Federal budget lacks sizzle, but has plenty for employers to digest

Today’s federal budget has a number of initiatives that are of interest to human resources professionals and employers. Among the highlights are moves to improve gender equality, new leave for parents and tax benefits for low-income workers.

The Trudeau Liberals also floated the idea of a national pharmacare program to look at covering the cost of prescription drugs for all Canadians — though there are concerns it could carry a staggering $19-billion price tag.

During his speech, Finance Minister Bill Morneau focused in on the all-too-elusive concept of pay equity.

“How are we going to make sure that more women and girls can be self-reliant and help their families, while helping to grow our economy?” he asked. “First, by making progress when it comes to equal pay for work of equal value.”

The budget is taking a “historic and meaningful step” to push proactive pay equity legislation in federally regulated sectors. He hopes the private sector will take notice and jump on the bandwagon.

“It is our hope in doing so, all employers will reflect on the way in which work done by women has been too often undervalued — and move to take action of their own to help close the gender wage gap,” said Morneau.

Gender equality

Morneau said gender equality would be an overarching theme of the 2018 federal budget, particularly when it comes to boosting the participation of women in the workplace.

That includes changes for paternity leave and plans for closing the gender wage gap in federally regulated workplaces, but here are some other measures aimed at advancing equality:

Status of women in Canada: The Liberal government has been giving Status of Women Canada more and more things to do since coming to power with the promise to implement a feminist agenda, but the agency remained relatively strapped for cash. The budget, which makes it a full department, is changing that. The funding boost includes another $100 million over five years to expand a grants program for projects aimed at advancing gender equality and $1.8 million over two years to develop a strategy to engage men and boys with the issue.

Tracking progress through better data: The budget went through a full gender-based analysis, which involves thinking about how every tax or spending measure would impact men and women in different ways, while also taking things like age, income, ethnicity and other intersecting factors into account. The Liberals also included a ``gender results framework,'' which is meant to help them assess the impact this and future budgets will have on the greater goal of improving equality. To bolster these efforts going forward, the Liberals are also committing millions of dollars to improving the collection of data needed to do this. That includes $6.7 million over five years and $600,000 a year thereafter, for Statistics Canada to set up a new Centre for Gender, Diversity and Inclusion Statistics.

Sexual assaults on campus: The Liberal government is committing $5.5 million over five years to develop a national framework aimed at addressing gender-based violence at universities and colleges. They are also backing up the initiative with a threat: if a post-secondary institution is not serious enough about dealing with on-campus sexual assault in 2019, the government will consider withdrawing funding. The federal gender-based violence strategy is also getting an additional $86 million over five years to focus on things like preventing dating violence among teenagers and giving more support to sexual assault centres located near Canadian Forces bases.

Women in non-traditional work: The Liberal government wants to increase the participation of women in the workforce — and that includes jobs that have traditionally been dominated by men. The federal government will allocate $19.9 million over five years, for a pilot apprenticeship incentive grant to provide women with up to $6,000 while training in male-dominated skilled trades, such as welding or pipe-fitting. Other measures include $1.4 billion over three years from the Business Development Bank in new financing for female entrepreneurs and $105 million over five years to help the regional development agencies support women-led businesses.

Women and girls around the world: The Liberal government is also committing to increasing its overseas humanitarian aid budget by $2 billion over five years, which the budget says will be focused on supporting women and girls through its feminist international development policy. The budget also includes $20.3 million over five years to settle 1,000 more refugee women and girls from conflict zones around the globe.

Use-it-or-lose-it leave

As previously reported by Canadian HR Reporter, the Trudeau Liberals have introduced a new “use it or lose it’ leave option for new parents, plus a modest increase in the value of rebranded tax benefit for low-income workers.

The government's third budget — coming on the heels of two that created an income-tested child benefit and a long-term funding commitment to child care — promised new parents the ability to share either five or eight additional weeks of leave following the birth of a child, provided they also share the job of caring for the baby.

Measures proposed Tuesday would give parents five additional weeks if they've opted for the traditional 12-month parental leave, or eight weeks under the new 18-month option introduced late last year. The benefit would be also be available to couples that adopt.

There won't be any boost in benefits for the extra weeks off, unlike the higher benefits provided under a similar program in Quebec. Nor will eligibility rules be changed to follow Quebec's lead, as experts had urged the Liberals to do.

The government hopes the measures will push more non-birthing parents to take more time to care for a newborn, allowing mothers to get back into workforce sooner. The budgetdocument notes that women accounted for 92 per cent of parental benefits paid through EI during the 2015-2016 fiscal year, the most recent numbers available, suggesting a wide gender divide when it comes to caring for an infant.

