December 16, 2021
Dear Minister Freeland:
Thank you for continuing to serve Canadians as Deputy Prime Minister and Minister of Finance.
From the beginning of this pandemic, Canadians have faced a once-in-a-century challenge. And through it all, from coast to coast to coast, people have met the moment. When it mattered most, Canadians adapted, helped one another, and stayed true to our values of compassion, courage and determination. That is what has defined our path through this pandemic so far. And that is what will pave our way forward.
During a difficult time, Canadians made a democratic choice. They entrusted us to finish the fight against COVID-19 and support the recovery of a strong middle class. At the same time, they also gave us clear direction: to take bold, concrete action to build a healthier, more resilient future. That is what Canadians have asked us to do and it is exactly what our Government is ready to deliver. We will work to build that brighter future through continued collaboration, engagement, and the use of science and evidence-based decision-making. With an unwavering focus on delivering results, we will work constructively with Parliamentarians and maintain our strong partnerships with provincial, territorial and municipal governments and Indigenous partners. This decade has had an incredibly difficult start, but this is the moment to rebuild a more resilient, inclusive and stronger country for everyone.
The science is clear. Canadians have been clear. We must not only continue taking real climate action, we must also move faster and go further. As Canadians are increasingly experiencing across the country, climate change is an existential threat. Building a cleaner, greener future will require a sustained and collaborative effort from all of us. As Minister, I expect you to seek opportunities within your portfolio to support our whole-of-government effort to reduce emissions, create clean jobs and address the climate-related challenges communities are already facing.
This year, Canadians were horrified by the discovery of unmarked graves and burial sites near former residential schools. These discoveries underscore that we must move faster on the path of reconciliation with First Nations, Inuit and Métis Peoples. We know that reconciliation cannot come without truth and our Government will continue to invest in that truth. As Ministers, each of us has a duty to further this work, both collectively and as individuals. Consequently, I am directing every Minister to implement the United Nations Declaration on the Rights of Indigenous Peoples and to work in partnership with Indigenous Peoples to advance their rights.
We must continue to address the profound systemic inequities and disparities that remain present in the core fabric of our society, including our core institutions. To this effect, it is essential that Canadians in every region of the country see themselves reflected in our Government’s priorities and our work. As Minister, I expect you to include and collaborate with various communities, and actively seek out and incorporate in your work, the diverse views of Canadians. This includes women, Indigenous Peoples, Black and racialized Canadians, newcomers, faith-based communities, persons with disabilities, LGBTQ2 Canadians, and, in both official languages.
Across our work, we remain committed to ensuring that public policies are informed and developed through an intersectional lens, including applying frameworks such as Gender-based Analysis Plus (GBA Plus) and the quality of life indicators in decision-making.
Canadians continue to rely on journalists and journalism for accurate and timely news. I expect you to maintain professional and respectful relationships with journalists to ensure that Canadians are well informed and have the information they need to keep themselves and their families safe.
Throughout the course of the pandemic, Canadians and their governments have adapted to new realities. Governments must draw on lessons learned from the pandemic to further adapt and develop more agile and effective ways to serve Canadians. To this end, I expect all Ministers to evaluate ways we can update our practices to ensure our Government continues to meet the challenges of today and tomorrow.
The success of this Parliament will require Parliamentarians, both in the House of Commons and the Senate, to work together across all parties to get big things done for Canadians. I expect you to maintain constructive relationships with your Opposition Critics and coordinate any legislation with the Leader of the Government in the House of Commons. As Minister, you are accountable to Parliament both individually, for your style of leadership and the performance of your responsibilities, and collectively, in support of our Ministry and decisions taken by Cabinet. Open and Accountable Government sets out these core principles and the standards of conduct expected of you and your office. I expect you to familiarize yourself with this document, which outlines my expectations for each member of the Ministry.
Our platform lays out an ambitious agenda. While finishing the fight against the pandemic must remain our central focus, we must continue building a strong middle class and work toward a better future where everyone has a real and fair chance at success and no one is left behind.
