Federal budget shifts focus of trade infrastructure fund to supply-chain

The National Trade Corridors Fund will see an injection of $450 million over five years and be “rebranded” to shift focus on bolstering the supply chain, the federal budget released April 7 said.

This was among the budget’s elements dedicated to Canada’s trade transportation and logistics network. The budget also included $136 million, over five years, to assist industry to develop data-driven solutions to the improve supply chain efficiency.

“We’ll await further details on the federal government’s plan for the Trade Corridors Fund, but we will also step up the advocacy for a significant recapitalization of that program to improve the movement of goods on our transportation network,” MHCA President Chris Lorenc said.

The MHCA and its Western heavy construction association counterparts have led a proposal called the Western Canada Trade Gateway and Corridor Initiative, to boost investment in the transportation network. The proposal looks to increasing Canada’s trade productivity and capitalizing on Western Canada’s links to the Asian markets to diversify the country’s global trade relationships.

The federal government missed an important commitment in the budget, namely to grow the economy and to harness the incredible importance that that trade plays as a percentage of GDP to grow the economy, Lorenc said.

“Respectfully, adding less than half a billion to fund trade gateways & corridors is to admit that trade investments are of little to no importance to federal thinking. The goose — trade – that has laid the golden egg of prosperity is being starved of capacity to lay more eggs.”

The Liberal government also announced that it would accelerate the deadline by which the provinces must fully commit to their allotment in the Investing in Canada Infrastructure Program (ICIP). That deadline has been moved up to March 31, 2023, after which Ottawa says it will reinvest funding elsewhere.

Manitoba has said it is fully committed its allotment under ICIP, as of last December, but is awaiting federal approval of the projects it submitted.

Much of the budget’s focus on infrastructure investment was tied to the need for increased affordable housing.

Other elements in the budget of interest to the industry revolve around the federal government’s focus on a shift to a green economy.

It’s agenda to move toward “net zero” – reducing greenhouse gas emissions to reduce the carbon footprint – included regulatory changes and purchase incentives for light, medium and heavy-duty zero-emission vehicles (ZEVs). In addition to extending the current $5,000 purchase incentive for eligible vehicles until March 2024, the budget included:

• A sales mandate to ensure at least 20% of new light-duty vehicle sales will be zero-emission vehicles (ZEVs) by 2026, at least 60% by 2030 and 100 per cent by 2035.
• A goal to achieve 35% of total MHDV sales being ZEVs by 2030, to reduce emissions from medium- and heavy-duty vehicles
• Developing a medium- and heavy-duty ZEV regulation to require 100% MHDV sales to be ZEVs by 2040 for a subset of vehicle types based on feasibility, with interim 2030 regulated sales requirements that would vary for different vehicle categories based on feasibility, and explore interim targets for the mid-2020s

Purchase incentives, starting in 2022-23, for medium- and heavy-duty ZEVs, will largely focus on the long-haul trucking industry:

• $547.5 million over four years, starting in 2022-23, to Transport Canada to launch a new purchase incentive program for medium- and heavy-duty ZEVs.
• $33.8 million over five years, starting in 2022-23, with $42.1 million in remaining amortization, to Transport Canada to work with provinces and territories to develop and harmonize regulations and to conduct safety testing for long-haul zero-emission trucks.
• $199.6 million over five years, starting in 2022-23, and $0.4 million ongoing, to Natural Resources Canada to expand the Green Freight Assessment Program, which will be renamed the Green Freight Program. This will support assessments and retrofits of more vehicles and a greater diversity of fleet and vehicle types

For further information on the federal budget, click here to see the Canadian Chamber of Commerce’s synopsis.