Benefit Implications of 2022 Federal Budget
On April 7, 2022 the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, tabled Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable.
The Federal Government’s budget includes a number of significant expenditures that may result in changes which will impact employers in all industries. Some highlights are discussed below.
National Dental Care
Budget 2022 proposes to provide funding of $5.3 billion over five years, starting in 2022-23, and $1.7 billion ongoing, to Health Canada to provide dental care for Canadians. This will start with coverage for children under 12-year-olds later in 2022, and then expand to include children under 18-year-olds, seniors, and persons living with a disability in 2023, with full implementation by 2025. The program would be restricted to families with an income of less than $90,000 annually, with no co-pays for those under $70,000 annually in income.
The budget stated that there will be continued ongoing work towards a universal national Pharmacare program. This will include tabling a Canada Pharmacare bill and working to have it passed by the end of 2023, and then tasking the Canadian Drug Agency to develop a national formulary of essential medicines and a bulk purchasing plan.
Expanding Support for Workers and Employers
The Federal Government committed to making continued investments to help workers succeed and ensure that Canadian businesses have access to a diverse, skilled workforce. Highlights of this commitment include:
- Reviewing the Employment Insurance (EI) program. As Canada’s economy continues to recover from the pandemic there will be consultation with Canadians on what needs to be done to build an EI system that better meets the current and future needs of workers and employers. This includes simpler and fairer rules for workers, new ways to support experienced workers transitioning to a new career, and coverage for self-employed and gig workers. Once consultations conclude, the government will release its long-term plan for the future of EI.
- Increasing the length of Employment Insurance sickness benefits from 15 to 26 weeks, as of Summer 2022.
- Increasing the federal minimum wage to $15.55 effective April 1, 2022.
Supporting Mental Health and Well-Being
The last two years have had a significant impact on Canadians’ mental health. To help ensure that everyone can receive the care they need, the Federal Government will invest in identifying and expanding effective mental health interventions some of which were part of the 2021 budget. These proposals include:
- Budget 2022 proposes to provide $140 million over two years, to Health Canada for the Wellness Together Canada portal so it can continue to provide Canadians with tools and services to support their mental health and well-being.
The Wellness Together Canada portal complements PocketWell, a free app that helps Canadians access free and confidential sessions with social workers, psychologists and other professionals, as well as other mental health and substance use prevention services from their phone.
- Addressing the Opioid Crisis. Budget 2022 proposes to provide $100 million over three years, to Health Canada for the Substance Use and Addictions Program to support harm reduction, treatment, and prevention at the community level.
Support For Parenthood
Budget 2022 proposes to allow medical expenses related to a surrogate mother or a sperm, ova, or embryo donor that are incurred in Canada for 2022 and subsequent taxation years to be claimed. This would include costs that have been reimbursed to a surrogate for in vitro fertilization expenses. The Budget also proposes to allow fees paid to fertility clinics and donor banks in Canada in order to obtain donor sperm and ova to be eligible under the Medical Expense Tax Credit for 2022 and subsequent taxation years.
Implications For Employers
Most employers provide a range of group benefits, including disability, extended health/drug and dental plans. Budget 2022 does not contain detail on all of its proposals, but some future implications for employers may include:
- a reduction in prescription drug costs as a result of a national Pharmacare program and a bulk purchasing plan;
- possible reduction in dental costs resulting from coordination with the national dental care program;
- some possible mitigation of disability costs as a result of the Federal Government’s mental health and wellness initiatives;
- depending on the enhancements to be made to the Employment Insurance program, increases in the premiums required to fund the program; and
- adjustments may need to be made to employer short term disability programs to continue to qualify for EI premium reduction as well as to long term disability programs to coordinate waiting periods.
If of interest, the full budget can be accessed here: https://budget.gc.ca/2022/report-rapport/toc-tdm-en.html