Projects Approved and Underway................................................................. 75 Creating Jobs Through the Investing in Canada Plan ................................ 79 New Infrastructure Funding for Local Communities Through a Municipal Top-Up ................................................................................... 80

Part 2: Affordable Electricity Bills and a Clean Economy ....................................... 81 Investing in the Future of Transportation ............................................................... 81 Making Zero-Emission Vehicles More Affordable ................................................ 81 Supporting Business Investment in Zero-Emission Vehicles ................................ 82 Reducing Energy Costs Through Greater Energy Efficiency.............................. 84 More Connectivity = More Affordable Electricity................................................ 85 Fighting Climate Change With a Price on Pollution............................................ 86 A Just Transition for Canadian Coal Power Workers and Communities.......... 88 Improving Canadian Energy Information ............................................................. 90 Fulfilling Canada's G20 Commitment ................................................................... 90

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Part 3: Connecting Canadians ................................................................................... 92 Access to High-Speed Internet for All Canadians............................................... 92 Bringing High-Speed Internet to Rural, Remote and Northern Communities ............................................................................. 92 How We Will Achieve a Fully Connected Canada ..................................... 95

Part 4: Building a Better Future for Canada's North .................................................. 98 Strong Arctic and Northern Communities............................................................. 98 Investing in Regional Priorities................................................................................ 104 Protecting Water and Soil in the Prairies...................................................... 104 Investing in Eastern Canada Ferry Services ................................................ 104 Improving Crossings in Canada's Capital Region ..................................... 105

Part 5: Building a Nation of Innovators .................................................................... 106 Canada's Innovation and Skills Plan.................................................................... 106 Promoting the Development of World-Class Canadian Businesses............... 107 Establishing a Permanent Global Talent Stream ................................................... 108 Improving Support for Small, Growing Companies.....................................................110 Supporting the Next Generation of Entrepreneurs......................................................110 Helping Canada's Forest Sector Innovate and Grow................................................111 Supporting Innovation in the Oil and Gas Sector Through Collaboration ........................................................................................................112 Investing in a Diverse and Growing Western Economy.............................................113 Launching a Federal Strategy on Jobs and Tourism ..................................................113 Bringing Innovation to Regulations ...................................................................... 116 Introducing Regulatory Roadmaps .............................................................. 117 Harmonizing Regulations ................................................................................ 119 Modernizing Regulations ................................................................................ 120

Part 6: Building Research Excellence in Canada................................................... 121 Support for Science, Research and Technology Organizations..................... 121 Strengthening Canada's World-Class Physics Research.................................. 123 Taking a New Approach With the Strategic Science Fund............................. 123

Chapter 3 ? Advancing Reconciliation ...................................................... 127

Part 1: Redressing Past Wrongs and Advancing Self-Determination ................... 128 Advancing Reconciliation by Settling Specific Claims .................................... 129 Forgiving and Reimbursing Loans for Comprehensive Claim Negotiations . 129

Part 2: Strengthening Governance Tools................................................................. 130 Supporting Strong and Successful Self-Governing Indigenous Communities ....................................................................................... 130 Better Information for Better Services .................................................................. 131 Core Governance Support for First Nations........................................................ 131

Part 3: Closing the Gap ............................................................................................. 133 Part 4: Better Services for First Nations and Inuit Children...................................... 136

Continuing Implementation of Jordan's Principle ............................................ 136 Supporting Inuit Children........................................................................................ 137

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Part 5: Preserving, Promoting and Revitalizing Indigenous Languages ............... 137 Supporting Indigenous Post-Secondary Education .......................................... 138

Part 6: Healthy, Safe and Resilient Indigenous Communities................................ 139 On Track to Eliminate Boil Water Advisories on Reserve................................... 139 Safe and Accessible Spaces for Urban Indigenous Peoples........................... 140 Improving Emergency Response On-Reserve.................................................... 141 Improving Assisted Living and Long-Term Care................................................. 142 Supporting the National Inuit Suicide Prevention Strategy.............................. 142 Supporting Indigenous Business Development .................................................. 143 Engaging Indigenous Communities in Major Resource Projects .................... 145 Supporting First Nations Priorities ........................................................................... 145 Supporting Inuit Priorities ........................................................................................ 146 Supporting M?tis Nation Priorities ......................................................................... 147

Chapter 4 ? Delivering Real Change .......................................................... 151

Part 1: Health and Well-Being................................................................................... 152 Addressing Major Health Care Challenges ........................................................ 153 Introducing a National Dementia Strategy ................................................ 153 Creating a Pan-Canadian Database for Organ Donation and Transplantation ........................................................................................ 154 Expanding Health-Related Tax Relief........................................................... 154 Enhancing the Federal Response to the Opioid Crisis in Canada ......... 155 Supporting a Pan-Canadian Suicide Prevention Service......................... 156 Supporting Community-Based Housing for People With Complex Health and Social Needs in Prince Edward Island .......... 157 Supporting a Safe and Non-Discriminatory Approach to Plasma Donation......................................................................................... 157 Making Canada Accessible and Supporting People With Disabilities .......... 158 Supporting Employment for Persons With Intellectual Disabilities and Autism Spectrum Disorders .................................................................... 159 More Accessible Federal Government Workplaces ................................. 160 Inclusion of Canadians With Visual Impairments and Other Print Disabilities.............................................................................. 160 Improvements to the Registered Disability Savings Plan .......................... 161 Introducing a Food Policy for Canada ............................................................... 161 Addressing the Challenge of African Swine Fever .................................... 164 The Social Finance Fund ........................................................................................ 164

