Canada | Federal Budget

A focus on skills training among federal budget expectations

The federal budget will drive the Liberal Party’s fall election campaign. CPA forecasts the main issues for 2019.

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Portrait of excited couple standing outside their new home with Sold signThe Finance Minister has said the government is seeking solutions to make homes more affordable for millennials, while keeping the housing market stable (Shutterstock/Monkey Business Images)

The 2019 federal budget, set to be introduced on Tuesday, March 19, is expected to touch a wide range of issues with long-term plans that will drive the Liberal Party’s fall election campaign. 

Last November, the Fall Economic Statement delivered some clues on what to expect in this year’s budget, as the government deferred deficit reduction opting instead to spend billions to support the economy and accelerate business investment. 

SKILLS FOR WORK

In terms of other possibilities, Finance Minister Bill Morneau has said that skills training will be a particular focus. The government already announced a number of skills-related initiatives over the past three federal budgets and CPA Canada expects Budget 2019 will include a major initiative to make skills training more accessible and affordable to all Canadians.

At a pre-budget photo opportunity, Morneau hinted the budget would include some sort of lifelong learning account, a personalized account to assist Canadians to access and pay for skills development. The minister’s Economic Advisory Council recommended such an initiative to assist Canadians to build and maintain relevant skills in the face of disruptive change. 

“The council’s recommendation is ambitious, but costly,” says Sarah Anson-Cartwright, CPA Canada’s director of public affairs. “We will be watching to see how that cost will be shared between government, employers and employees. It will also be critical to have clear criteria for eligible training programs in order to ensure results and accountability.”   

HOUSING AFFORDABILITY

High prices in some housing markets have created concern among younger Canadians hoping to borrow money to purchase a home. The Finance Minister has said the government is seeking solutions to make homes more affordable for millennials, while keeping the housing market stable.

On March 15, Morneau announced that the federal government, along with the British Columbia government, is creating an Expert Panel on the Future of Housing Supply and Affordability.

“Canada’s economy is growing, and a competitive housing market is a testament to that,” Morneau said in a statement. “Yet there's a problem when too many Canadians are priced out of buying a home or finding a good place to rent. To make the housing market more fair, affordable and accessible, we need new and innovative ideas to increase the supply of units.”

While it’s still unclear as to other mechanism the government might use, the goal is trying to help those struggling to get access to affordable housing in major urban centres, says Francis Fong, CPA Canada’s chief economist. 

Possibilities include raising the first-time homebuyers tax credit or raising the cap on the homebuyer’s plan program. But Fong points out that the tax credit represents a low amount relative to the level of home prices, while allowing people to draw more on their retirement savings may not be the best way to address affordability issues. 

NATIONAL PHARMACARE

It’s expected that the Liberal government will also propose a limited expansion to Canada’s healthcare system, covering part of the cost of prescription drugs, according to Reuters.

The 2018 budget announced the creation of an Advisory Council on the Implementation of National Pharmacare. The council was created to lead a national dialogue on how to implement affordable national pharmacare for Canadians and their families, employers and governments. 

On March 6, the council provided an interim report to the Minister of Health and the Minister of Finance on the progress of their work. The report says: “…the Council heard loud and clear that the current system of drug coverage in Canada is neither adequate nor sustainable over the long-term and leaves too many Canadians behind.”

Their preliminary recommendations include creating a national drug agency to oversee national pharmacare; developing a comprehensive, evidence-based list of prescribed drugs—a national formulary—to harmonize coverage across Canada; and investing in data on prescription drugs and information technology systems.

TIME FOR ACTION

In advance of the budget being tabled, CPA Canada released a series of three reports highlighting the need for a comprehensive tax system review—and how to get there.. 

Read the reports: International Trends in Tax Reform: Canada is Losing Ground, Canada’s Tax System: What’s so Wrong and Why it Matters, The Best Way Forward: Designing a Tax Review for Canada.