Table of Contents - Previous - Next

Supporting Industries and Communities

Highlights

• $23 million has been committed to date to support twelve world-famous summer events across Canada through the $100-million Marquee Tourism Events Program.
• Nearly all of the $70 million provided to the Parks Canada Agency in 2009–10 for upgrades and repairs to national historic sites and visitor facilities in national parks have been committed.
• $117 million has been committed to projects that will support forestry and lobster fishing communities out of the $1-billion Community Adjustment Fund.
• About $75 million of the $100 million provided to the National Research Council's Industrial Research Assistance Program is expected to be committed by the end of June to support innovative small and medium companies.
• The tariff relief on machinery and equipment has been in effect since January 28, 2009, and has already saved the manufacturing industry about $27 million in customs duties. Industry sectors already benefiting from tariff relief include food processors, printing and power generation/distribution.
• To encourage investment, growth and job creation in Canada, actions have been taken since 2006 that will result in more than $7 billion in tax reductions in 2009–10 for Canadian businesses. This tax relief consists of significant broad-based tax reductions, including for small businesses, a one-year extension of the Mineral Exploration Tax Credit and temporary changes to capital cost allowance rates to encourage new investment in computers and manufacturing or processing machinery and equipment.

The Canadian economy has been hit by the global recession and is going through significant restructuring. Traditional industries are shifting and jobs and communities are being dramatically affected. That is why Canada's Economic Action Plan provides $4.3 billion to support adjustment and help create and protect jobs in regions, communities and industries of the Canadian economy that have been most affected by the severe downturn. This includes targeted support for traditional industries such as forestry and agriculture, and manufacturing, which play important roles in the economies of many communities. This support will help these industries invest in their long-term success and create new opportunities and jobs for Canadians in all areas of the country.

Table 2.12
Supporting Industries and Communities

	2008–09	2009–10	2010–11	Total
	(millions of dollars)
Support for Industries
Forestry		70	100	170
Agriculture		85	140	225
Mineral exploration		70	-15	55
Small business		170	195	365
Tourism		70	70	140
Shipbuilding		19	30	49
Culture		177	158	335
Tax and tariff relief
Accelerated capital cost allowance     for computers		340	355	695
Tariff relief for machinery and equipment	12	76	81	169
Subtotal—Support for Industries	12	1,077	1,114	2,203
Support for Communities
Helping all regions prosper		774	746	1,520
Strengthening partnerships   with Aboriginal Canadians		115	183	297
Subtotal—Support for Communities		888	929	1,817
Total—Supporting Industries   and Communities	12	1,965	2,043	4,020
Total stimulus value		2,106	2,178	4,284
Notes: Totals may not add due to rounding. The stimulus value reflects projected cash expenditures. The budgetary impact may differ because some of these expenditures relate to construction and renovation costs of federal assets (for which only depreciation is recorded on a budgetary basis) and loans to third parties (where there is a budgetary impact only in the event that there is a risk of loss).

Introduction

Canada's economy was built on a base of traditional industries that have provided employment and livelihoods for generations in hundreds of communities. These industries, including agriculture, fishing, forestry and mining, continue to represent important elements of our economy today, especially in rural and remote communities, providing jobs and supporting communities.

Manufacturing plays an equally important role in other parts of the country, employing thousands of Canadians and indirectly supporting many others through distribution, processing and retailing. Today, manufacturing continues to contribute to our economy by producing the goods that Canadians rely on and that enable us to successfully trade with other countries around the world.

Canadians are understandably concerned about the health of traditional industries and manufacturing. The Government has acted decisively to bolster the competitiveness of these sectors, so that they can take advantage of new opportunities and continue to be an important contributor to job and wealth creation in Canada.

Government actions to date include:

• Lowering taxes, so that companies can use their resources to reinvest and create jobs.
• Reducing the paper burden on company growth and investments.
• Improving the regulation of large resource-based projects through the Major Projects Management Office.
• Resolving the softwood lumber dispute to reopen access to the U.S. market for our lumber.
• Making targeted investments to support farmers and their families, address the pine beetle infestation, help open new markets for our forestry producers, sustain the fishery and increase tourism in Canada.
• Building world class infrastructure to assist businesses in reaching markets more efficiently.
• Investing in science and technology initiatives to help build the highly-skilled workforce needed for Canadian businesses to remain competitive in the global economy.

