Checking the Fine Print of Budget 2024

April 18, 2024

By Cam Holmstrom, Founder and Principal

Whenever governments of any political stripe tables a Federal Budget in this country, there is always anticipation across all sectors to see where the government is planning to go and how they want to get there. In the lead up to the big day, we see media reports that tend to focus on the top line of the policy announcements to come and the expected negative reaction from opposition parties. But it’s when the budget gets tabled after 4 pm on that day that we see the details that determine not just how effective or problematic the policy will be, but also the potential opportunities that may truly lay at hand.

This year's budget was no exception, with the devils truly being in the details of the policies. Investments and programs announced in the budget. This was especially true when it came to three policies that spoke directly to Indigenous communities and governments, each with unique challenges and opportunities that come from those details.

The first such policy was the widely-anticipated loan guarantee program for Indigenous communities to participate in natural resources and energy projects. The budget pledges $5 billion in loan guarantees, replicating a similar approach that has been taken in Alberta and Ontario. According to the First Nations Major Projects Coalition, Indigenous loan guarantee programs in Alberta and Ontario have already helped to generate more than $1.5 billion in economic benefits for Indigenous nations in those provinces. For the Federal program though, the “devil in the detail” that could have thwarted that effect would have been the scope of the loan program. Thankfully, the federal government listened to Indigenous leaders from across the country and ensured that this announced program would be sector agnostic. This means that individual nations will be able to choose for themselves what they wish to invest in, without Ottawa interfering. That is an important detail that will help create many opportunities for Indigenous nations and peoples, though it also leaves open the question of how much more it could create with a larger budget.


The second policy that people have been waiting for the details on has been the Clean Electricity investment tax credit, which finally came in this budget. The tax credit is a significant part of Canada’s response to the American Inflation Reduction Act. Many of the specifics of the Canadian approach are similar to the American version with one major exception; it’s far less generous than what President Biden has done. Where the American version will provide up to a 30% tax credit for these investments that meet all the necessary criteria, the Canadian version announced yesterday will only provide up to 15% for the same projects that meet the same criteria. This difference could have a negative impact for anyone seeking to invest in any of the technologies that this fund would cover, like wind, solar, water, geothermal,waste biomass, nuclear, or natural gas with carbon capture and storage. While this detail isn’t shocking, it is consequential and will be a factor in where and how people invest their money in cutting edge clean energy projects, either here in Canada or to our south.


The final policy announcement where the details truly mattered was the renewal of Canada's commitment to Indigenous Financial Institutions. These organizations provide important funds to Indigenous entrepreneurs and businesses, the very ones that are helping to build stronger economies in our communities. Funds like these matter greatly as they drive innovation and support economic growth which is critical to helping Indigenous people build successful businesses and take part in the greater regional, national, and international economy. This year's budget pledges $350 million over five years, including $30 million over that period specifically for the Métis Capital Corporations. That detail is one that can be viewed in many different ways. The positive is that means $70 million per year to help fund these important activities.


But the negative is that $70 million only takes you so far. Looking at the five Métis capital corporations as an example, every year they will get $6 million to be split amongst them. Just over a million dollars is a lot of money, but when it comes to helping to grow businesses, it’s a relative drop in the bucket. It’s also a far cry short of the $97 million a year over five years that the Métis National Council was asking for in Budget 2023. Extrapolate those figures overall the remaining Indigenous financial institutions across Canada and you seethe challenges that quickly come into focus.

Whether these details contained in the Budget help or hurt in your specific situation, they all offer an opportunity to engage further with the leaders in government who driving these important policies frameworks and making the critical decisions on the details that define how the policies are implemented and ultimately their success or failure. While every budget is an important moment, they are only the starting point for the critical conversations to come, either to protect and promote the positive aspects of details announced in the budget or to address the negative ones.  With a federal election just over a year away and political parties working to differentiate themselves in the minds of voters, there has never been a better time to focus on the “details” and influence federal policies, programs, and funding decisions.