Despite slashing more than $60 billion from the federal debt, Ottawa must do more to curb the nation's accumulated debt, Alberta stakeholders say.
It's a strong message being sent by business groups to federal Finance Minister Ralph Goodale as he prepares his budget, which will be presented Feb. 23 in the House of Commons.
Accelerated debt repayments are just part of the wish list from Alberta companies and organizations. They are also seeking tax cuts - including lower unemployment insurance rates - and reassurance about issues such as the Kyoto accord and soaring airport rents.
The bottom line, according to the business community, is that the overall corporate climate must remain competitive in the world marketplace.
In a letter sent to Goodale, the Calgary Chamber of Commerce states it is imperative that debt payments be stepped up aggressively. "Economic expansion does not continue indefinitely. Recessions occur somewhat unexpectedly and we must be in a position to weather the next one," chamber executives wrote recently.
That position is echoed by the Edmonton Chamber of Commerce, which has asked the minister to hasten debt repayment so that, by 2013, debt as a percentage of gross domestic product (GDP) is capped at a maximum of 25 per cent.
Last year, the federal debt-to-GDP ratio stood at 41 per cent, compared to 68 per cent in 1995. Last March, Goodale pledged to lower it to the 25-per-cent level within 10 years.
However, cutting the debt is just one aspect of what Goodale needs to put on the table if his budget is going to be successful, says Murray Sigler, president and CEO of the Calgary chamber.
"We're pleased that the Government of Canada has been running surpluses, so we're in pretty good fiscal shape as a country. Given the size of our surplus, we're calling on the government to reduce taxes, both corporate and personal," says Sigler.
"We think government spending should be held in line. That's why we believe they can look at the tax levels. We don't think they need to increase their program spending by more than three per cent," he adds. "We would be upset if we saw them just spend, spend, spend."
Sigler points out that because this is a minority government, that possibility exists. "A minority government has a tendency to spend more than if it were a majority. Often majority governments make some tough decisions in the first year or two of their tenure. They (a minority) might try to please everybody and spend more."
Specifically, the Calgary chamber wants the corporate tax rate cut to 17 per cent. This, combined with its recommendation for the provincial rate to be pegged at eight per cent, would create a competitive taxation level of 25 per cent.
When it comes to managing the employment insurance (EI) fund, changes are required, says the Edmonton chamber, which is calling for immediate premium reductions to eliminate any surplus in annual operations of the fund.
EI premium reductions also top the budget wish list of the Calgary-based Progressive Group for Independent Business (PGIB).
"There's been a surplus in the EI account for years," says executive director Craig Chandler, who refers to the excess funds as "over-taxation.”
The PGIB is seeking a premium reduction of at least 25 per cent.
Quicker debt repayment is No. 2 on the PGIB's wish list, followed by an independent forensic audit of government programs. Chandler says this would allow the government to find out where spending should or could be cut and would not be done by the auditor general.
"When it comes to red tape, they (Ottawa) cut it lengthwise rather than in half. We need to get people who are in the private sector, who understand budgets and accounting, to analyse the structure of our federal government," says Chandler, adding his group would be happy to offer this service to Ottawa free of charge.
At the Canadian Federation of Independent Business (CFIB), national affairs director Andre Piche says the organization's membership of 105,000 small and medium-sized businesses across Canada wants a new five-year tax- reduction plan to replace one that expires this year.
"Our business owners felt this was a very useful planning tool for them. It gave them an idea of what direction the government was heading in," says Piche.
Nationally, CFIB members wanted to see 49 cents of every dollar applied to the federal debt and another 18 cents to program spending.
In Alberta, with 9,200 CFIB members, those numbers were quite similar to the national breakdown. Of every dollar, Alberta businesses wanted 49 cents to go to debt reduction and 15.7 cents to program spending.
When it comes to reducing taxes, nationally 33 per cent of CFIB members marked that as a priority. In Alberta, the number was 35.3 per cent.
On the environmental front, concerns are being raised about the Kyoto accord and its implementation.
"We've expressed our concerns for the need to be competitive and the need to also practise responsible environmental leadership. We think the Kyoto Protocol doesn't address either of those," says Sigler, who notes that the chamber will work closely with the oil and gas sector to let Ottawa know what is or isn't practical.
Meanwhile, the Canadian Association of Petroleum Producers (CAPP) is reiterating its hopes the oilpatch will enjoy a level playing field when it comes to expenditures related to the Kyoto commitment.
"We are not asking for special treatment, subsidies or relief," says CAPP president Pierre Alvarez. "We are asking to be treated fairly."
Meanwhile, airports also must be on the finance minister's radar screen, says the Calgary chamber.
"Airport rents are a major issue for us. Call it what you will, it's another tax and we think it's excessive taxation," said Sigler. "Both Calgary and Edmonton have huge airport rent increases that they're facing in the year or two ahead. If it goes through, it will be a huge negative."
Edmonton Airports president and CEO Reg Milley, who took the helm Feb. 1, has already lobbied Goodale and federal Transport Minister Jean Lapierre on the matter.
"In my capacity as chair of the Canadian Airports Council (CAC), I've met with Minister Lapierre and Minister Goodale on this issue. Both have assured me that they see that it's a major issue and that they've both undertaken to address this," says Milley.
Milley says Edmonton Airports will see the rent it pays to the federal government rise to more than $22 million in 2006. It is paying Ottawa $4.2 million for rent this year.
Collectively, Canadian airports paid Ottawa about $240 million in rent in 2004, a figure that Milley says they've received nothing for in return.
The CAC request, says Milley, calls for an immediate 50-per-cent reduction in rents that would be frozen at that level and only be escalated by passenger growth or hikes in the consumer price index. Further, airports with less than two million passengers a year would be exempt from rent. A second step would be the full elimination of airport rents.
"There is no policy reason why the federal government should be charging us rent on these facilities. These facilities were bought and paid for many times over," says Milley.
