Federal pre-budget consultations - The Quebec Employers Council urges the federal government to stay the course to improve corporate competitiveness and encourage job creation

MONTREAL, Nov. 21, 2013 /CNW Telbec/ - At its participation in the House of Commons Standing Committee on Finance public hearings in conjunction with federal pre-budget consultations, the Quebec Employers Council addressed members of parliament today in Ottawa about the specific measures the Council believes are needed to maximize job creation.

Overall taxation: A freeze on payroll contributions

From the outset, Norma Kozhaya, the Employers Council's Research Director and Chief Economist, noted the efforts the federal government has put forth in the last few years to tighten the control of public spending growth in order to stabilize public finances. This approach has allowed the government to stay the course in its efforts to return to a balanced budget in 2015-2016 at the latest and to maintain competitive taxation, helped notably by a corporate tax reduction to 15% since 2012.

But Ms. Kozhaya also stressed the importance for the federal government to quickly address the issue of funding the various programs that are paid for through payroll contributions. These payroll taxes actually have to be factored into the overall taxes employers must assume, and a steady rise in these increasingly heavier tax loads could put the brakes on investments and job creation.

In this regard, the Research Director and Chief Economist expressed serious reservations about the various proposals to enhance public pension plans in Canada, specifically the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP). Ms. Kozhaya remarked that Canada ranks quite well in terms of retirement savings, although that doesn't dismiss the fact there are major challenges that need to be met in the coming years, including increasing the level of savings. The problem of maintaining one's standard of living in retirement isn't generalized, however, a fact confirmed by many recent studies and analyses.

"The proposal of enhancing the QPP/CPP that has been put forth in recent weeks doesn't necessarily address a real need, and, contrarily, it runs the risk of having adverse effects on economic activity, investments, jobs and salaries, all of which would go against the federal government's announced objective of maximizing job creation," said Ms. Kozhaya. "Moreover, such enhancements don't encourage the extending of an active life, - an objective on which we should be placing an emphasis in terms of the aging demographic - but instead it would encourage people to take early retirement."

Manpower training: An open and pragmatic federalism

Employers Council Research Director and Chief Economist, Norma Kozhaya, urged the federal government to review its plan to introduce the Canada Job Grant program and recommended that Canada's Minister of Employment and Social Development, Jason Kenney, instead negotiate a new agreement on manpower training with Quebec, so that the province remains in charge of its own programs.

"Quebec employers hail the federal government's plan, through the Canada Job Grant, to have more employer input, so that Quebec and Canadian companies have a better trained and more productive labour force," stated Ms. Kozhaya. "But, in our view, it would seem to be more promising and efficient that the federal government sets the guidelines and objectives in terms of job training while refraining from getting involved in implementing the measures to attain these objectives."

Ms. Kozhaya also noted that since the signing of a first Canada-Quebec agreement on the job market, in 1997, the province has proven to be a reliable partner, both in how the federal government money has been spent and in accountability. The Employers Council doesn't believe Quebec should be penalized by a new formula, such as the one being proposed for the implementation of the Canada Job Grant program.

Other major issues for the Quebec and Canadian business communities

In addition to these priority matters, the Employers Council Research Director and Chief Economist presented the organization's proposals pertaining to other key issues for the Quebec and Canadian business communities. Some of these issues include:

  • Implementing a strategic monitoring of any impact that stems from employment-insurance reform, by proposing prompt solutions to any issue that would arise in terms of manpower availability;
  • Following up on the implementation of the Red Tape Reduction Action Plan;
  • Continuing discussions aimed at ratifying the global economic and trade agreement between Canada and the European Union and opening and diversifying the country's economic and trade relations with other countries;
  • Moving up the timetable for replacing the Champlain Bridge, including a public rapid-transit system.

The detailed comments and proposals presented by the Employers Council in conjunction with the federal pre-budget consultations are available on the organization's website (www.cpq.qc.ca).

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

SOURCE: Conseil du patronat du Québec

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Patrick Lemieux
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