Big spending is on the way: What Canada's 2016 budget means for the work truck industry

By Mike Kastner, NTEA Managing Director

This article was published in the May 2016 edition of NTEA News.

Recently, Canadian Finance Minister Bill Morneau presented the government’s highly anticipated Budget 2016: Growing the Middle Class in the House of Commons. The new budget supports an ambitious agenda that seeks to fulfill key election promises and will see new federal investments in everything from infrastructure, to the creation of the Canadian Child Benefit, to re-engaging indigenous communities. The Liberal Party’s campaign promise of keeping budget deficits to below $10 billion was not kept, with the projected deficit now at $29.4 billion.

Following is a closer look at provisions relevant to the work truck industry: infrastructure, energy and mining.


One of Budget 2016’s largest expenditures is infrastructure, with plans to invest more than $120 billion over the next 10 years, divided into two phases. The first concentrates on Canada’s short-term needs (e.g., upgrading public transit, allotting funds for wastewater facilities, etc.) with investments totaling $11.9 billion over five years and set to begin immediately.

The second phase concentrates on Canada’s long-term infrastructure needs to help create a more modern economy better positioned to capitalize on global trade. Investments will focus on making Canada’s largest cities better places to live through cost-effective, sustainable and integrated transportation networks. This will also create fast and efficient corridors to help Canadian exporters benefit fully from international trade. Noteworthy investments include:

  • $3.4 billion over the next five years, on a cash basis, to maintain and upgrade federal infrastructure assets such as airports and border infrastructure
  • Approximately $3 billion each year in dedicated funding for municipal infrastructure projects through the Gas Tax Fund and the Goods and Services Tax Rebate for Municipalities
  • $9 billion available under New Building Canada Fund’s Provincial-Territorial Infrastructure Component and other existing infrastructure programs
  • $3.4 billion in public transit over three years, starting in 2016 to 2017. Funding will be provided through a new Public Transit Infrastructure Fund
  • Continued investment toward construction of the Gordie Howe International Bridge project between Windsor, Ontario, and Detroit, Michigan, including requests-for-proposals to select private-sector partners for construction and ongoing operation of the new crossing



Canada’s energy sector, particularly Alberta oil sands, has been hit hard by the drop in global oil prices, high labor costs and constraints on infrastructure to move the product to market (i.e., pipelines). Most energy-related commitments in Budget 2016 pertain to increased investment in green and renewable energy technologies to spur energy-sector diversification and combat climate change. New spending includes:

  • $82.5 million over two years to Natural Resources Canada to support the research, development and demonstration of clean energy technologies
  • $128.8 million over five years to Natural Resources Canada to deliver energy efficiency policies and programs to support improved energy efficiency standards and codes for products, buildings, industry and vehicles
  • $56.9 million over two years to Transport Canada and Environment and Climate Change Canada to support the transition to a cleaner transportation sector, including the development of regulations and standards for clean transportation technology
  • $62.5 million over two years to Natural Resources Canada to support infrastructure deployment for alternative transportation fuels, including electric vehicle charging and
    natural gas and hydrogen refueling stations.


Canada heavily relies on its resource extraction and export sector. Although this budget looks toward new industries and technologies, it also builds on Canada’s strengths in more traditional segments. Key investments for this area:

  • One-year extension of the 15-percent Mineral Exploration Tax Credit. This helps junior mineral exploration companies raise capital by providing an incentive to individual investors in flow-through shares issued to finance “grassroots” mineral exploration
  • $1 billion over four years to support clean technology, including in the forestry, fishery, mining, energy and agriculture sectors (specific details are being provided through the government’s Innovation Agenda).

Motor vehicle safety

Motor vehicle safety is one of the priority regulatory areas NTEA monitors and on which it engages policymakers. Budget 2016 proposes $7.3 million over two years to increase inspection capacity and support development of a regulatory framework for emerging technologies, such as automated vehicles.

Looking ahead

The new budget presents a dramatic shift from the previous government. The last time Canada projected double-digit deficits was after the 2008 financial crisis when then-Minister of Finance Jim Flaherty engaged in heavy deficit spending through stimulus packages. The Liberal government has promised to continue reducing the debt to GDP (gross domestic product) ratio, while running deficits for all four years of their mandate.

As the details surrounding specific initiatives are released, NTEA’s government relations office in Ottawa, Ontario, will continue to follow key developments.

If you have any questions regarding the information in this article, please contact Mike Kastner at 202-552-1600 or