Special Report

Federal Budget 2021: Ten key takeaways for the innovation economy

The Liberal federal government unveiled its first budget in two years, pledging unprecedented sums to reverse the deep economic and job losses of the COVID-19 pandemic amid an uneven recovery. The plan comes as the pandemic’s third wave sweeps across the country’s biggest provinces even as vaccination efforts ramp up, prompting Ottawa to extend its pandemic supports while launching ambitious new initiatives like a national child care program. 

Monday’s budget lays out $101 billion in new spending over three years, plus billions more in the years following. Finance Canada has projected a deficit of $154.7 billion for the 2021–2022 fiscal year. “I really believe that the greater danger today is not to invest in a strong recovery from the COVID recession, and not to invest in stronger, more robust, long-term growth for Canada,” Finance Minister Chrystia Freeland told reporters before tabling the budget in the House of Commons. The government is positioning its billions in spending as an effort to reverse decades of declining growth in real GDP.

It is the first budget for Freeland and deputy finance minister Michael Sabia, who assumed their new roles late last year amid the pandemic. It includes programs designed to encourage employers to hire historically marginalized workers, and to get businesses to adopt new technology and spend on R&D—all longstanding drags on productivity in Canada. For the innovation economy, it also includes the most significant outlay of dollars since the 2017 edition, when the Liberals launched many of their flagship R&D, commercialization and venture capital programs.

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