Part 2: Support for Diversity, Culture and the Arts ................................................... 167 Expanding Support for Artists and Cultural Events ............................................ 168 Advancing Gender Equality ................................................................................. 169 Expanding the Work of the LGBTQ2+ Secretariat.............................................. 170 Introducing a New Anti-Racism Strategy............................................................ 171 Enhancing Support for Minority-Language Education in Canada ................ 172

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Supporting Canadian Journalism......................................................................... 173 Supporting Donations of Cultural Property ................................................................ 173

Ensuring a Safe and Healthy Sport System ......................................................... 174 Part 3: Support for Canada's Veterans and Their Families..................................... 174

Supporting Veterans as They Transition to Post-Service Life ............................ 175 Supporting Research on Military and Veteran Health...................................... 176 Supporting Veterans' Families............................................................................... 177 Commemorating Canada's Veterans ................................................................ 177 Part 4: Public Safety and Justice .............................................................................. 178 Safeguarding the Integrity of Our Institutions and Infrastructure.................... 178

Protecting Canada's Critical Infrastructure From Cyber Threats ............ 178 Growing Canada's Advantage in Cyber Security .................................... 179 Protecting Democracy ................................................................................... 179 Protecting Canada's National Security....................................................... 181 Enhancing Accountability and Oversight of the Canada Border Services Agency ........................................................................ 182 Enhancing the Integrity of Canada's Borders and Asylum System................ 184 Protecting People From Unscrupulous Immigration Consultants.................... 184 Improving Canada's Ability to Prepare for and Respond to Emergencies and Natural Disasters ..................................................................... 185 Ensuring Better Disaster Management Preparation and Response........ 185 Improving Emergency Medical Response in Western Canada.............. 186 Protecting Vulnerable Canadians From Violence and Exploitation and Promoting Access to Justice......................................................................... 186 Protecting Children From Sexual Exploitation Online ................................ 186 Combatting Human Trafficking..................................................................... 187 Giving Canadians Better Access to Public Legal Education and Information ............................................................................................... 187 Supporting Access to Family Justice in the Official Language of One's Choice............................................................................................... 187 Protecting Community Gathering Places From Hate-Motivated Crimes .................................................................................. 188 Part 5: Canada's International Engagement .......................................................... 188 Increasing Canada's International Assistance Envelope ................................ 188 Supporting Farmers in Supply Managed Sectors Following Ratification of New Trade Agreements ............................................................... 189 Renewing Canada's Middle East Strategy ........................................................ 190 Reinforcing Canada's Support for Ukraine......................................................... 191 More Affordable International Remittances ...................................................... 191 Part 6: Better Government ........................................................................................ 192 Investing in Service Canada ................................................................................. 192 Improving Client Services at the Canada Revenue Agency ......................... 193 Improving Immigration Client Service ................................................................. 194 Helping Travellers Visit Canada ............................................................................ 194 Resolving Income Security Program Disputes More Quickly and Easily ........ 195

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Ensuring Proper Payment for Public Servants ..................................................... 195 Moving Toward the Next Generation Pay System for the Federal Public Service ............................................................................... 196 Part 7: A Fair Tax System for All Canadians............................................................. 196 Improving Tax Compliance ................................................................................... 197 Strengthening Beneficial Ownership Transparency .......................................... 198 Strengthening Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime ......................................................... 198 Combatting Aggressive International Tax Avoidance..................................... 200

Update on the Base Erosion and Profit Shifting Project ............................ 200 Strengthening Canada's International Tax Rules....................................... 202 Employee Stock Options........................................................................................ 202 Adjusting the Rules for Cannabis Taxation ......................................................... 206 Improving Access to the Canada Workers Benefit Throughout the Year..... 206 Intergenerational Business Transfers ..................................................................... 207 Small Business Deduction--Farmers and Fishers ................................................ 207 Closing Tax Loopholes ............................................................................................ 207

Gender Equality Statement.......................................................................... 211 Advancing Gender Equality and Diversity ............................................................. 211 Gender Results Framework....................................................................................... 212

Education and Skills Development ...................................................................... 215 Economic Participation and Prosperity............................................................... 220 Leadership and Democratic Participation......................................................... 225 Gender-Based Violence and Access to Justice................................................ 231 Poverty Reduction, Health and Well-Being ........................................................ 236 Gender Equality Around the World...................................................................... 242 GBA+ of Budget 2019 ................................................................................................ 246 Strengthening the GBA+ Process ......................................................................... 246 Target Population for Budget Measures.............................................................. 247

A Renewed Relationship With Indigenous Peoples ................................... 248 Helping Persons With Disabilities and Health Issues.................................... 249 Supporting Youth ............................................................................................. 250 Major Beneficiaries.................................................................................................. 251 Gender .............................................................................................................. 251 Demographics.................................................................................................. 253 Visible Minority Communities ......................................................................... 254 Rural Communities........................................................................................... 255 Income Distributional Impacts .............................................................................. 255 Intergenerational Impacts ..................................................................................... 256

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