On 27 January 2009, the Canadian Government released its proposed budget for the 2009 fiscal year. This budget must be approved by Parliament, which is not a certainty because of the present government's minority position. However, the budget contains a number of new and expanded initiatives to help address the financial crisis and the present recession. The following is a brief summary of a few of the initiatives to address the financial crisis.

The Insured Mortgage Purchase Program (IMPP) will be increased by Can$50 billion from Can$75 billion to Can$125 billion. The IMPP is administered by Canada Mortgage and Housing Corporation, a wholly owned Crown corporation. It involves the purchase of pools of insured residential mortgages from Canadian mortgage lenders. The goal of this initiative is to increase liquidity and lending by the major institutions.

A new Canadian Secured Credit Facility (CSCF) will be created. Under the CSCF, the government will purchase from banks and other regulated financial institutions up to Can$12 billion worth of securities that are backed by auto loans and leases on vehicles and equipment. The banks and other regulated financial institutions are then expected to increase the credit available to the dealers to finance their own operations, as well as increase lending for car loans and leases.

Other measures introduced include the raising of the amount of capital and liabilities that Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) can potentially have. It will also allow EDC, a financier and insurer to exporters, to support financing in the domestic Canadian market, including accounts receivable insurance, for a period of two years. EDC and BDC's authorised capital limits will double, to Can$3 billion apiece, while EDC's liability limit rises from Can$30 billion to Can$45 billion, and the BDC limit rises from Can$13 billion to Can$20 billion. Additionally, through a newly created Business Credit Availability Program, BDC and EDC will provide at least Can$5 billion in loans and credit support at market rates to companies that are having trouble obtaining loans.

The Canadian Lenders Assurance Facility, a programme designed to guarantee the debt of banks and other qualifying deposit-taking institutions and assist them in obtaining access to the wholesale lending market, will be extended from 30 April 2009 to the end of December 2009. It will also create a similar programme, called the Canadian Life Insurers Assurance Facility, for life insurers.

For small businesses, there will be an increase in the maximum loan a company can access under the Canada Small Business Financing Program as of April. The limit will be raised from Can$250,000 to Can$350,000, and will double to Can$500,000 for loans that are taken out to buy real property. Together with an increase in the amount of losses that will be reimbursed, this is expected to result in more than Can$300 million in additional financing.

The financial crisis in Canada, which brought both a decline in the equity markets and interest rate fluctuations, has led to poor individual investment performance in defined contribution plans, and, more markedly, large deficits in defined benefit plans at a time when most plan sponsors are ill equipped to deal with them.

Most jurisdictions in Canada currently require that all defined benefit pension plans must be fully funded over time. If a plan valuation reveals a deficit on an ongoing basis, that deficit must be amortised over fifteen years. If that valuation reveals a deficiency on a "solvency" basis, that is, on the assumption that the pension plan is wound up as at the date of the valuation, that deficiency must be amortised over five years. During times of economic crisis, especially with low interest rates, it can be very difficult for corporations to make these so-called "special payments" to amortise these pension funding deficiencies. Currently, several jurisdictions have enacted or proposed legislation to allow plan sponsors to extend the solvency amortisation period to ten years, if certain conditions, such as consent from the plan membership and disclosure requirements, are fulfilled. Some jurisdictions are contemplating the use of letters of credit to satisfy funding obligations.

In an insolvency, recent amendments to the Bankruptcy and Insolvency Act provide that unpaid pension plan contributions are granted a super-priority charge over all of the assets of the employer where the employer is bankrupt or in receivership proceedings, with certain exceptions. This does not include special payments, including those required to fund a solvency deficiency. In Ontario, the only province with such an entity, the pension payments to plan members may be covered by the Pension Benefits Guarantee Fund, up to a maximum of Can$1,000 per month.