8 budget announcements that public service professionals are talking about

1. Historic childcare announcement

The government’s announcement of increased access to affordable childcare is a huge win for working families. This will be transformative for parents, and for the women who systematically shoulder the majority of childcare responsibilities in Canada.

Program details will require consultation with the provinces to define, but an ambitious $10 per day target was established, appropriate money was allocated, and the work will start in the current fiscal year. The announcement got a resounding endorsement from leading advocates such as Child Care Now.

We must remain vigilant to see that this vital initiative is implemented properly.

2. Federal leadership in public health is the new normal

The response to COVID-19 has highlighted the importance of a robust and well-resourced public health infrastructure. In a federation like Canada, that requires national coordination from the Public Health Agency of Canada and Health Canada.

Budget 2021 reasserts the importance of these organizations in fighting the pandemic but also signals their broader importance by tapping them to address issues such as domestic violence, mental health, diabetes, autism and long-term care.

3. Gender, diversity and inclusion become a national priority

The negative impacts of COVID-19 have not been felt uniformly by all Canadians. Systemic discrimination was the reality before the crisis and, whether from increased exposure to health risks or economic precarity, COVID-19 has only increased its destructiveness.

Budget 2021 recognizes a “she-cession” and addresses issues faced by women in the world of work. It collects data, analyzes problems, and targets solutions based on those who need them most.

Though this is an important priority, the government has a lot of work to do as an employer to ensure gender equity. In recent months we’ve devoted significant energy to issues such as harassment prevention, access to 699 leave, and discouraging outsourcing to contractors with sometimes questionable labour practices. These issues all disproportionately impact women and the budget gave no explicit indication that change is coming. We expect the government to do better.

4. Tax fairness: lots of sizzle, not much steak

Given the extent to which the ultra-rich and web giants have profited throughout the crisis, we can’t let them off the hook as we rebuild.

After years of advocacy, the government has been slowly reinvesting in the Canada Revenue Agency after years of ill-advised cuts. Budget 2021 adds $534 million over 5 years to “strengthen CRA” and enhance efforts to tackle tax avoidance and evasion.

Other important initiatives were announced including a digital service tax for companies like Netflix and Amazon, as well as closing loopholes for “excessive deductions of interest,” a new tax to discourage real estate speculation by foreign entities that leave properties vacant and a new tax on luxury cars, boats and planes.

Budget 2021 announced the creation of a publicly accessible beneficial ownership registry. This initiative has been championed by auditors at CRA as an effective way to discourage illegal behaviour that occurs when ownership relationships are unclear. While the announcement is welcomed, the delay before a full implementation in 2025 is unnecessary.

All these measures are welcomed, but the expected return is small ($3.5 billion per year) when compared to the scale of the recovery response. There is still incredible potential to increase tax revenues by implementing other tax fairness measures.

5. Research and Development within federal departments needs attention

Innovation, research and development will be an important part of the post-COVID recovery process. The government provided further details about the $7.2 billion Strategic Innovation Fund as well as the $360 million National Quantum Strategy.

Increased funding for the National Research Council and the Canada Space Agency, and new money for Statistics Canada and Environment and Climate Change Canada to create a Census of the Environment is also good news.

Unfortunately, most of the other core government departments received relatively small research and development amounts, which will likely continue the longstanding trend of internal R&D in the federal government diminishing compared to the private sector and universities.

6. A green recovery plan is important and public services must be protected

Positive economic performance in the fourth quarter of 2020 means the total deficit is expected to be less than expected last fall ($354 billion instead of $382 billion).

Canada’s crisis-response deficit is in line with the average of other OECD countries. The International Monetary Fund’s Fiscal Monitor from April 2021 shows Canada’s federal net-debt is expected to be one-third of the G20 average for 2020 and 2021.

The strength of the federal government’s financial position before the crisis combined with low levels of debt and low interest rates means it can protect Canadians now, invest in green technology to stimulate a full recovery, be ready for unforeseen events in the future, and maintain the public services Canadians rely on. The risk of the government doing too little outweighs the risk of it doing too much.

7. IT infrastructure and the Phoenix backlog

We were pleased to see the critical investment in the government’s aging IT systems. $300 million over 3 years was provided to Shared Services Canada to repair and replace IT infrastructure. A further $453 million was announced for SSC and the Communications Security Establishment to improve cyber security. This work must be conducted internally by public service professionals in information technology (IT).

$46 million was allocated to Public Services and Procurement Canada to eliminate the backlog of Phoenix pay system transactions by December 2022. This system continues to plague our members and we hope this funding can resolve all outstanding Phoenix pay issues.

8. $15 minimum wage

The federal minimum wage of $15 announced in Budget 2021 is a major victory for the labour movement and working people. The announcement will directly benefit 26,000 workers currently earning less than the new minimum in federally regulated private sector employers such as banks, telecommunications companies and airlines. It is now imperative that provinces follow suit and adopt a livable minimum wage for all Canadians.