Many communities are making the transition required to meet changing economic conditions. The Government has worked closely with affected communities, as well as provinces and territories, to address short-term economic disruptions and help support community economic development. Initiatives in all parts of the country are renewing community economic prospects through planning, innovation and partnerships supported by the $1-billion Community Development Trust in Budget 2008 and the $1-billion Community Adjustment Fund announced in the Economic Action Plan.

The Government is taking the necessary steps to help traditional industries and manufacturing, and the many Canadians and communities that depend on them, to prosper.

Support for Industries

The significant financial assistance provided in the Economic Action Plan to key economic industries including forestry, agriculture, shipbuilding, fishing, manufacturing, culture and sport, and tourism will help to position Canadian firms for long-term, sustainable economic success and will help to create and maintain jobs.

Manufacturing: Especially hard-hit during this global economic crisis, the manufacturing industry is undergoing significant global restructuring. Through a number of measures, the Government is helping the nation's manufacturers protect jobs during the global recession, while helping them emerge even better equipped to compete globally and grow once the economy recovers.

This industry is already benefiting from the following measures, ensuring it will continue to produce the goods Canadians rely on, while successfully exporting around the world:

• To assist manufacturing and processing industries restructure and retool for long-term success, the Economic Action Plan extends the temporary 50-per-cent straight-line accelerated capital cost allowance (CCA) rate to manufacturing or processing machinery and equipment acquired in 2010 and 2011.
• To help businesses in all sectors adopt new technology at a faster pace, the Government introduced a temporary two-year 100-per-cent CCA rate for computers acquired after January 27, 2009 and before February 1, 2011.
• The permanent elimination of tariffs on a wide range or machinery and equipment is now lowering the costs of importing specialized equipment from overseas to modernize operations. The Government continues to consult with Canadian businesses on providing even more tariff relief.

In total, the Government has introduced more than $60 billion in tax relief for Canadian businesses.

Forestry: A strong and vibrant forestry industry is important to the overall performance of the Canadian economy. It is a significant employer in the hundreds of communities across this country, providing approximately 250,000 direct jobs. The global economic downturn and the collapse in the U.S. housing market have created challenges for the forestry industry. The continued success of the entire industry, including the pulp and paper sector, lies in the ability of firms to become more competitive by, for example, making increased investments that will improve productivity and contribute to environmental sustainability.

To date, a total of $70 million has been provided to Natural Resources Canada to support programs in 2009–10 that foster market diversification and innovation initiatives for the forestry industry so that it can prosper and create jobs. This investment will be supplemented with a further $100 million next year.

The Government has also put in place a joint forestry task team with the Government of Quebec. The objective of the task team is to accelerate efforts to help the forestry sector, including workers, businesses and communities. The task team's efforts to date have led to the joint investment of $200 million by the federal and Quebec governments to support important silviculture activities in the province (see the box entitled "Creating Jobs in Communities Across Canada").

Agriculture: Canada's agricultural industry plays a unique role by providing healthy and nutritious foods for families in Canada and across the world while forming the economic basis for many small and rural communities in all regions of the country. The Government continues to make progress on the four new measures targeted to Canada's farm businesses outlined in the Economic Action Plan.

Under the five-year, $500-million AgriFlexibility program, the Government will provide funding for initiatives that help the sector adapt to pressures and improve its competitiveness, such as those that reduce the farm business's costs of production and its footprint on the environment, support innovative processes and products, and address market challenges. Discussions on possible initiatives have begun with the provinces and industry. Program details will be announced early this summer. Initiatives will be implemented both by the federal government alone as well as in partnership with provinces and industry. Implementation of initiatives will commence over the summer months.

The Government will also provide funding totalling $50 million over two years to support investments in meat slaughter and processing plants that are aimed at reducing these plants' costs, increasing their revenues and improving their operations. Program details will be announced in June, and proposals from industry will be accepted in mid-summer.

The Government is providing Canada's farmers expanded access to the credit they need to build and grow their operations. The Government tabled Bill C-29 in the House of Commons on May 4, 2009, which proposes to increase the amount of guaranteed agricultural loans as well as increase their availability to include new farmers and more agricultural cooperatives. This bill will also support intergenerational farm transfers so that young farmers can more easily take over the family farm. The new loan program will be implemented once the bill receives Royal Assent.