How many non-birthing parents take the leave may be small given how the Liberals have set up the program, said Angella McEwen, an economist with the Canadian Labour Congress.

The option isn't expected to come into effect until June 2019, just ahead of a federal election where parties will be currying political favour with middle-class families trying to foot the bill for raising children.

The budget also promises to allow new mothers and those on sick leave to keep more of their employment insurance benefits if they work just a few hours every month.

The government doesn't expect the working-while-on-claim provisions — long a pilot project that the budget makes permanent — to change the number of Canadians working while on maternity leave. The budget document says the measure is targeted at low-income households facing a financial squeeze that requires them to work.

The Liberals are also targeting low-income workers with a rebranded benefit — dubbed the Canada Workers Benefit — that will enrich and expand eligibility at a cost of $1 billion. For workers earning at or below the poverty line, the changes will mean an extra $170 a year to a maximum of $1,355 for unattached workers, and $2,335 for couples or single parents.

The Liberals estimate that 300,000 more workers will take advantage of the benefit, but not until the 2019 tax year, meaning the refunds won't actually arrive until 2020.

But the measure lacks real teeth to make a serious dent in poverty rates, said economist Armine Yalnizyan, who noted that the changes may affect how much families receive in provincial and housing benefits. The tax refund will also be delivered annually — a potential problem for low-income families that often budget month-to-month.

``It definitely doesn't lift that many people above the poverty rate,'' Yalnizyan said. ``You definitely can't call it an anti-poverty measure.''

Workers are targeted in other areas of the budget: Extra benefits to employees who lose out on pay, vacation and severance when an employer files for bankruptcy; a promise to review the rules around protecting pensions; $90 million over three years to speed up processing of EI claims; and an extra $127.7 million over three years to make sure Canadians with EI questions can get through to someone at a call centre.

Paying for all the new measures will mean a bump in EI premiums paid by both employers and employees. The increase will come into effect in the fiscal year beginning in April, and continue an upward trend after taking into account new measures in Tuesday's budget.

National pharmacare coming?

Ottawa will appoint a group of advisers, led by Ontario's former health minister, to explore options for a national program to cover the cost of prescription drugs — and are already making it easier to cover the cost of cannabis-based pharmaceuticals.

The two measures, while unrelated, form part of a trinity of major drug initiatives in Tuesday's federal budget, the third being a $231-million package of steps that aims to confront Canada's escalating opioid crisis, including $150 million in emergency funding.

The next year will see former Ontario health minister Eric Hoskins head up an advisory council to come up with options on how to create a national pharmacare program — a program that the parliamentary budget watchdog has warned could cost $19 billion a year.

An estimated 10 per cent of Canadians can't afford their prescription drugs each year, the Liberals say.

``We're trying to get at this issue. It's a really important issue,'' Finance Minister Bill Morneau told a news conference Tuesday before the budget was tabled.

``It's, in our estimation, just not acceptable that a significant subset of the population doesn't have access to pharmaceutical products.''

Morneau didn't give a timeline on when the council will have to report its findings — fuelling speculation that the Liberals plan to make pharmacare a centrepiece of its 2019 election campaign and take away a key talking point for NDP Leader Jagmeet Singh.

In the meantime, the Liberals say they won't apply new sales taxes to cannabis-based pharmaceutical products that can be obtained with a prescription.

Nor will taxes be applied to oils that contain low amounts of THC, the primary psychoactive element in marijuana, that are used by children with certain medical conditions.

As well, the government says it plans to look at creating a rebate program to retroactively reimburse patients an unspecified amount for taxes already paid on cannabis-based pharmaceuticals.

Taxes on marijuana will amount to $1 per gram, or 10 per cent of product price, when a legalized cannabis regime comes into effect by this fall. The federal government will keep up to $100 million on the new taxes as part of a cost sharing split that will see three-quarters of cannabis tax revenue flow to provinces and territories.

The Opposition Conservatives have chided the government for moving too fast on legal pot, suggesting there are outstanding public safety issues that need to be addressed.

The budget outlines $62.5 million over five years beginning this year for public education programs around cannabis use, and a further $20 million over five years for research by the Mental Health Commission of Canada and the Canadian Centre on Substance Use and Addiction.

The Liberals are also spending $80.5 million over five years starting this year to reduce tobacco use, particularly in Indigenous communities, and raising taxes on cigarettes by $1 per carton.

On opioids, provinces and territories will receive $150 million in emergency funding this year to deal with a crisis that is projected to claim more than 4,000 lives this year.

The balance of the $231.4 million will go towards public education campaigns, better access to public health data and new equipment and tools to allow border agents to better detect dangerous opioids like fentanyl before they enter the country.

- with files from the Canadian Press