Budget 2021: A Recovery Plan for Jobs, Growth, and Resilience

After two years and through the most turbulent period since World War II, the federal government released its long-awaited budget plan with $101.4 billion in new spending to support Canadians as the pandemic transitions to an endemic. The stakes are high as this is arguably Canada’s largest deficit since confederation, the Liberal’s continue to govern in a minority parliament, requiring the support of one other party, and the fabric of Canada’s economy and social welfare program has been under extreme duress for well over a year. With the Liberal’s comfortably leading in the polls, it remains to be seen if this budget is a precursor to a federal election while the country grapples with COVID-19 variants and the intensity of wave three.

After committing to a national pharmacare regime in the 2018 and 2019 budgets respectively, Budget 2021 has a new signature focus with a National Childcare Program. Whereas pharmacare has never had funding associated with it, this new program is starting out with a $30 billion commitment. There is a significant amount of funding in this budget for the health care sector broadly, with long-term care being the primary focus, committing $3 billion in new dollars after COVID-19 hit the sector hard across the country.

Mark your calendar: Your Santis Health team will lead a webinar on Tuesday, April 27 at 3:00 p.m. (EST) after the dust settles to reflect on Budget Week 2021, assess the potential of an election and the politics that follow today’s budget speech.

Canada Health Transfers

Budget 2021-22 does not include any new or announced expansion of the Canada Health Transfer. For 2021-22, provinces and territories will receive $43.1 billion as part of the Canada Health Transfer. This includes the $4 billion through a one-time top-up to the Canada Health Transfer announced by the federal government in March 2021. The budget recommitted $500 million a year in funding for a high-cost rare drugs strategy, though it is unclear if this will be part of or seperate from the Canada Health Transfer.

Long-term care

Long-term care is one of the main highlights of net-new health care funding. Unsurprisingly, this funding is tied directly to the implementation of new national standards for the sector. Specifically, the budget proposes to provide $3 billion over five years, starting in 2022-23, to Health Canada to support provinces and territories in ensuring standards for long-term care are applied and permanent changes are made. To keep seniors safe and improve their quality of life, the federal government will work collaboratively with provinces and territories, while respecting their jurisdiction over health care, including long-term care. This work would ensure seniors and those in care live in safe and dignified conditions.

Budget 2021 also proposes to provide $41.3 million over six years, and $7.7 million ongoing, starting in 2021-22, for Statistics Canada to improve data infrastructure and data collection on supportive care, primary care, and pharmaceuticals.

Seniors benefits

Budget 2021 proposes to provide $90 million over three years, starting in 2021-22, to Employment and Social Development Canada to launch the Age Well at Home initiative. In addition to this funding announcement, the government is proposing to increase Old Age Security for seniors 75 and over, beginning in 2022.

Strengthening Canada’s bio-manufacturing and life sciences sector

Budget 2021 proposes to provide a total $2.2 billion over seven years towards growing a vibrant domestic life sciences sector. This support would provide foundational investments to help build Canada’s talent pipeline and research systems, and support the growth of Canadian life sciences firms, including:

$500 million over four years, starting in 2021-22, for the Canada Foundation for Innovation to support the bio-science capital and infrastructure needs of post-secondary institutions and research hospitals.
$250 million over four years, starting in 2021-22, for the federal research granting councils to create a new tri-council biomedical research fund.
$92 million over four years, starting in 2021-22, for adMare to support company creation, scale up and training activities in the life sciences sector.
$59.2 million over three years, starting in 2021-22, for the Vaccine and Infectious Disease Organization to support the development of its vaccine candidates and expand its facility in Saskatoon.
$45 million over three years, starting in 2022-23, to the Stem Cell Network to support stem cell and regenerative medicine research.

Several other initiatives proposed in Budget 2021 also include targeted support for the life sciences and bio-manufacturing sector. These measures form an important part of the government’s investment in the sector and include:

$1 billion on a cash basis over seven years, starting in 2021-22, of support through the Strategic Innovation Fund would be targeted toward promising domestic life sciences and bio-manufacturing firms. This is a key component of the total investment in the Strategic Innovation Fund.
$250 million over three years, starting in 2021-22, to increase clinical research capacity through a new Canadian Institutes of Health Research Clinical Trials Fund.
$50 million on a cash basis over five years, starting in 2021-22, to create a life sciences stream in the Venture Capital Catalyst Initiative.

