The federal government announced the budget this week, and if you haven’t had a chance to read the 724-page document, well, that’s understandable!
Shifting systems towards a people and planet first world requires market, policy and cultural change. We’ve always felt this in our bones, known it in our hearts and understood it intellectually. This budget has the potential to push on key market and policy levers, and it is no doubt influenced by the cultural changes afoot. Yes, there are critical pieces missing and plenty of room for improvement (notably, we’re missing the inclusion of a Universal Basic Income strategy and this budget needs to do more to support climate action), but this is an important budget that we believe holds potential for creating a more people and planet first world with some promising Next Economy trends.
The Next Economy is
equitable, sustainable, and prosperous.
We know you have all been a part of pushing for the changes and solutions our communities, economies, and planet need, and we’re proud to continue working with the incredible CSI community, pushing forward for a better today and tomorrow. Here’s a roundup of some budget highlights:
Ending the She-session
This budget proposes supporting women entrepreneurs with $146.9 million over four years to increase access to affordable financing, increase data, and strengthen capacity within the entrepreneurship ecosystem. It looks to strengthen the Women Entrepreneurship Strategy, Women Entrepreneurship Ecosystem Fund, and the Women Entrepreneurship Knowledge Hub. We know that women have been hit hard by the pandemic “she-session”—we’ve heard firsthand from our Women of Ontario Enterprise Network (WOSEN) participants how its affected them—and we’re eager to see these funds support more women as they return to the workforce and flourish in the years ahead.
Supporting BIPOC Entrepreneurs & Economies
Covid-19 has disproportionately affected Black Canadians and they’re more likely than other Canadians to experience layoffs because of it. These issues stem from systemic anti-Black racism. This budget proposes providing $100 million in the next year to the Supporting Black Canadian Communities Initiative as well as $200 million to Employment and Social Development Canada to establish a new Black-led Philanthropic Endowment Fund which intends to “create a sustainable source of funding, including for Black youth and social purpose organizations, and help combat anti-Black racism and improve social and economic outcomes in Black communities.”
The budget also proposes expanding the Aboriginal Entrepreneurship Program by investing $42 million over three years to directly support Indigenous-led businesses. The National Aboriginal Capital Corporations Association’s Indigenous Women’s Entrepreneurship Initiative will also be granted $22 million over three years to provide tools, services, and resources to increase the number of Indigenous women entrepreneurs.
Creating Accessible Communities & Workplaces
For our physical spaces to be truly equitable, they must be physically accessible. The budget pledges to provide $100 million over two years to triple funding for the Enabling Accessibility Fund which provides support for renovation, construction, and retrofit projects that make communities and workplaces more accessible for persons with disabilities. This fund helped CSI install a wheelchair lift and pave the laneway at 192 Spadina!
Surfing From Far and Wide
Unless a very kind and thoughtful friend printed this blog post out and mailed it to you, you’re probably using the internet to read it. In many rural and remote Canadian communities, inaccessibility to broadband internet creates a barrier, not only to reading the CSI blog, but to participating in the economy. This budget proposes providing an additional $1 billion to the existing $6.2 billion already in the Universal Broadband Fund over six years, to support a more rapid rollout of broadband projects.
Getting to Net Zero
The budget earmarks $5 billion over seven years for the Net Zero Accelerator, a program launched in the government’s climate plan last December to fast-track decarbonization projects. This funding would provide up to $8 billion of support for jobs and projects that will help reduce domestic greenhouse gas emissions. The plan is to reduce the general corporate and small business income tax rates by 50 per cent for businesses that manufacture zero-emission technologies (starting in 2022, gradually phasing out starting in 2029, and eliminated by 2032).
Financing Clean Tech
As we’ve seen through our EarthTech program, Canadian Clean Tech has a critical role to play in tackling the climate crisis and ventures from coast to coast are working harder than ever to ensure a flourishing future for people and the planet. This budget suggests making up to $1 billion available on a cash basis, over five years, to help draw in private sector investment to the Canadian clean technology sector.
Greening Our Bond Options
You already know we’re fans of innovative bonds. The government plans to issue its inaugural federal green bond in 2021-22. Through green bonds, investors have the opportunity to finance projects such as green infrastructure, clean tech innovations, and nature conservation in an effort to combat climate change. You can also check out some Green Community Bonds.
Recovering From Covid
Last year was hard for the nonprofit and charitable sectors, and this year hasn’t been easier. By way of some relief, the government plans to provide $400 million to charities and non-profits through the temporary Community Services Recovery Fund in 2021-22. It also plans to extend Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) and Lockdown Support beyond June, with both programs extending until September 25 and CEWS eventually replaced by the new Canada Recovery Hiring Program.
If approved, this budget will also see the Canada Small Business Financing Program expand its borrower eligibility to include non-profit and charitable social enterprises, lending against intellectual property and start-up assets and expenses, and a new line of credit product. It also proposes to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses.
Investing in the Social Finance Fund & Investment Readiness Program
Social finance helps mobilize capital to bring about public good for people and planet. The government is planning to release up to $220 million of the $755 million Social Finance Fund over the next two years and proposes to renew the Investment Readiness Program (IRP) with $50 million over two years. This program supports charities, non-profits, and social purpose organizations in capacity-building activities such as business plan development, expanding products and services, skills development, and hiring. We’ve seen firsthand what this funding can do: over 20% of the 48 projects funded by the IRP were existing and former CSI accelerator program participants and members! Thanks to the IRP, Social Innovation Canada has been deepening and broadening the capacity of Canada’s social innovation ecosystem to apply Social R&D practices that can help strengthen programs and improve organizational investment readiness.
Spending for Good
If you’re a charity, you’ve got to spend a minimum amount on your programs or gifts each year. However, in Canada we’ve got a gap of at least $1 billion in charitable expenditures! The budget proposes launching public consultations with charities on increasing the disbursement quota beginning in 2022. According to the budget, “this could potentially increase support for the charitable sector and those that rely on its services by between $1 billion and $2 billion annually.” That’s ‘billion’ with a “B”.
Digitizing Our Businesses
More important than ever, the new Canada Digital Adoption Program will help small and medium-sized businesses adopt new digital technologies through micro-grants and access to zero-interest financing to help offset the costs of going digital. The budget proposes providing $2.6 billion over four years on a cash basis to the Business Development Bank of Canada to help small- and medium-sized businesses finance technology adoption.
In 2019 Canada declared housing a human right. Good thing because right now, the country is in an affordable housing crisis which is only showing signs of accelerating (the reason we’re engaged in a Financialization of Housing lab right now). Hopefully, there is some relief coming through some of the budget’s proposals: $2.5 billion over seven years to Canada Mortgage and Housing Corporation which includes an additional $1.5 billion for the Rapid Housing Initiative (at least 25 per cent of this funding would go towards women-focused housing projects); $600 million over seven years to renew and expand the Affordable Housing Innovation Fund; $315.4 million over seven years through the Canada Housing Benefit; $118.2 million over seven years through the Federal Community Housing Initiative; and $3.8 billion earmarked for affordable housing units.
The Trudeau government also proposes reallocating $1.3 billion of previously announced funding, including $750 million in funding under the National Housing Co-Investment Fund, $250 million in funding under the National Housing Co-Investment Fund, and $300 million in funding from the Rental Construction Financing Initiative.