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2019-03-21

Budget 2019 Highlights

The 2019 budget, which was unveiled by Finance Minister Bill Morneau on March 19, contains a range of new spending measures aimed at key demographic groups in preparation for the upcoming federal election.  Although this budget is not as focused on infrastructure and trade as in previous years, it nevertheless contains a number of items that are of interest from an ocean shipping perspective. These include: 

Regulatory Modernization

The budget allocates $219 million over five years to three departments and agencies (Transport Canada, the Canadian Food Inspection Agency and Health Canada) to develop “regulatory roadmaps” for modernizing regulations within their respective sectors.  The intent of these roadmaps is to create a more user-friendly regulatory system that facilitates innovation, supports greater use of digital services such as online portals and electronic templates, and achieves better alignment between existing regulatory frameworks and industry realities.

Specific projects to be developed under these regulatory roadmaps include:

  • Leveraging existing technology to replace the paper documentation that currently accompanies the transportation of dangerous goods with electronic shipping documents and processes;
  • Reviewing the Canada Grains Act and the operations of the Canadian Grain Commission to address issues that place unnecessary restrictions on Canadian grain exporters, including redundant inspections and questions regarding the current classification process;
  • Digitizing CFIA’s process for issuing export certificates (which is currently paper-based) in order to allow Canadian businesses to export their products more rapidly.

The budget also proposes to allocate up to $67.8 million to the Department of Justice over five years, which would be used to strengthen the government’s capacity to draft the necessary legislative and regulatory changes to support a new approach to regulations in these and other sectors. 

For its part, the Federation intends to use the regulatory modernization agenda as a platform for accelerating discussions on the development and implementation of the “single window” concept for maritime transportation in Canada

Border Management and Security

The budget allocates a significant amount of funding ($1.18 billion over five years) to support the implementation of a Border Enforcement Strategy.  Although the bulk of this funding would be used to support the processing of asylum claims and the timely removal of failed claimants, $332 million would be directed to CBSA in order to modernize current border operations and management processes and facilitate the safe and timely flow of transactions at the border. 

Marine Safety Response

The budget allocates $46 million to marine environmental response planning, with a view to enhancing the ability of federal, provincial and Indigenous partners to jointly plan for timely, efficient and effective responses to marine pollution incidents.  The Canadian Coast Guard would receive the majority of these funds ($34 million), with Environment Canada and Transport Canada receiving the balance ($9 million and $3 million respectively). 

In addition to the $34 million in marine safety response funding noted above, the budget also allocates $23 million to DFO in support of Indigenous reconciliation (which would likely be spent on stakeholder consultations and related activities).

Forestry Sector

The budget proposes to allocate up to $251.3 million over three years to Natural Resources Canada to extend existing innovation and diversification programs within the forestry sector.  This includes $64 million to increase and diversify market opportunities for Canadian forest products in offshore markets, and $91.8 million to support research and development to position Canada at the forefront of the emerging bio-economy (which is based on the use of biomass resources such as trees and organic materials left over from harvesting and timber processing to produce a broad range of consumer and industrial products).    

Legislative Measures

The budget also contains a number of non tax-related measures that would be implemented through legislation, including the introduction of proposals to modernize the pilotage system through amendments to the Pilotage Act. 

Other legislative measures of interest include the development of new legislation to implement a cyber systems framework to protect Canada’s critical infrastructure from cyber threats; the introduction of an annual modernization bill to update existing regulations and eliminate those that are outdated (in support of the regulatory modernization initiative noted above); and the introduction of legislative amendments to clarify the Transportation Appeal Tribunal of Canada’s jurisdiction over reviews and appeals connected to administrative monetary penalties under the Marine Liability Act