Funding for plasma collection

Budget 2021 proposes to provide $20 million over three years, beginning in 2021-22, to Health Canada to construct eight plasma collection sites across the country. These sites would be operated by Canadian Blood Services. The government will continue to work with partners like Canadian Blood Services and Héma-Québec to ensure a secure plasma supply across Canada.

Healthy living commitments

This budget announces the government’s intention to introduce a new taxation framework for the imposition of excise duties on vaping products in 2022. Additionally, the federal budget proposes to increase the tobacco excise duty by $4 per carton of 200 cigarettes, along with corresponding increases to the excise duty rates for other tobacco products. This measure would take effect the day after Budget Day.

Mental health and addictions

To address mental health and addictions in Canada, the federal government makes significant investments of:

$45 million over two years, starting in 2021-22, to Health Canada, the Public Health Agency of Canada, and the Canadian Institutes of Health Research to help develop national mental health service standards, in collaboration with provinces and territories, health organizations, and key stakeholders.
$100 million over three years, starting in 2021-22, to the Public Health Agency of Canada to support projects for innovative mental health interventions for populations disproportionately impacted by COVID-19, including health care workers, front-line workers, youth, seniors, Indigenous people, and racialized and Black Canadians.
$50 million over two years, starting in 2021-22, to Health Canada to support a trauma and post-traumatic stress disorder (PTSD) stream of mental health programming for populations at high risk of experiencing COVID-19 trauma and those exposed to various trauma brought about by COVID-19.
$62 million in 2021-22, to Health Canada for the Wellness Together Canada portal so that it can continue to provide Canadians with tools and services to support mental health and well-being.
$116 million over two years, starting in 2021-22, building on the $66 million invested in the 2020 Fall Economic Statement, for the Substance Use and Addictions Program to support a range of innovative approaches to harm reduction, treatment, and prevention at the community level.
Funding for the Kids Help Line that was initially provided in 2020-21 is extended into 2021-22 to ensure that it can continue to deliver counselling services to youth during the COVID-19 pandemic.

Addressing antimicrobial resistance

Budget 2021 proposes to provide $28.6 million over five years, beginning in 2021-22, with $5.7 million per year ongoing, to the Public Health Agency of Canada, Health Canada, and the Canadian Food Inspection Agency, to help address antimicrobial resistance. Investments would support efforts to prevent the inappropriate use of antimicrobials and expand efforts to monitor the emergence of antimicrobial resistance in Canada.

Extending COVID-Support for businesses, charities, non-profits

This budget will extend COVID-Support for businesses, charities, and non-profits by:

Investing $400 million in 2021-22 to Employment and Social Development Canada to create a temporary Community Services Recovery Fund to help charities and nonprofits adapt and modernize so they can better support the economic recovery in our communities.
Launching public consultations with charities over the coming months on potentially increasing the disbursement quota and updating the tools at the Canada Revenue Agency’s disposal, beginning in 2022. This could potentially increase support for the charitable sector and those that rely on its services by between $1 billion and $2 billion annually.
A $12 billion plan to extend key COVID-19 business aid programs and commit to continue other income support measures.
Extending the federal wage and rent subsidies and lockdown supports through to September, from June 2021.
$3.9 billion to reform EI and make it more accessible and streamlined.

Health research, supports and disease strategies

In support of research and development and disease strategies in Canada, this budget proposes to provide:

