Canada's economic engine needs to be refuelled, business groups are telling federal Finance Minister Ralph Goodale as he prepares the budget to be presented Feb. 23 in the House of Commons.

Toronto contributes $35 billion a year in tax revenue to the federal and provincial governments, money that is used to fund public services for people from coast to coast to coast, says the Toronto Board of Trade (BOT).

But it only receives $26 billion in return, says BOT president and CEO Glen Grunwald. "That $9-billion difference is roughly equivalent to the surplus the federal government has. We need to fund the engine, the engine is sputtering right now," says Grunwald. "It needs some servicing. It has been ignored over the past couple of years."

The BOT's pre-budget submission to Goodale includes 22 recommendations, ones that the board says will strengthen Toronto, and, in turn, Canada. It wants action immediately on sharing the federal gas tax revenue, investing in key areas such as public transit and housing, and improving the immigration system to better integrate skilled workers.

Glen Grunwald, persident and CEO of the Toronto Board of Trade

The announcements Ottawa has already made as far as sharing revenues from the federal gas tax are positive, says Grunwald, but he stresses that the money is needed sooner rather than later and that it must be devoted to public transit.

Not only is the Toronto Transit Commission facing funding problems, he adds, its moves to cut back services and raise fares will be counterproductive to getting people out of cars and into public transit.

"We would encourage (the finance minister that) the federal gas tax monies should be split up primarily on a ridership basis," says Grunwald, pointing to BOT figures that show while Toronto has about eight per cent of Canada's population, it accounts for 27 per cent of Canada's transit riders.

"Business needs to operate efficiently and we can't if we don't have the appropriate roads or public transit to get people to and from work and move goods efficiently."

The BOT also wants quick action to bring more skilled workers into the country and to get them into the workforce sooner. An irritant for the BOT is that Quebec gets more to help with settlement-related funding, and it would like to see additional money coming Ontario's way.

CFIB's Andre Piche says members want new five-year tax reduction plan.

Grunwald is also hoping for movement from Ottawa that will push forward Toronto's stalled downtown waterfront redevelopment.

It is calling on the federal government to produce the money it has previously committed to redevelopment of the waterfront as soon as possible.

"It's probably the largest downtown revitalization project in the past 50 years - around the world. It's bigger than (London's) Canary Wharf," says Grunwald.

But the BOT, Canada's largest local chamber of commerce with more than 10,000 members, also wants action on lowering taxes and reducing public debt, two items that have an even stronger profile out West.

With more than $60 billion slashed from the federal debt, the BOT praised Ottawa for its "successes to date in reducing the public debt" but asks that the federal government maintain its commitment to reducing the debt-to-GDP ratio to 25 per cent within 10 years.

Both the Calgary and Edmonton chambers of commerce have taken similar stances.

The BOT is also recommending that Ottawa take immediate action on promises to cut corporate taxes and eliminate the capital gains tax.

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, the CFIB's national director who is based in Ottawa.

CFIB members also want to see corporate taxes cut. They'd like to see the small-business tax deduction increased to $400,000 from $300,000, in part to account for inflation and in part to allow small businesses to grow into medium-sized ones, says Piche.

Nationally, CFIB members want to see 49 cents of every dollar applied to the federal debt and another 18 cents to program spending.

In Ontario, with 41,000 CFIB members, those numbers were similar to the national breakdown. Of every dollar, Ontario businesses wanted 49.9 cents to go to debt reduction and 17.6 cents to program spending.

When it comes to reducing taxes, nationally 33 per cent of CFIB members marked that as a priority. In Ontario, the number was 32.5 per cent.

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 budget 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.

Meanwhile, the rising cost of airport rents is also a budget concern.

Canadian Airports Council (CAC) chairman Reg Milley has met with both Transport Minister Jean Lapierre and Goodale, and says both have assured him they see rents as a major issue. "I'm very hopeful that we're going to see something in this budget that's going to be handed down that address this problem.

"Not only is the quantum of rent that they (the federal government) take out of the system too much but the distribution of it doesn't make any sense," says Milley, who is also CEO of Edmonton Airports. "You have an airport like Ottawa with three million passengers paying just about $12 million annually in rent and you've got an airport like Halifax with pretty close to the same number of passengers paying $4 million in rent. You also have an airport like Toronto paying $145 million in federal rent - they've conducted a study that shows their (aeronautical fees) are the second highest in North America. If federal rent was eliminated they'd move down below the middle of the pack."

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 the hikes in the consumer price index. 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.

(Laura Severs can be reached at laura@businessedge.ca)