On March 28, 2023, Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, presented the 2023 Budget entitled, “A Made-in-Canada Plan: Strong Middle Class, Affordable Economy, Healthy Future.” The Budget focuses on healthcare including dental care, affordability issues, and environmental sustainability, with about $43 billion in net new spending over six years. This memo highlights items that may be of interest to plan administrators, employers, and members without comments from PBI.

Health

Dental Care

The federal government plans to bring legislation to enable the implementation of the new Canadian Dental Care Plan, which will provide dental treatment to uninsured Canadians with family incomes under $90,000 annually. The Act would require T4/T4A reporting for dental benefits provided to employees and plan participants by employers and employer pension plans. This would ensure that the new Dental Care Plan would only be available to Canadians without access to private insurance who have an unmet need for dental services. Additionally, the legislation would give Health Canada permission to collect and use the applicants’ Social Insurance Numbers to administer and enforce the plan.

Natural Health Products

The Protecting Canadians from Unsafe Drugs Act grants certain authorities which the government wants to extend to natural health products by amending the Food and Drugs Act. This will enable regulators to take stronger action when health or safety concerns are found with natural health products on the market.

Canada Health Transfer

The government proposes to amend the Federal-Provincial Fiscal Arrangements Act to provide a $2 billion Canada Health Transfer top-up to all provinces and territories to address immediate pressures on the health care system.

Health Services in Indigenous Communities

Budget 2023 proposes to provide $810.6 million over five years, beginning in 2023-24, to support medical travel and to maintain medically necessary services through the NonInsured Health Benefits Program, including mental health services, dental and vision care, and medications. It also proposes $16.2 million over three years, beginning in 2023-24, for interventions to reduce rates of tuberculosis in Inuit communities.

Leave for Pregnancy Loss

The government proposes to make amendments to the Canada Labour Code to create a new stand-alone leave for workers in federally regulated sectors who experience pregnancy loss.

Suicide Prevention

Budget 2023 includes $158.4 million over three years for the 988 suicide prevention hotline, launching November 30, 2023.

Substance Use and Addictions

The Canadian Drugs and Substances Strategy will be supported by a total of $359.2 million from the federal government over a five-year period beginning in 2023–2024, with $5.7 million in ongoing funding and $1.3 million in remaining amortisation. Included in this are the following:

• $144 million to Health Canada for the Substance Use and Addictions Program over five years, beginning in 2023–24, to fund community-based services, such as safer supply, supervised consumption sites, and other evidence-based health interventions.
• $20.2 million over five years, beginning in 2023–2024, to the Public Health Agency of Canada for the creation of a new community-based initiative to combat youth substance abuse.
• $73.9 million over five years, beginning in 2023–2024, with $4.6 million ongoing, to Health Canada to speed up the authorization process for supervised consumption sites and drug testing services, expand access to a safer supply, and assess innovative approaches.
• $50.8 million over five years, beginning in 2023–2024, with $1.1 million in ongoing and $1.3 million in remaining amortization to Health Canada; and $16 million over five years, beginning in 2023–2024, to the Public Health Agency of Canada to support crucial data collection on substance-related harms and lab-based analysis of the illegal drug supply.
• $4.6 million over five years, starting in 2023-24, to Public Safety Canada to create an overdose monitoring app for paramedics and other first responders.
• $42 million over five years, beginning in 2023–2024, to the Royal Canadian Mounted Police; $6.2 million over five years, beginning in 2023–2024, to Public Services and Procurement Canada; and $1.6 million over five years, beginning in 2023–2024, sourced from existing resources to, Global Affairs Canada.

Pensions

Investments in Crypto Currencies

The government proposes that federally regulated pension funds be required by the government to inform OSFI of their exposure to crypto-assets. To ensure Canadians are informed of their pension plan’s possible exposure to crypto-assets, the government will also collaborate with the provinces and territories to explore the disclosure of crypto-assets or similar activity by Canada’s top pension plans.

Retirement Savings for Personal Support Workers

Budget 2023 proposes to provide up to $50 million over five years, starting in 2023-24, to Employment and Social Development Canada to develop and test new solutions to strengthen the retirement savings of personal support workers without workplace retirement security coverage.

