New Government must get back to work and put economy first: Canadian Chamber of Commerce



    OTTAWA, Oct. 15 /CNW Telbec/ - Canada's largest business group is urging
the Government to recall Parliament as soon as possible and present to the
nation an Economic and Fiscal Update. "The well-being of every Canadian
citizen depends on how quickly the new government addresses the current global
economic turmoil", says Perrin Beatty, President and CEO of the Canadian
Chamber of Commerce. "Early action is essential, and many critical initiatives
can be started immediately at little or no cost to the Government."
    In a letter being sent to Prime Minister Stephen Harper (attached), the
Canadian Chamber of Commerce calls for quick action: "The ability of the
Government to meet its commitments may be compromised by an economy that will
show little or no growth over the next year, constraining government revenues.
The affordability and timing of commitments will need to be re-examined to
avoid risking a deficit next year. An Update will also help ensure Canadians
and international investors that Canada is still a great place to invest and
do business."

    
    October 15, 2008

    The Right Honourable Stephen Harper, P.C., M.P.
    Prime Minister of Canada
    House of Commons
    80 Wellington Street
    Ottawa, Ontario
    K1A 0A2

    Dear Prime Minister:

    I am writing to extend my congratulations to you and your colleagues on
your election victory. The 40th Parliament faces significant economic
challenges and it is imperative that all parties work together for the good of
the nation and in support of national goals. The Canadian Chamber of Commerce
looks forward to working closely with the government to strengthen our
economy.

    Since Parliament last met, the global economic outlook has taken a turn
for the worse as the US economy slows dramatically. Commodity prices have
slumped on recession worries. There is no question that Canada's economy will
be negatively affected. As a major trading nation, and a net exporter of many
commodities, weakening demand worldwide and, in particular, south of the
border, will be a blow to the external side of the Canadian economy.

    Canada has also been caught up in the turmoil in the global financial
system. Profound risk aversion has taken hold among investors and lenders
alike. Additionally, while Canada's financial sector remains much stronger
than its counterparts in the United States and Europe, concerns over the cost
and availability of credit and extreme market volatility will dampen domestic
spending, further weakening Canada's economic prospects.

    I am encouraged by the coordinated actions taken by the Bank of Canada and
other central banks to inject liquidity and stabilize the financial system.
The Government's program to help enhance the long-term funding capacity of the
banks at a time when financing costs have climbed sharply and private credit
markets have seized up is also a step in the right direction. G7 members have
acted decisively, and further coordination with our international counterparts
can help us weather the storm.

    Other measures can be considered to address the current financial crisis
including:

    - The Bank of Canada can provide further short-term interest rate relief
      by easing the overnight rate by half a percentage point on October 21,
      2008, the next scheduled date for announcing the overnight rate target.

    - The Bank of Canada could also consider creating a commercial paper and
      bankers' acceptances funding facility. The US Federal Reserve has done
      just this to provide liquidity for short-term credit markets. Because
      businesses and banks finance their short-term credit needs in these
      markets, it would help reduce the cost of capital to households and
      increase its availability.

    - Ensure that small- and medium-size enterprises (SMEs) have access to
      credit.

    - Consider insuring all bank deposits, regardless of size, to boost
      confidence and remain competitive. Denmark, Germany, Ireland and Hong
      Kong have already done so and other countries, including the United
      States, have boosted the deposit insurance cap.

    I urge the Government to convene Parliament as soon as possible and
present to the nation an Economic and Fiscal Update. The ability of the
Government to meet its commitments may be compromised by an economy that will
show little or no growth over the next year, constraining government revenues.
The affordability and timing of commitments will need to be re-examined to
avoid risking a deficit next year. An Update will also help ensure Canadians
and international investors that Canada is still a great place to invest and
do business.

    Despite the critical present situation, the Government will also need to
focus on long-term structural reforms to improve Canada's prosperity and
competitiveness. Some excellent work in this area has already been done by the
government, including the Advantage Canada strategy and the report of the
Competition Review Panel earlier this year. The challenge now is to turn those
strategies into early action. Many of these critical initiatives can be
started immediately at little or no cost to the Government.

    Public policies must promote and enhance flexibility so that our economy
and small and large businesses can readily adapt to current and future
circumstances. We need to focus on taking action on a number of fronts:

    - Internal Trade: Develop an open and efficient Canadian marketplace that
      is free from internal barriers to trade, investment and labour
      mobility. The government must make it an urgent priority to work with
      the provinces and territories to eliminate all internal trade barriers
      that impede the free flow of goods, services and people by 2010.

    - International Trade: Seek multilateral, regional and bilateral
      agreements with key trading partners that create new market
      opportunities for Canadian companies. Immediately launch negotiations
      for a Canada-EU Free Trade Agreement.

    - Canada-US Relations: Canada's competitiveness is directly linked to the
      strength of our relationship with the United States, our closest ally
      and largest trading partner. Fostering this relationship must remain
      the Government's top international priority.

    - Border Infrastructure: The maintenance and development of Canada-U.S.
      border infrastructure is of the utmost importance to handle the
      US$1.5 billion in trade that crosses our border every day, in addition
      to business travel and tourism. Ensuring a secure and competitive
      Canada-US border is paramount.

    - Infrastructure: Invest in productivity-enhancing infrastructure -
      transportation, border and broadband networks. Accelerate the approval
      process for major infrastructure projects currently in the works.

    - Tax Harmonization: Expeditiously work with the provinces (British
      Columbia, Saskatchewan, Manitoba, Ontario and Prince Edward Island) to
      harmonize provincial sales taxes with the GST on an expedited basis.

    - Immigration: Align Canada's immigration policies with the needs of the
      labour market. Act now to review and streamline current processes to
      ensure that applications are processed within six to 12 months,
      starting with economic and business applicants, and work with the
      provinces and territories to develop national accreditation standards
      to evaluate foreign credentials, professional and trade qualifications,
      and certification in regulated and non-regulated occupations.

    - Labour Participation: Immediately undertake a full review of the
      EI system to examine its role in labour mobility across Canada.

    - Competition Policy: Implement the Competition Policy Review Panel's
      recommendations with respect to the Investment Canada Act.

    With the financial crisis and the dramatic slowdown in the world's
economy, the Government needs to set out clear policies to promote the success
of Canadian businesses. The well-being of every Canadian family depends on
both short-term measures to counteract the threat of a possible recession and
wide-ranging structural reforms that can help our businesses compete in the
future.

    Mr. Prime Minister, the members of the Canadian Chamber of Commerce wish
you and your government every success as you confront these important
challenges. We are anxious to assist in every way we can to build a stronger
and more prosperous Canada.

    Sincerely,

    (signed)

    Perrin Beatty
    President and Chief Executive Officer
    




For further information:

For further information: Katie Anderson, Director, Communications,
Office: (613) 238-4000 Ext. 231, Cell: (613) 797-1860, kanderson@chamber.ca


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