The federal government released its long-awaited fall economic statement
last week, providing an update on the Canadian economy and outlining spending plans for 2021 onwards. Developments relevant to the digital economy—some new and some drawn from previous announcements—are detailed in the section below.
The Canada Infrastructure Bank will support the electrification of Canada’s energy system through the development of new transmission infrastructure in coal-dependent regions. Other plans for the green economy include new funding for energy audits and building retrofits; accelerated targets for zero emissions vehicle infrastructure; and the increased use of nature-based solutions like carbon sinks.
The economic update provides new clarity on the proposed tax changes outlined in the speech from the throne. Starting in July 2021, foreign vendors and digital marketplaces would be required to collect and remit sales taxes on digital products and services provided to Canadians, and short term rental platforms, such as VRBO and AirBnb, would be required to do so on units supplied in Canada. The government has also outlined plans to provisionally tax the corporate profits of digital companies beginning in January 2022. The proposed changes are expected to increase federal revenues by approximately $6.6 billion in the first five years.
The government has earmarked an additional $750 million for broadband infrastructure over the next five years, brining the new total of the Universal Broadband Fund to $1.75 billion. The funding is intended to connect 98% of Canadians by 2026 (up from the original target of 95%) and 100% of Canadians by 2030.
On the skills and training front, the government has proposed new funding for the Foreign Credential Recognition Program, which helps integrate newcomers into high-demand sectors, such as health, IT, and skilled trades. The government will also work with the provinces and territories to support an additional $1.5 billion worth of skills training and employment supports, representing a new total of $4.9 billion.