Tax Treatment of Annuities

The Budget proposes changes to the tax treatment of annuities to make them more accessible and affordable for retirees. The government proposes to amend the Pension Benefits Standards Act, 1985 and the Pooled Registered Pension Plans Act and create new frameworks for variable payment life annuities and technical housekeeping amendments.

Retirement Compensation Arrangements

Budget 2023 proposes that the CRA make refunds to certain Retirement Compensation Arrangements for previously remitted refundable taxes related to premiums for securing retirement benefits via a letter of credit and to exempt those premiums from refundable tax going forward. The tax relief measure will benefit employers that sponsor certain types of Retirement Compensation Arrangements, in addition to higher-income individuals.

Canada Growth Fund

Budget 2023 announces that the government intends to introduce legislative amendments to enable the Public Sector Pension Investment Board (PSP Investments) to manage the assets of the Canada Growth Fund to deliver on the Growth Fund’s mandate of attracting private capital to invest in Canada’s clean economy.

Old Age Security

Budget 2023 proposes to provide $123.9 million over seven years, starting in 2023-24, to Employment and Social Development Canada to complete Old Age Security IT modernization.

Social Benefits

Disability Benefits

The government proposes to provide $21.5 million in 2023-24 to Employment and Social Development Canada to continue work on the future delivery of the Canada Disability Benefit, including engagement with the disability community and provinces and territories on the regulatory process.

Employment Insurance for Seasonal Workers

The government proposes to extend the rules of a temporary measure that provides seasonal claimants in 13 regions up to an additional five weeks of regular Employment Insurance regular until October 2024.

Grocery Rebate

In Budget 2023, the federal government is providing new, targeted inflation relief. For low- and modest-income Canadians and families, the Grocery Rebate will provide eligible couples with two children with up to an extra $467, single Canadians without children with up to an extra $234, and seniors with an extra $225 on average. This will be delivered through a one-time payment through the Goods and Services Tax Credit (GST Credit) mechanism.

This one-time Grocery Rebate is expected to provide $2.5 billion in targeted inflation relief to eligible Canadians. The Grocery Rebate will be delivered as soon as possible following the passage of legislation.

Trusts

Employee Ownership Trusts

Employee Ownership Trusts encourage employee input into business decisions and enable employees to receive a portion of the company’s profits. They can also give business owners an alternative succession option.

Tax adjustments are proposed in Budget 2023 to make it easier to create Employee Ownership Trusts. Employee-owned businesses would be able to reinvest more of their profits in growth, and selling the company to employees would become a more attractive exit strategy for owners.

The government welcomes stakeholder feedback on how best to enhance employee rights and participation in the governance of Employee Ownership Trusts.

Labour

Labour Market Transfer Agreements

Budget 2023 proposes to invest an additional $625 million in 2023-24 in the Labour Market Transfer Agreements.

Trades

Tradespeople’s Tool Deduction

Budget 2023 proposes to double the maximum employment deduction for tradespeople’s tool expenses from $500 to $1,000. This change would take effect for the 2023 taxation year.

Environmental Sustainability

Green Technologies Tax Credits

The Budget includes $20B over six years for tax credits to promote investment in green technologies.

Tax credits for investments in clean technology and clean hydrogen equipment have requirements that include paying prevailing wages and ensuring that apprenticeship opportunities are being created.

Savings Incentives

Tax-Free First Home Savings Account

Budget 2023 announces that financial institutions will be able to start offering the Tax-Free First Home Savings Account to Canadians as of April 1, 2023.

Registered Disability Savings Plans

Registered Disability Savings Plans (RDSPs) are there to support the long-term financial security of people with disabilities who are eligible for the Disability Tax Credit. Qualifying family members can open an RDSP and be the plan holder for an adult with mental disabilities whose ability to enter an RDSP contract is in doubt and who does not have a legal representative. Budget 2023 announces the government’s intention to extend the Qualifying Family Member provision until December 31, 2026. To further increase access to RDSPs, the government also intends to expand the provision to include adult siblings of an RDSP beneficiary. These measures are expected to cost $13 million over five years, starting in 2023-24, and $3 million ongoing.