FBC-ABC 2019 BUDGET BRIEFING NOTE - March 19,2019
Following is a highlight of Federal Budget 2019 announcements as they relate to the food and beverage manufacturing sector:
Labour Pilot - To help the agri-food sector meet export targets and attract and retain needed labour, a 3-Year immigration pilot to bring in full-time, non-seasonal agricultural workers that will include a pathway to permanent residency (no further details provided).
Underrepresented Groups: $5.0 million over five years, starting in 2019–20, to Employment and Social Development Canada to develop a strategy and improve capacity to better measure, monitor and address gender disparity and promote access of under-represented groups across skills programming.
Canada Training Benefit: $1.7 billion over five years, and $586.5 million per year ongoing to establish a new non-taxable Canada Training Credit to help with the cost of training fees. Every year, eligible workers between the ages of 25 and 64 would accumulate a credit balance of $250 per year, up to a lifetime limit of $5,000 to be used for training fees. The accumulation of this refundable tax credit would be available to workers with earnings of at least $10,000 (including maternity and parental benefits) and income less than around
$150,000 a year ($147,667 in the 2019 tax year). The credit can be applied against up to half the cost of training fees at colleges, universities and eligible institutions.
Employment Insurance (EI) Training Support Benefit: Expected to be launched in late 2020— the benefit would be available through the EI program and would provide up to four weeks of income support, every four years. This income support—paid at 55 per cent of a person’s average weekly earnings—would help workers cover their living expenses, providing support for ongoing payments such as mortgage payments, electricity bills, and general life costs, while on training and without their regular paycheque. In addition, the government intends to consult on changes to federal, provincial and territorial labour legislation to ensure that workers can take time away from work to pursue training without risk to their job security.
EI Small Business Premium Rebate: Starting in 2020 any business that pays employer EI premiums equal to or less than $20,000 per year would be eligible for a rebate to offset the upward pressure on EI premiums resulting from the introduction of the new EI Training Support Benefit.
ACCESS TO HIGH-SPEED INTERNET
$5 to $6 billion in new investments in rural broadband over the next 10 years with a goal of 100% coverage by 2030.
Strategic Innovation Fund: an additional $100 million from the SIF for agri-food value-added production in Canada
SR&ED: The Scientific Research and Experimental Development (SR&ED) Tax Incentive provides a 35-per-cent refundable tax credit to eligible small and medium-sized businesses and a 15-per-cent tax credit to all businesses performing SR&ED in Canada. Access to the 35-per-cent rate is determined by a business’ level of income and capital. Government will eliminate the income threshold for accessing the enhanced credit. This will ensure continued enhanced support for small and medium-sized innovative businesses that are experiencing rapid growth in income or may have variable income from year to year; that is, at the exact time when continued Government support can help take a business to the next level.
Regulatory Roadmaps: The Budget announces that regulatory roadmaps for the three sectors subject to Treasury Board’s regulatory review – including Agri-food and aquaculture
- will be released in the coming weeks. The Roadmaps will cover 3 themes:
- Creating a user-friendly regulatory system: The Roadmaps propose a more user- friendly regulatory system, including the use of more digital services (e.g. online portals, electronic templates), and clearer guidance for industry so that innovative and safe products are available for Canadians more quickly.
- Using novel or experimental approaches: The Roadmaps propose greater exploration, innovation, and the use of sandboxes and pilot programs for new and innovative products. This will allow these products to be approved for use in a risk- based and flexible way—encouraging ongoing innovation while continuing to protect Canadians’ health and safety, and the environment.
- Facilitating greater cooperation and reducing duplication: The Roadmaps propose greater alignment and coordination within the federal government and across Canadian and international jurisdictions.
Budget 2019 provides the CFIA, Health Canada and Transport Canada with up to $219.1 million over five years, starting in 2019–20, (with $0.5 million in remaining amortization), and
$3.1 million per year on an ongoing basis to implement changes some of which will include:
Digitizing Canadian Food Inspection Agency services: Allowing on-line processing of CFIA export certificates.
Removing federal barriers to the interprovincial trade of alcohol: The Government intends to remove the federal requirement that alcohol moving from one province to another be sold or consigned to a provincial liquor authority. Provinces and territories would continue to be able to regulate the sale and distribution of alcohol within their boundaries.
Harmonizing Regulations: Budget 2019 proposes to provide $3.1 million per year in ongoing funding to the Treasury Board Secretariat, starting in 2020–21, to support its leadership of the Government’s regulatory cooperation priorities at home and abroad.
FOOD POLICY FOR CANADA
Food Policy for Canada—$134.4 million over five years, on a cash basis, beginning in 2019– 20, with $5.2 million ongoing in a suite of new measures to implement a Food Policy for Canada which will set out a coordinated and collaborative approach to addressing food-related issues while ensuring that Canada’s agriculture and agri-food sector continues to succeed and help grow the economy as a trusted global source of healthy food.
The Food Policy for Canada will establish four areas for near-term action, including:
- Help Canadian Communities Access Healthy Food;
- Make Canadian Food the Top Choice at Home and Abroad;
- Support Food Security in Northern and Indigenous Communities; and
- Reduce Food Waste.
Highlights for our sector include:
- Local Food Infrastructure fund - $50 million over 5 years starting 2019-20 to support infrastructure for local food projects, including at food banks, farmers markets, and other community drive projects
- Buy Canadian Campaign - $25 million over 5 years, starting 2-019-20 for an advertising and marketing campaign to promote Canadian agriculture products
- Tackling Food Fraud - $24.4 million over 5 years starting in 219019-20 to enhance federal capacity to detect and take enforcement action against food fraud
- Support for Food Processors – an additional $100 million from the SIF for agri-food value-added production in Canada (listed above)
- Labour Pilot - To help the agri-food sector meet export targets and attract and retain needed labour, Three Year immigration pilot to bring in full-time, nonseasonal agricultural workers that will include a pathway to permanent residency (listed above)
- Food Waste Reduction Challenge - $20 million over 5 years, stating 2019-20 to create a new challenge with funding awarded to the most innovative food waste reduction proposal in three sectors: 1) food processing 2) grocer retail 3) food service.
- Plastics - The Government will continue to make efforts on this important issue.
Animal Swine Fever – Up to $31 million over the next five years, starting in 2019–20, with up to $5.8 million per year ongoing, for CBSA to increase the number of detector dogs deployed across the country. This will help ensure that no contaminated products enter the country, protecting Canada’s hog farmers and meat processors from the serious economic threat posed by African Swine Fever.
Supporting Farmers in Supply Managed Sectors - $2.4 billion to sustain the incomes of eligible dairy, poultry, and egg farmers. Of this amount, $250 million has already been provided to support dairy farmers as a result of CETA, therefore a net amount of up to $2.15 billion will be available in coming years to deal with income losses associated with these agreements. Assistance will also be offered to protect the value of investments made by farmers in supply-managed sectors, through a Quota Value Guarantee Program that will protect against the reduction in quota value when the quota is sold. $1.5 billion has been set aside for this demand-driven program. Through 2019, the Government will continue to work in partnership with supply management stakeholders to address the impacts on processing.
Western Economy: $100 million over three years (on a cash basis), starting in 2019–20, to Western Economic Diversification Canada to increase its programming in western Canada.