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Remarks delivered by Brian Kingston, Vice-President, International and Fiscal Issues
Mr. Chair, committee members, thank you for the invitation to take part in your consultations on Bill C-44.
The Business Council of Canada represents the chief executives and entrepreneurs of 150 leading Canadian companies, in all sectors and regions of the country. Our member companies employ 1.7 million Canadians, account for more than half the value of the Toronto Stock Exchange, contribute the largest share of federal corporate taxes, and are responsible for most of Canada’s exports, corporate philanthropy, and private-sector investments in research and development.
In the Council’s pre-budget submission we urged the government to adopt a laser-like focus on competitiveness as the key to generating long-term economic growth and ensuring a better life for all citizens. Canada needs a focused strategy to encourage new business investment, attract international capital and enhance Canada’s ability to compete in the global economy.
Among other recommendations, we called on the government to: streamline the approval process for private-sector infrastructure projects; develop a comprehensive plan to broaden the tax base and bring down rates; and set out in detail a fiscally sustainable path to balanced budgets with a commitment to an explicit debt-to-GDP target.
Acting on these recommendations would, among other things, help to position Canada as a global trade and investment hub. This is increasingly important in the face of growing protectionist and competitiveness threats.
We applaud the government’s efforts to establish the Canada Infrastructure Bank to attract private sector and institutional investment to new revenue-generating infrastructure projects. Targeted spending on productivity- and trade- enhancing infrastructure projects would bolster Canada’s long-term competitiveness.
In our view, the Infrastructure Bank should be designed to stimulate – through open and competitive bidding – the development of infrastructure projects that would not otherwise be pursued by federal, provincial or municipal authorities.
But injecting new capital alone will not improve Canadian infrastructure. The federal government can lay the groundwork for new major infrastructure projects by ensuring that regulatory approval processes are transparent, predictable, fact-based and capable of rendering decisions in a timely manner.
Turning to foreign investment, the Business Council has long called for the creation of a single-window to attract major investments to Canada and for that reason we welcome the creation of the Invest in Canada Hub.
Canada’s ability to attract foreign investment has diminished. In the early 1980s, the stock of inward foreign direct investment (FDI) as a share of GDP was higher in Canada than in countries such as Australia, Norway, Sweden and the United Kingdom.
Today, the situation is reversed: Canada lags all four of those countries as a destination for foreign investment. Over the same period, our country’s share of global FDI has fallen from almost eight per cent to three per cent.
According to the 2016 World Investment Report, compiled by the United Nations Conference on Trade and Development (UNCTAD), Canada does not even rank among the top 15 prospective host economies for multinational enterprise investment for the 2016-2018 period. Based on a survey of multinational executives, the report ranks top destinations for new investment.
We believe that the proposed Invest in Canada Hub – and the adoption of a streamlined, single-window approach to facilitating new investments – can help reverse these worrying trends.
Finally, our Council believes that foreign investment is, except in unique circumstances, beneficial to Canada, and for that reason we support raising the Investment Canada Act review threshold to $1 billion.
With that I conclude my remarks.
Thank you for the opportunity to address your Committee.