The Kelowna Chamber of Commerce has joined the Canadian Chamber in calling the new federal budget a missed opportunity to increase Canada’s competitiveness through tax measures that encourage private sector investment.
The budget, handed down in Ottawa by federal Finance Minister Bill Morneau Tuesday, is primarily about spending, says the Kelowna chamber—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.
“These are all reasonable areas of focus, as are the spending initiatives in the budget that will help business, particularly women entrepreneurs and small businesses, but they are limited in scope,” said the Kelowna chamber in a statement issued Wednesday afternoon.
“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.”
Chamber president Tom Dyas said his organization is pleased there is now greater clarity and simplicity in the government’s plans to change the corporate tax system for Canadian Controlled Private Corporations
“The Kelowna chamber, along with our national network, led the fight against the proposed changes that were first introduced last summer and we’re glad the government has listened and shelved most of the ill-thought-out proposals,” said Dyas.
The Kelowna chamber said it heard from many members between July and January, about what they considered the negative effects the summer tax proposals would have on a range of businesses. Along with the Canadian Chamber of Commerce, and chambers across the country, the the local chamber feel its advocacy efforts turned the tide in Ottawa and many negative aspects of the proposals were removed from the budget.
The Kelowna chamber also agrees with its colleagues at the Canadian chamber who suggest the federal government should be focused 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, if predictions of continued strong economic performance pan out.
“We are concerned that the budget is built on rosy economic assumptions,” said Dyas.
“The financial plan doesn’t appear to factor in that our growth could be put to the test by the risks of growing protectionism in the U.S., uncertainty over NAFTA negotiations, tightening monetary policies worldwide and the risk associated with higher interest rates.”
“Recent U.S. tax reforms present another serious risk to business investment in Canada, which are missing from the budget’s calculations. We await further analysis.”
The federal budget has provided an opportunity for the Kelowna chamber to join the Canadian Chamber again in calling on the Ottawa to undertake a comprehensive review of its tax competitiveness and act with urgency to implement measures that will retain and attract business.
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