Highlights from Federal Budget 2023-2024 – Impact on Construction Industry

On Tuesday, March 28, the federal government released its 2023-2024 budget with a plan to build a stronger, more sustainable, and more secure Canadian economy.

Statement from the Canadian Construction Association

Click here to read a statement from the Canadian Construction Association on the 2023 federal budget.

Federal Budget Highlights

Government of Canada – Federal Budget 2023

The following information is from the Government of Canada’s federal budget 2023 PDF document, which can be accessed in full through this link.

Chapter 1: Making Life More Affordable and Supporting the Middle Class

Building More Affordable Housing – Budget 2023 announces the government’s intention to support the reallocation of funding from the National Housing Co-Investment Fund’s repair stream to its new construction stream, as needed, to boost the construction of new affordable homes for the Canadians who need them most.

Investing in an Urban, Rural, and Northern Indigenous Housing Strategy – Budget 2023 proposes to commit an additional $4 billion, over seven years, starting in 2024-25, to implement a co-developed Urban, Rural, and Northern Indigenous Housing Strategy.

Chapter 2: Investing in Public Health Care and Affordable Dental Care

Building the Shepody Healing Centre – Budget 2023 proposes to accelerate the construction of the Shepody Healing Centre in Dorchester, New Brunswick.

Chapter 3: A Made-In-Canada Plan: Affordable Energy, Good Jobs, and a Growing Clean Economy

An Investment Tax Credit for Clean Electricity – Budget 2023 proposes to introduce a 15 per cent refundable tax credit for eligible investments, with both new projects and the refurbishment of existing facilities will be eligible. Labour requirements, including ensuring that wages paid are at the prevailing level, and that apprenticeship training opportunities are being created, will need to be met to receive the full 15-per-cent tax credit.

A Clean Electricity Focus for the Canada Infrastructure Bank – Budget 2023 announces that the Canada Infrastructure Bank will invest at least $10 billion through its Clean Power priority area, and at least $10 billion through its Green Infrastructure priority area. This will allow the Canada Infrastructure Bank to invest at least $20 billion to support the building of major clean electricity and clean growth infrastructure projects. These investments will be sourced from existing resources.

Getting Major Projects Done – Budget 2023 announces that, by the end of 2023, the government will outline a concrete plan to improve the efficiency of the impact assessment and permitting processes for major projects, which will include clarifying and reducing timelines, mitigating inefficiencies, and improving engagement and partnerships.

Fair Pay for Workers Who Build the Clean Economy – Budget 2023 is announcing additional details on the labour requirements for the Clean Technology and Clean Hydrogen Investment Tax Credits.

  • To be eligible for the highest tax credit rates, businesses must pay
    a total compensation package that equates to the prevailing wage. The definition of prevailing wage would be based on union compensation, including benefits and pension contributions from the most recent, widely applicable multi-employer collective bargaining agreement, or corresponding project labour agreements, in the jurisdiction within which relevant labour is employed.
  • Additionally, at least ten per cent of the tradesperson hours worked must be performed by registered apprentices in the Red Seal trades.

Ensuring Fairness for Canadian Workers with Federal Reciprocal Procurement – Budget 2023 announces the government will undertake targeted engagement with provinces and territories, industry stakeholders, and workers and unions on concrete reciprocal procurement measures, so they can be implemented in the near term. The proposed measures will include placing conditions on foreign suppliers’ participation in federally funded infrastructure projects, applying strict reciprocity to federal procurement, and creating a preference program for Canadian small businesses.

Doubling the Tradespeople’s Tool Deduction – To help tradespeople invest in the equipment they need, Budget 2023 proposes to double the maximum employment deduction for tradespeople’s tool expenses from $500 to $1,000.

Investing in Canada’s Labour Market Transfer Agreements Every year, the federal government invests nearly $3 billion in Canada’s Labour Market Development Agreements and Workforce Development Agreements with provinces and territories. This funds a range of supports, including skills training, on-site work experience, career counselling, and job search assistance that helps one million Canadians each year to upgrade their skills or find new jobs. Budget 2023 proposes to invest an additional $625 million in 2023-24 in the Labour Market Transfer Agreements to ensure Canadians continue to have access to the supports they need to get their next job.

Protecting Jobs with Timely Access to Work-Sharing Agreements

Work-Sharing Program helps avoid layoffs during temporary decreases in business activity by providing income support through the Employment Insurance program to eligible employees who work a reduced week while their employer recovers. This means that employees can keep their jobs and continue earning income, while their employer retains skilled workers without having to hire someone new when business picks up. Budget 2023 proposes to provide $5.4 million over three years, starting in 2023‑24, to Employment and Social Development Canada to ensure that the Work-Sharing Program continues to provide timely support to Canadian workers and businesses.

Continuing Support for the Student Work Placement Program – Work-integrated learning programs such as co-ops and internships play a critical role in helping students transition from post-secondary institutions to the workforce. The federal government recognizes the need to continue supporting students to develop work-ready skills, particularly in the context of an increasingly complex and evolving labour market.

Budget 2023 proposes to provide $197.7 million in 2024-25 to the Student Work Placement Program to continue creating quality work-integrated learning opportunities for students through partnerships between employers and post-secondary education institutions. These measures will ensure that students can gain the necessary skills, education, and real-life work experience to transition successfully into the workforce.

Prohibiting the Use of Replacement Workers – Budget 2023 proposes to table amendments to the Canada Labour Code, before the end of 2023, that would prohibit the use of replacement workers during a strike or lockout, and improve the process to review activities that must be maintained to ensure the health and safety of the public during a work stoppage.

Strengthening Canada’s Trade Corridors Supporting Transportation Supply Chain Projects Through the National Trade Corridors Fund; $90 million to Nova Scotia for the twinning of Highway 104. This will ease congestion and improve the efficiency of one of the region’s most important trade corridors.

Delivering Canada’s Infrastructure Funding – Through the Investing in Canada Infrastructure Program (ICIP), the federal government is providing more than $33 billion in funding for public infrastructure. To help build more infrastructure sooner, Budget 2022 signalled the government’s intent to accelerate the deadline for provinces to commit their remaining funding to March 31, 2023, with any uncommitted funds after this date to be reallocated to other priorities. The government is working closely with the provinces to support them in allocating their remaining funding and expects that all remaining funding will be committed by the deadline. To date, Nova Scotia has 0% of total project funding envelope remaining.

Chapter 4: Advancing Reconciliation and Building a Canada That Works for Everyone

Supporting Indigenous Economic Participation in Major Projects – Budget 2023 announces that the Canada Infrastructure Bank will provide loans to Indigenous communities to support them in purchasing equity stakes in infrastructure projects in which the Bank is also investing. These loans will be sourced from the Canada Infrastructure Bank’s existing funding envelope.