Federal Budget Yields Good Returns for Provinces, Mixed Bag for Taxpayers, and Lacklustre Results for Business



    OTTAWA, March 19 /CNW/ - Today's federal budget moves in the right
direction in key areas - capital gains, research and development, and IT
investments - but offers little for businesses from Main Street to Bay Street,
says CMA Canada Vice-Chair and federal budget analyst Michael Tinkler.
    "The budget was good news for the provinces and territories, a mixed bag
for taxpayers, and lacklustre for business," said Tinkler, after reviewing
Finance Minister Jim Flaherty's 2007 budget, A Stronger, Safer, Better Canada.
    "CMA Canada was pleased to see the government address some of our
recommendations, however the limited measures introduced today leave much more
to be done to improve Canada's productivity and competitiveness," said
Tinkler.
    However, the government's move to restore fiscal balance will be good for
improving productivity if it results in a better skilled and better trained
and healthier workforce. Also, the proposed infrastructure investments will
yield benefits as improvements to transportation infrastructure come online.
    CMA Canada was disappointed with the lack of any new reductions in
corporate tax rates, over and above measures that had already been announced.
In the area of personal income tax, where the Budget takes a targeted approach
instead of broad-based measures, there are tax reductions that assist single
income couples, including those with kids, low income families, and seniors,
instead of an increase to the basic personal exemption.
    When measuring which CMA pre-budget proposals the government has acted
upon, CMA Canada welcomed the government's move to raise the lifetime capital
gains exemption from $500,000 to $750,000, increase the capital cost allowance
(CCA) rate for computer equipment to 55%, and the government's plans to invest
$4.5 million over two years to establish a new Industrial R&D Internship
program.
    CMA Canada remains ready to assist the government as it identifies
opportunities to improve the Scientific Research and Experimental Development
Tax Credit (SR&ED) program and looks forward to working with the government to
build on what was introduced in today's budget.
    Despite announcing a new expenditure review mechanism, the government
will have its work cut out for it as budget documents project increases to
departmental operating expenses of nearly 10% in 2007-8 and 4% in 2008-9.
    In spite of reductions in Employment Insurance premiums, they continue to
generate net revenues of $1.3 billion in 2007/8 and over $2 billion in 2008/9.
This remains a hidden tax on both working Canadians and their employers.
    After criticising previous governments for low-balling budget surpluses,
the current government is forecasting a $3 billion dollar surplus for the next
two years, which is significantly below the experience of the past three
years.

    With more than 38,000 certified members around the world, CMA Canada
grants a professional designation in strategic management accounting(TM) and
is responsible for standards-setting, accreditation and the continuing
professional development of CMAs. CMAs provide an integrating perspective to
business decision-making, applying a unique blend of expertise in accounting,
management and strategy to identify new market opportunities, ensure corporate
accountability, and help organizations maintain a long-term competitive
advantage. To optimize the performance of global enterprises and build
strategic management accounting(TM) skills, CMA Canada offers innovative
executive development programs, advanced on-line courses, and internationally
recognized knowledge management publications. For more information, visit
www.managementaccounting.ca.




For further information:

For further information: Media contacts: R. David Fletcher, Vice
President Public Affairs, CMA Canada, (905) 946-3106, Toll-free:
1-800-262-7622 ext 3106, dfletcher@cma-canada.org; Stuart McCarthy, Bluesky
Strategy Group, (for CMA Canada), (613) 241-3512 ext. 229, Cell: (613)
762-4321, stuart@blueskystrategygroup.com

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Certified Management Accountants

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FEDERAL BUDGET REACTION 2007

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