To assist parliamentarians in their budgetary deliberations, this report identifies key issues arising from the Government’s Fall Economic Statement (FES) published on 30 November 2020.
In January 2019, PBO released a report assessing the Government of Canada’s 2018 decision to acquire, expand, operate, and eventually divest of the Trans Mountain Pipeline system.
This report provides an updated financial valuation of the purchased assets, estimates the valuation’s sensitivity to several key factors, and projects the economic impact of the Expansion Project’s construction activities.
In response to a request from the House of Commons Government Operations and Estimates Committee (OGGO), this report estimates the construction costs of the Joint Support Ship program to build two supply ships and costs of contracting converted commercial vessels named the MV Asterix and the Obelix to provide military support. This report also attempts to compare the two projects by incorporating additional project cost elements.
This report updates PBO’s February 2020 assessment of the sustainability of government finances over the long term for the federal government, subnational governments and public pension plans. It incorporates federal and provincial budgetary measures up to 1 September and 30 October, respectively.
To assist parliamentarians in their role to scrutinize the raising and spending of public monies, this report provides an overview of the spending measures associated with the Government of Canada’s proactive pay equity regime within the federal public and private sectors.
This note presents a detailed analysis of the Government’s second supplementary estimates for the 2020-21 fiscal year, which seeks Parliament’s approval of $20.9 billion.
This report was prepared at the request of Senator Kim Pate. It estimates the impact of a proposed bill in the Senate, S-207, on sentencing for murder and the cost implications of those changes for the Correctional Service of Canada.
This report responds to a request from a Senator to estimate the financial cost of Bill C-7, which broadens eligibility for medical assistance in dying.
This report updates and extends PBO’s analysis of the additional carbon pricing needed to achieve Canada’s greenhouse gas (GHG) emissions target in 2030 under the Paris Agreement.
We provide an updated estimate based on a broad carbon levy and extend our analysis to incorporate additional carbon pricing using an Output-Based Pricing System (OBPS), taking into consideration alternative structures. Estimates of the corresponding impacts on the Canadian economy are also provided.
This report analyses the relationship between federal spending and additional tax revenues generated through business compliance programs since 2015-16 and estimates how changes in funding might affect future revenues.
In the 2020 Fall Economic Statement, the Government proposed to index the maximum payment of $60 per capita (set in 1987) available to a province each year through the Fiscal Stabilization Program (FSP). This indexation increases the maximum payment to $169.82 per capita for both fiscal years 2019-2020 and 2020-2021 and will grow with the Canadian economy, that is, nominal gross domestic product (GDP) per person, for subsequent years.
The GST/HST would apply to all taxable supplies of short-term accommodation facilitated through digital accommodation platforms.
Notably, where the traditional supplier (e.g. property owner) is not registered for the GST/HST, the accommodation platform would be deemed the supplier and would be responsible for the collection and remittance of the GST/HST.
Removing interest charges on the repayment of the federal portion of Canada Student Loans (CSL) and on Canada Apprentice Loans (CAL) for the fiscal year 2021-22.
Increasing the Canada Child Benefit (CCB) in 2021 by $1,200 for each child under the age of 6 for families with an adjusted net income at or below $120,000 who are entitled to the CCB.
Increasing the Canada Child Benefit (CCB) in 2021 by $600 for each child under the age of 6 for families with an adjusted net income above $120,000 who are entitled to the CCB.
Increasing the Children’s Special Allowance in 2021 by $1,200 for each child under the age of 6 that is under the care of child protection services.
Applying an annual limit of $200,000 on the amount of employee stock options qualifying for the 50% stock option deduction. The limit will be based on the fair market value of the shares at the time the options are granted. Stock options granted in excess of the $200,000 threshold will be considered ineligible, meaning that the entire benefit realized from the exercise of ineligible options by the employee will now be considered taxable income.
For stock options that are considered ineligible, the employer will now be entitled to a tax deduction equal to the total benefit realized by the exercise of these options by the employee.
Canadian-controlled private corporations (CCPCs) and corporations with revenues of $500 million or less will not be subject to the new rules.
This measure will be introduced on 1 July 2021. Only options granted after that date will be subject to the new rules.
