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Federal budget analysis 2023 


The Government of Canada’s 2023 budget focuses affordability, job growth, dental care, and advancing Indigenous reconciliation – areas which intersect with United Way East Ontario’s work to support our communities’ most vulnerable people. Other items of interest include investments in the green economy, health care, and responding to the economic effects of inflation. 

The rising costs of living are hitting people hard: The budget was tabled at a time when many Canadians must make difficult choices such as paying rent or putting food on the table, paying for mental health support or going to the dentist. 

On the surface, many of the measures outlined by the government seem piecemeal and even look short-sighted. However, whether it is the grocery rebate or dental support, every dollar counts for people under financial stress. For example, pandemic benefits and the Canada Child Benefit contributed to the lowest child poverty rate in decades in 2020. Smaller supports can still provide a boost to lower-income individuals and families, especially when it comes to immediate needs like food.  

By Preeti Prabhu, Senior Director of Public Policy, Government and Stakeholder Relations, United Way East Ontario

There certainly were gaps in the 2023 budget: While the government tabled investments through Reaching Home and National Housing Strategy in the previous year’s budget, and the $400 million (2021 Budget) Community Services Recovery Fund (CSRF) will begin to flow to not-for-profit and charitable organizations this spring, we would have liked to see continued planning and investment to address the housing and homelessness crisis, and long-term strategic support for the non-profit and charitable sector.  

We hope that the government will continue to partner with non-profit organizations so we can continue to tackle the tough problems – together.

Here is a more in-depth look at how the federal budget sets out to invest in areas that urgently need support in our local communities, and where we must continue to work together to address critical gaps. 

Three years of the COVID-19 pandemic, paired with increased needs, a decline in donations, staff burnout, and rising operating costs have strained the social sector. The sector has demonstrated resilience and adaptability but is over-stressed and needs financial investment to cope with continued pressure to offer more service with less money. 

Our policy recommendation: Invest in capacity, including pay equity, as well as technical and operational infrastructure for non-profit-driven care services for long-term, sustainable recovery. Invest in infrastructure, affordable housing strategies, and staffing resources, including investing in staff expertise to administer shelters and support for people fleeing gender-based violence. 

Success in motion: UWEO invested in virtual care – like Counselling Connect – as well as targeted mental health services for Indigenous and African, Caribbean and Black communities. UWEO supported Lanark County Interval House to be a safe haven for women and children fleeing violence. 

What we saw in the 2023 budget: 

  • $359.2 million over five years to support a renewed Canadian Drugs and Substances Strategy. This includes funding to the Substance Use and Addictions Program, new community-based programs to prevent substance use among young people, and data collection. 

  • $158.4 million over three years starting in 2023-24 to the Public Health Agency of Canada to support the implementation and operation of the 988 Suicide Prevention Line. 

  • $160 million over three years starting in 2023-24 to provide funding to organizations in Canada that serve women. 

  • A new Action Plan to combat hateful rhetoric and acts. 

  • Additional $25.4 million over five years to support Canada’s Anti-Racism Strategy. 

  • $25 million, in 2024-25, to Employment and Social Development Canada for the Supporting Black Canadian Communities Initiative, to continue empowering Black-led and Black-serving community organizations and work to promote inclusiveness. 

The social services sector contributes $192 billion to our economy, accounts for 8.3 per cent of Canada’s GDP and employs 2.4 million people, many of whom are women or people from equity-seeking groups. The government must recognize that investments in social policy are in fact good economic policy. 

In the 2021 budget, the federal government contributed $400 million through the Community Services Recovery Fund (CSRF) to the not-for-profit and charitable sector to renew, innovate and modernize post-pandemic. These funds, which will be available to community agencies starting in May 2023, opened a door for the federal government to work more closely with the sector to address many of our country’s most serious, complex, and urgent issues. 

We would have liked to see more direct support for the sector considering the stress it is currently under, the contributions it makes to the Canadian economy and labour force, and the considerable work the sector has done to support the government and the community over the past three years.  

Furthermore, at a time when distrust in public institutions is on the rise, NGOs are most trusted by Canadians to coordinate solutions to societal problems. We know that government collaboration with the community sector can bring real change.  

The rising cost of living disproportionately affects the wellbeing of Indigenous people, vulnerable women, youth, newcomers, racialized communities, and people with disabilities. We continue to advocate for the government to implement social procurement policies to help empower communities, provide employment, and ensure local needs are considered during major public and private projects. We also advocate for increasing labour market participation through equitable workforce development, and the extension of supports to vulnerable and marginalized communities. 

The price of groceries for a family of four in Ottawa has ballooned from $901 per month in 2019 to $1,088 per month in 2022, a substantial increase of over 20 per cent. While one-time relief payments will ease some of the burdens on vulnerable families, long-term solutions are needed to alleviate inflated prices. 

Our policy recommendation: Incentivize social procurement policies in government and the private sector, to provide capacity to social enterprises and promote local businesses. Ensure equity-seeking groups have the appropriate skills and training to meet market demands, and employers are ready to include diverse workers.  

Success in motion: In November 2022 the Ottawa Community Housing Corporation, in partnership with the Ottawa Community Benefits Network, signed the National Capital Region’s first community benefits agreement. It provides a framework for social responsibility, partnership, communication, and collaboration. 

What we saw in the 2023 budget: 

  • Details on the labour requirements for the Clean Technology and Clean Hydrogen Investment Tax Credits.

  • The federal government states that it is committed to procurement policies that treat Canadian workers and businesses fairly. 

  • A doubling of the maximum employment deduction for tradespeople’s tool expenses from $500 to $1,000. 

  •  Tax changes to create Employee Ownership Trusts. 