$400 million over six years, starting in 2021-22, in support of a Pan-Canadian Genomics Strategy. This funding would provide $136.7 million over five years, starting in 2022-23, for mission-driven programming delivered by Genome Canada to kick-start the new Strategy and complement the government’s existing genomics research and innovation programming.
$20 million over five years, starting in 2021-22, to the Canadian Institutes of Health Research to support a new National Institute for Women’s Health Research. The new institute will advance a coordinated research program that addresses under-researched and high-priority areas of women’s health and ensure new evidence improves women’s care and health outcomes.
$15.4 million over two years, starting in 2021-22, to the Public Health Agency of Canada to work with partners to support the creation of a national autism strategy.
$30 million over two years, starting in 2021-22, to the Canadian Institutes of Health Research to fund pediatric cancer research that can lead to better outcomes and healthier lives for these young patients. The funding will support promising research projects with the greatest potential for fighting pediatric cancers.
$25 million over five years, starting in 2021-22, to Health Canada for additional investments for research on diabetes (including in juvenile diabetes), surveillance, and prevention, and to work towards the development of a national framework for diabetes. This framework will be developed in consultation with provinces and territories, Indigenous groups, and stakeholders, and will help to support improved access to prevention and treatment, and better health outcomes for Canadians.
$10 million over five years, starting in 2021-22, to the Public Health Agency of Canada for a new Diabetes Challenge Prize. This initiative will help surface novel approaches to diabetes prevention and promote the development and testing of new interventions to reduce the risks associated with Type 2 diabetes.
$29.8 million over six years, starting in 2021-22, to Health Canada to advance the government’s palliative care strategy and lay a better foundation for coordinated action on long-term and supportive care needs, improving access to quality palliative care. Initiatives could include: raising awareness of the importance of palliative care; providing public education on grief; improving palliative care skills and supports for health care providers, families, caregivers, and communities; enhancing data collection and research; and improving access to culturally sensitive palliative and end-of-life care.
$13.2 million over five years, beginning in 2021-22, with $2.6 million per year ongoing, to Health Canada to ensure that Canada’s medical assistance in dying framework is implemented consistently and with all appropriate safeguards. Funding would support training and the development of guidance materials for practitioners, as well as support research to guide the evolution of medical assistance in dying in Canada.

What is missing?

Pharmacare, later? Noticeably absent from the budget plan is any new information on pharmacare and the new Canada Drug Agency, only repeating previous commitments around a high-cost rare drug strategy and language regarding the broad commitment to a pharmacare policy.
A broader life-sciences strategy. While there is funding in place for bio-manufacturing, the government has not indicated how it would approach a concrete strategy or leverage the work completed at the health and bio-sciences economic strategy table.
Any mention of the Patented Medicine Prices Review Board (PMPRB). The government did not reiterate their commitment to the PMPRB policy, after delaying implementation of the policy twice so far.

Nutrition policies. Since 2015, the government has committed and recommitted to front-of-package and marketing to kids policies. These commitments were not found in the above-the-line budget, but are found in the Health Minister’s mandate letter(s).
Supporting the growing backlog in health care. While the budget makes reference to previous funding transfers to provinces, it is silent on the growing impacts to the health care system as a result of the most significant wave of COVID the country is currently facing.

Looking forward

The government’s challenge is to prioritize and implement. This 700-page budget aims to support not just the ongoing COVID-19 crisis, but turn the nation’s mind to recovery as well as support implementation of the government’s pre-existing priorities.
The NDP’s conundrum. For the second time, the Federal Liberals inserted a national childcare program into the federal budget. In 2005, the NDP supported the Harper Conservatives in toppling the government.
Long-term care is the primary health care focus. With a commitment of $3 billion over the next 5 years, the government intends to make some progress on increasing quality in the long-term care sector. However, the commitment highlights the need to respect jurisdictional boundaries and work closely with the provinces and territories, and the language around creating national standards appears to be softer and more passive compared to the Throne Speech last September.
Follow the money. There are a number of new funding programs and funding not currently defined. Over the coming weeks and months, it will be important to determine delegated authorities and ownership over particular pots of funding to either shape or access new federal dollars.

Will there be an election? Speculation will be high, and the government surely has a budget they can run an election campaign on. The government faces a series of confidence votes in the House of Commons that could trigger an election at any point in the coming weeks.

Join our webinar on April 27

With so much turmoil at all levels of government, Canadians are left with many unanswered questions when it comes to the growing issues facing hospitals and the broader health system, vaccination timelines, and the potential of a federal election. Join Santis Health’s political and health policy experts on Tuesday, April 27 at 3:00 p.m. EST as we unpack the release of this year’s federal budget, its impact on the provinces and what to expect next for health system recovery.

Visit our website to learn more about the webinar.

Additional reading

Read A Recovery Plan for Jobs, Growth, and Resilience here.