This policy extends the period that junior mining exploration companies and other issuers of flow through shares (FTS) have to spend the capital raised through the use of FTS agreements by an additional 12 months. This policy applies to FTS agreements that were entered into to fund Canadian exploration expenditures (CEE) using the general rule after March 2018 and before the end of 2020 or, in the case of the look-back rule, in 2019 and 2020. The policy provides an additional 12 months for firms to incur eligible CEE before losing the tax benefits tied to the FTS or having to pay fines associated with failing to incur expenses within the time frame specified by the agreement.
PBO estimates that the net cost of the policy will be $32.5 million from 2019-2020 to 2021-2022.
Providing a wage subsidy to employers with reduced revenues due to COVID.
The subsidy is available for wages paid in sixteen 4-week periods from 15 March 2020 to June 2021. The subsidy rate for March 2021 is assumed to also apply for the April to June 2021 periods. Consistent with the magnitude of the Department of Finance’s estimates, it is assumed that for April to June of 2021, revenues will be compared to a reasonably constant baseline unaffected by COVID-19.
The revenue decline required for eligibility is 15% for March, and 30% for April, May and June 2020. For July onwards, employers are eligible for the subsidy if in a period they have any revenue decline. The revenue decline is measured relative to either the average of January/February 2020 or the corresponding month in the previous year.
The subsidy rate that an employer will receive depends on the extent of the employer’s revenue losses in the corresponding calendar month. The employee remuneration eligible for subsides is capped at $1,129 per week. For Periods 1 to 4, the subsidy is 75% of wages up to the lesser of the weekly cap and wages actually paid. For new employees, the subsidy is 75% of wages paid up to the cap.
For employees on leave with pay, employers can also recover 100% of employer-paid contributions to Employment Insurance, the Canada Pension Plan, the Quebec Pension Plan, and the Quebec Parental Insurance Plan.
Eligible employers include individuals, taxable corporations, partnerships, non-profit institutions and registered charities; public bodies are not eligible.
Providing rent assistance to businesses.
The rent assistance will be provided as direct transfers to businesses with revenue declines, covering the period from 27 September 2020 to June 2021. The subsidy rate for March 2021 is assumed to also apply for the April to June 2021 periods. Consistent with the magnitude of the Department of Finance’s estimates, it is assumed that for April to June of 2021, revenues will be compared to a reasonably constant baseline unaffected by COVID-19.
Rent assistance is calculated as a percentage of eligible expenses which is greater for businesses with greater revenue declines.
An additional 25% subsidy is available to businesses that are forced to temporarily close certain locations or have their business activities significantly restricted by a direct mandatory public health order.
Eligible expenses include commercial rent, property taxes, property insurance, and interest on commercial mortgages (subject to conditions), less any subleasing revenues. Expenses for each qualifying period would be capped at $75,000 per month per location with an overall cap of $300,000 per month shared among affiliated entities.
The program is not cost-shared with provinces or territories.
This bill amends the Greenhouse Gas Pollution Pricing Act to extend the exemption for qualifying farming fuel to marketable natural gas and propane.
The exemption will cover marketable natural gas and propane used for all farm operations. Currently, carbon charge exemptions for these fuels apply only to greenhouse operations. The exemption applies only to provinces and territories that are subject to federal carbon pricing because they do not have climate pricing plans that meet federal standards.
Fuel used for farming activities, but not personal use, is eligible for the exemption.
The Canada Emergency Response Benefit (CERB) eligibility period expired on September 26, 2020. To support those who remain unable to work, the Government has made several modifications to Employment Insurance (EI) regular, maternity and parental programs:
1. Reduce, to 120 hours through a credit, the minimum number of hours of insurable employment required for a regular, maternity and parental claim;
2. Set a minimum EI regular, maternity and parental benefit rate of $500 per week ($300 for extended parental benefits);
3. Provide a minimum entitlement of 26 weeks for regular EI beneficiaries.
The weekly benefit rate is calculated based on the 14 best weeks of earnings.
In general, these changes are effective on September 27, 2020 for one year. There are a few exceptions: the hours credit is retroactive to March 15, 2020 and the 26 week minimum entitlement is effective on August 9, 2020.