2022 Federal budget: Part one – Child care and pandemic stimulus

Pre-budget insights and analysis

Video overview

The 2022 federal budget is expected to be introduced in early-April. To address what measures may be included, we’ve developed a two-part video series with our National Tax Leader, Tara Benham.

In the first video, Tara discusses: Child care and pandemic stimulus. These two measures are intended to support individuals and businesses on the road to recovery from Covid-19.

Key moments in this video

  • 0:30: Child care (Measure one)
  • 1:31: Pandemic related stimulus (Measure two)

Video transcript

Click to read the transcript

Hi, I'm Tara Benham, National Tax Leader for Grant Thornton. This is the first of a two-part series of what you might expect to see in the 2022 federal budget.

In this video, I'll discuss two anticipated measures: child care and pandemic stimulus.

These two measures are intended support individuals and businesses on the road to recovery from COVID-19.

Child care

To address one of its election campaign promises, the Liberal government has been working on agreements with the provinces to cap child care costs across the country to $10 a day.

Additional tax changes related to child care could also help Canadians make the cost more affordable.

Why does it matter?

Although not a tax measure, this is a significant change that could help parents, and particularly lower income women whose jobs have been most impacted, return to the workforce.

What's expected in Budget 2022?

The Canadian Chamber of Commerce outlined several possibilities in its pre-budget consultation submission, which include:

  • allowing the higher-income spouse to claim child care deduction,
  • allowing the deduction to be taken against non-eligible dividend income, and
  • allowing small business owners to deduct child care as an eligible business expense.

Pandemic-related stimulus

Another measure that we may see in the budget is a continuation of pandemic-related stimulus programs.

Why does it matter?

Our economy is recovering, with some provinces reducing or eliminating pandemic-related restrictions and others announcing their intention to soon follow.

Nevertheless, some individuals and businesses are continuing to struggle financially.

What's expected in Budget 2022?

The government has replaced the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy programs with two new targeted programs:

  • the Tourism and Hospitality Recovery Program, and
  • the Hardest-Hit Business Recovery Program.

These limit the availability of the wage and rent subsidies to tourism and hospitality businesses, and other businesses that have been severely impacted by the pandemic.

The new programs are available until May of this year, with possible extensions to July.

To help the economy return to its pre-pandemic level, the government may provide more stimulus to both businesses

Additional support is expected to be limited to the or expansion of the current programs, rather than introducing new ones.

For more on the 2022 federal budget, watch part two – environmental intiatives and wealth tax.

2022 Federal Budget: Pre-budget insights & analysis

Read our pre-budget alert 2022 for more information about what you may see in the 2022 Federal Budget.