Tabled in the House of Commons March 22, 2017

Tabled in the House of Commons by the Honourable William Francis Morneau, P.C., M.P. Minister of Finance

March 22, 2017

?Her Majesty the Queen in Right of Canada (2017) All rights reserved

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Cat. No.: F1-23/3E-PDF ISSN: 1719-7740

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TABLE OF CONTENTS

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

Canada at 150...............................................................................................................9 A Story of People and Progress ..................................................................................10 The Challenge of Change ..........................................................................................11 Real Change for Canadians.......................................................................................12 Canada's Place in a Time of Change .......................................................................15 A Long-Term Plan to Strengthen and Grow the Middle Class .................................17 The Case for Innovation ..............................................................................................17 Budget 2017: Building a Strong Middle Class Through Innovation .........................19 Conclusion ...................................................................................................................21

Economic and Fiscal Overview: Progress for the Middle Class.....23

Introduction ..................................................................................................................23 The Canadian Economy Is Showing Resilience........................................................24 Private Sector Outlook ................................................................................................34

Risk Assessment ..........................................................................................................34 Economic and Fiscal Developments.........................................................................36

Continued Investments in a Strong Middle Class ................................................36 Investing in Priorities...................................................................................................38 Upside and Downside Risks to the Economic and Fiscal Outlook....................40 Revitalizing the Economy With Investments to Grow the Middle Class .............................................................................................41

Chapter 1--Skills, Innovation and Middle Class Jobs ....................43

Introduction ..................................................................................................................43 Canada's Innovation and Skills Plan ...........................................................................44 Part 1--Equipping Canadians With the Skills They Need to Get Good Jobs..............................................................................................48

Lifelong Learning: Supporting Working Canadians.............................................52 Helping Canadians Get New and Better Jobs...........................................52 Helping Working Adults Upgrade Their Skills ................................................53

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Encouraging Unemployed Canadians to Seek New Training Through Employment Insurance.................................................... 56 Investing in Skills Innovation ........................................................................... 57 Helping Young Canadians Succeed .................................................................... 59 Expanding the Youth Employment Strategy .............................................. 59 A New, Ambitious Approach to Work-Integrated Learning ................... 60 Renewing Investments in Pathways to Education Canada .................... 61 Improving Access to the Canada Learning Bond .................................... 62 Youth Service ................................................................................................... 62 Building a Workforce That Looks Like Canada.................................................... 63 Expanding Employment Insurance Benefits to Offer More Flexibility for Families ............................................................................. 63 Improving Benefit Delivery............................................................................. 64 Creating More Opportunities for Indigenous Peoples ....................................... 65 Post-Secondary Student Support Program................................................. 65 Indspire .............................................................................................................. 65 Supporting Access to Skills Development and Training for Indigenous Peoples ................................................................................... 66 Reducing Employment Barriers for First Nations Youth Living On-Reserve............................................................................................ 66 Investing in Adult Basic Education in the North ......................................... 66 Attracting Top Talent From Around the World .................................................... 67 Global Skills Strategy ....................................................................................... 67 Attracting Talent to Strengthen University Research ................................ 68 Improving the Temporary Foreign Worker Program and the International Mobility Program ...................................................... 69 Recognizing Foreign Credentials ................................................................. 71 Giving Canadians Living With Disabilities an Opportunity to Succeed .......... 71 Preparing for the Digital Economy ........................................................................ 71 Teaching Kids to Code................................................................................... 72 Expanding Digital Learning Opportunities .................................................. 72 Developing Assistive Technology ................................................................. 72 Making Home Internet Access More Affordable for Low-Income Families ...................................................................................... 73 Promoting STEM to Young Canadians......................................................... 74 Part 2--A Nation of Innovators ...................................................................................75 Innovation Canada: A New Approach to Supporting Canadian Innovators............................................................................................... 76

