Fiscally responsible 2012 budget includes targeted measures to improve Canadian competitiveness, CEOs say
OTTAWA, March 29, 2012 - The 2012 federal budget moves Canada closer to fiscal balance while taking steps to promote job creation and business investment, according to the Canadian Council of Chief Executives (CCCE).
“By restraining the growth in public spending, reducing regulatory overlap, improving Canada’s immigration system and enhancing support for business-driven research, the government is helping to build a stronger and more competitive Canadian economy,” said The Honourable John Manley, the CCCE’s President and Chief Executive Officer.
The CCCE is the senior voice of Canadian business, representing 150 chief executives and entrepreneurs from all major sectors and regions of the country.
“Budget 2012 builds on our country’s reputation for fiscal responsibility, while at the same time establishing a more positive environment for private sector investment and growth,” Mr. Manley said.
The CCCE welcomes the budget’s commitments to:
- Build a faster and more flexible immigration system aimed at meeting Canada’s labour market needs;
- Reform the review process for major economic projects to establish clear timelines and reduce regulatory duplication;
- Intensify Canada’s pursuit of new and closer trade relationships, particularly in emerging markets;
- Introduce targeted improvements to the foreign ownership review process that will strengthen investor confidence and enhance transparency;
- Improve First Nations education and expand opportunities for Aboriginal peoples to participate fully in the economy;
- Enhance job opportunities for military reservists by compensating employers for the costs they incur when reservists are called to serve abroad;
- Reduce delays at the Canada-U.S. border by significantly increasing exemption limits for returning Canadian travelers.
The CCCE also welcomed the government’s commitment to streamline and simplify the broad array of programs that support business innovation, but cautioned that some of the proposed changes may reduce Canada’s attractiveness as a location for research and development. In particular, the proposal to eliminate the tax credit for research-related capital expenditures could hurt capital-intensive companies that conduct R&D in Canada.
Mr. Manley noted that a year ago, Finance Minister Jim Flaherty called on Canada’s private sector to “step up to the plate” by increasing their investments in new, productivity-enhancing machinery and equipment. In fact, Budget 2012 shows that business investment across the country has increased dramatically every year since 2009 and is on track to set a new record in 2012.
Still, Mr. Manley said he was disappointed that today’s budget fails to provide relief to federally regulated companies with costly defined-benefit pension plans. In the current low-interest-rate environment, such companies are being forced to cancel or postpone major capital investments in order to meet strict pension-solvency requirements. “By providing federally regulated employers with more flexibility in funding their pension plans, Canada could benefit from much greater private-sector investment in jobs and growth,” Mr. Manley said.
Founded in 1976, the CCCE is a non-partisan organization that engages in public policy research, consultation and advocacy. Its members lead companies that collectively administer $4.5 trillion in assets, employ more than 1.4 million men and women and are responsible for most of Canada’s private-sector exports, investment and training.