  •  $625 million in 2023-24 in the Labour Market Transfer Agreements to ensure Canadians continue to have access to supports to get their next job. 

Research shows us that community wealth building has multiple economic and social-justice benefits. For example, local purchasing recirculates 63 per cent of every dollar in the local economy. That number is only 14 per cent when goods are purchased from multi-national suppliers. On a $1 million contract, local suppliers create an average of 3.6 jobs compared to 1.8 to 2 jobs with multi-national corporations. We hope the federal government will consider implementing social procurement and community benefit initiatives into public contracts as investments are rolled out over the coming years. 

We were glad to see the implementation of $2.5 billion of one-time “grocery rebate” for 11 million low and modest-income Canadians and families, and the implementation of procurement policies to create a preference for Canadian small businesses. 

Access to food, transportation, and community services are often severely limited in rural communities, and we must continue to bridge those gaps. Safety has also been a rising concern in these communities, as highlighted by the 2015 femicide in Renfrew County.  

Our policy recommendations: Food distribution to rural residents with limited mobility, to ensure populations have access to nutritious food; and advocating and promoting local businesses and the agri-food sector to find affordable and sustainable solutions for food deserts. 

Success in motion: Community organizations have collaborated to tackle food insecurity (access to food). 

What we saw in the 2023 budget:  

  • $45.9 million over four years starting in 2024-25 to expand the Canada Student Loan Forgiveness program for doctors and nurses in rural communities. 

  • $368.4 million to renew and update forest sector programs, which will support jobs in the forestry sector in rural and remote communities. 

  • $10 million in 2023-24 to top up the Local Food Infrastructure Fund to strengthen food insecurity in Northern, rural, and Indigenous communities. 

  • $108 million over three years to the Regional Development Agencies for projects and local events to increase local tourism. 

  • $210.0 million over five years to VIA Rail to maintain train routes outside the Quebec City-Windsor Corridor, and to maintain levels of service. 

The 2023 budget saw an increased number of initiatives aimed at improving access to basic needs in rural communities, including contributions to improve food accessibility. We now need to set our sights on improving local transportation solutions in rural communities. 

Without safe, stable shelter, it is impossible for people to live healthy, safe, and successful lives. The housing and homelessness crisis is the most urgent issue facing every community in Canada, with thousands of people sleeping without a roof over their head each night.  

Our policy recommendation: Make housing (including energy costs) truly affordable, especially for seniors and those living below the low-income cut-off (LICO) in each community. United Way endorsed Starts With Home, a non-partisan campaign to mobilize public and political support for affordable housing and ending homelessness. Policies that invest in or incentivize partnership with nonprofit developers and non-profit housing agencies will ensure that housing truly remains accessible and affordable. 

Success in motion: Hollyer House community hub and affordable housing project in Ottawa’s Bells Corners neighbourhood is a great example of mixed housing offerings. 

What we saw in the 2023 budget: 

  • Financial institutions will be able to start offering the Tax-Free First Home Savings Account as of April 1, 2023 for first time home buyers. 

  • The government will take steps to reform and simplify tax and financial processes to provide relief to people struggling with the high cost of living, including homebuyers from diverse communities. 

  • Reallocation of funding within the National Housing Co-Investment Fund to prioritize construction of new affordable homes. 

  • $4 billion over seven years starting in 2024-25 to implement a co-developed Urban, Rural, and Northern Indigenous Housing Strategy. 

While the government tabled investments through Reaching Home and National Housing Strategy in the previous year’s budget, some targeted measures such as rent support, preventing loss of affordable housing, creating a pipeline of rental units in partnership with the non-profit sector for building and service delivery is necessary to respond to the housing crisis. Many experts including the Canadian Alliance to End Homelessness, Smart Prosperity Institute, a number of academics, and others (CTV News, Ottawa Citzen, National Post) have highlighted the lack of funding for housing in Budget 2023.  

For residents to thrive in school, at work, and in society, they must have access to stable, transitional, and permanent housing options. Chronic homelessness should be rare, brief, and non-recurring.  

We would have liked to see more support provided to shelters and homelessness prevention, especially for priority populations like youth, people fleeing violence, and newcomers. While incentives for home buyers and towards new home construction are important, we do not see enough supports to improve the affordability of available housing, and affordability for renters. 

We invite the government to collaborate with non-profits and businesses to develop a comprehensive long-term plan to provide safe, reliable, and affordable housing. 

  • Government proposes to provide $813.6 million in 2023-24 to enhance student financial assistance for the school year starting August 1, 2023. 

  • $49.5 million over five years to Public Safety Canada to enhance and expand the Communities at Risk: Security Infrastructure Program to allow it to be more responsive to the evolving security needs of communities. 

  • $76.3 million in 2023-24 to Indigenous Services Canada to continue to support the administrative capacity of First Nations governments and tribal councils delivering critical programs and services to their members. 
  • $505 million over five years starting in 2023-24 to the Canadian Institute for Health Information, Canada Health Infoway, another federal data partners to develop new health data indicators. 

Where we go from here 

As the Government of Canada’s trusted partner, United Way East Ontario is administering the Community Services Recovery Fund to strengthen the social services sector by helping charities and non-profits adapt and modernize in the wake of the pandemic. This will ensure service providers have the capacity to handle rising demand and prevent vulnerable people from falling through the cracks. 

We are also collaborating with leaders in the health care sector to strengthen the critical supports available to people in need throughout our region, and convening with local educators and labour market leaders to ensure stability for services that help newcomers, students, and marginalized populations find work.  

Now that the 2023 federal budget has been tabled, it will take time to see where most of the funding lands and how decisions by our political leaders impact the most vulnerable people in our communities. 

We look forward to continuing our work with all levels of government by prioritizing policies required to respond to the needs of our communities. 



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