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2023 Federal Budget Highlights

Miller Thomson LLP

On March 28, 2023, the Honourable Chrystia Freeland tabled a new federal budget (the “2023 Budget”). The 2023 Budget sets out the Government of Canada’s spending priorities for the years ahead. These priorities include making life more affordable, investing in health care and dental care, advancing Indigenous reconciliation, and supercharging Canada’s clean technology sector in response to the US Inflation Reduction Act.

The 2023 Budget also follows through on some previously proposed tax measures, such as raising the Alternative Minimum Tax (AMT) rate[1] and imposing new penalties on transactions that are subject to the General Anti-Avoidance Rule (GAAR).[2] These proposals, which our Tax Group discusses in a separate article, may be of relevance to high net worth donors planning to make large or complex tax-driven gifts.

After last year’s eventful federal budget (which changed the disbursement quota rules and introduced new rules governing qualifying disbursements), many sector observers had predicted a “quieter” budget this year for charities and not-for-profit organizations in terms of new tax proposals. That prediction was largely correct.

As with previous years, the Government of Canada made a number of funding announcements in the Budget that are of interest to the sector and its stakeholders. For your convenience, we have organized these funding proposals below by topic/group; however, please note that some organizations may be eligible for funding opportunities in more than one category below.

Addictions and Substance Use

  • $73.9M over five years, starting in 2023-2024, with $4.6M ongoing, to Health Canada to streamline authorizations for supervised consumption sites and drug checking services, scale-up access to safer supply, and evaluate innovative approaches.
  • $144M over five years, starting in 2023-2024, to Health Canada for the Substance Use and Addictions Program to fund community-based supports, including safer supply, supervised consumption sites, and other evidence-based interventions.
  • $20.2M over five years, starting in 2023-2024, to the Public Health Agency of Canada for a new community-based program to prevent substance abuse among young people.

Arts and Culture

Black Canadians

Canadians with Disabilities

  • $10M over two years, beginning in 2023-2024, to Employment and Social Development Canada to address the needs and barriers facing persons with disabilities through investing in capacity-building and community-level work of Canadian disability organizations.
  • $21.5M to Employment and Social Development Canada to continue work on the future delivery of the Canada Disability Benefit, including engagement with the disability community and provinces and territories on the regulatory process.
  • $922M to provinces and territories through the Workforce Development Agreements, and, of this, approximately 30% will be targeted towards helping persons with disabilities gain skills training and work experience.
  • $105M to support the implementation of an employment strategy for persons with disabilities through an Opportunities Fund (this includes funding to the Ready, Willing and Able Program to support persons with Autism Spectrum Disorder or intellectual disabilities in finding employment).

Clean Technology

Industry associations may be interested in the Government of Canada’s proposed tax incentives, investments, and funds to help achieve Canada’s net-zero emissions goals. These announcements include:

  • a 15% refundable tax credit for eligible investments in certain types of electricity generation systems and equipment.
  • a 15-40% refundable tax credit for eligible project costs to produce clean hydrogen.
  • a refundable tax credit equal to 30% of the cost of investments in new machinery and equipment used to manufacture and process clean technologies and extract, process, or recycle critical materials.
  • a $15B Canada Growth Fund (PDF) to encourage private investment in low-carbon projects, technologies, businesses and supply chains.
  • a 50% reduction in corporate income tax rates for zero emission technology manufacturers.
  • $500M over 10 years to the Strategic Innovation Fund which provides funding for large projects across sectors that include emissions reduction, biomanufacturing and natural resources.
  • expanding eligibility for the Clean Technology Investment Tax Credit to include geothermal energy systems.
  • enhancing the Investment Tax Credit for Carbon Capture, Utilization, and Storage.

Climate Change, Conservation, and the Environment

Disaster Relief and Mitigation

Education and Bilingualism

  • $813.6M in 2023-24 to enhance student financial assistance for the school year starting August 1, 2023.
  • $197.7M in 2024-25 to the Student Work Placement Program.
  • $679.2M over five years, starting in 2023-24, for the Department of Canadian Heritage to support equal access to services of equal quality in education by working with provinces and territories to make high-quality minority-language education, opportunities for second-language learning, and bilingual government services more readily available.
  • $373.7M over five years, starting in 2023-24, in additional funding to support new and enhanced federal initiatives under the Action Plan for Official Languages, 2023-28.

Equity, Diversity, and Inclusion

  • $160M over three years, starting in 2023-24, for the Women’s Program to provide funding to organizations in Canada that serve women.
  • $25.4M over five years, starting in 2023-24, and $0.6M ongoing, to the Department of Canadian Heritage to continue to support Canada’s Anti-Racism Strategy and fight all forms of racism, including but not limited to anti-Indigenous racism, anti-Black racism, anti-Asian racism, antisemitism, and Islamophobia.
  • $1.5M over two years, starting in 2023-24, to the Privy Council Office to create a new Anti-Racism, Equity and Inclusion Secretariat to ensure that considerations of anti-racism, equity and inclusion are applied in the development of federal government policies.

Health

  • $2B over 10 years to be distributed on a distinctions basis through the Indigenous Health Equity Fund.
  • $25B over 10 years through a new set of bilateral agreements to address individual provincial and territorial health system needs, such as expanding access to family health services, supporting health workers and reducing backlogs, increasing mental health and substance use support, and modernizing health systems.
  • $2B in 2022-23 to address urgent pressures in emergency rooms, operating rooms, and pediatric hospitals.
  • $350M over 10 years in recognition of medical travel and the higher cost of delivering health care in the territories.
  • $505M over five years, starting in 2023-24, to the Canadian Institute for Health InformationCanada Health Infoway, and other federal data partners.
  • $359.2M over five years, starting in 2023-24, to support a renewed Canadian Drugs and Substances Strategy.
  • $158.4M over three years, starting in 2023-24, to the Public Health Agency of Canada to support the implementation and operation of the 988 Suicide Prevention Line.
  • $36M over three years, starting in 2024-25, to Health Canada to renew the Sexual and Reproductive Health Fund.
  • $13B over five years, starting in 2023-24, and $4.4B ongoing to Health Canada to implement the Canadian Dental Care Plan.
  • $250M over three years, starting in 2025-26, and $75M ongoing to Health Canada to establish an Oral Health Access Fund.
  • $23.1M over two years, starting in 2023-24, to Statistics Canada to collect data on oral health and access to dental care in Canada, to inform the rollout of the Canadian Dental Care Plan.

Immigration and Settlement

  • $123.2M to boost Francophone immigration in Canada, including support for Canadian employers to recruit French-speaking foreign workers, and increased support for these immigrants once they arrive in Canada.

Indigenous Canadians

Legal Aid, Refugees, and Human Rights

Research, Development, Science, and Industry

To view all formatting for this article (eg, tables, footnotes), please access the original here.

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Miller Thomson LLP – Robert B. HayhoeNicole K. D’AoustCaitlin LeeHillary LindenStephen HsiaAdelaide Earl-KinleyMichelle Eng and Rebekah Timm