Canada Federal Budget 2016 Highlights

Last week, federal Minister of Finance Bill Morneau tabled the new Government of Canada’s first federal budget. Growing the Middle Class is a plan that takes steps to revitalize the Canadian economy with a strong focus on efforts on helping to restore hope for the middle class and more generally, create an inclusive and fair Canada. Growing the Middle Class reinforces the Government’s belief that a strong economy starts with a strong middle class. Budget 2016 aims to offer immediate help to those who need it most, and lays the groundwork for long-term economic growth.

Growing the Middle Class


  • $29.4B deficit in 2016-2017.

Enhancing Investments in Training:

  • Budget 2016 proposes to provide an additional $125 million in 2016–17 for the Labour Market Development Agreements, and an additional $50 million in 2016–17 for the Canada Job Fund Agreements. These investments will help ensure unemployed and underemployed Canadians can access the training and support they need to develop their skills and pursue opportunities for a better future.

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Supporting a Strong and Innovative Automotive Sector:

  • Budget 2016 announces the extension of the Automotive Innovation Fund, which is currently scheduled to sunset at the end of 2017–18, through to the end of 2020–21.

  • The Government also noted that it will examine approaches that will allow it to maximize the impact of federal support offered to the automotive sector by consulting with stakeholders on the terms of the Automotive Innovation Fund.

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Helping Small and Medium-Sized Companies to Grow and Innovate:

  • Budget 2016 proposes to provide the Industrial Research Assistance Program (IRAP) with an additional $50 million in 2016–17 to increase the number of companies served by the Program’s highly qualified Industrial Technology Advisors nationwide.

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Expanding Trade Opportunities:

  • The Government is also committed to deepening trade relationships with large emerging markets, including China and India.

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Small Business:

  • The Small Business Income Tax Rate remains 10.5% for 2016 with further reductions deferred.

Improving Motor Vehicle Safety:

  • Budget 2016 will provide $7.3 million over two years to increase inspection capacity and support the development of a regulatory framework for emerging technologies such as automated vehicles.

  • Additionally, as part of the federal infrastructure initiative, Budget 2016 proposes to provide $5.4 million to the Motor Vehicle Test Centre in Blainville, Quebec to enhance testing capacity at the facility. Through these actions, the Government is taking concrete steps to ensure Canada’s transportation system remains safe.

Federal Budget

Increasing Capacity at Status of Women Canada:

  • Budget 2016 announces $23.3 million over 5 years starting in 2016-2017 to expand regional reach and support local activities of Status of Women Canada.

  • Funding would be used to expand the Agency’s regional presence across Canada and support local organizations working on women’s issues and gender equality.

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This funding bump is especially interesting to the Association as AIA received substantial funding from the Agency last year to launch the Advancing Women in Automotive Knowledge Exchange (AWAKE) program. AIA commends to Government for their continued support for gender equality.