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Federal Budget Cautious Bridge To Better Economy PDF Print E-mail


We applaud the government’s measures to assist small and medium size businesses, and are particularly pleased with their support for innovation, reducing the regulatory burden, improving the availability of credit, reducing the tax compliance and administrative burden facing businesses. Over the long run, I believe that’s going to result in much higher business performance, a more competitive economy and greater productivity.”

The government has recognized the need for providing competitive advantages for Canadian business through:
  • staying the course of corporate income tax reductions
  • extending the accelerated capital cost allowance, mentioned in previous budgets, for investments in clean energy generation
  • eliminating all remaining tariffs on productivity improvements on machinery and equipment, and goods imported for further manufacturing in Canada, creating a total country tariff-free zone for manufacturers
  • continuing the business credit availability program
  • the creation of the “Vehicle and Equipment Financing Partnership Program” to be managed by BDC, ensure that businesses of all sizes have adequate financing to acquire vehicles and equipment to compete better when the economy recovers
  • development of a Digital Economy Strategy for the Information and Communication Technology sector to create new products and services, accelerate adoption of digital technologies, contribute to improving Cyber Security practices for both industry and consumers
  • creating a Red Tape Commission to reduce the regulatory and compliance burden on all business

Even though the Federal debt is forecast to increase to $622 billion by 2015, the debt to GDP ratio (which is what international investors look at) is actually dropping. By 2014/15 that ratio will be about 32%, which given our economic circumstances and what is going on globally, will be one of the best debt to GDP ratios in the world.

One key area that underpins the success of this budget is control of spending.  There is concern that the spending increase target of less than 1% is overly ambitious. Generally, spending in Canada over the last decade has been increasing at between 6% and 8% per year, and to go from that magnitude to less than 1% is going to be extremely difficult.  This will be a major challenge indeed that we will be watching closely.

It is an understatement to say we’ve been through some very difficult times, and we have some challenges yet ahead.  However, we see this budget as a plan that is supportive of a delicate, slowly strengthening economy, while remaining fiscally responsible. 


You can read the Canadian Chamber of Commerce response to the budget in this Adobe Acrobat file.
 

Surrey Board of Trade