OTTAWA, Feb. 28, 2018 /CNW Telbec/ - Following the tabling of the federal budget, the Conseil du patronat du Québec (Quebec Employers Council) deplores the fact that the government hasn't made the economy more of a focal point in its priorities, since its ability to fund its social policy is predicated on the strength of the economy.
"The government has made its third budget an opportunity to unveil its social policy; meanwhile, the economy appears to be the poor cousin," remarks Norma Kozhaya, the CPQ's Vice-President and Chief Economist. "But, guiding social and economic objectives should go hand in hand, because equality and growth – as the budget is titled – needs to be able to rely on greater economic wealth. And, along with this, we can't help but regret the fact there is no mention of a return to a balanced budget."
An unbalanced budget highly concerning
Despite many uncertainties weighing on the Canadian economy, including the NAFTA renegotiations and an eventual correction on the stock markets, the government decided not to make the stabilizing of its finances a priority, so it could have some room to manoeuvre in the event of some tough economic times. It has announced deficits will continue until at least 2023, and this will be accompanied by many new, major expenditures.
"We are disappointed by the absence of a target to return to a balanced budget, while the government had promised this for 2019 during the election campaign," stated Ms. Kozhaya "Given the current state of public finances, it's well past the time for a plan to get back to a balanced budget as quickly as possible, so that future generations, especially the future middle class, are not burdened by the debt stemming from services we are currently using."
Erosion of competiveness and fiscal equality for businesses
Regrettably, the CPQ sees no measures that might be able to respond to the unprecedented tax reform in the United States, and thereby maintain the competiveness of the Canadian tax system, on which many current and future investments highly depend.
On the contrary, the government has just added to the Canadian system's burden with a reform which will make Canadian taxation even more complex, and this is even the opinion of the Senate committee tasked with studying the issue; the committee recommended the reform should be abandoned or delayed, at the very least.
While the reduction in the deduction provided to small and medium businesses - $50,000 for small and medium enterprises and $150,000 for bigger companies - affords the advantage of being less complex to administrate, the fact remains the Finance Minister's reform, as it is presently, will continue to be problematic for the growth and current operations of many businesses.
Meanwhile, the CPQ again deplores the government's unwillingness to legislate in an equitable manner in the area of e-commerce taxation, another major issue which must be dealt with if we want our businesses to be able to compete on equal footing against cross-border competitors. Many countries throughout the world are legislating in this area, or are trying to come up with fair solutions.
The CPQ calls for a refocusing on the economy
In reading the budget-related documents, we can't help but note the economy takes a back seat, because there is just one which dwells exclusively on the economy.
Some of the positive things the CPQ finds in the budget:
- Major investments in research and innovation with the intention of bringing the research and business communities closer together
- Measures aimed at supporting certain sectors affected by trade litigation, such as the softwood lumber industry
- The tabling of a law aimed at Deferred Prosecution Agreements
- Measures to encourage women's entrepreneurship
The CPQ is disappointed by:
- The $29 million of additional spending on the Coast Guard, which does not seem overly significant and provides no clear indication for Québec
- The increase in tobacco tax; an apparent, easy target but one that will probably not reap the hoped-for benefits
- The absence of new and ambitious measures in the area of the conversion of our economy to meet Canada's greenhouse gas emission objectives.
« Clearly, the public accounts situation puts the government in a position of having to announce its social policy, rather than issuing a budget statement geared toward a strong economy which allows to fund our social programs," stated Ms. Kozhaya. "And remember, in this regard, many of the announced social measures, such as parental leave and pay equity, or medical insurance, target an electoral clientele outside the province of Québec, or the measures are not under Québec's jurisdiction."
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. It represents directly and indirectly more than 70,000 employers of all sizes in both the private and public sectors, with operations in Québec.
SOURCE Conseil du patronat du Québec
For further information: Nadine Légaré, Senior Consultant - Communications and Media Relations, Conseil du patronat du Québec, [email protected], Office: 514-288-5161 ext. 243, Cell.: 514-265-5471