Rapid Recap: Federal Budget 2024-2025: Fairness for Every Generation

April 16, 2024 – Earlier today, Federal Minister of Finance Chrystia Freeland tabled the 2024-25 Budget titled Fairness for Every Generation in the House of Commons. The budget includes $53 billion in new spending with a deficit of $40 billion this fiscal year. The governing Liberals hope that Canadians see this budget as one that addresses affordability and housing, and creates fiscal room through targeted taxes on large corporations and Canada’s wealthiest 1%. The budget notably includes significant investment in health research and artificial intelligence, while continuing to meet the demands of the NDP and Liberal Supply and a Confidence Agreement, including investment in pharmacare.

Key Takeaways

It’s a fundamental government reset budget, and it’s expensive. With $53 billion in net new spending, including some considerable investments that benefit the health care ecosystem, this document reads like a government seeking to reset and re-establish itself as one that can reduce Canadians’ anxieties.
It’s not a health budget. There are some new health investments, but the budget narrative on health care is largely focused on highlighting previously announced federal health care investments and Federal-Provincial-Territorial (FPT) collaboration on bilateral health agreements. The full list of health-related commitments can be found at the end of this memo.
There is a significant structural reform in the way the federal government oversees research funding, coupled with new funding for research granting agencies. The government is moving forward with the Innovation, Science and Economic Development Canada (ISED)-driven Advisory Panel on the Federal Research Support System. The government proposes fundamental changes to how governing councils will operate, reporting to a new capstone research funding organization and continuing to have linkages to the health portfolio. The budget does not specify which portfolio will be responsible for this new capstone organization, though the intent of these structural changes are to deliver greater coordination and effectiveness of the granting councils. More information is set to be delivered on this in the upcoming 2024 Fall Economic Statement. While new investments in health research are positive and significant, the commitment in today’s budget wouldn’t see 71% of the funding distributed until 2027-2029.
Funding is earmarked for pharmacare, but a fund to support access to diabetes devices and supplies is missing. With $1.5 billion over five years, the budget for the pharmacare initiative is relatively small and does not ramp up fully until 2027-28. In this upcoming year, the government expects to only need to invest $59 million across Canada, suggesting an anticipated slow uptake from the provinces and territories to be slow and drawn out. While the government did announce its intention to create a separate diabetes devices and supplies fund, there is no funding allocated for that in this year’s budget. The government expects to determine these details following discussions with provinces and territories.
The commitment to a Canada Disability Benefit, supplementing existing provincial and territorial programs, is significant. Totalling $1.4 billion per year ongoing, it speaks to when the government is fully behind something, the dollars flow. The Canada Disability Benefit is a priority for this government, and the quantum of dollars allocated signifies that.
There is significant progress in signing bilateral health agreements, but debatable whether this is buying systemic change in health care. The budget provides considerable detail on what the $200 billion in federal dollars for health care bought, detailing key spending plans from provinces for how they will allocate new funding. While critics would say that the bilateral deals simply articulate what provinces were already planning to spend in priority areas, the federal government likely sees this round of bilateral health funding deals as a resounding success. They now have deals in hand that are time-constrained with provinces committing publicly to invest in priority areas and to measure and report on progress.
On Drugs for Rare Diseases, the budget does not offer details of when previously committed funding will flow to provinces. The budget does however indicate that the “first phase” of the strategy has been launched.
Artificial intelligence investments are a keystone of the government’s innovation agenda, including for health care. The vast majority of the funding is focused on creating domestic capacity and capability in computational power and AI infrastructure, while $200 million is allocated and delivered through the regional development agencies to support AI start-ups and to accelerate AI adoption in sectors, including health care. Similar to previous big-ticket items, the spending is back-ended with 68% of the fund projected to be spent in years four and five (2027-2029).
Pandemic? What pandemic? With only one mention of the Biomanufacturing and Life Sciences Strategy, the only pandemic preparedness investment is $3.4 million for Health Canada supply management capacity for drugs and medical devices – and this is focused on drug shortages, not supply chain resilience. The budget does invest $30 million for a health research project to enable the study of high-risk pathogens to support vaccine and therapeutic development.
There is good news for allied health professionals. They will see the Canada Student Loan Forgiveness Program apply to more health care and social services professionals working in rural and remote communities.
The federal agenda is dependent on provincial and territorial collaboration. Consistent with how this government has proceeded with bilateral health agreements and targeted initiatives, the federal government will not impose strategies or standards on provinces and territories for health care initiatives – including the Pharmacare Act and the Safe-Long Term Care Act.
Want to see these investments become a reality? Passing next year’s budget will need to come first. Often governments back-end their financial commitments and this budget is no exception. Several health-related initiatives will not have funding until the upcoming election year in 2025-26, including support for students, job skills training and foreign health care credential recognition.
Will this budget trigger an election? Not likely. With the tabling of the Pharmacare Act in March and further funding and articulation of priorities in this budget related to the NDP and Liberal Supply and Confidence Agreement, the Liberal Government continues to fulfill the terms of the agreement. It is not anticipated that this budget will trigger an election.

