Letters August 28, 2023

Key priorities for Canadian economic growth and prosperity

Goldy Hyder – President and Chief Executive Officer, Business Council of Canada

Economic Strategy Energy Industry and innovation Regulation Taxation

Letter to the Honourable Pierre Poilievre, P.C., M.P., Leader of His Majesty’s Loyal Opposition

Dear Mr. Poilievre,

In advance of this week’s cabinet retreat, we wrote to Prime Minister Trudeau with a list of priorities which we strongly believe his government must focus on in the fall sitting of Parliament. We are sharing that list of priorities with you as well given the critical role that the Official Opposition plays in our parliamentary system of government.

We are concerned the global economy is weakening, and the Canadian economy is straining under the weight of high interest rates, low productivity, and persistent inflation. As you have pointed out this summer, Canadians are struggling with affordability and anxious about their futures and those of their families.

The list of priorities we identified are those we believe would have an immediate, positive impact on the Canadian economy, improving prospects for sustainable and equitable long-term growth and enhancing prosperity for all Canadians. Failing to address the following priorities would invite greater uncertainty and risks exposing Canadians to a further erosion of their living standards.

Adopting a Meaningful Fiscal Anchor

The federal debt has more than doubled over the last three years. According to the Fiscal Monitor released today, public debt charges in June increased by 55% year-over-year. This is even higher than the increase we noted in our letter to the Prime Minister last week. As a result, a much larger portion of government revenues will need to go towards debt servicing costs. That is why we continue to call on the government to adopt a meaningful fiscal anchor.

Specifically, we endorse former Bank of Canada Governor David Dodge’s proposed anchor of limiting debt servicing costs to 10% of revenue.

The recent downgrade of U.S. debt by Fitch Ratings is a cautionary tale and a cause for grave concern. Consequently, we believe the 2023 Fall Economic Statement must demonstrate the government is committed to fiscal responsibility by introducing an anchor that guides the country towards sustainable spending, taking both the effects of inflation and interest rates into account.

Delivering a Plan for Permitting reform

Budget 2023 committed the government to developing a concrete plan – by the end of this year – to speed up approvals for major projects to facilitate the energy transition, lower emissions, and ensure Canada can deliver our natural resources and critical minerals to its international allies. That process is ongoing, but the United States and Europe are moving much more aggressively to shorten approval timelines for projects needed to achieve their security and climate objectives.

We therefore urged the government to expedite delivery of the plan and introduce any legislative changes required for its implementation by way of Budget Implementation Act, Part II. We further urged the government to include in its plan measures to improve access to capital for Indigenous communities and businesses. Indigenous equity partnerships are essential to the efficient, effective approval of new projects and can contribute significantly to economic reconciliation.

Seizing the Energy Transition Opportunity

Budget 2023 included a suite of measures aimed at bolstering investment in the transition to clean energy. However, we noted, an announcement of intent is insufficient when other countries, most notably the United States, have processes already in place to deliver incentives that attract new investment from around the world, including from Canadian firms.

Canadian companies and global investors urgently require the details about the terms for each tax credit to determine how they will de-risk potential investments. Absent details about how those incentives will be delivered, we risk losing out on a generational influx of both domestic as well as foreign direct investment. For the same reason, we are urging the government to follow through on its promise to make carbon pricing more predictable for clean growth projects.

In sharing the priorities which we raised with the prime minister, we recognize that you and your caucus may identify other or additional public policy areas demanding the government’s urgent attention. Our intention is simply to ensure both the Government and the Official Opposition have the same understanding of where we, as Canada’s business leaders, are focusing our efforts.

I would very much welcome the opportunity to meet with you to discuss these priorities as well as other policy solutions which we believe would benefit all Canadians.

Yours very truly,