2021 Federal Budget

April 18, 2021 BDO CANADA

Rethinking the path forward

Deputy Prime Minister and Minister of Finance Chrystia Freeland tabled the 2021 Federal Budget on April 19. This Budget is the first since the onset of the COVID-19 pandemic and the first since 2019.

The government faced a two-pronged challenge in this pandemic-time Budget: spur recovery with spending and rein in runaway debt levels created by that spending.

National deficit

  • 2020-21—$354.2 billion
  • 2021-22—$154.7 billion

The deficit in 2019-2020 was $39.4 billion. The previous largest deficit in Canadian history was $55 billion in 2009, a result of the 2008 financial crisis. No timeline was included for balancing the budget.

National debt

  • Federal debt—$1,079 billion (projected to be $1,233.8 billion in March 2022)
  • Federal debt as a percentage of GDP—49% (projected to be 51.2% in March 2022)

Elevated national debt levels are mostly due to COVID-19 spending. The projected spend for the Canada Emergency Wage Subsidy (CEWS) for the 2020-21 and 2021-22 fiscal years combined is $110.6 billion. For the Canada Emergency Rent Subsidy (CERS) it is $8.4 billion.

See more on the economic outlook based on this year’s Budget.

Budget at a glance

As expected, the government prioritized spending to spur a sustainable recovery from the pandemic. The Budget extended COVID-19 support programs, introduced a new hiring incentive for employers called the Canada Recovery Hiring Program, updates the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Rent Subsidy (CERS) programs.The 2021 Budget also covered various tax measures: for business, individuals, sales and excise tax, and international issues.

Register for BDO's 2021 Federal Budget webinar
Join us on Tuesday April 20, as BDO and keynote speakers John Ivison and Trevin Stratton analyze the 2021 Federal Budget.
Read the article about COVID-19 Support Programs in the 2021 Federal Budget
How will Budget 2021 affect your access to government support during this third wave of the pandemic? BDO Tax leaders break down the details – from wage subsidy programs to rent relief.
Read the article about Corporate tax measures
Key corporate tax measures announced in Canada’s 2021 Federal Budget.
Read the article about Personal tax measures
The federal government released the 2021 Budget, which includes personal tax measures. We cover the highlights from a tax on select luxury goods to postdoctoral fellowship income.
Read the article about Sales and excise tax measures
The 2021 Budget unveiled key changes for sales and excise tax. From e-commerce to vaping, we bring you up to date on the changes for businesses and households.
Read the article about International tax measures
Details on key international tax proposals announced in Canada’s 2021 Federal Budget.
How does the 2021 Federal Budget impact manufacturers in Canada? Our team weighs in on changes and new developments to support programs, funding, and tax considerations
How does the 2021 Federal Budget impact manufacturers in Canada? Our team weighs in on changes and new developments to support programs, funding, and tax considerations.
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