Last updated: Jan. 5, 2022
Last week, Deputy Prime Minister and Minister of Finance, Chrystia Freeland, delivered the federal budget for 2021. Below are select highlights that may have a positive impact your business or farm:
1. Covid-19 subsidy extensions and program winddowns
The good news is that proposed budget will extend the current wage subsidy, rent subsidy, and Lockdown Support programs to September 2021. However, these support amounts will start to taper off starting in July in order to ensure an orderly phase-out of these programs as vaccines roll out ramps up and the economy re-opens. Further details on these measures can be found in Annex 6 of the budget.
2. Staffing up with the new Canada Recovery Hiring Program
The proposed Canada Recovery Hiring Program will provide eligible employers with a subsidy of up to 50% of the incremental remuneration paid to eligible employees between June 6, 2021 and November 20, 2021.
This new program is intended to offset a portion of the extra costs that employers take on as they reopen, either by increasing wages, hours worked or by hiring more staff. However, employers can only apply for the hiring program or wage subsidy – not both. The earlier you start to access the program, the more you can maximize your subsidy.
3. Helping small businesses go digital
While details are forthcoming, the government has proposed two funding measures to help Canadian businesses go digital:
- $1.4 billion over four years, starting in 2021-22, to access skills and training, micro-grants and to create a corps of 28,000 young people to help businesses adapt to the digital age.
- $2.6 billion over four years, on a cash basis, starting in 2021-22, to the Business Development Bank of Canada to help small- and medium-sized businesses finance technology adoption.
4. Immediate expensing of property
Budget 2021 proposes to allow immediate expensing of up to $1.5 million of eligible property investments by Canadian-Controlled Private Corporations (CCPC) made on or after April 19, 2021 and before January 1, 2024. Eligible investments will cover over 60 per cent of capital investments typically made by CCPCs.
Eligible property would be subject to the Capital Cost Allowance (CCA) rules and does not include in CCA classes 1 to 6, 14.1, 17, 47, 49 and 51. Unfortunately, these exemptions include some of the largest and generally most long-lived assets like buildings, farmland, and grain bins.
5. Carbon pricing rebates
Beginning in 2021-22, the government will return a portion of the proceeds from federal carbon pricing directly to farmers in backstop jurisdictions (currently Alberta, Saskatchewan, Manitoba, and Ontario). Farmers could receive up to $100 million in the first year. Further details will be released later in 2021.
6. More efficient grain dryers for farmers
Additionally, the recently expanded $165.5 million Agricultural Clean Technology program will prioritize $50 million for the purchase of more efficient grain dryers for farmers across Canada. We’re not sure how this will roll out or what the eligibility criteria is at this point, but it sounds promising.
7. Agricultural Climate Solutions
Under the Agricultural Climate Solutions program, the budget will provide an additional $200 million over two years, starting in 2021-22, to launch immediate, on-farm climate action under the Agricultural Climate Solutions program. This will target projects accelerating emission reductions by improving nitrogen management, increasing adoption of cover cropping, and normalizing rotational grazing. Again, more details are needed, but it could present a good opportunity for some farmers and ranchers.
Budget 2021 was one the largest in recent history and this list presents just a fraction of potential impacts for small business and farm owners. Rest assured, FBC will continue to monitor regulations as they roll out, and share information as it is updated.
To read the full budget, click here.
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