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Budget commentary from the business community

Canadian Business canvassed members of Canada’s business community for their reactions to Budget 2012


 

It’s a budget that’s sweeping in scope, covering Old Age Security, national defense, the government’s Scientific Research and Experimental Development program and the penny. Canadian Business spoke to members of Canada’s business community about whether the federal budget will be good for business and the economy.

Iain Black, president and CEO, Vancouver Board of Trade
This budget reflects the type of long-term thinking that needs to be shown in a global context of the need for more free trade, particularly with Asia, South America and Europe. We congratulate the government for accelerating its balanced budget target rate back to 2015. Similarly, after a period of stimulus spending that increased spending and debt, the government is moving its spending back to traditional levels. The combination of spending control and economic growth is going to restore some of those key financial measurements back to where they were pre-recession, and at that point give them a very strong footing to compete. A commitment of any government to balance the budget is the best method to ensuring government stay within their means and stay sustainable over the long term.

Catherine Swift, chair, president and CEO of Canadian Federation of Independent Business
It is a pretty good budget for business. They’re basically keeping on their schedule for deficit reduction and eventual elimination. They made a good opening gambit, I’d say, on public sector pensions and MP pensions. A lot of detail has yet to be delivered but they have said they will be eventually asking public servants to contribute 50% to their premiums, up from about 35%, while the taxpayer kicks in 65%, which is pretty imbalanced. So they’re going to move to 50-50 and gradually require federal public servants to work until age 65. We think they could have implemented it in a much more compact timeline. They’re asking the rest of Canadians to delay receiving OAS until 67, but they should put the federal employee changes on the same timeline as the OAS change, just as a fairness measure. They did manage to reduce the deficit and I’m not surprised as they always leave themselves a bit of a cushion. They’re saying right now they’ll get rid of the deficit on their original timeline of 2014-2015, but I suspect it’ll happen a year earlier. It’ll be an election year, right?

Glen Hodgson, senior vice-president and chief economist, Conference Board of Canada
It’s good that the government is still shooting to balance the budget by 2015 and gives itself room to do it at least a year earlier. It uses pretty modest growth assumptions. The numbers in the budget, something like 2.1% growth this year and 2.4% next year, are below our numbers. And that’s a good thing. They’ve built in a $3-billion reserve, lowered their revenue expectations by about $3 billion and then there’s room on the upside which is good for business because it means there is a serious plan to get back to balance. And that means no more surprise tax increases down the road.

There’s a bit more moving money around, focusing on innovation, which is clearly in the interest of business, but our view here is that innovation must be lead by business not by government. Adding another $1 billion to supporting innovation is good, but what we really need is to build an innovative culture within businesses. Government can’t fix the innovation file; the ball has been passed to business.

Craig Alexander, senior vice-president and chief economist, TD Financial Group
It’s quite a favourable budget for business. I do think this is very much the government handing the baton to the private sector in terms of economic growth. During the recession, the government needed to provide support to the economy, provided stimulus to mitigate how deep the recession hit, and also helped the economy get into recovery. But now that the economy is growing, the government has to turn its attention to fighting the deficit and that means the private sector will have to pick up that baton and provide the growth to the economy. The government is looking for exports and business investment to be the two strongest drivers of economic growth. In a fiscally constrained world, they’re providing incentives for businesses to invest, hire and promote trade. While this was a fiscally austere budget, it was also pro-business and pro-growth, and I think it struck a pretty good balance between growth and austerity. But the point is the growth has to come from the private sector.

Mark Noonan, partner, Deloitte & Touche
Overall, our view is that it’s more of a stay-the-course budget rather than a revolution budget. There are some good things in there for business, particularly for innovation and technology with the $400 million to a venture capital initiative and $100 million to BDC for their VC initiative. One of the critical shortages in Canada right now is venture capital money for our technology companies, so these are very positive areas of improvement. One thing that could’ve been a bit better for business would’ve been an angel tax credit. British Columbia has one and we hoped one would be put in place on a federal level, helping angel investors of early stage companies to get a credit for that investment, but it wasn’t mentioned in the budget.

Jeff Beer is a staff writer with
Canadian Business.


 
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Budget commentary from the business community

  1. Same kind of thing they say about every budget….polite, pleasant …very Canadian

    • You’re not very polite or pleasant… does that mean you’re not very Canadian?

      •  We may be polite, but we aren’t meek.

        • WTF? I’ll just assume that’s a “Yes”, considering you’re so out of tune with Canadian values.

          •  Actually, I’m mainstream….it’s your assumptions that are at fault.

          • You also believe that most Canadians are Communists like yourself… which has been demonstrated to be false 3 elections in a row. But you’ve proven you don’t want to learn from the past, you simply want to repeat it.

          •  You and JD should get together…..it would save you both trolling time

            And now….back to the topic….hint: it’s not me.

          • I love it when the biggest troll on the site accuses of others of trolling! It’s just too damn funny! You do know that there’s actual statistical evidence of you being the biggest troll too, publicly available on the site, for everyone to see, right? LOL

            You wouldn’t know the topic at hand if it slapped you in the face.

          •  @Rick_Omen:disqus

            Sorry, not biting. Troll somebody else.

  2. “The ball has been passed to business..” “the growth has to come from the private sector”

    Yes, because we all know how much of a rat’s ass business is willing to do for the economy in general. TD bank is well known for hiring people because unemployment is too high, is that it, gentlemen?

    So tell me.. what if it drops the ball? What if the private sector doesn’t decide to grow?  I’m betting it isn’t you guys who will be feeling the pain.

    • That may be the dumbest comment that has ever entered the blogosphere so it`s only fitting Emily should approve of it.
      We all suspected you guys thought a perfect economy was one where everyone would work for the government—now you`ve shown it.
      Until you understand that a healthy economy is one where successful private businesses have the desire and ability to continue to expand and pay more taxes and hire more people, then you will remain lost out there in blogland.

      • Until you understand there’s such a thing as timing, and part of the difference between good governance and bad governance is the proper application of it, you’ll be lost thinking conservatives know what the hell they’re talking about.

        Look at unemployment stats lately. You’re trying to tell me that unemployment is increasing because businesses want to expand but somehow the government is preventing them, and this budget, which does basically nothing for business, is going to suddenly let them?

        You don’t just drop the ball and hope that private business will pick it up when there’s no evidence shown that it’s happening. You wait until you start getting evidence that business is coming back. Then you can start letting go of the ball, knowing that they’ll take it.

        Seriously, the dumbest comments on here are the ones who assume everything is black and white.

        That’d be yours, just so we’re clear.

        • Seriously, have you been giving advice to the Minister of Finance in Greece ?

          • No more than you to the Minister of Finance in Ireland.

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