Budget Summary

Pharmacare

The government commits $1.5 billion over five years, starting in 2024-25, to Health Canada to support the first phase of the National Pharmacare Plan funding diabetes medications and contraceptives.

Health Research

To increase core research grant funding and support Canadian researchers, Budget 2024 commits $1.8 billion over five years, starting in 2024-25, with $748.3 million per year ongoing to Social Sciences and Humanities Research Council (SSHRC), Natural Sciences and Engineering Research Council of Canada (NSERC), and Canadian Institutes of Health Research (CIHR).

The government will create a new capstone research funding organization. The granting councils will continue to exist within this new organization, and continue supporting excellence in investigator-driven research, including linkages with the health portfolio. This new organization and structure will help to advance internationally collaborative, multi-disciplinary, and mission-driven research.
The government will create an Advisory Council on Science and Innovation. This Council will be made up of leaders from the academic, industry, and not-for-profit sectors, and be responsible for a national science and innovation strategy to guide priority setting and increase the impact of these significant federal investments.
In addition, the government is investing $26.9 million over five years, starting in 2024-25, with $26.6 million in remaining amortization and $6.6 million ongoing, to the granting councils to establish an improved and harmonized grant management system.
The budget indicates that more information will become available in the 2024 Fall Economic Statement.

Research Talent

The government is committing $825 million over five years, starting in 2024-25 to support the next generation of researchers.

$199.8 million per year ongoing, to increase the annual value of master’s and doctoral student scholarships to $27,000 and $40,000 and post-doctoral fellowships to $70,000.
$30 million over three years, starting in 2024-25, to support Indigenous participation in research, with $10 million each for First Nation, Métis, and Inuit partners.

Research Infrastructure

$30 million over three years, starting in 2024-25, to support the completion of the University of Saskatchewan’s Centre for Pandemic Research at the Vaccine and Infectious Disease Organization in Saskatoon. This investment will enable the study of high-risk pathogens to support vaccine and therapeutic development, a key pillar in Canada’s Biomanufacturing and Life Sciences Strategy. Of this amount, $3 million would be sourced from the existing resources of Prairies Economic Development Canada.

Artificial Intelligence

The federal government commits $2.4 billion to build capacity in artificial intelligence, largely for computing capabilities and technical infrastructure. AI investments that impact health care include:

$2 billion over five years, starting in 2024-25, to launch a new AI Compute Access Fund and Canadian AI Sovereign Compute Strategy.
$200 million over five years, starting in 2024-25, to boost AI start-ups to bring new technologies to market, and accelerate AI adoption in critical sectors.
$100 million over five years, starting in 2024-25, for the National Research Council’s AI Assist Program to help Canadian small- and medium-sized businesses and innovators build and deploy new AI solutions, potentially in coordination with major firms, to increase productivity across the country.
$50 million over four years, starting in 2025-26, to support workers who may be impacted by AI, such as creative industries. This support will be delivered through the Sectoral Workforce Solutions Program, which will provide new skills training for workers in potentially disrupted sectors and communities.
$50 million over five years, starting in 2024-25, to create an AI Safety Institute of Canada to ensure the safe development and deployment of AI.
$5.1 million in 2025-26 to equip the AI and Data Commissioner Office with the necessary resources to begin enforcing the proposed Artificial Intelligence and Data Act.
$3.5 million over two years, starting in 2024-25, to advance Canada’s leadership role with the Global Partnership on Artificial Intelligence, securing Canada’s leadership on the global stage when it comes to advancing the responsible development, governance, and use of AI technologies internationally.

Health Human Resources

Budget 2024 announces the government’s intent to introduce amendments to the Canada Student Financial Assistance Act and the Canada Student Loans Act to permanently expand the reach of the Canada Student Loan Forgiveness Program to more health care and social services professionals working in rural and remote communities.

The cost of this measure is estimated to be $253.8 million over four years, starting in 2025-26, and $84.3 million ongoing. This will expand the program to include:

Dentists;
Dental hygienists;
Pharmacists;
Midwives;
Teachers;
Social workers;
Personal support workers;
Physiotherapists; and
Psychologists.

Budget 2024 also proposes to provide $77.1 million over four years, starting in 2025-26, to more effectively integrate internationally educated health care professionals into Canada’s health workforce by creating 120 specific training positions, increasing assessment capacity and providing support to navigate credential recognition systems.