Discussions on the devolution of the AgriStability administration from the federal government to provinces are proceeding with those provinces that have signalled an interest in delivering the program. To date, British Columbia and Saskatchewan have indicated their respective interest to deliver the AgriStability program for the 2009 program year. The federal government is currently in discussions with these provinces.

Mining: Canada's rich mineral resources represent significant economic opportunities. Promoting the exploration and development of these resources offers important benefits in terms of employment, investment and infrastructure, especially for rural and remote communities. Canada's Economic Action Plan supports mineral exploration activity across Canada by extending for an additional year the temporary 15-per-cent Mineral Exploration Tax Credit to flow-through share agreements entered into during the period from April 1, 2009 to March 31, 2010.

The extension of the Mineral Exploration Tax Credit has been in effect since April 1, 2009. The legislation required to implement the extension received Royal Assent on March 12, 2009.

Fisheries: Fishing continues to be an important part of the Canadian economy, especially in rural and remote communities. Canada's Economic Action Plan provides $200 million over two years to support the repair and maintenance of Canada's core commercial fishing harbours, and an additional $17 million to accelerate the construction of a small craft harbour in Pangnirtung, Nunavut.

The federal government has also announced $8 million in funding, over the next two years, to modernize 33 facilities and hatcheries in the Salmonid Enhancement Program in British Columbia. The funding is part of a $250-million commitment in Canada's Economic Action Plan designed to address deferred maintenance at federal laboratories across the country.

Hard-hit lobster fishing communities throughout Atlantic Canada and Quebec will benefit from an additional $10 million in financial support through the Community Adjustment Fund for marketing and market access, innovation and technology development initiatives to protect jobs in this industry. The Community Adjustment Fund is designed to target the hardest-hit industries and communities throughout Canada. In addition, governments and industry will collaborate in a lobster development council to increase domestic and international market access.

Small Business: Canada's many innovative small and medium-sized companies are key to our economic success by producing new goods and services, developing breakthrough new technologies and creating jobs for highly skilled young graduates.

However, these firms often have difficulty in transforming innovations into economic value. Budget 2009 provided $200 million in new resources over two years to support additional innovative small and medium-sized businesses through the National Research Council's Industrial Research Assistance Program. To date, the National Research Council has committed about $45 million to support innovative companies. It is anticipated that a further $30 million will be committed by the end of June.

Canada's Economic Action Plan further supports the growth of small businesses and helps to ensure that Canada will emerge from the global economic recession in a stronger position, by increasing the amount of small business income eligible for the reduced federal income tax rate of 11 per cent to $500,000 from $400,000 as of January 1, 2009 (saving small businesses up to $8,000 each for 2009 alone).

Tax relief for small businesses has been in effect since January 2009. The legislation required to implement the increase in the amount of small business income eligible for the reduced federal income tax rate received Royal Assent on March 12, 2009.

To help young Canadians start their own business, the Economic Action Plan provided $10 million over two years to the Canadian Youth Business Foundation. This contribution will enable the foundation to assist over 480 entrepreneurs between the ages of 18 and 34 by providing them with loans and mentoring services. Funding will be provided in June and the foundation will begin disbursing the funds immediately, throughout Canada.

Tourism: The tourism industry is an important economic engine in many communities by drawing visitors and economic activity that create jobs. The Economic Action Plan included new funding of $100 million over two years to support marquee tourism events across Canada, help them attract a larger number of visitors and increase the profile of Canada's tourism sector at home and abroad. To date, the Government has provided $23 million to support 12 world-famous summer events across Canada through the Marquee Tourism Events Program. Funding for additional events will be allocated through a call for proposals that closed May 8, 2009 and another call for proposals that is expected to be announced in the fall of 2009. The federal government will undertake consultations with provinces and territories and other stakeholders on a new National Tourism Strategy that will help strengthen tourism in all parts of Canada and lead to the creation of new jobs in the industry.

