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Tax Alert

The Speech from the Throne

Additional government support announced as COVID-19 continues

On September 23, 2020, Governor General Julie Payette delivered the federal government’s Speech from the Throne (the “Speech”), in a socially-distanced setting in the Senate Chamber. The Speech outlined the government’s immediate plan to address the challenges posed by the pandemic and to lay out the government’s long-term vision for the future.

It’s clear that one of the government’s priorities is to continue to support Canadians in the battle against COVID-19. Among other initiatives, the focus will be on improving testing capacity, increasing PPE available for healthcare workers and ensuring Canadians have access to a vaccine—when it eventually becomes available.

From an economic perspective, the key initiatives centered around:

  • COVID-19 economic support programs,
  • tax-related changes, and
  • introducing new, and expanding existing, social and economic programs.

COVID-19 economic support programs

The government stated it would introduce new, and extend or expand existing COVID-19 support programs:

  • extend the Canada Emergency Wage Subsidy (CEWS) until summer 2021,
  • expand the Canada Emergency Business Account (CEBA) to cover a business’s fixed costs,
  • transition recipients of Canada Emergency Response Benefit (CERB) to either the EI system or other new benefits that were recently proposed,
  • improve the Business Credit Availability Program (BCAP)[1], although no details were provided,
  • provide financial support for the hardest hit sectors, such as travel, tourism, hospitality and the arts, and
  • suggest financial support would be provided to local businesses required to temporarily shut down due to a local public health decision, although no details were provided.

Tax-related changes

A number of tax-related changes were sprinkled throughout the Speech. These included:

  • limiting the stock option deduction, originally introduced as a discussion point as part of the 2019 federal budget,
  • identifying other ways to “tax extreme wealth inequality”,
  • taxing the income of “digital giants,” which was part of the Liberal party’s most recent election platform,[2]
  • halving the corporate tax rate for companies making zero emissions products,[3]
  • introducing free, automatic filing of simple tax returns, and
  • enhancing the First-time Home Buyer Incentive.[4]

Additional new programs and expansion of existing programs

The government has promised to increase spending related to social and environmental programs, with a goal to regain the

1 million jobs that were lost since the pandemic began. Increased spending is proposed as follows:

  • Invest in training for workers to upgrade skills and receive education and accreditation
  • Improve the Youth Employment and Skills Strategy (YESS) to increase jobs for youth
  • Invest in a Canada-wide early learning and childcare system and subsidize before-and after-school programs
  • Promote entrepreneurship through accelerating the Women’s Entrepreneurship Strategy
  • Accelerate the goal to establish a national, universal pharmacare program
  • Increase Old Age Security pension at age 75
  • Boost the Canada Pension Plan survivor’s benefit
  • Introduce a Disability Inclusion Plan, which will include a new Canadian Disability Benefit, similar to the Guaranteed Income Supplement received by lower-income seniors
  • Invest in several initiatives addressing climate change including increasing transit, making zero-emissions vehicles more affordable, focusing on clean energy projects such as the Atlantic Loop, and banning single-use plastics next year
  • Accelerate the Universal Broadband Fund to provide high-speed internet across the country
  • Compensate farmers in supply managed sectors for recent trade agreements
  • Increase investment in housing to address chronic homelessness
  • Accelerate funding for shelters and transition housing for vulnerable women
  • Continue the path to reconciliation by addressing infrastructure gaps in Indigenous communities, improve access to clean drinking water, and continue the work on MMIWG, among other initiatives
  • Address systemic racism through the economic empowerment for specific communities, increase representation in hiring and leadership in the Public Service, and support the artistic and economic contributions of Black Canadian culture and heritage


With the introduction of several new programs, the expansion of existing programs, and the continuation of several COVID-19 support programs, it is uncertain how the cost of implementing all of these programs will be financed. In the Speech, the Prime Minister stated that “Canadians should not have to take on debt that their government can better shoulder.” Given the limited tax revenues that would likely be raised by changes to the stock option deduction rules and the digital giants tax mentioned above, the question remains whether these programs will need to be financed by additional tax increases that have not been mentioned in this year’s Speech. Additional details are likely to follow, as the government also stated it would release an update to Canada’s COVID-19 Economic Response Plan this fall.

The federal Liberal government is in a minority position and would need support from one or more political parties to ensure it is not defeated, as the Throne Speech requires a vote of confidence. If the government does not receive enough support from the other political parties, the result would be a federal election, which would add additional challenges during an already tumultuous time.

After the Throne Speech, the Conservatives stated they would not support the government and the Bloc Quebecois suggested the same, if certain conditions were not met. The NDP is also asking for additional legislative changes to be introduced by the government, although they appear more likely to support the government at this time. The vote on the Speech to decide whether the government can implement at least parts of this plan will take place later this month.


[1] The BCAP provides loan guarantees on up to $6.25 million to small and medium sized businesses to help them cover their operating costs.

[2] As part of the Liberals’ most recent election platform, a 3% tax on the income of international digital corporations was introduced that would apply to businesses with worldwide income of at least $1 billion and Canadian revenues of over $40 million.

[3] As part of the Liberals’ most recent election platform, both the federal small business tax rate and general corporate tax rate would be cut in half for companies considered to be “clean tech” businesses.

[4] As part of the Liberals’ most recent election platform, the maximum home value for homes eligible for the incentive would be increased from $500,000 to $800,000.