As Deputy Prime Minister, you will work in close collaboration with me in setting and implementing our Government’s agenda. At the core of our work is continuing to have Canadians’ backs. In your capacity as Minister of Finance, your immediate priority is to ensure targeted supports remain available, as needed, for Canadians and businesses that continue to struggle as we finish the fight against COVID-19. I also expect you to bolster inclusive economic recovery and growth that supports our efforts to achieve our 2030 climate goals and accelerates the transition to a net-zero economy no later than 2050. Furthermore, you will work to make life more affordable for middle class Canadians and their families, including building off our sustained investment in early learning and child care and taking significant action on housing affordability, while maintaining our sound fiscal trajectory.
To realize these objectives, I ask that you achieve results for Canadians by delivering the following commitments.
- Continue to ensure the overall fiscal health of the government, including by working to implement the fiscal plan outlined in Budget 2021 and driving a plan for long-term economic growth.
- Support the Minister of Health and the Minister of Mental Health and Addictions and Associate Minister of Health in advancing our renewed commitment to work in partnership with and increase funding to provinces and territories to strengthen our universal public health system, including by establishing the new Canada Mental Health Transfer.
- Top up the Safe Return to Class Fund for ventilation improvement projects across Canada, provide funding for First Nations to improve indoor air quality in on-reserve schools, and introduce a tax credit for small businesses to make it easier for them to invest in better ventilation.
- Increase the Eligible Educator School Supply Tax Credit to 25 per cent, expand eligibility to include tech devices, and ensure that teaching supplies purchased for employment duties are eligible no matter where those duties are performed.
- Continue to support business recovery and workers, including by securing the passage of and implementing legislation that extends the Canada Recovery Hiring Program, introduces temporary rent and wage supports for the hard-hit tourism and hospitality sectors and arts and culture industries, and provides emergency support to businesses and workers in the event of future public health lockdowns.
- Ensure that all Canadians and businesses contribute their fair share to a stronger economic recovery by:
- Introducing legislation to raise the corporate income tax payable by banks and insurance companies that earn more than $1 billion and requiring them to pay a temporary Canada Recovery Dividend;
- Establishing a minimum 15 per cent tax rule for top-bracket earners;
- Implementing a tax on luxury cars, boats and planes;
- Investing in the Canada Revenue Agency to close the tax gap and combat aggressive tax planning and avoidance; and
- Modernizing the general anti-avoidance rule regime to focus on economic substance and restrict the ability of federally regulated entities, including financial institutions such as banks and insurance companies, to use tiered structures as a form of corporate tax planning that flows Canadian-derived profit through entities in low-tax jurisdictions in order to reduce taxes back in Canada.
- To protect Canadian supply chains and ensure that Canada’s trading relationships are mutually beneficial economic relationships, work with the Minister of International Trade, Export Promotion, Small Business and Economic Development to introduce a reciprocal procurement policy that will ensure goods and services are procured from countries that grant Canadian businesses a similar level of market access.
- To address labour shortages and help businesses grow, introduce a Labour Mobility Tax Credit of up to $600 a year for workers in the building and construction trades in eligible travel and temporary relocation expenses, and a Career Extension Tax Credit of up to $1,650 a year for seniors who want to stay in the workforce. You will be supported in this work by the Minister of Labour.
- Work with me to champion the adoption of a global minimum standard on carbon pricing while continuing to consult with Canadians and actively engage with provinces, territories and key trading partners, including the United States and the European Union, to inform the development of an approach to applying Border Carbon Adjustments to imports from countries that are not doing their part to reduce carbon pollution and fight climate change. Consider applying Border Carbon Adjustments to emissions-intensive imports, such as steel, cement and aluminum.
- Ensure budgetary measures are consistent with the Government’s climate goals and the legislated requirement to achieve net-zero emissions by no later than 2050. To support these efforts and foster jobs and growth across industries, regions and supply chains, make appropriate investments to achieve a 100 per cent net-zero electricity system by 2035, accelerate the adoption of zero-emissions vehicles and other clean technologies, and advance the decarbonization of buildings and broader industry.
- Work with the Minister of Environment and Climate Change, and with the support of the Minister of Natural Resources, to accelerate our G20 commitment to eliminate fossil fuel subsidies from 2025 to 2023, develop a plan to phase out public financing of the fossil fuel sector, including by federal Crown corporations, and eliminate flow-through shares for oil, gas and coal projects.
- Introduce an investment tax credit for capital invested in Carbon Capture, Utilization and Storage projects.
