While last week’s federal budget drew general praise for prudent fiscal management, differences of opinion on its usefulness divided business associations and industry.
The Alberta Chambers of Commerce (ACC) charged the ‘election-style budget’ largely shut out business.
ACC president Irene Pfeiffer said business needed much more than it was given. “The productivity gap between Canada and the U.S. continues to widen, which is a paramount concern as the U.S. economy continues to rebound,” she said.
Pfeiffer warned the Liberal government’s failure to provide business with a meaningful cuts to employment insurance premiums and corporate taxes puts a number of the budget’s economic assumptions at risk. Canadian Manufacturers and Exporters (CME) took a similar view, saying the measures introduced by Ottawa will have a “low impact” on Canada’s economic prospects at a time of growing uncertainty.
“The federal budget is an action plan without much action,” said Perrin Beatty, president and CEO of CME. “The limited measures in this budget will make little difference to the future of Canada’s largest business sector.” Federal Finance Minister Ralph Goodale is forecasting a balanced budget for the next two years, with spending growth to be roughly in line with economic growth. The government is allocating $4 billion for a contingency fund and debt reduction.
While noting with approval the federal budget’s focus on financial management and prudence, the Edmonton Chamber of Commerce was disappointed by Ottawa’s failure to more forcefully reduce debt.
CATAAlliance, Canada’s largest high-tech association, liked the budget’s more generous provisions for the depreciation of computer equipment and investment in data network infrastructure, saying the changes will stimulate demand for members’ products.
CATA’s view was echoed by the Investment Dealers Association of Canada (IDA). Canada’s treatment of depreciation has become outdated for a wide variety of equipment, said the IDA.
