Tag: Federal Budget

Budget 2018: Big on Spending, Short on Growth

Budget 2018 is primarily about spending—new spending initiatives and enhanced spending for programs that aim to support low-wage Canadians, address gender inequality, support First Nations development, strengthen indigenous rights and self-determination, promote skills and research, improve health and environmental stewardship and enhance justice and security.

Some of the spending initiatives announced in the budget will help business, particularly women entrepreneurs and small businesses, but they are limited in scope. There are also some important improvements in government policies—particularly with respect to the tax treatment of small business and the simplification of business support programs.

The government is intent on tightening tax rules and clamping down on tax avoidance. It should be focused even more intently on bringing its books back to balance and creating a tax and regulatory environment to support business investment and economic growth.

The budget projects the federal debt will increase by almost $80 billion over the next five years, although the government’s debt-to-GDP ratio is expected to decline slightly, thanks to continued strong economic performance. The government is counting on a buoyant economy to fund its spending initiatives and meet its fiscal targets. Its rosy economic assumptions will be put to the test by the risks it identifies itself in the budget—growing protectionism and uncertainty over NAFTA negotiations, tightening monetary policies worldwide and the risk higher interest rates pose for an already overextended household sector in Canada. Recent U.S. tax reforms are another serious risk to business investment in Canada that is missing from the budget’s calculations—we are awaiting further analysis.

Higher interest rates are certain to throw the government off its fiscal course—a 1% increase in the cost of borrowing alone translates into a $3-billion increase in the federal deficit over a period of five years. But, what is even more of a concern is that the government now has very little room to respond to an economic slowdown or any other problem affecting the Canadian economy. The leeway it has enjoyed to reduce taxes and increase spending in an era of low interest rates is quickly coming to an end.

Now, more than ever, Canada needs to undertake a comprehensive review of its tax competitiveness—and act with urgency to implement measures that will retain and attract business investment in Canada. That is the only way we can shield the Canadian economy against the headwinds that lie ahead. And, ultimately, it is the only way we will be able to pay for the government’s ambitious spending plans.

Read the full Chamber Analysis.

2017 Federal Budget: Work in Progress for Oakville’s Business community

The Oakville Chamber of Commerce is encouraged by the focus on skills development, but calls for increased investment in competitiveness trade-enabling infrastructure.

Yesterday afternoon, the federal government released their 2017 budget. The Oakville Chamber of Commerce welcomes the Government of Canada’s decision to focus on skills and innovation; however, the Budget delivers underwhelming implications for Oakville’s business community. Oakville’s businesses face more regulation and increased costs imposed by all levels of government for fees, taxes and essential inputs, like electricity. The Oakville Chamber believes more urgency is needed in reducing business costs and improving competitiveness. The Oakville Chamber has heard from its members for the need to address the current skills gap and has advocated this to all levels of government. The Chamber is encouraged with the Budget’s plan to invest $225 million over four years, starting in 2018-2019, to develop an organization which has three main goals: identify the skills sought and required by Canadian employers, explore new and innovative approaches to skills development, and share information and analysis to help future skills investments and programming. The Oakville Chamber is also encouraged with the Budget’s increased funding for work-integrated learning, which aligns with their policy priorities for 2017.
“Addressing the current skills gap is essential to creating a sustainable workforce. Our members have been asking for this type of investment and we are pleased to see the federal government delivering” stated John Sawyer, President of the Oakville Chamber of Commerce.
Investing in the workforce helps create a competitive advantage, however; there is a pressing need for investment in trade-enabling infrastructure. The Oakville Chamber has been urging investment in the type infrastructure that will boost productivity.
“From our 2016 Advocacy Survey, our members stated the need for infrastructure investments in Oakville. In particular, their top three infrastructure priorities were all transportation related. They are local roads and bridges, public parking and transit” stated Faye Lyons, Vice President Government Relations & Advocacy, Oakville Chamber of Commerce. “Increased spending must be directed towards this kind of trade-enabling infrastructure that can transition our economy to an innovative and high-growth phase.”
Unfortunately, these types of investments represent just 11% of the total $120 billion in infrastructure spending. The Oakville Chamber is concerned about the lack of funding for this type of infrastructure in the Budget. Trade-enabling infrastructure delivers a significant return on investment and responds to the need for Canadian goods in the global market. Lastly, the Oakville Chamber would like to see the federal government recognize the increasing cost to doing business in Oakville, Ontario and Canada. In our 2016 Advocacy Survey our members stated rising costs as the most significant factor impacting business and industry, and this is an unfortunate reality faced by businesses across the province and throughout Canada. While the Oakville Chamber applauds the federal government for its focus on skills development and innovation, the infrastructure gap and the rising cost of doing business must be addressed in order for Oakville’s, Ontario’s and Canada’s businesses to be competitive. Read the full Budget 2017 Analysis by the Chamber.