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Accelerating Innovation Through Superclusters..................................................79 Innovating to Solve Canada's Big Challenges....................................................81 The New Strategic Innovation Fund: A Simpler, More Flexible Tool to Grow Canada's Economy .........................................................................82 Supporting Canadian Innovators Through Venture Capital .............................83 Helping Women Entrepreneurs Grow Their Businesses and the Economy......84 Supporting the Next Generation of Entrepreneurs .............................................85 Helping Innovative Companies Grow Through Strategic Procurement .........85 Obtaining the Best Value in Procurement ............................................................87 Intellectual Property Strategy 2017 ........................................................................87 Fundamental Science Review................................................................................88 Strengthening Science in Government.................................................................88 Positioning National Research Council Canada Within the Innovation and Skills Plan..................................................................................89 Attracting International Tourists to Grow Our Economy.....................................91 Supporting Early-Stage Mineral Exploration by Junior Companies ..................93 Supporting Jobs in the Resource Sector ...............................................................93 Strengthening Trade Within Canada.....................................................................93 Part 3--Canada's Innovation Economy: Clean Technology, Digital Industries and Agri-Food.................................................................................95 Canada's Clean Technology Advantage ...........................................................96

Access to Financing for Cleantech Firms ....................................................97 Promoting the Demonstration of Clean Technologies..............................98 Investing in Research and Development for Clean Energy and Transportation ..........................................................................................99 Encouraging Clean Technology in the Natural Resources Sectors ........99 Expanding Tax Support for Clean Energy..................................................100 Capitalizing on International Business Development for Clean Technology....................................................................................100 Establishing a Clean Technology Data Strategy and the Clean Growth Hub.........................................................................................100 Canada's Digital Future .........................................................................................102 Canada as an Advanced Digital Environment .......................................103 Growing Canada's Advantage in Artificial Intelligence ........................103 Supporting Innovation in Financial Services..............................................104 Canadian Digital Services ............................................................................105 Growing the Economy Through Agri-Food Innovation.....................................107

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Developing the Next Agricultural Policy Framework .............................. 108 Advancing Agricultural Science and Innovation.................................... 108

Chapter 2--Communities Built for Change...................................113

Canada in 10 Years ...................................................................................................113 Investing to Create Jobs and Build Strong Communities ......................................115 Encouraging Innovation With the Smart Cities Challenge.....................................118 Delivering Results With the Canada Infrastructure Bank........................................118

Accelerated Implementation .............................................................................. 119 Better Decisions Through Better Data ................................................................. 119 Building Strong Communities With Public Transit ....................................................119 Creating Canada's Clean Growth Economy..........................................................120 Celebrating and Protecting Our Natural Heritage .......................................... 122

Completing the Trans Canada Trail........................................................... 125 Protecting Canada's Marine and Freshwater Ecosystems .................... 125 Improving Air Quality for Canadians ......................................................... 126 The Pan-Canadian Framework on Clean Growth and Climate Change ... 126 Federal Carbon Pricing Backstop .............................................................. 127 Complementary Actions.............................................................................. 127 Accelerating the Replacement of Coal-Generated Electricity.......... 127 Reducing Reliance on Diesel in Indigenous and Northern Communities ................................................................................. 127 A More Energy Efficient Transportation Sector......................................... 128 Greener Buildings .......................................................................................... 128 Leading by Example ..................................................................................... 128 Adaptation and Climate Resilience .......................................................... 129 Clean Technology......................................................................................... 130 Policy, Communications and Engagement ............................................. 130 Charting a Better Future for Rural and Northern Communities..............................130 Building Stronger Communities and Neighbourhoods ..........................................131 Supporting Families Through Early Learning and Child Care ................................131 Building an Inclusive National Housing Strategy ....................................................132 A Renewed Federal-Provincial-Territorial Partnership in Housing................... 133 A New National Housing Fund ............................................................................. 134 Targeted Support for Northern Housing.............................................................. 135 Targeted Housing Support for Indigenous Peoples Not Living On-Reserve............................................................................................ 135