- In support of comprehensive action to achieve a Just Transition, help ensure that workers and communities prosper as we move to net-zero by working with the Minister of International Trade, Export Promotion, Small Business and Economic Development to establish a new Futures Fund for Alberta, Saskatchewan and Newfoundland and Labrador that supports local and regional economic diversification and place-based strategies. You will be supported in this work by the Ministers responsible for the Atlantic Canada Opportunities Agency and Prairies Economic Development Canada, the Minister of Rural Economic Development and the Minister of Tourism and Associate Minister of Finance.
- Support clean energy and clean technologies by introducing additional investment tax credits for renewable energy and battery storage solutions; doubling the Mineral Exploration Tax Credit for minerals essential to the manufacture of vital clean technologies; and establishing an investment tax credit of up to 30 per cent for a broad range of clean technologies, both market-ready and emerging, to be identified in ongoing consultation with experts.
- Supported by the Minister of Environment and Climate Change, work with provinces and territories to move toward mandatory climate-related financial disclosures based on the Task Force on Climate-related Financial Disclosures framework and require federally regulated institutions, including financial institutions, pension funds and government agencies, to issue climate-related financial disclosures and net-zero plans.
- Launch an annual program of green bond issuances with an initial issuance of $5 billion; and consult with financial experts, including the Sustainable Finance Action Council, to develop a net-zero capital allocation strategy to accelerate Canada’s transition to a prosperous net-zero future.
- To extend the life of home appliances, introduce a 15 per cent tax credit of up to $500 to cover the cost of repairs performed by technicians.
- Support first-time home buyers by introducing legislation to double the First-Time Home Buyers’ Tax Credit; working with financial institutions to create a tax-free First Home Savings Account; and, as an option to the current shared-equity mortgage, developing with the Canada Mortgage and Housing Corporation (CMHC) a loan program, repayable only at the time of sale.
- Support home owners by introducing legislation to double the Home Accessibility Tax Credit and to establish a new Multigenerational Home Renovation tax credit; and ensure CMHC undertakes a review of its insurance policies to assess whether such policies are appropriately supportive of CMHC’s aspiration that, by 2030, everyone in Canada has a home that they can afford and that meets their needs.
- Support the Minister of Housing and Diversity and Inclusion in making critical investments and priority policy decisions to expand Canada’s housing supply, and in continuing to advance our investments in affordable housing and extending the model of co-operative housing to new communities.
- In support of a Fairness in Real Estate Action Plan, work with the Minister of Housing and Diversity and Inclusion to deter “renovictions” and address housing affordability in Canada, including by:
- Introducing amendments to the Income Tax Act to require landlords to disclose in their tax filings the rent they receive pre- and post-renovation and to pay a proportional surtax if the increase in rent is excessive;
- Establishing an anti-flipping tax on residential properties, requiring properties to be held for at least 12 months;
- Implementing Canada’s tax on non-resident, non-Canadian owners of vacant, underused housing, and subsequently working to include foreign-owned vacant land within large urban areas;
- Reviewing and considering possible reforms to the tax treatment of Real Estate Investment Trusts, reviewing the down payment requirements for investment properties, and developing policies to curb excessive profits while protecting small independent landlords;
- Considering measures to increase consumer protection and transparency in real estate transactions, including a ban on blind bidding;
- Identifying how federal regulators can be better positioned to respond to housing price fluctuations and to help ensure a more stable Canadian housing market; and
- Establishing a ban on foreign investment capital in non-recreational residential property for the next two years.
- Advance the priority of Indigenous communities to reclaim full jurisdiction over tax matters.
- Support the Minister of Intergovernmental Affairs, Infrastructure and Communities in work to continue to ensure the Canada Infrastructure Bank has the support it needs for its core purpose of attracting private sector and institutional investment to expand the scope of public infrastructure investment in Canada, in line with the Government’s public policy objectives.
- Continue to work with our global partners to bring the new OECD/G20 agreement on tax reform related to the world’s largest corporations into effect and then legislate its implementation, while also moving ahead with legislation to implement a Digital Services Tax to come into effect in 2024 if the treaty is not in force.
