Archived - Canada's Economic Action Plan

A Second Report to Canadians
June 2009

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Many Canadian communities, businesses and workers have been seriously affected by the economic slowdown. That is why our Government introduced Canada's Economic Action Plan. It is a clear blueprint to stimulate the economy, protect Canadian jobs and support those hit hardest. It is delivering $62 billion in stimulus, among the largest of the Group of Seven (G7) economies.

The Government is delivering on Canada's Economic Action Plan today, when it is needed the most. It will provide a boost to output and employment. It is an investment in our future.

The Plan:

• Reduces taxes permanently.
• Helps the unemployed through enhanced Employment Insurance (EI) and training.
• Avoids layoffs by enhancing the EI work-sharing program.
• Creates jobs through a massive injection of infrastructure spending.
• Helps create the economy of tomorrow by improving infrastructure at colleges and universities and supporting research and technology.
• Supports industries and communities most affected by the global downturn.
• Improves access to and affordability of financing for Canadian households and businesses.

Reducing the Tax Burden for Canadians

The personal income tax relief in Canada's Economic Action Plan puts more money in the pockets of Canadians, particularly low- and middle-income earners, for them to spend as they see fit, helping stimulate the economy and create and protect jobs. Key measures include:

• An increase in the amount of income Canadians can earn before paying federal income taxes or facing higher tax rates.
• An enhanced Working Income Tax Benefit to further strengthen work incentives.
• An increase in the Age Credit to make retirement more affordable.
• Substantial tax relief for Canadians who invest in their homes, and for first-time home buyers.

Tax Relief for Canadian Businesses

A competitive business tax system is essential to encourage new investment, growth and job creation in Canada. Key tax relief for Canadian businesses includes:

• Temporary immediate expensing of computers to help business adopt new technology.
• Extension of the temporary accelerated capital cost allowance for manufacturing or processing machinery and equipment to help manufacturers and processors restructure and retool for long-term success.
• An increase to $500,000 in the amount of small business income eligible for the reduced federal income tax rate to help small businesses weather the recession and create and maintain jobs.
• Extension of the temporary Mineral Exploration Tax Credit to support exploration activity.

Helping the Unemployed

The ultimate objective of Canada's Economic Action Plan is to protect jobs and support Canadians affected by the global recession. As unemployment has risen, more Canadians are accessing EI benefits. Total EI support is now expected to be $5.5 billion higher this year. Key initiatives include:

• Providing EI recipients with up to an extra 5 weeks of EI benefits—worth up to an additional $2,235 per recipient, providing them with additional support while finding a job.
• Delivering EI benefits on a more timely basis by engaging more staff to process claims and respond to enquiries from Canadians, and by extending the hours of operation of EI call centres.
• Extending the duration of work-sharing agreements to a maximum of one year, which protects even more jobs by allowing workers to work a reduced work week and receive EI benefits on the days they do not work.

Training and EI Support for More Canadian Workers

• Extended EI benefits of up to two years for long-tenured workers on longer-term training.
• More training support for EI- and non-EI-eligible Canadians, making training available to more Canadians.
• Additional support for youth, older workers, Aboriginal Canadians and apprentices.
• EI premium rates frozen for 2010, saving employers money.

Building Infrastructure and Creating Jobs

Jobs are a top priority. That is why infrastructure spending is an effective way to meet the Action Plan's key objective of maintaining and creating jobs—every dollar spent on infrastructure generates $1.60 in economic activity.

Example:

• $550 million to improve service and reliability of GO Transit services in Ontario and build the Sheppard Rapid Transit Line in Toronto.

Accelerating Existing Infrastructure Funding

The Government has accelerated existing funding for large strategic projects of national and regional significance. More than $1.7 billion in federal funding has been committed to more than 50 large strategic projects since January 2009.

Example:

• $350 million for British Columbia to construct the Evergreen Line—a new 11-kilometre rapid transit line from Burnaby to Coquitlam.

Additional Infrastructure Investments With Provinces and Territories

The Economic Action Plan works with provinces and territories to accelerate access to provincial/territorial base funding:

• $4-billion Infrastructure Stimulus Fund to support construction-ready projects in all regions.
• Additional support to the Communities Component of the Building Canada Fund.
• $1-billion Green Infrastructure Fund.

