Legislative Costing Notes

Cost estimate for the Veterans portion of Bill C-221: An act to amend certain Acts in relation to survivor pension benefits

This enactment amends certain Acts to allow the survivor of an eligible person to receive pension benefits after the death of the person even if the person and the survivor married or began cohabiting in a conjugal relationship after the person attained the age of 60 years or retired. The PBO estimates the cost of the Veterans portion of this Bill with an effective date of January 1, 2023.

The PBO estimates the Veterans portion of Bill C-221 will cost $15 million in 2022-23 for a total of $276 million over the next 5 years.

Cost of a Dental Care Plan for Canadians

Implementing a dental care plan for Canadians. The plan is expected to cover the costs of routine care, fluoride treatments, radiographs, sealants and other combinations of caries treatments, dentures, and periodontics. Households with an income below $90,000 may benefit from the plan. A phase-in period lasting from 2022 to 2025 will gradually expand coverage to those eligible. Households with an income below $70,000 per year will bear no cost. Co-payments scale linearly for households with income between $70,000 and $90,000. The thresholds are indexed to inflation.

The PBO estimates that this program will cost $9,036 million over a 5 fiscal year period and benefit 1,425 thousand people over 2022-2023, increasing to 5,894 thousand by 2026-2027.

Increasing Loan Forgiveness for Doctors and Nurses in Rural and Remote Communities

Increasing the maximum amount of forgivable Canada Student Loans by 50 per cent, from $40,000 to $60,000 for doctors and from $20,000 to $30,000 for nurses working in underserved rural or remote communities. This policy will be effective April 1, 2023. 

The PBO estimates the proposed increase to the forgivable amount of Canada Student Loans for doctors and nurses who practice in rural and remote communities will generate a 5-year total cost of $19 million.

Luxury goods sales tax (update)

The PBO estimates that introduction of a luxury goods sales tax will generate $163 million of revenue in 2023-2024.

This enactment amends the Excise Tax Act in exempting psychotherapy services from the goods and services tax

The PBO estimates that the implementation of Bill C-218 will reduce GST revenues by approximately $3 million in 2022-23 for a total of $76 million over the next 5 years. This cost estimate represents the reduction in GST revenues if all goods and services provided under North American Industry Classification System (NAICS) code 621330 (Offices of mental health practitioners (except physicians)) were to become GST exempt. The PBO assumes this Bill will be effective January 1, 2023.

Tax-Free First Home Savings Accounts

The PBO estimates that First Home Savings Accounts will reduce Personal Income Tax revenue by approximately $0.8 billion each year of operation.

Mobility tax deduction for tradespersons and indentured apprentices

Bill C-19, the Budget Implement Act, proposed to introduce a Labour Mobility Deduction which would provide tax recognition of up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices. The PBO estimates that it will cost $103 million in 2022-2023 to allow tradespersons and indentured apprentices to deduct costs from travelling when employed in a construction activity at a job site that is located at least 150 kilometers from their ordinary place of residence.

Mobility tax deduction for tradespersons and indentured apprentices

Bill C-222 proposes to allow tradespersons and indentured apprentices to deduct, for income tax purposes, the costs associated with travelling when employed in a construction activity at a job site that is located at least 80 kilometers away from their ordinary place of residence. This act is to apply to the 2022 tax year and any subsequent taxation years.

The PBO estimates that it will cost $117 million in 2022-2023 to allow tradespersons and indentured apprentices to deduct costs from travelling when employed in a construction activity at a job site that is located at least 80 kilometers from their ordinary place of residence.

Tuition grant for persons with a Disability Tax Credit certificate

Private member’s bill C-255 proposes amending the *Income Tax Act* and the *Canada Student Financial Assistance Act* so that students enrolled in a designated post-secondary educational institution with a Disability Tax Credit (DTC) certificate will receive a grant equal to their annual tuition fees. It is assumed that the bill will be effective August 1, 2022, the start of the 2022-23 loan year.

The PBO estimates the proposed tuition grant for persons with a Disability Tax Credit certificate will generate a 5-year total cost of $402 million. This includes a gross cost of $591 million and a cost recovery of $189 million.

Increasing the maximum number of weeks of employment insurance sickness benefits to 52 weeks from 15 weeks

Bill C-215 proposes to increase the maximum number of weeks for employment insurance sickness benefits due to a prescribed illness, injury, or quarantine to 52 weeks from 15 weeks. 
The extension is assumed to come into effect in summer 2022.

The PBO estimates the net cost of the proposal to be $1,092 million in 2022-2023 which grows to $1,932 million in 2026-2027.

Establishing the position of the Parliamentary Visual Artist Laureate

A parliamentarian requested that the Parliamentary Budget Office prepare a cost estimate of Bill S-202: An Act to amend the Parliament of Canada Act (Parliamentary Visual Artist Laureate).  The bill would establish the position of the Parliamentary Visual Artist Laureate.  The mandate and administrative structure is intended to be analogous to the existing Parliamentary Poet Laureate (PPL).

The PBO estimates the annual ongoing fiscal impact to be $0.1 million per annum.

Volunteer Firefighters and Search and Rescue Volunteers Tax Credit Enhancement

The proposed measure increases the tax credit for volunteer firefighters and search and rescue volunteers to $10,000 from $3,000 for individuals that have completed 200 hours of volunteer service in a calendar year. The measure applies to the 2022 and subsequent taxation years.

