Respondents split on effectiveness of measures introduced
TORONTO, March 27, 2013 /CNW/ - While 43% of Canadian business people
surveyed rated last week's Federal budget a "B" or higher overall,
respondents were generally split down the middle on the specific
measures it entailed, Ernst & Young finds. That said, 57% ranked this
year's budget a "C" or worse.
"Not unlike the Canadian political scene itself, the response to the
budget was somewhat polarized," says Gary Zed, Tax Markets Leader,
Ernst & Young. "The business community seems particularly divided on
whether this budget will stimulate jobs and growth or the economy
overall — which we know was a major focus for the government this time
For example, 44% said they believe the budget would stimulate jobs and
growth moderately, with a further 1% saying they believed it would
provide a strong stimulus. That's in contrast to the 46% who did not
think the measures introduced would drive results in these
Respondents were similarly split on whether the budget struck the right
balance between stimulating the economy and reducing government
expenditures. While 36% agreed that it did (and a further 6% strongly
agreed), 38% disagreed (and 13% strongly disagreed).
"That divergence in opinion was clear on the business investment front,
too," added Fred O'Riordan, National Tax Advisor who also heads up
Ernst & Young's economic analysis and analytical services practice.
"Forty-five percent of respondents said the budget would stimulate
business investment from their company's perspective, while an almost
equal 46% said it would not."
In contrast, respondents were much more aligned in their views on
whether the federal budget deficit will be eliminated by 2015, as
projected in this budget. While 32% thought it likely or highly likely,
a whopping 67% thought it unlikely, or highly unlikely. They were
similarly vocal in their agreement that the recent federal budget trend
toward lower corporate tax rates to provide an internationally
competitive tax environment was good economic policy (75% agreed or
strongly agreed; only 23% disagreed or strongly disagreed).
The Ernst & Young National Survey polled individuals, primarily from the
business community, between March 21 and March 25. Additional survey
Fifty-four percent agreed targeted tax relief and economic incentives to
support specific industries were good economic policy (40% disagreed)
Public debt management emerged as the most pressing policy priority not
adequately addressed by this budget (25%, followed by
productivity/innovation and tax reform, 16% each respectively)
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SOURCE: Ernst & Young
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