April 17, 2024 | Circular No. 11659

Dear Member,

The 2024 federal budget, which was unveiled by Finance Minister Chrystia Freeland yesterday afternoon, provides for $53 billion in new spending over the next five years,  to be funded primarily through increases to capital gains taxes and excise duties on tobacco and vaping products. Of this new spending, $19 billion will be allocated to housing and affordability measures, $10.7 billion to defense, $9.1 billion to Indigeneous communities and businesses, $7.6 billion to economic growth measures, and $6.4 billion to community health and safety.

Although the budget contains only a handful of funding measures that are directly allocated to the maritime industry, it also announces a number of initiatives that may be of relevance from a broader supply chain perspective, as per below:

Labour Review

  • The budget provides funding of $3.1 million over two years to enable the Minister of Labour to complete the second phase of his review of port labour disruptions across Canada, which will explore long-term solutions for minimizing labour disputes and securing the stability of Canada’s supply chains.  As noted in previous CLs, the first phase of this review (which was announced after this summer’s west coast longshore strike) was completed earlier this year, when the two industrial labour relations experts leading the review process submitted their proposed terms of reference to the Minister.  An announcement from the Minister’s office as to the next steps in the review process is now awaited.

Impact Assessment and Permitting Process

  • The budget announces new measures to improve the efficiency of the federal impact assessment and permitting process for major infrastructure projects, including those related to critical minerals, nuclear, oil and gas, transportation, and projects on federal land.  This includes setting a target of 5 years or less to complete assessment and permitting processes for federally-designated projects (and a target of two years or loss for non-federally designated projects), building a federal permitting dashboard that reports on the status of large projects requiring permits, and making targeted amendments to the Impact Assessment Act.  We view this is a much-needed and long overdue development, given that the length and complexity of the current impact assessment process has served as major impediment to the timely completion of several projects to increase the efficiency of Canada’s transportation system.  This is an issue that the Federation has highlighted in several of its recent submissions to the government, including in its recommendations to the National Supply Chain Task Force.

Regulatory Modernization

  • The budget introduces amendments to the Red Tape Reduction Act to broaden the use of “regulatory sandboxes” across government to help ensure that regulation keeps pace with the speed of new innovations.  This will allow for the creation of temporary rules and limited exemptions to existing legislation and regulations to enable the testing of products, services or new regulatory approaches.

Port Divestiture

  • The budget allocates $152 million in funding over five years for Transport Canada to administer the Ports Asset Transfer Program (formerly know as the port divestiture program), which facilitates the transfer of TC administered port facilities to local owners.

Marine Transportation Security 

  • The budget allocates $108 in funding over five years for Transport Canada and the RCMP to administer the Transportation Security Clearance Program, which screens workers at ports and airports who perform certain duties or have access to restricted areas, to prevent security threats within Canada’s transportation system.

Competition Regime

  • Although the budget makes a number of general references to modernizing the Competition Act and strengthening the powers of the Competition Bureau, this relates mostly to strengthening consumer protections against hidden prices and “junk fees” and is targeted at specific sectors such as banking, telecommunications and airlines.  Unlike the budgets released in 2022 and 2023, the 2024 budget does not contain any references to modernization of the Shipping Conferences Exemption Act or the operation of liner shipping overall.

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The provisions proposed in the budget will now be incorporated into an “omnibus” budget implementation bill, which will be introduced in Parliament within the coming weeks.  We will be keeping a close eye on this legislation as it makes its way through Parliament, with a particular view to ensuring that it does not include any new provisions or legislative amendments that were not explicitly mentioned in the budget document.

Sincerely,

Karen Kancens
Vice President