Mental Health and Addictions

To support the delivery of mental health care, Budget 2024 includes:

$7.5 million over three years, starting in 2024-25, to the Public Health Agency of Canada to support Kids Help Phone in their work providing mental health, counselling, and crisis support to young people.
$150 million over three years, starting in 2024-25, to Health Canada for an Emergency Treatment Fund, open to municipalities and Indigenous communities to help provide rapid responses to emergent, critical needs related to the opioid crisis.
$500 million over five years, starting in 2024-25, for the creation of a new Youth Mental Health Fund to help younger Canadians access the mental health care they need.
$4 million over two years, starting in 2024-25, for the Public Health Agency of Canada to continue supporting initiatives through the Mental Health of Black Canadians Fund that aim to increase health equity and address mental health and its determinants for Black Canadians.

Canada Disability Benefit

To support the delivery of the Canada Disability Benefit, Budget 2024 includes:

$6.1 billion over six years, beginning in 2024-25, and $1.4 billion per year ongoing, for a new Canada Disability Benefit.
The government would begin providing payments to eligible Canadians starting in July 2025, following successful completion of the regulatory process and consultations with persons with disabilities.
$243 million over six years, beginning in 2024-25, and $41 million per year ongoing, to cover the cost of the medical forms required to apply for the Disability Tax Credit.

Indigenous Health

Budget 2024 advances Indigenous health priorities through the following supports:

$167.5 million over two years, starting in 2023-24, to ensure Inuit children can access the health, social and educational services.
$60 million over two years, starting in 2024-25, to support Friendship Centres across the country.
Budget 2024 announces the government’s intention to bring forward legislation for an opt-in Fuel, Alcohol, Cannabis, Tobacco, and Vaping (FACT) sales tax framework. The FACT framework would include appropriate sharing arrangements, to meet the interests of both Indigenous governments and the federal government. The federal government will work with Indigenous partners over the coming months to finalize and implement the FACT framework.
$562.5 million in 2024-25 to support medically necessary services through the Non-Insured Health Benefits Program.
$390.4 million over four years, starting in 2024-25, to build or renovate health facilities, including to support the Virtual Health Hub led by the Saskatchewan Indian Institute of Technologies.
$104.9 million over five years, starting in 2024-25, for health transformation initiatives to support First Nations self-determination in the design and delivery of health services in their communities.
$57.5 million over three years, starting in 2024-25, which builds on previous federal investments to construct a mercury care home in Grassy Narrows First Nation.
$630.2 million over two years, starting in 2024-25, to support Indigenous People’s access to mental health services, including through distinctions-based mental wellness strategies.
$167.6 million over five years, starting in 2024-25, to combat anti-Indigenous racism in health care to help ensure Indigenous Peoples are treated with the respect and safety they deserve.

Long-Term Care

The government will introduce a Safe Long-Term Care Act to support new national long-term care standards to help ensure safe, reliable, and high-quality care, and improve infection prevention and control practices. It is notable that the budget stated that “provinces and territories are primarily responsible for managing the delivery and operation of long-term care facilities, including how and whether they adopt the standards.”.

Dental Care Program (No New Funding)

By 2025, up to nine million uninsured Canadians will have dental coverage:

By May, all seniors aged 65 and older will be able to apply, followed by persons with disabilities with a valid Disability Tax Credit certificate and children under the age of 18.
All uninsured Canadians between the ages of 18 and 64, with a family income up to $90,000, will be able to apply online, and visit a dentist, in 2025.

Other Health Priorities

$1 billion over five years to fund a new National School Food Program intended to provide meals to 400,000 more kids.
Budget 2024 proposes to increase the tobacco excise duty by $4 per carton of 200 cigarettes, in addition to the automatic inflation adjustment of $1.49 per carton of 200 cigarettes that took effect on April 1, 2024. Starting the day after this budget, the total tobacco excise duties increase will be $5.49 per carton. It is estimated that this measure would increase federal revenues by $1.36 billion over five years starting in 2024-25.
Increasing the vaping excise duty rates by 12%. This increase is the equivalent of 12 cents per typical vape pod in a non-participating jurisdiction, or 24 cents per typical vape pod in a participating jurisdiction. This measure would take effect on July 1, 2024, along with the implementation of a coordinated taxation regime in Ontario, Quebec, the Northwest Territories, and Nunavut. It is estimated that this measure would increase federal revenues by $310 million over five years starting in 2024-25.
Launching the “first phase” of the National Strategy for Drugs for Rare Diseases to help increase access to, and affordability of, effective drugs for rare diseases for patients across Canada (ongoing).

Rapid Recap: Federal Budget 2024

Rapid Recap: Federal Budget 2024-2025: Fairness for Every Generation

Key Takeaways

Budget Summary

Further Reading

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