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Working Together to Tackle Homelessness .........................................................136 Making More Federal Lands Available for Affordable Housing......................136 Strengthening Housing Research and Establishing a Housing Statistics Framework ................................................................................................137 Delivering Better Transportation to Support Trade..................................................138 Moving People and Helping Businesses Compete ...........................................138 National Trade Corridors Fund ..............................................................................139 Trade and Transportation Information System ...................................................139 Modernizing Canada's Transportation System ..................................................140 Connecting Communities by Rail and Water ....................................................140 Investing in Canadian Small Craft Harbours ......................................................141 Protecting Air Travellers ..........................................................................................142 Strengthening Cultural and Recreational Infrastructure ........................................142 Canada Cultural Spaces Fund .............................................................................142 Community Educational Infrastructure ...............................................................143 Enabling Accessibility Fund ...................................................................................143 Improving Indigenous Communities ....................................................................146 Prioritizing Critical Home Care Infrastructure..........................................................148

Chapter 3--A Strong Canada at Home and in the World ..............................................................................153

Introduction ................................................................................................................153 Part 1--Stronger Health Care and a Healthier Canada.........................................154

Home Care and Mental Health............................................................................155 Prescription Medications and Health Innovation ..............................................158 Canadian Drugs and Substances Strategy ........................................................158

Public Education Programming and Surveillance for Legalized Cannabis.......................................................................................160 Territorial Health Investment Fund ........................................................................160 Supporting Canada's High-Performance Athletes ...........................................161 Part 2--Furthering Partnerships With Indigenous Peoples......................................161 Healthier First Nations and Inuit Communities ....................................................163 Building Strong Indigenous Communities............................................................165 A Renewed Nation-to-Nation Relationship ...............................................165 Taking Steps to Preserve, Revitalize and Enhance Indigenous Languages and Cultures .........................................................166 Investing in Indigenous Youth and Sport ...................................................168

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Promoting the Use of Restorative Justice Practices ................................ 168 Rehabilitating and Reintegrating Past Offenders ................................... 169 Policing Services in First Nations Communities ......................................... 169 Supporting Indigenous Participation in Fisheries...................................... 170 Launching an Indigenous Guardians Pilot Project to Promote Environmental Stewardship of Indigenous Lands.................................... 170 Tailored Programs and Services to Support Indigenous Peoples Living in Urban Centres ................................................................. 170 Part 3--Greater Support for Canada's Veterans and Their Families ..............................................................................................................173 Further Enhancing Lifelong Financial Support for Our Ill and Injured Veterans ............................................................................................. 174 Closing the Seam--Supporting Canadian Armed Forces Members and Veterans......................................................................................... 175 A New Veterans' Education and Training Benefit ............................................ 176 Enhancing Career Transition Services................................................................. 176 Caregiver Recognition Benefit............................................................................. 177 Eliminating Vocational Rehabilitation Time Limits for Veterans' Survivors and Spouses ......................................................................... 177 Expanding Access to the Military Family Resource Centres for Medically Released Veterans' Families ........................................................ 178 Creating a Centre of Excellence on Post-Traumatic Stress Disorder and Related Mental Health Conditions ............................................................. 178 Veteran and Family Well-Being Fund.................................................................. 179 Veteran Emergency Fund..................................................................................... 179 Part 4--Upholding Canada's Place in the World ....................................................179 Canada-United States Relationship.................................................................... 180 Growth and Development in Asia....................................................................... 181 Canada-European Union (EU) Comprehensive Economic and Trade Agreement ................................................................................................... 181 A Comprehensive Approach to International Assistance .............................. 182 Innovative Development Finance ............................................................. 182 Improving Market Access for the World's Least Developed Countries ........ 183 Helping Build a Safer and More Prosperous World ........................................... 183 Protecting the Integrity of Canada's Asylum System ...................................... 184 Better Legal Aid Services for Asylum Seekers .................................................... 184 Building on Canada's Global Cooperation ...................................................... 185 Delivering a Modern, More Agile, Better-Equipped Military ........................... 185

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