- To boost business investment and productivity, introduce amendments to the Income Tax Act to allow privately owned, Canadian-controlled businesses to expense up to $1.5 million of growth-enhancing investments, such as software, patents and machinery; and reform the Scientific Research and Experimental Development Program to reduce red tape, align eligible expenses with today’s innovation and R&D, and make the program more generous for companies that take the biggest risks.
- Introduce a one-time income tax deduction for health care professionals who are just starting out in their careers to help with the costs of setting up their practice in a rural community.
- Introduce amendments to the Income Tax Act to make anti-abortion organizations that provide dishonest counselling to pregnant women about their rights and options ineligible for charitable status, and to expand the Medical Expense Tax Credit to include costs reimbursed to surrogate mothers for IVF expenses. You will be supported in this work by the Minister for Women and Gender Equality and Youth.
- Move forward with a national tax on vaping products.
- Convert the Canada Caregiver Credit into a refundable tax-free benefit, allowing caregivers to receive up to $1,250 a year.
- Work with provinces and territories over the next review cycle to increase the Canada Pension Plan and Quebec Pension Plan survivor’s benefit by 25 per cent.
- Move forward on our commitment to adapt and apply the Canada Business Corporations Act diversity requirements to federally regulated financial institutions to ensure diversity in senior ranks.
- Require federally regulated financial institutions to offer flexible repayment options to individuals who face a life event causing financial stress, including a six-month deferral of mortgage payments in qualifying circumstances.
- Establish a permanent Council of Economic Advisors to provide the Government with independent advice and policy options on long-term economic growth that will help Canada achieve a higher standard of living, better quality of life, inclusive growth and a more innovative and skillful economy.
- Establish a single, independent ombudsperson, with the power to impose binding arbitration, to address consumer complaints involving banks.
- Crack down on predatory lenders by lowering the criminal rate of interest.
- Advance legislation to enhance the powers of the Financial Consumer Agency of Canada to review bank fees and charges and to require adjustments if they are excessive.
- Support the Minister of Public Safety in their work to consider options to strengthen laws and investigative powers related to major financial crimes and to bring forward a proposal to establish a Canada Financial Crimes Agency.
- Work with the Minister of Innovation, Science and Industry, and with the support of the Minister of National Revenue, to implement a beneficial ownership registry.
- Continue to engage with stakeholders to lower the average overall cost of interchange fees for merchants, proceeding in a way that ensures small businesses benefit from this work and protects existing reward points of consumers.
As Minister, you are also responsible for actively engaging with your Cabinet and Caucus colleagues. As we deliver on our platform commitments, it will be important that members of the Ministry continue to collaborate and work constructively to support rigorous and productive Cabinet decision-making. I expect you to support your colleagues in delivering their commitments, leveraging the expertise of your department and your own lived experiences.
To best achieve results for Canadians, Ministers must be rigorous and coordinated in our approach to implementation. I would therefore ask that you return to me with a proposed approach for the delivery of your mandate commitments, including priorities for early implementation. Furthermore, to ensure we are accountable for our work, I will be asking you to publicly report to me, and all Canadians, on your progress toward these commitments on a regular basis.
As we have been reminded throughout the pandemic, adapting to change is not only something government should do, it is something government must do. As you work to fulfil our commitments, I expect you to actively consider new ideas and issues as they emerge, whether through public engagement, your work with Parliamentarians or advice from the public service. I also expect you to work with your Deputy Minister to assess priorities on a continual basis as we build a better future for all Canadians. In addition to achieving results, you are responsible for overseeing the work of your department and ensuring the effective operation of your portfolio.
As you staff your office and implement outreach and recruitment strategies for federally appointed leadership positions and boards, I ask that you uphold the principles of equity, diversity and inclusion. This helps ensure that federal workplaces are dynamic and reflective of the Canadians we serve. You will also ensure your Minister’s office and portfolio are reflective of our commitment to healthy and safe workplaces.
Canadians expect us to work hard, speak truthfully and be committed to advancing their interests and aspirations. When we make mistakes – as we all will – Canadians expect us to acknowledge them, and most importantly, to learn from them.
I know I can count on you to fulfill the important responsibilities entrusted in you, and to turn to me early and often to support you in your role as Minister.
Rt. Hon. Justin Trudeau, P.C., M.P.
Prime Minister of Canada