Economy - Canadian
Going deeper in debt won't lead to a lasting economic recovery
Ottawa - The Quebec Employers Council (CPQ) will be in the media lockup on Tuesday for the 2016-17 federal budget announcement. Once the lockup is lifted, Council President and CEO, Yves-Thomas Dorval, will be available to respond to media requests and provide the reaction of employers, and more specifically Québec's business community, to the measures announced in Finance Minister Bill Morneau's budget.
The main priorities
Approval of infrastructure projects:
To ensure that the money being spent actually results in the realization of projects with an emphasis on the fact these projects have to be structural the federal government should implement a set of criteria that will enable the projects to be fast-tracked, thereby avoiding any delays in the approval process.
The federal government should target a reduction of the tax burden for every taxpayer, rather than raising the taxes of certain categories of taxpayers; it should also review the various programs paid by payroll contributions. These contributions are actually a major burden that is an impediment to job creation.
Productivity, innovation and aeronautics:
Canada continues to lag in terms of R&D funding among the OECD countries and in the commercialization of innovative products so that these products can make it into the marketplace. Furthermore, federal government participation in Bombardier, as the province of Québec has done, would ensure a burgeoning Canadian aeronautics industry, a highly innovative sector which accounts for a major share of our exports.
The government should encourage the responsible exploitation of our natural resources, which also entails the building of the required infrastructures in order to derive benefit from the potential of our resources.
A better structural system regulating online commerce would lead to the recovery of a substantial amount of tax revenues that the federal and provincial governments are currently missing out on; it would also ensure a fairer type of competition for our businesses.
It is important that the government further revise its Temporary Foreign Worker Program, where the changes that have been made, while commendable, are a major drawback for businesses in getting contracts and maintaining jobs for Canadians.
The government should continue its efforts pertaining to administrative and regulatory streamlining for businesses and individuals by, among other things, taking another look at the overlapping of organizations and processes in the two levels of government, because this undeniably results in higher costs and more complications for the government, businesses, and taxpayers as a whole.
The concerns of the business community
The $18.4 billion deficit announced recently by federal Finance Minister Bill Morneau could turn out to be even higher because the government of Canada has not yet divulged the various programs it plans to implement. In the current economic context, it is in the government's best interest to devote priority consideration to a tighter control of regular public spending, implementing investment incentives in the private sector and stimulating growth in productivity and exports, which should take full advantage of the window of opportunity provided by the lower loonie.
"Investing more in infrastructures, as Ottawa seems inclined to do, is certainly a substantive way to improve our competitiveness, and we encourage such an initiative," remarked Mr. Dorval. "But these projects must also benefit future generations, because we should not pass the "buck" for these deficit recovery plans to the next generation of taxpayers if they won't be able to reap the benefits. It is important to reiterate: Canada is not in a recession; there is no justification to pay for this spending by inflating the deficit."
The Employers Council also issues a reminder that falling back into a structural deficit position would also jeopardize a reduction of the tax burden, which is another crucial objective in improving the competitiveness of our economy and our standard of living. Only sound public finances will actually enable the federal government to maintain a competitive corporate and individual taxation system, thereby spurring investment, job creation and the country's prosperity. The government needs to ensure there is a continual revision of non-essential operational spending if it wants to maintain its ability to react to the next economic fluctuation.
"The Canadian economy needs to be bolstered in a sustainable manner, by advocating policies that are mindful of leaving a country that is prosperous and in sound financial health to future generations," added Mr. Dorval. "Any minimalizing of the issues relating to the growing debt is a cause for alarm because this might put Canada into a structural deficit, at a time when we need to improve the performance of our economy and standard of living so we can re-instill a lasting prosperity."
The Quebec Employers Council brings together many of Québec's largest companies and the vast majority of sector-based employers' groups, making it Québec's sole employer federation. It represents directly and indirectly more than 70,000 employers of all sizes in both the private and public sectors, with operations in Quebec.