National Parks: Our vast and diverse national parks attract a large number of visitors from Canada and abroad each year, creating important economic activity and helping Canadians to benefit from our natural heritage. Canada's Economic Action Plan includes over $150 million over two years to Parks Canada to support upgrades and major capital repairs to national historic sites and visitor facilities in national parks. Projects totalling $140 million over two years have been announced to date, including:

• $10 million for infrastructure repair work to preserve and improve Lachine Canal National Historic Site of Canada.
• $25 million for major infrastructure improvements in national historic sites across Nova Scotia and in Cape Breton Highlands National Park of Canada.
• $10 million to undertake roadway improvements in Jasper National Park of Canada around the Town of Banff in Alberta.
• $12 million to protect and renew national historic sites associated with the War of 1812, in Ontario, Quebec and New Brunswick.

These important investments will create economic stimulus and jobs while ensuring that these treasured places remain protected for the enjoyment of this generation and those to come.

Shipbuilding: Canada's shipbuilding industry has been a mainstay of our history as a seafaring nation bounded by three oceans. The industry employs Canadians in over 150 establishments in Atlantic Canada, Quebec, Ontario and British Columbia. The Canadian Coast Guard ensures the safety and security of our coasts and waterways, and the shipbuilding sector is instrumental in ensuring that the Canadian Coast Guard can meet its vessel requirements. Funding of $175 million on a cash basis will be provided to the Canadian Coast Guard to purchase 98 new vessels and to repair and refit 40 existing vessels. In 2009–10, $90 million is scheduled to be spent. Contracts will be signed with shipbuilding and repair companies in Canada, with the majority of work expected to begin during the summer.

Culture: Our culture defines who we are as Canadians, by speaking to us in the diverse and unique voices of our heritage and our shared experiences. The cultural industries are also important economic engines, by providing employment and opportunities for talented Canadians. The Economic Action Plan provides over $335 million in additional funding for several programs dedicated to culture and the arts, in recognition of the importance of our artistic institutions and the role they play in Canadians' lives. Support will be provided for infrastructure-related costs for local and community cultural and heritage institutions such as local theatres, libraries and small museums.

In addition, funding will support continued access by Canadians to Canadian magazines and community newspapers, as well as training artists for professional careers in the highest-calibre artistic institutions in Canada through the National Arts Training Contribution Program. Resources will also be provided for the Canada New Media Fund and the Canadian Television Fund. Funding will become available for most of these programs over the summer months.

Tax and Tariff Relief: A competitive business tax system that is responsive to changes in the economic environment is important to encourage new investment, growth and job creation in all regions of Canada.

Canada's Economic Action Plan introduces measures to help Canadian businesses in the current economic circumstances to emerge even stronger and better equipped to compete globally as the economy recovers. The Plan builds on significant corporate tax reductions introduced by the Government since 2006, which are positioning businesses for success (see the box entitled "A Strong Record of Tax Relief for Competitiveness and Long-Term Prosperity"). Canada's Economic Action Plan proposed to:

• Help businesses in all sectors adopt newer technology at a faster pace by introducing a temporary two-year 100-per-cent capital cost allowance (CCA) rate for computers acquired after January 27, 2009 and before February 1, 2011.
• Assist the manufacturing and processing industries to restructure and retool to position themselves for long-term success by extending the temporary 50-per-cent straight-line accelerated CCA rate to manufacturing or processing machinery and equipment acquired in 2010 and 2011.
• Permanently eliminate tariffs on a range of machinery and equipment to lower the costs of Canadian businesses that must import specialized equipment from overseas to modernize their operations, and to consider further tariff relief in consultations with Canadian business to enhance Canadian competitiveness.
• Facilitate the movement of goods by making two technical changes to the Customs Tariff rules respecting the treatment of temporarily imported containers, and undertake consultations with respect to further liberalizing the use of these containers in Canada.

The temporary accelerated CCA rate for computers has been in effect since January 28, 2009. Amendments to the Income Tax Regulations to implement the temporary accelerated CCA rate for computers and the extension of the temporary 50-per-cent straight-line accelerated CCA rate for manufacturing or processing machinery and equipment have been promulgated. Businesses are already benefiting from a temporary 50-per-cent straight-line accelerated CCA rate for investment in manufacturing or processing machinery and equipment introduced in Budget 2007 and extended in Budget 2008, and will further benefit with the extension of this measure to eligible assets acquired in 2010 and 2011.

