Construction stakeholders found lots to like in the Justin Trudeau government’s latest budget but several expressed concern over what they perceived as gaps, misfires and missed opportunities.
The Canadian Construction Association (CCA) and the Association of Consulting Engineering Companies — Canada (ACEC) suggested Budget 2024 missed the mark by focusing extensively on housing and related issues to the exclusion of important long-range infrastructure planning.
The multiple new housing supports mean the construction sector will be busy for the near and medium terms, others said, but the lack of fiscal restraint and the expansion of capital gains taxes are causes of concern.
Finance Minister Chrystia Freeland delivered Budget 2024, subtitled Fairness for Every Generation, in the House of Commons on April 16. Addressing Canada’s housing crisis is the government’s top priority Freeland said in outlining dozens of new measures to support the creation of 3.87 million new homes by 2031.
The expanded capital gains tax will raise $19.3 billion over the next five years, including $10.5 billion from companies. Businesses will now pay income tax on two-thirds of their capital gains, up from one-half.
“You can anticipate there’s going to certainly be some concerns from the business community,” said Mechanical Contractors Association of Canada COO Ken Lancastle on the new tax measure. “Capital gains, particularly in small businesses that are family-owned, are going to be impacted, but I think we need to dive into that a little bit more.”
More vision needed
The pledges of billions to be spent on housing and infrastructure to support housing mean there will be lots of construction activity on the horizon, Lancastle said.
“I think you can anticipate…the construction industry across Canada is going to play a fairly prominent role in the years ahead,” he remarked.
Still, Lancastle said, the government has not made it clear how the myriad housing programs and workforce development programs will be implemented – there does not seem to be a vision or focus, he said.
It’s important that “industry stakeholder groups are at the table to work with the government on the implementation.”
CCA president Mary Van Buren also mentioned a lack of vision.
“Budget 2024 sets a bold objective to help Canadians buy homes but misses the mark on delivering sufficient investment and a plan to ensure a steady flow of funds to address our nation’s infrastructure challenges,” she said.
“While we acknowledge some initiatives, such as funding for creating affordable apartments, training and recruiting more workers, and upgrading water and wastewater systems, the conditions attached and lack of strategic vision are concerning.”
ACEC CEO John Gamble had stressed the importance of progress on the National Infrastructure Assessment (NIA) and a replacement or extension for the Investing in Canada Infrastructure Program (ICIP) in the association’s pre-budget submission. The ACEC’s post-budget analysis noted there was no discussion of the successor to the ICIP in the budget.
“While other announcements included in this budget will supplement infrastructure funding, an ICIP successor program is essential to ensuring continuity in Canada’s infrastructure maintenance and asset management,” asserted the statement.
As for the NIA, precise timing on its launch was absent from the budget but the ACEC said it will “continue meeting with the National Infrastructure Assessment Secretariat Directorate to highlight the importance of a comprehensive NIA.”
‘Not fiscally responsible’
Paul de Jong, president of the Progressive Contractors Association of Canada, stated the PCA was “disappointed by another big spend budget, that provides little in the way of new infrastructure dollars, and requires Canadians to spend billions annually on debt servicing costs. This is not a fiscally responsible path forward.”
De Jong also criticized the government’s proposed plans to amend the Impact Assessment Act after parts were declared unconstitutional by the Supreme Court. The act requires a major overhaul, he said, with approvals providing more certainty to proponents and not subject to political interference.
Canada’s Building Trades Unions executive director Sean Strickland highlighted new or stable funding for the Canadian Apprenticeship Strategy, Sustainable Jobs Training Fund and Skilled Trades Awareness and Readiness Program along with continued investments in nuclear development and net-zero technology investments as positives in the budget.
“This will strengthen our workforce and ensure Canada has the support it needs as we forge ahead building new homes and transitioning our nation’s economy to a net-zero future,” he commented.
Indigenous loans to be enabled
The budget also introduces a proposal to address what Strickland called the “misclassification of workers” as independent contractors by some employers to avoid payroll taxes and benefits remittances.
The reforms will “bring workers out of the underground economy,” he said.
The Canadian Renewable Energy Association (CanREA) said it welcomed the news of further details on the Clean Electricity Investment Tax Credit and looks forward to the enabling legislation being tabled. The association also praised the tabling of enabling legislation for the Indigenous Loan Guarantee Program.
“This program is a gamechanger that will boost opportunities for Indigenous communities and companies to build the renewable energy and energy storage projects that Canada needs,” said CanREA CEO Vittoria Bellissimo.
Check out our 2024 Federal Budget: Construction Coverage Hub for more articles and analysis.
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