The PBO estimates that the proposed measure will generate a 5-year cost of $171 million.

Canada Worker Lockdown Benefit (CWLB) under Expanded Eligibility

The Canada Worker Lockdown Benefit (CWLB) provides a taxable benefit of $300 per week to workers whose weekly income is at least 50% decreased compared to the previous year’s average due to a government-imposed COVID-19 lockdown. The worker must be in an area that is designated as a lockdown region for the week of application. Workers must have earned at least $5,000 in any of 2020, 2021 or the 12 months before their benefit claim. While receiving the CWLB, workers must not simultaneously be receiving employer-paid leave or certain other types of government benefits (such as the Canada Recovery Sickness Benefit or Employment Insurance).

For the period of December 19, 2021 to March 12, 2022, the definition of “lockdown” for the purposes of the CWLB was expanded by the federal government. This costing will only focus on the period during which the expanded lockdown definition is in effect.

Eligible workers can currently retroactively apply to the CWLB up to October 24, 2021, for which the original lockdown definition applies. However, only a very small number of workers resided in regions that met the original lockdown criteria from October 24 to December 18, 2021. Due to the small number of potential claimants and data limitations, the PBO did not calculate the cost of the CWLB before December 19, 2021.

The PBO estimates that the total net cost of this measure will be $248 million. This includes a gross cost of $266 million and a cost recovery of $18 million.

Temporarily Expanding Eligibility for the Local Lockdown Program

The local lockdown program provides increased support under the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) programs for businesses whose activities are restricted by public health measures. As enacted in Bill C-2, the increased subsidy rates were applicable to businesses whose activities stopped due to a public health restriction that accounted for more than 25% of baseline revenues.

A proposed Order in Council expands this measure between 19 December 2021 and 12 March 2022.  Specifically, the measure is extended to all businesses with any location whose capacity has been reduced by 50% or more due to a public health measure, and whose activities restricted by the public health order account for at least 50% of the entity’s total qualifying baseline revenues. For this period, the threshold to qualify for the CEWS and CERS is revised to a 25% revenue reduction and subsidies are increased to be proportional to revenue declines up to a maximum of 75%. This costing focuses only on the period during which the expanded lockdown eligibility is in effect.

We expect the Local Lockdown Program to cost an additional $885 million in subsidies under the CEWS and an additional $338 million under the CERS programs. This represents a net cost to the federal government of $1,058 million after accounting for incremental corporate income tax revenues.

Making the Disability Tax Credit Refundable (Motion M-6, 44th Parliament)

Making the existing Disability Tax Credit (DTC) refundable within the meaning of the Income Tax Act.  The applicable 2021 credit for adults is $8,662, with an additional $5,053 supplement for those under 18.

Small Business Air Quality Improvement Tax Credit

Pursuant to Bill C-8, the Small Business Air Quality Improvement Tax Credit would provide a 25% refundable tax credit for installation or upgrade of ventilation and air filtration systems.  

Eligible claimants are sole proprietors and Canadian Controlled Private Corporations (CCPCs) with less than $15 million in taxable capital (or partnerships, where one of the partners is an eligible claimant).  Entities can claim up to $10,000 in eligible expenses for each location, up to a maximum of 5 locations.  

The temporary tax credit would be available for qualifying expenditures made between September 1, 2021 and December 31, 2022.

Canada Recovery Hiring Program (CRHP) as extended by Bill C-2

Providing eligible employers with a subsidy on the incremental remuneration paid to eligible employees between 6 June 2021 and 7 May 2022.  
Bill C-2 extended this program beyond its original end date of 20 November 2021 to instead end on 7 May 2022. Bill C-2 also increased the subsidy rate for October 24 to November 20th to 50%.

Underused Housing Tax Act

Pursuant to Bill C-8, the Underused Housing Tax Act would implement a 1 percent tax on the value of dwellings owned by non-resident, non-Canadians that are considered to be vacant or underused.

Several exemptions apply. Notably, properties that are the primary place of residence for the owner, owners’ common-law partner or owners’ children. In addition, vacation/recreational properties are also excluded.

The new measure will take effect on January 1, 2022.

Enhancing the Eligible Educator School Supply Tax Credit

Pursuant to Bill C-8, the Eligible Educator School Supply Tax Credit rate will be increased from 15% to 25%. This rate will still apply to eligible teaching supplies expenses of up to $1,000 and the credit will remain refundable. The definition of eligible teaching supplies will be modified to include technological devices and the requirement that the supplies must be used in school will be waived.

This measure would apply to the 2021 and subsequent taxation years.

Canada Emergency Wage Subsidy (CEWS) - as extended by Order in Council 2021-0882 & as further extended by Bill C-2

Providing a wage subsidy to employers with reduced revenues. Employers must choose between the Canada Recovery Hiring Program and this program.

We expect that the extension of the Canada Emergency Wage Subsidy by Bill C-2 will result in an additional $5,456 million in subsidies being paid beyond those already approved by Order in Council 2021-0882. Of these additional subsidies, we expect $666 million to be paid under the Tourism and Hospitality Recovery Program, and $4,790 million to be paid under the Hardest-Hit Business Recovery Program. With this extension, we expect the gross cost of the Canada Emergency Wage Subsidy to be $106,680 million. This represents a net cost to the federal government of $92,307 million after accounting for corporate income tax recoveries.