The tariff relief on imported machinery and equipment has been in effect since January 28, 2009, and has already saved the manufacturing industry about $27 million in customs duties. Industry sectors already benefiting from tariff relief include food processors, printing and power generation/distribution. The Government is now taking steps to provide further tariff relief to support the economy in consultations with Canadian business.

The technical changes to the Customs Tariff rules respecting the treatment of temporarily imported containers have been in effect since January 28, 2009. Consultations to further liberalize these rules were concluded in April 2009. The Government is now reviewing this public input.

Support for Communities

To thrive, our communities require ongoing renewal and investment so that they can continue to provide their residents with the best possible quality of life. The Government is investing more than $2 billion over five years to help communities promote economic development and diversification initiatives to ensure that they remain attractive places to live and invest.

The Government has announced the creation of the $1-billion Community Adjustment Fund to help mitigate the short-term impacts of restructuring in communities. Funding is available to communities with a population equal to or less than 250,000 that have experienced major layoffs that have resulted in significant job losses. The funding is being rolled out by the regional development agencies, which are consulting with their partners to identify projects that will be of greatest benefit to workers and communities in their region. Transitional measures are being taken by Industry Canada and Indian and Northern Affairs Canada while the new regional economic development agency for the North and the Southern Ontario development agency are being established.

In response to Ontario's economic challenges, the Economic Action Plan provides more than $1 billion over five years for a new Southern Ontario development agency. Its programs will support economic and community development, innovation and economic diversification, with contributions to communities, businesses and non-profit organizations. This agency will help workers, communities and businesses in Southern Ontario position themselves to take advantage of opportunities, as economic growth recovers in Canada and around the world.

Table 2.13
Supporting Industries and Communities

	2009–10 Stimulus Value (millions of dollars)	Authorities   in Place	Funding Committed (millions of dollars)	Funding to Flow/Benefits Available
Support for Industries
Forestry
Forestry marketing and innovation	70	Yes	–	Summer
Agriculture
Agricultural flexibility program	65	June	–	Summer
Strengthen slaughterhouse capacity	20	June	–	Fall
Amendments to Farm Improvement   and Marketing   Cooperatives Loans   Act (FIMCLA)	–	Yes	–	Contingent on Royal Assent of legislation
Mining
Extending the Mineral Exploration   Tax Credit	70	Yes	70	April
Small Business
Reducing taxes for small businesses	45	Yes	45	January
Industrial Research Assistance Program	100	Yes	45	April
Canadian Youth Business Foundation	10	Yes	10	June
Canada Business Networks	15	Yes	15	April
Tourism
Canadian Tourism Commission	20	Yes	20	June
Marquee festivals	50	Yes	23	June
Parks Canada	70	Yes	66	June
Shipbuilding
Shipbuilding	90	Yes	14	Spring
Culture
Cultural infrastructure	30	Yes	–	October
Canada Prizes for the Arts and Creativity	25	No	–	March 2010
National Arts Training Contribution   Program	7	No	–	August
Community newspapers and   magazines	15	Yes	–	June
Canadian Television Fund	100	Yes	–	June
Tax and Tariff Relief
Temporary   100-per-cent capital cost allowance   (CCA) rate for computers	340	Yes	340	February
Temporary accelerated CCA rate   for manufacturing or processing   machinery and equipment	–	Yes	–	As of 2010
Tariff relief on machinery   and equipment	76	Yes	76	January
Further liberalizing the rules on   the use of temporarily imported   cargo containers	–	–	–	–
Support for Communities
Helping All Regions Prosper
Community   Adjustment Fund	500	Yes	117	Summer
Southern Ontario   development agency	206	Yes	–	June
Eastern Ontario   Development Program	10	Yes	10	April
Strengthening economic   development in the North	10	July	–	September
Strategic Investments   in northern economic   development	10	Yes	–	Summer/fall
Promoting energy   development in Canada's North	38	Yes	–	November/ December
Strengthening Partnerships With Aboriginal Canadians
First Nations and Inuit   health programs	108	Yes	108	April
First Nations child   and family services	7	Yes	–	September
Total:	2,106		959

Table of Contents - Previous - Next