Federal budget insufficiently focused on business, says Timmins Chamber

TIMMINS, February 28, 2018—Though there are some measures in the 2018 federal budget that may benefit Timmins businesses and entrepreneurs, it also contains a number of measures that threaten competitiveness and growth, according to the Timmins Chamber of Commerce.

Presented on February 27 by Finance Minister Bill Morneau, the 2018 federal budget makes even more changes to how small businesses are taxed in Canada. While it has simplified its proposed rules around passive investment, the budget also dictates that firms with more than $150,000 in passive investment income will lose access to the small business tax rate.

“While it’s good that the federal government has listened to the national Chamber network in making these rules more focused than what had been announced last summer, there’s still much work to be done on corporate tax rules in Canada,” said Jamie Clarke, president of the Timmins Chamber of Commerce.

“Businesses in Timmins and across Canada need a tax system that actually encourages investment, rather than make it more challenging or businesses to grow and thrive. Today’s budget makes it even more clear that Canada needs a complete and independent review of the federal tax system, and that’s something we will continue to work with our national partners to advocate for.” 

However, Clarke added that there are some positive measures of interest to Timmins businesses in the budget, including:

        -$115 million over five years to enhance support for women entrepreneurs, including the launch of entrepreneurship support programs and an expansion of export opportunity initiatives;
        -An extension of the 15-per-cent Mineral Exploration Tax Credit for an additional year to March 31, 2019, which helps junior exploration firms to raise capital;
        -$5.5 million per year over five years to improve national labour market information, an
        -$2 billion over five years to create a new Indigenous Skills and Employment Training program (replacing the Aboriginal Skills and Employment Training Strategy), which will assist 15,000 people over five years.

These items in particular stand as important means of addressing some prominent gaps, and will certainly prove beneficial for Timmins’ economy, said Clarke.

However, in order to pay for these and countless other programs, the budget will see $18 billion deficit. As these projections are also based on an extremely optimistic view of Canada’s economic fortunes over the next five years, this raises a lot of questions about the nation’s fiscal future, said Clarke.

“We certainly appreciate some of the positive items that the government has introduced in this budget, but there are still too few measures to ensure that our businesses can remain competitive in an increasingly challenging global market. That also means that the Canadian economy itself must remain on strong footing, but that also means having a realistic plan to bring things back into balance.”

This concern was shared by Perrin Beatty, President and CEO of the Canadian Chamber of Commerce, who said that there simply isn’t enough in the budget to address the changing fiscal reality for today’s entrepreneur.

“Canadian business asked the government to focus on fundamentals like the growing competitiveness gap, the need to attract more private sector investment and presenting a realistic plan to balance the government’s books,” said Perrin Beatty. “Although the budget sets out many positive measures, including support for women entrepreneurs, a clearer path to Indigenous self-determination and improved skills development, it doesn’t address the most basic issues facing our economy. The cost of running a business in Canada is rising rapidly and without a strong private sector, there’s no way to pay for all this spending, except by sending the bill to our kids.” 

Beatty said the Canadian Chamber is also disappointed in the lack of a concrete and responsible plan to balance the budget, and the unrealistic economic expectations laid out in the budget.

“By adding a further $27 billion to the national debt in 2018, the government appears to believe that we can spend our way to prosperity. If Ottawa continues to run up the debt when times are good, we can only speculate on what our national finances will look like next time there is a downturn,” said Beatty.