It's critical that British Columbia remain competitive with the United States, business groups are telling federal Finance Minister Ralph Goodale as he prepares the budget to be presented Feb. 23 in the House of Commons.
But competitiveness is just part of the wish list from B.C. businesses for the upcoming federal budget. While they say they want tax cuts to ensure they can compete in an increasingly global marketplace, concern is also being expressed about the effects of the Kyoto accord.
"Taxes are probably the No. 1 priority for any business looking for a level playing field," says John Winter, president and CEO of the BC Chamber of Commerce, a federation of 130 chambers across the province that represents more than 28,000 businesses.
Winter is calling for more tax reform and points to the surge in the Canadian dollar last year as one reason why it is harder for business to compete with its neighbours to the south. "We have to find ways to compensate for that and (cutting) taxation is one," says Winter.
However, Winter isn't optimistic that Ottawa will come through with what is needed.
"I think we're seeing signs of the issues that are going to appeal to this minority government - social and moral issues as opposed to economic issues. I'm not sure we elected the government to focus on that, but that seems to be the reality," says Winter. "We need a lot more focus with the United States, our biggest trading partner."
Unease is also being raised in B.C.'s business community about the Kyoto accord and its implementation.
"We're very concerned about Kyoto imposing additional costs and regulations that will be very difficult to comply with. At this point in time, it will render Canadian businesses non-competitive," says Winter. "B.C. has a growing energy sector and we've got a significant resource base extraction industry, which will be negatively impacted."
Meanwhile, in Alberta, Calgary Chamber of Commerce president Murray Sigler says the accord doesn't address either the need for business to be competitive or to practise responsible environmental leadership.
Both the Calgary and Edmonton chambers have asked Goodale to lower taxes. The Calgary chamber wants the corporate tax rate cut to 17 per cent. Alberta business is also telling Goodale that he needs to accelerate debt payments, reduce employment insurance (EI) premiums and do something about the costs of airport rents, which are soaring across the country.
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 B.C., with 10,000 CFIB members, the numbers are slightly different from the national breakdown. Of every dollar, B.C. businesses wanted 51.5 cents to go to debt reduction and 15.8 cents to program spending. When it comes to reducing taxes, nationally 33 per cent of CFIB members marked that as a priority. In B.C., the number was 32.6 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 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 federal 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."
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.