Example:

• In Ontario, more than $900 million has been committed to support over 1,000 municipal infrastructure projects such as public transit, cultural facilities, roads, parks and municipal buildings.

First Nations Infrastructure

The Economic Action Plan is further supporting job creation through the construction and renovation of schools, water and wastewater projects and critical community infrastructure, such as health and police facilities in First Nations communities.

Example:

• Thirteen school projects and eighteen water and wastewater projects to support First Nations communities have been announced for a total investment of $365 million.

Federal Infrastructure

The Government is making investments to upgrade and modernize federal infrastructure and create jobs. These investments will provide Canadians with better passenger rail services, safer bridges and roads, refurbished harbours for small craft and more efficient border crossings.

Example:

• The Jacques Cartier and Champlain Bridges Incorporated designed a comprehensive 10-year repair program for the Champlain Bridge in Montréal to ensure the bridge remains safe. Canada's Economic Action Plan allocated $212 million to this project.

Support for Home Ownership and Protecting and Creating Jobs Through Housing Construction

For many Canadians, their homes are the most important investment of their lives. The housing industry is an important source of economic activity and job creation in Canada. Canada's Economic Action Plan provides powerful incentives for Canadians to invest in their homes, stimulating the economy and creating jobs:

• The temporary Home Renovation Tax Credit will provide up to $1,350 in tax relief to an estimated 4.6 million Canadian families that renovate their homes.
• All homeowners are also able to benefit from the enhanced ecoENERGY Retrofit program.
• The First-Time Home Buyers' Tax Credit will provide up to $750 in tax relief to reduce the cost of a first home purchase completed after January 27, 2009.
• First-time home buyers also benefit from greater access to their Registered Retirement Savings Plan savings to purchase a first home.

Investments in Social Housing

Canada's Economic Action Plan provides significant funding for social housing construction and renovation. This funding will provide a significant boost to jobs and improve the quality and energy efficiency of up to 200,000 social housing units across Canada.

The Economic Action Plan also provides $400 million over two years to build new and renovate existing affordable housing units in First Nations communities.

Creating the Economy of Tomorrow

The Government is helping to build a strong innovative economy through investments in science, technology and research:

• Close to $1 billion in federal contributions has been announced for projects to create world-class research facilities at universities and improve learning opportunities at colleges.
• Scholarships have been increased to provide young Canadians with opportunities to better prepare for the jobs of tomorrow.
• Investments are being made to strengthen research facilities in Canada's North and across the country in federal laboratories.

Example:

• The College of the North Atlantic in Newfoundland and Labrador will receive nearly $13 million from the federal government for three projects, including the construction of a new campus in Labrador City, roof and ventilation upgrade on the Prince Philip Drive campus, and building envelope and ventilation upgrade at the Seal Cove campus.

Supporting Industries and Communities

The Economic Action Plan provides $2 billion in 2009 to support jobs in sectors and communities most affected by the global recession. This includes industries such as manufacturing, fisheries, forestry, agriculture and tourism.

• The $1-billion Community Adjustment Fund is funding projects to help create jobs and short-term stimulus in communities with fewer than 250,000 people that have been affected by major layoffs and significant job losses.
• The Government is also supporting economic development in Northern Canada and Southern Ontario by establishing development agencies dedicated to these regions.

Example:

• $100 million over two years to support reforestation in Quebec. These projects could create some 8,000 jobs in more than 10 regions: Saguenay-Lac-Saint-Jean, Nord-du-Québec, Abitibi-Témiscamingue, Côte-Nord, Outaouais, Lanaudière, Laurentides, Mauricie, Québec, Bas-Saint-Laurent and Gaspésie.

Improving Access to Financing

Canadians need access to affordable financing for their homes, cars and businesses. Canada's Economic Action Plan provides up to $200 billion to support lending to Canadian households and businesses through:

• The Business Credit Availability Program.
• The Canadian Secured Credit Facility.
• The Insured Mortgage Purchase Program.
• The Canadian Lenders Assurance Facility.
• The Canadian Life Insurers Assurance Facility.

For more information on Canada's Economic Action Plan, visit

WWW.ACTIONPLAN.GC.CA

or call

1 800 O-Canada (1-800-622-6232)

1-800-926-9105 (TTY)

Ce document est également offert en français.